REGIONAL DEVELOPMENT AND TERRITORIAL PLANNING IN THE EUROPEAN UNION

REGIONAL DEVELOPMENT AND TERRITORIAL PLANNING IN THE

EUROPEAN UNION

Regina SalvadorNew University of Lisbon

Viessmann Research Centre on Modern Europe

2007 AAG ANUAL MEETINGSan Francisco

REGIONAL DEVELOPMENT IN THE EU

The Rome Treaty (1957) didn’t preview any European Regional Policy (ERP). The six founding Member States were quite similar in what development levels were concerned, with the possible exception of Southern Italy (Mezzogiorno).

Only in the aftermath of the first enlargement (1972), with the entry of the UK (a country with important territorial disequilibrium and looking for a counterpart for its losses with the Common Agricultural Policy - CAP) and that of Ireland (with a GDP per capita equal to 50% of the European average), did the decision for a European Regional Policy received green light (Paris Summit, 1972).

Regina SalvadorNew University of Lisbon / Viessmann Research Centre on Modern Europe


• The European Regional Development Fund (ERDF), established in 1975, is till the present time the main instrument to correct territorial disequilibrium and to promote regional sustainable development.

• During its first generation (1975-1985), EDRF focused its action in infrastructures, productive investment and local development. 95% of its budget was oriented towards supporting national policies. So, only 5% were ruled according to common European goals.

• The third enlargement (1986) – with the entry of Portugal and Spain, following that of Greece (1980) - increased territorial imbalances to such a degree that Jacques Delors (the French President of the European Commission) was pushed to achieve an agreement that multiplied by 4 the financial amounts addressed to the ERP.

Regina SalvadorNew University of Lisbon / Viessmann Research Centreon Modern Europe

• Besides that, the other 4 European Structural Funds (European Social Fund, European Agricultural Guidance and Guarantee Fund (EAGGF) - Guidance Section, the Financial Instrument for Fisheries Guidance (FIFG) and, after the Maastricht Treaty (1991), the Cohesion Fund, were subordinated to the Regional Policy goals.

• The accession of Austria, Sweden and Finland, in 1995, countries richer than the EU average, also contributed in a positive way to finance the development of lagging regions.



As a result of all these factors, the less prosperous regions saw their

Gross Domestic Product (GDP) approach the EU average

(1986-1996)

REGIONAL GDP GROWTH (%), 1986-1996

Regina SalvadorNew University of Lisbon / Viessmann Research

Centre on Modern Europe

There was also a reduction between the average GDP per capita in the

poorest regions and the EU average.

But during 1986-1996, one can also observe:

- structural problems persistence - raised unemployment

- increase in the prosperity of the 10 richest regions.

REGIONAL DISPARITIES in EU15 GDP PER HEAD(PPP), 1996

Regina SalvadorNew University of Lisbon / Viessmann Research Centre on Modern

Europe


REGIONAL DISPARITIES, GDP PER HEAD (PPP)


REGIONAL DEVELOPMENT AND TERRITORIAL PLANNING IN THE EU

Art. 158 of the Treaty of Nice (2003) – that amended the Maastricht Treaty and the Treaty of Rome – foresees that economic and social cohesion calls for the reduction of disparities among regions, namely to help the less favoured regions.

So, Art. 87 of the same Treaty previews non-automatic derogations to the free competition between firms from different member states.

National Government and EU subsidies are both allowed, when oriented towards favour economic growth in regions with an abnormal low level of living or in a serious unemployment condition.

In 2004, the EU underwent its fifth enlargement to 10 countries of Central and Eastern Europe and the Mediterranean: Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Slovakia and Slovenia.

Regina Salvador New University of Lisbon / Viessmann Research Centre on Modern Europe


• New Eastern Member States = all below 70% EU average (2000)

THE FIFTH ENLARGEMENT


Three special aid programs were created to these new member states:The PHARE (1989) : 11 billion € to institutions, public administrations and basic infrastructures.The SAPARD: 3,6 billion € - “Accession Special Program on Agriculture and Rural Development”.The ISPA: 7,6 billion €, Pre-Accession Structural Instrument.

• The accession of Romania and Bulgaria on the 1 January 2007 completed this process, that signified the re-unification of Europe after decades of division by an Iron Curtain.

• Croatia, the former Yugoslav Republic of Macedonia and Turkey are candidate countries. Accession negotiations have not started yet.

• All the other Western Balkan countries are potential candidate countries: Albania, Bosnia and Herzegovina, Montenegro and Serbia (including Kosovo).


FUTURE ENLARGEMENTS


– Population: from 380 to 454 million (EU 25) or 485 million (EU 27).

– Population in convergence regions: from 84 million to 123 million.

– Faster growth in new Member States (4% per year against 2.5% in EU 15).

– EU average GDP per head drops: -12.5% EU 25; -18% EU 27.


ENLARGEMENT IMPACT



ENLARGEMENT IMPACT


THE 10 RICHEST AND THE 10 POOREST REGIONS (EU=100)

2002

GDP per head in % PPP (2002)

REGIONAL EMPLOYMENT RATES 2003


EDUCATIONAL LEVEL 2002% Total Population aged 25-64



EMPLOYMENT HI-TECH 2002



REGIONAL EXPENDITURE in R&D 2002in % GDP



NEW EU BUDGET STRUCTURE: COHESION POLICY GAINS 2006 vs. 2013


• For the period 2007-2013, the EU will apply a new-look and more integrated regional policy.

• Old and new member states will no longer be treated separately. Procedures will be simplified and funding concentrated on the most needy regions of the member states.

• For the new period, the combined budget of the structural and cohesions funds will be about €308 billion. This represents 36% of overall EU spending during this period.

•Spending will be divided into three categories. Of the total amount, 79% will go on reducing the gap between poor and richer regions while 17% will be spent on increasing the competitiveness of poor regions and creating local jobs there. The remaining 4% will focus on cross-border cooperation between frontier regions.

NEW EU BUDGET STRUCTURE: COHESION POLICY GAINS


GEOGRAPHICAL ELIGIBILITY FOR STRUCTURAL FUNDS SUPPORT 2007-2013


• In territorial planning terms, after World War II, indicative forecast ruled: the military methodologies used during the War, the reconstruction of European cities and factories and the need to restore democracy were urgent tasks.

• In France, the first Indicative Plan (1946) was co-ordinated by the “Father of Europe” Jean Monnet, under the inspiration of the book “Planning for Democracy”, by the Hungarian Karl Mannheim.

• The creation of great industrial and shipping areas, the planning of seaboard tourism, the conception of “new towns” and the generalisation of highway networks were the great tasks of that

generation. 2007 AAG ANUAL MEETING

San Francisco

TERRITORIAL PLANNING IN THE EU

• The growing economic importance of heavy industrial sectors, such as siderurgy and petrochemical, subject to heavy transportation costs and fearing the closure of the Suez Channel, stimulated the construction of huge tankers (using the South African route). In turn, this stimulated the construction of industrial-portuary “white elephants”, that brought factories to the seaboard.

• Just finished these gigantic complexes, the oil crisis brought about the stagnation of the maritime transport. But despite the negative effects, those industrial complexes had the merit to develop some peripheral areas, even if, after them, the “growth pole concept” was terminated.




• Another important achievement, mainly in Southern European countries, was seashore planning: it was the case of Côte d’Azur (France), Costa del Sol (Spain), some Adriatic regions (Rimini in Italy), etc. The goal is to reframe regions, mainly agricultural or fishing, allowing the existence of tourist facilities along with empty areas.

• The construction of “new towns” was the third main type of territorial planning, due to the need to relieve great agglomerations such as London or Paris. The role of Central Governments was, in general, determinant: they financed the studies, bought the land and built the public equipment. Object of severe opposition, these “new towns” are now relatively well integrated in the socio-economic landscape, despite uncompleted and with financial problems.



• In order to stimulate the rhythm of economic growth, the road and highway network that covers most of the European territory, today, was put into place.

• But the large majority of all these actions of territorial planning – even of those financed by EU structural funds – were thought at national level. A European global perspective was clearly missing.

• The same can be said about regional development programs, even if one can clearly detect since 1975 a steady long-term trend to increase the European perspective vs. the national one: negotiations between governments and the EU Commission or the growing percentage attributed to “European” projects and programs (Interreg, ex.) are clear signs.




• It’s true that, already in 1983, the European Council presented the “European Chart on Territorial Planning”, that called for a balanced territorial development.

• Till the beginning of the 90’s, there were abundant studies that proposed spatial metaphors for the European territory:

- the “Blue Banana”;

- the “Blue Star”;

- the “Bunch of Grapes”;

- the “Seven Room House”…

• All these metaphors were quite efficient in creating an appealing image for a strategic view of a unique Continent.





• In the first half of the 90’s, two studies (Europe 2000 and Europe 2000+) propose the creation of mega-regions, established by regions of different member states: it’s the case of the Baltic Sea Arch, the Atlantic Arch or the Western Mediterranean Arch.

• The “Europe of Regions” was born, where the growth of the political and economic power of regions, within a federal Europe, seems inevitable.



• All these efforts resulted in the approval of the “European Spatial Development Perspective” (ESDP), in 1999, at the Potsdam Summit.

• With ESDP, EU leaves a single planning territorial approach towards a territorial management perspective, where greater economic efficiency is supported by spatial integration.




• But it’s only recently that the need was felt for a real GLOBAL and EUROPEAN perspective.

• The reasons for that are summarized in the next figure.

• The creation of an Economic and Monetary Union (with a common currency), the call for a deeper integration, the growing roles of cities and regions and the increased competitiveness - both at world (Globalization) and European (Eastern enlargement) levels -, led to a dramatic increase in spatial disequilibrium.

• Time has come for a much deeper coordination between institutions, member states, regional and local authorities.

2007 AAG ANUAL MEETINGSan FranciscoRegina Salvador

New University of Lisbon / Viessmann Research Centre on Modern Europe

TERRITORY GROWING IMPORTANCE TO THE EU DEVELOPMENT

Economic and Monetary Union

Deeper Economic Integration

Growing Role of Cities and Regions

Increased Competitiveness

Increase in Spatial Desequilibriums

Balanced and Sustainable Spatial Development in EU

Territory

GlobalizationEastern

Enlargement

Regional Transnational Cooperation

Political Coordination

Regional and Local Communities Importance


• Although the 2007-2013 period will be a transitional one, Structural Funds are expected to focus greater attention on topics and themes that are of particular importance to EU:

– Competitiveness;

– Environmental enhancement and ecological modernization;

– Reduction of social and economic exclusion;

– Reduction of physical peripherality and spatial exclusion.

The EU, like most political organizations, will expect more for its money.

This suggests that the arrangements for regional development and management for each and every European region should form the basis for both the European and the national development policies.


REGIONAL DEVELOPMENT AND TERRITORIAL PLANNING IN THE EU: CONCLUSIONS


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REGIONAL DEVELOPMENT AND TERRITORIAL PLANNING IN THE EUROPEAN UNION