Report charts new EU ‘COVID-19 geography’, growing inequality risks

EU President of the Committee of Regions Apostolos Tzitzikostas addresses a press conference on the implementation of the Coronavirus Response Investment Initiative (CRII) in Brussels, Belgium, 12 October 2020. [EPA-EFE/FRANCOIS WALSCHAERTS / POOL]

The first EU-wide survey of the current challenges the pandemic has posed for local and regional governments across the bloc shows risks of a widening divide between the EU’s regions and calls for closer involvement of local authorities in drawing up recovery plans.

“The differentiated impact of the crisis drew a new geography in the EU – a COVID-19 geography – distinct from the traditional dividing lines of urban/rural, centre/periphery or cohesion regions,” said the Regional and Local Barometer report.

The report, produced by an advisory committee to the main EU institutions and made up of regionally or locally elected politicians, highlighted the differences in death rates across regions due not only to diverging healthcare capacities but also the effects of air pollution and prevalence of vulnerable groups.

According to the analysis, “the most socially and economically hard-hit regions are those that were under strict lockdown measures for the longest period, not necessarily the ones with the highest death rates or the most cases detected.”

The report pointed out the devastating economic effects of the pandemic on areas whose economy relies on SMEs, self-employed or those dependent on international trade, like tourism and the cultural industry.

“At the same time, the increased use of teleworking may cause demographic and economic shifts from the cities towards suburban or rural areas,” the document said.

However, these trends may take a while to manifest.

Gábor Kerpel-Fronius, deputy mayor of Budapest, said that while Hungary’s capital has seen an increase in teleworking during lockdown, it is has been too short to see effects on housing.

“I think there is a greater demand in the past few months for suburbanization, to move out in the countryside. But I [also] think people actually are leaving villages and smaller towns, not only because of work opportunities but because of the lacking infrastructure for life,” such as cultural venues and amenities like shopping centres.

“So I think the ability to actually work from home is not the major force in the determination of the fate of villages in Hungary,” Kerpel-Fronius said at a recent event.

Meanwhile, the finances of regional and local authorities are in flux. Expenditures have increased because of business and social support schemes to complement national strategies during lockdown, while revenues could decrease by as much as 10% because of, for example, suspension of local taxes.

Higher trust in local democracy

A public opinion carried out for the report showed that Europeans trust their regional and local authorities (52%) more than they trust the EU (47%) or their national government (43%).

While trusting local authorities (48%) to tackle the fallout from the pandemic better than the EU (45%) or national governments (44%), Europeans think their local representatives do not have enough say on the decisions made in Brussels. At the same time, a majority of citizens in all 27 member states think the bloc’s ability to solve problems would benefit from more involvement from lower levels of governance.

The 329 member-strong committee, made up of regionally or locally elected politicians, currently plays only an advisory role to the main institutions.

Risks of “spatially bind” recovery

European Commission President Ursula von der Leyen has said that “regions and cities will be at the core of Next Generation EU,” the EU’s plan to recover from the crisis, backed by €750 billion to be borrowed from the market.

Von der Leyen said the Commission has given “a very clear message” to national governments that “cities and regions should be included in national recovery plans right from the very start.”

However, the recovery fund, which will channel the bulk of funds – €672.5 billion if the figure stays at the level agreed by the European leaders in the summer – foresees only a limited involvement for local and regional in how the money is spent, “which means that those instruments are somewhat ‘spatially blind,'” the report warns.

With the negotiations on the final text still ongoing, different political groups in the European Parliament are pushing for increased involvement of sub-national authorities in the planning and management of the fund.

The barometer report also pointed out that the €47.5 billion in newly set up additional funds to help create a bridge between the EU’s short term COVID-19 response and long-term recovery, called REACT-EU, gives a lot of freedom to capitals in the way it is spent. In contrast, the usual cohesion policy is tightly linked with each region’s socio-economic situation.

This gives “unprecedented leeway on the allocation of the funding among their regions” to national authorities, increasing the “risk that the regions most severely affected by the crisis may not receive timely and proportional support,” the report said.

[Edited by Zoran Radosavljevic]

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