The state of Europe’s regions, January 2003

On 30 January 2003 the European Commission published its Second Progress Report on Economic and Social Cohesion (COM (2003)34). Introducing the Report, the European Commissioner responsible for regional policy, Michel Barnier, said:

'There is no doubt that in 2003 the question of the future of regional policy will be at the top of Europe's domestic agenda. This report shows that much is at stake. With enlargement, income disparities will double. A quarter of the population in an enlarged Europe will live in low-income regions of which no fewer than six out of every ten will be in the new Member States. Bridging the gaps between rich and poor is a major challenge for the future.'

Described in a Commission press release as 'an update on the state of Europe's regions', the Report has three main parts:

1. Situation and trends
2. Discussions on the future of cohesion policy
3. Preparing for enlargement up to the end of 2006

As regards the current situation and trends, the Report identifies several factors which warrant consideration in the context of enlargement to a Union of 25 Member States, including increasing economic disparities and a shift in their geographical spread, and a 'less advantageous employment situation'.

With respect to the future of cohesion policy, a number of key issues are identified:

• Less developed regions. The Commission states that there 'is a broad consensus on the need to continue to concentrate resources on the less developed regions.'

• Special cases. Some existing Objective 1 regions, together with the least densely populated regions in the north of the Union and the outermost regions (overseas territories) require special treatment.

• Regions outside Objective 1. Support might still be required for parts of the EU which are not considered 'less developed' but which nonetheless have problems which EU regional policy/funding can address.

• Cross-frontier cooperation. The Report says there is 'universal demand' for the Union's promotion of cross-border cooperation to continue into the 2007-2013 programming period.

• Simplifying management. Current systems for managing EU programmes are deemed 'inappropriate' in a 25-member Union. The Commission suggest one option might be to develop a 'contractual approach involving the Commission, the national authorities, and the regional authorities'.

• Financial resources. Future Structural Funds will be seeking to address an 'unprecedented scale of disparities' between the regions of an enlarged Union. The Report indicates that the minimum level of resources required to support cohesion policy might be in the region of 0.45% of EU GDP.

The third section, Preparing for enlargement up to the end of 2006, offers a brief overview of the amount of money available for the 10 new Member States and also identifies some potential problems with implementing assistance programmes in those countries.

According to Commissioner Barnier:

'A genuine Community based on the principles of solidarity and cohesion cannot ignore the problems faced by all of its citizens, especially in today's global and rapidly changing economy. Europe needs an ambitious, well-targeted and forward-looking regional policy that responds to the needs in its cities, in its rural areas and in its industrial areas.'

This is the first of two such reports to be published in 2003: the Third Report on Economic and Social Cohesion is due by the end of the year and is expected to present 'concrete proposals for the future of cohesion policy'. The current Structural Funds - which underpin the Union's regional policy - will come to an end in 2006; plans must be made for the subsequent programming period, 2007-2013. The proposals contained in the Third Report will be intended to assist 'the effective implementation of the new generation of programmes to commence at the beginning of the new programming period'.

Links:
European Commission:
	30.01.03:	Commission adopts Second Progress Report on economic and social cohesion [IP/03/145]
	Regional development and cohesion in the European Union: The debate goes on!
	30.01.03:	Second Progress Report on Economic and Social Cohesion COM(2003)34
European Sources Online: In Focus
	European Commission adopts Second Report on economic and social cohesion, 31 January 2001
European Sources Online: Topic Guides
	The Structural Policy of the European Union

Eric Davies
Researcher
Compiled: Friday, 31 January 2003

On 30 January 2003 the European Commission published its Second Progress Report on Economic and Social Cohesion.