Regions in transition are most at risk due to economic stagnation, no innovation

Panel on 'Cohesion Policy beyond 2020' held in Brussels on 18 April 2018. (L-R) Willy BORSUS, Minister-President of Wallonia; Petr OSVALD, Councillor of Plzeň; Karl-Heinz LAMBERTZ, president of the European Committee of the Regions. [Flickr/European Committee of the Regions]

European regions want an enhanced and inclusive Cohesion Policy that will make use of structural funds and more complementary mechanisms to address the current problems at their core. At the same time, the Committee of the Regions is asking for a concrete plan before the European elections in May 2019.

“We ask for Cohesion for all the regions. Regional development is the European added value,” underlined Petr Osvald, chair of the COTER commission of the European Committee of the Regions (COR), during a conference at COR on 18 April.

Therefore, development and funding should be guaranteed for all regions and not just the poorest ones, as that would risk substantially the sensitive economic balance of Europe right now. Considerable simplification and flexibility, especially in the administrative sector, are imperative along with a cut in red tape.

“We need tangible results. Europe without a Cohesion Policy that is accessible to all regions is no longer the Europe that we defend,” Karl-Heinz Lambertz, President of the European Committee of the Regions added.

European regions are now focusing on innovation, entrepreneurship, unemployment, support of SMEs, research and the demographic problem in relation to local economic and social growth.

However, the transition regions are particularly at risk of losing funding, according to the scenarios for the future of Cohesion Policy in the next multiannual budget, recently announced by the Commission.

“The objective is to take better account of the regions that are somewhere in between. It is crucial to make reforms and take strong political action,” said Willy Borsus, Minister-President of Wallonia. He cited the impact European financial support has had on the economy of his region in the past 15 years, without which there would have been little economic growth.

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Currently, the main issue that transition regions are facing is economic stagnation and lack of innovation. While they enjoy a fairly stable economic status, they fail to take a step further and address the issues of demography, jobs and investments market. Cohesion Policy is considered as a key solution to this problem because it enables the mobilisation of both the private and the public sector.

“We need to create new jobs. And to create new jobs, more money has to be spent and resources mobilised,” underlined Maria de Diego, deputy regional minister on Spatial Planning and Institutional Relations, Castilla y Leon.

According to Michael Schneider, CoR rapporteur and representative of the Land of Saxony-Anhalt to the Federal Government, development depends essentially on the continuation of the funds for the transition regions.

“We hope that the structural funds will step in so that regions that are weak now will not be weak after. However, we need to provide space for the regions to produce their specific economic programmes”.

For the weaker economic regions like the Greek and Italian ones, the main issues are still a lack of innovation, high unemployment, education stagnation and a limited use of technology systems compared to the EU average.

They also face high competition from lower-cost locations and thus fail to attract new firms or major investments, which would allow them to move to higher-value activities.

According to Lena Andersson Pench, a director at the DG REGIO, priority regarding those areas should be given to migration, social inclusion, innovation and environmental issues. However, the main responsibility for the implementation lies with the member states.

“We need a more coordinated and targeted approach,” she underlined.

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