European Commission adopts Second Report on economic and social cohesion, 31 January 2001

Author (Person)
Publisher
Series Title
Series Details 4.2.01
Publication Date 04/02/2001
Content Type , ,

The European Commission adopted on the 31 January 2001 the Second Report on economic and social cohesion 'Unity, solidarity, diversity for Europe, its people and its territory', as required by Article 159 of the EC Treaty. As well as assessing the state of cohesion in the existing European Uunion, the report also sets outs initial ideas and options for future cohesion policy in an enlarged Union.

Background

From the very beginning of the European Economic Community there has been considerable disparities in economic and social development between different regions of the Community. These disparities have been even more apparent as the Community enlarged to include a wider range of countries in the 1970s and 1980s. Just as in nations states governments pursue policies to reduce such disparities between regions to enhance cohesion, the European Community has also had a similar objective.

In the preamble to the Treaty of Rome, 1957 establishing the European Economic Community one of the objectives of the Community is stated to be:

Desirous of strengthening the unity of their economies and of ensuring their harmonious development by diminishing both the disparities between the various regions and the backwardness of the less favoured regions

Subsequent Treaty amendments have changed the precise wording slightly, but the basic objective has remained:

Anxious to strengthen the unity of their economies and to ensure their harmonious development by reducing the differences existing between the various regions and the backwardness of the less favoured regions,

Although specific EC initiatives in the area of regional policy began in the 1970s it was only with the signing of the Single European Act in 1986 that economic and social cohesion was made an explicit objective. The Treaty on European Union (TEU) in 1992 established as one of the objectives of the Union:

to promote economic and social progress which is balanced and sustainable, in particular through the creation of an area without internal frontiers, through the strengthening of economic and social cohesion and through the establishment of economic and monetary union, ultimately including a single currency in accordance with the provisions of this Treaty;

Following the TEU the relevant sections on economic and social cohesion of the amended Treaty establishing the European Community were Articles 130a to 130e (since the ratification of the Treaty of Amsterdam in 1999 these articles have been re-numbered 158 to 162). In Article 130b/159 it says:

The Commission shall submit a report to the European Parliament, the Council, the Economic and Social Committee and the Committee of the Regions every three years on the progress made towards achieving economic and social cohesion and on the manner in which the various means provided for in this Article have contributed to it. This report shall, if necessary, be accompanied by appropriate proposals.

The First Report on economic and social cohesion (COM (1996)542 final) was published by the European Commission in 1996. It looked at the economic and social disparities between EU Member States, regions and social groups. While noting the narrowing of differences in levels of prosperity between Member States the report also showed substantial absolute differences in economic prosperity and unemployment. The report also looked at the EC and the national policies in place to enhance cohesion. The opinions of the European Parliament, the Economic and Social Committee and the Committee of the Regions to the First Report are summarised in the Legislative Observatory.

Disparities were considerable between the poorest and richest regions of the existing EU. However, it was obvious that they would be significantly greater if the EU was further enlarged to include the countries of Eastern and Central Europe, Cyprus and Malta. The EU launched in 1999 the Agenda 2000 programme to ensure an adequate financial framework and common policies were in place during the period 2000-2006 to deal with the challenges of an enlarged Europe. Agenda 2000 included specific policy initiatives to:

  • increase the effectiveness of the Structural Funds and the Cohesion Fund by greater thematic and geographic concentration of projects on specific objectives and geographical areas and thus improving management
  • strengthen the pre-accession strategy for applicant countries by setting up two financial mechanisms: a pre-accession structural instrument (ISPA) to support improved transport and environmental protection infrastructures and a pre-accession agricultural instrument (SAPARD) to facilitate the long-term adjustment of agriculture and the rural areas of the applicant countries

The Structural and Cohesion Funds are key instruments of EU policies to promote economic and social cohesion, as is the work of the European Investment Bank.

Further general background information on the EU's policies in the area of economic and social cohesion can be found in:

Second Report on Economic and Social Cohesion

It might have been assumed that the Second Cohesion Report would be published in 1999, three years after the first. However, the detailed regulations for the reform of the Structural Funds for the period 2000-2006 were being negotiated at that time and it was decided to delay the Second Cohesion Report until these new regulations were in place, so that their initial impact could be analysed. In addition, it was decided to include in the Second Report a substantial first analysis of the impact of enlargement on economic and social cohesion, as the serious negotiations with twelve applicant countries were beginning. It should be noted that the Second Report on Economic and Social Cohesion, published in January 2001, formally replaces the series of Periodic Reports, which have been published since the 1980's and, of which, the Sixth Periodic Report was the last in 1999.

The full report has three main sections:

  • Situation and trends: the progress being made in economic and social cohesion as well as its spatial development dimnesion, and the factors contributing to the development of Europe's regions. Where the information is available this analysis extends to the applicant countries.
  • Contribution of Community policies towards cohesion
  • The budget and the contribution of structural policies to economic and social cohesion

The report is able to report on progress in reducing disparities in the existing EU - it is estimated that disparities since the 1980s have been reduced by one third amongst Member States and by one fifth between regions in the EU. In the three least well-off Member States (Greece, Spain and Portugal), average per capita income went up from 68&percent; of the EU avergae in 1988 to 79&percent; in 1999.

Nevertheless, considerable disparities still exist in pockets and in outlying regions, which lack skilled manpower, are short of investment and find it difficult to profitably participate in the developing information society. Disparities in unemployment rates between regions are still considerable.

These disparities will undoubtedly be significantly increased with enlargement to twenty seven countries. Enlargement brings an enormous challenge for cohesion policy. The European Commission for Regional Policy, Michel Barnier, said:

Regional policy is not going to disappear with enlargement; the opposite is the case. With wider disparities, it will become even more vital in the present and future Member States, based upon the same principles and the same goals

One of the aims of the Second Cohesion Report is to stimulate a wide-ranging debate on economic and social cohesion in the EU, and what specific initiatives and proposals are needed for the EU's cohesion policy for the period after 2007. A formal discussion will take place at the Cohesion Forum to take place in Brussels, 21-22 May 2001.

A synthesis [pdf] of the report is available, as are its main conclusions and recommendations [pdf]. A Press Release (IP/01/148) was issued to announce the report, and European Commissioner Barnier gave a speech (SPEECH/01/41) in the European Parliament on the 31 January 2001 to launch the report.

Formal progress of the Second Report within the policy-making process of the EU can be followed through:

Further information within European Sources Online:

European Sources Online: Topic Guide
- The structural policy of the European Union

European Sources Online: In Focus
- European Council, Lisbon, 22-23 March 2000, March 2000

European Sources Online: European Voice
- 5.12.96: 'Big picture' fails to tell the whole cohesion story- 8.5.97: 28-30 April Economic and Social Cohesion Forum

Further information can be seen in these external links:
(long-term access cannot be guaranteed)

European Commission: Press and Communication Service: EUROPA
- Policies: Economic and Social Cohesion

European Commission: DG Regional Policy
- Homepage
- InfoRegio
- Official documents
- The Cohesion Fund

European Commission: DG Enlargement
- Homepage

European Commisison: Eurostat
- Homepage
- General Statistics (this section includes various statistics providing regional comparisons, including with candiate countries)

European Parliament:
- IGC 1996: Briefing Paper: Economic and social cohesion

European Investment Bank
- Homepage

Council of the European Union
- Document submitted to the Lisbon European Council: Employment - economic reforms and social cohesion - towards a Europe based on innovation and knowledge, March 2001

European Court of Auditors
- Special Report 15/2000: The Cohesion Fund

FT.com
- 1.2.01: Enlarged EU 'could face wider rich-poor gulf'

Further and subsequent information on the subject of this In Focus can be found by an 'Advanced Search' in European Sources Online by inserting 'Economic and social cohesion' in the keyword field.

Ian Thomson
Executive Editor, European Sources Online
Compiled: 4 February 2001

The European Commission adopted on the 31 January 2001 the Second Report on economic and social cohesion 'Unity, solidarity, diversity for Europe, its people and its territory', as required by Article 159 of the EC Treaty.

Subject Categories