Pop quiz: How do you close the economic and cultural disparities of 27 countries? For the EU, the answer lies in focusing largely on regional policy to achieve economic and social solidarity among its member states. If the EU’s cohesion strategy turns out to be successful, Europa may be riding a new ‘bull’ – all the way to the bank.
Look out Zeus - There may be a new bull in town...
The EU’s cohesion policy, the keystone of EU regional policy, consists of three separate – yet related – objectives: convergence, competiveness, and cooperation. Put succinctly, the main goal of EU cohesion policy is to limit the wide inequality among the EU’s 271 regions. The labor productivity of inner London, for example, rests at 296% of the EU average, whereas the Northeast region of Poland has only 44.5% the EU productivity average. [1]
The EU’s regional policy website cites possible causes of such lagging regions as “longstanding handicaps imposed by geographic remoteness or by more recent social and economic change, or a combination of both.”[2] The consequences of these factors can seriously inhibit the quality of life in poorer regions, as evidenced by “social deprivation, poor quality schools, higher joblessness and inadequate infrastructures.”[3] The goal of the EU’s regional policy, then, is to bolster growth and innovation in suffering regions by revamping infrastructure, creating jobs, and providing economic incentives for entrepreneurs.
The strategy employed by the EU’s regional policy is two-fold. Economically, regional policy aims to bolster growth in laggard regions through revamping infrastructure, creating jobs, and providing incentive for innovation and entrepreneurship. Socially, regional policy provides funding for programs such as bettering schools or re-introducing criminals into society.
The price tag for this goal is hefty at €350 billion (from 2007-2013), but the fact that regional policy consists of 36% of the EU’s total budget highlights the important role regional policy plays in achieving European solidarity.[4] Thus far, the results have been positive. Since 2007, regional policy has contributed to a 10% gain in employment and has created 1.4 million jobs. Johannes Hahn, the European Commissioner for Regional Policy, has stated in a press conference in January that “regional policy has been an absolute success story for European integration…I’m saying [this] with clear words and I have no doubt about it.”[5]
Skeptics, however, point out that the structural funds that grant regional policy funds lack transparency and are overly complex. Marian Harkin, an MEP from Ireland, has noted that there is “a strong argument for greater visibility of these funds, and an urgent need for simplification.”[6] She goes on to say that bureaucracy and red tape limit the availability and swift deliverance of regional policy monies.
Still, regional policy overall has seemed to be quite effective in facilitating European solidarity despite numerous obstacles to integration. One such obstacle is labor mobility within the EU. In 2008, only 1.2% of total working age population changed their residence within the EU, compared to 2.8% in the US.[7] This could pose a real threat to future economic stability of the EU as the baby-boom generation retires.
There is a beacon of hope, contingent upon the outcome of regional policy itself. The European Commission cites “significant differences between countries in the extent of regional movements, with a clear distinction between the countries in the Eastern and Western part”[8] as one explanation of the lack of inter-EU mobility. If regional policy continues to be successful in facilitating European integration, perhaps the cultural differences among EU member states may be diluted enough to encourage more inter-EU mobility. If this becomes the scenario (certainly the hope of EU regional policy advocates), Europe will open the floodgates for unimaginable economic prosperity – and the billions of Euros pumped into cohesion policy will be returned tenfold.
However, even if regional policy fails in accomplishing its goal of social solidarity across Europe, it will remain hard for Europeans to argue that granting funding to socially and economically disadvantaged regions was a mistake – especially when viewed against the backdrop of normative EU social values.
[1]“Investing in Europe’s Future” (Video) http://ec.europa.eu/regional_policy/sources/docoffic/official/reports/cohesion5/index_en.cfm
[3] Ibid
[4] Ibid
[7] European Commission. Investing in Europe’s Future: Fifth report on economic, social and territorial cohesion. Pg 9
http://ec.europa.eu/regional_policy/sources/docoffic/official/reports/cohesion5/index_en.cfm
[8] Ibid, Pg. 10
