EU cash boost for poorest regions

EU funding has helped Europe’s poorer regions close the gap with the most affluent parts of the continent, a new report shows.

The European commission’s assessment of the state of economic and social cohesion within the EU – the first to cover all 27 member states – charts the development of GDP, productivity and employment in the 268 EU regions.

The enlargement of the EU in the three years since the last report had the potential to increase the gap between rich and poor, with the market economies in many of the newest member states still in their infancy.
 
But the report shows that disparities in income and employment across the EU have in fact narrowed over the past decade – helped in no small part by EU cash.

For example, between 2000 and 2006, EU cohesion policy contributed to increasing GDP by 2.8 per cent in Greece and 2.0 per cent in Portugal, while the same policy should lead to increases of around 8.5 per cent in Lithuania, Latvia, and the Czech Republic by 2013.

EU funding is also used to help with training and education, with more than 450,000 jobs generated in six of the least well-off countries between 2000 and 2005.

“Cohesion policy has demonstrated its capacity to adjust to changing circumstances. It has supported much-needed investment in infrastructure, human resources, and the modernisation and diversification of regional economies,” said regional policy commissioner Danuta Hübner, presenting the report.

“Cohesion policy is all about providing opportunities to each EU citizen wherever they live by reducing disparities between regions, by mobilising unused potential, by concentrating resources on growth-generating investments.”

“The union faces many challenges in the period ahead: a population that will start to decline by around 2020 and is already declining in many regions, increased economic pressure from global competitors, increased energy prices, climate change, and social polarisation.”

“Europe must respond to these challenges. To do this we need to involve all the regions and people in generating wealth, jobs and growth.”

The report also shows that there has been a slow but steady shift towards decentralisation of power, with public spending decisions taken increasingly at the local and regional levels.

Between 2000 and 2005 public expenditure at those levels increased annually by 3.6 per cent, faster than the increase in both GDP (1.7 per cent) and total public expenditure (2.4 per cent).

The report also asks a series of questions designed to help policymakers build on the experiences of the last ten years and improve the way in which EU cohesion policy funding is spent after 2013, when the current budget period expires.

These include assessments of how cohesion policy can help tackle issues sucha s climate change or an ageing population, as well as how powers and responsibility should be shared by EU, national and local authorities to ensure the best use of the money available.

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