2013 Policy Domains On EU Equity

Common Policy Domains to
Address Equity Issues

MIGRATION, SOCIAL –
EMPLOYMENT AND REGIONAL
POLICIES
Making A European Market N.Dytianquin 1

European Studies program University of Maastricht
AGENDA
• EU Migration Policy
• EU Social and Employment Policy
• EU Regional Policy

Unifying Theme: Equity
Migration policy affects the welfare system which is

the EU’s mechanism for dealing with social equity
Social policy deals with policies affecting employment

and labor markets and achieving social equity.
Regional policy concerns the attainment of balanced

growth in the EU such that regional disparities are
narrowed.

EU Migration Policy
• Factors influencing decisions to migrate

• Impact of migration on wages and
employment
• Reasons why governments restrict migration
• Forms of immigration
• Pattern of immigration
• The Schengen Agreement
• Migration Policy on Accession Countries
• The Green Paper on Harmonization of
Migration of Third Country Nationals

Factors influencing migration decisions
• wage differences
• political and ethnic disturbances at
home
• better employment possibilities
• economic expectations
• geographic proximity
• emigration traditions
• ethnic and family networks
• cultural and linguistic factors
• settlement costs
Impact of migration on wages and employment
Differences in wages will cause laborers from low-wage country B to migrate to

high-wage country A. As a result, labor supply in high-wage country A increases
by amount of migration and drops correspondingly in low-wage country B
causing wages to fall in A and drop in B until they reach w* at which point
migration stops. Wages converge to the same level in both countries.

Effects of Labor Mobility
 Brain drain: emigration of highly educated and skilled
people from developing countries to industrial nations
limiting the growth potential of developing nations.
 The move of immigrants is most of the time temporary and
not permanent. (guest workers)
 Illegal immigration affects the income of legal low-skilled
workers.
 There will be unemployment in the short run in the
receiving country, exerting downward pressure on wages,
inducing firms to employ more labor until unemployment
reverts back to original level.

Reasons why governments restrict migration
• Increase in government expenditure to provide social provisions for foreign
workers (e.g., assimilation, language courses, housing)
• Societal disruptions due to cultural, religious, ethnic, ideological
differences
• Increased regional disparities due to attraction to urban areas
(agglomeration)
• Worsening of the balance of payments in the recipient country if foreign
workers send or remit most of their earnings home
• Downward pressure on wages
• Increased unemployment
• Fear of rise in criminality rates (gang wars), disturbance of peace

Forms of immigration
• Economic immigrants seeking permanent

residence
• Asylum seekers looking for refuge from war or
oppression
• Seasonal or temporary workers (contract
workers)
• Illegal immigrants

Pattern of immigration
1958-1973: 1973-1989:
• Italian migrants to Northern Europe • intra-EC migration from
• Guest workers to Germany from Turkey multinational corporations and
and former Yugoslavia international organizations
• Spanish migrants to France, Germany and • Irish migrants to the UK
Switzerland • Migration from Spain, Greece
• Greek migrants to Germany and UK and Portugal
• Portuguese migrants to France • Migration from Turkey, North
• Migrants from former colonies Africa and former Yugoslavia
1989 onwards:
• Immigration from third country nationals increased mainly from
Mediterranean, Middle East, Asia, sub-Saharan Africa, Latin America,
Central and Eastern Europe and former Soviet republics
• Increased immigration from the east
• ethnic Germans or Aussiedlers
• Roma who left Bulgaria and Romania, Czech Republic and Slovakia
• refugees from Yugoslav wars (Croatia, Bosnia, Kosovo, Albania)
The Schengen Agreement
• Establish institutional framework for abolition of border
controls between Schengen signatories
• Setting up of Schengen Information System (computer network
for information sharing)
• Common rules and procedures for checks at external borders
• Cooperation on extradition
• Harmonization of legislation governing firearms
• Facilitate cross border transport of goods and increased
cooperation of customs authorities
• Common list of countries requiring visas and common model of
visa
• Increased cooperation between national police forces including
establishment of Europol

The New Europe: Schengen
EU Member States
in the Schengen area
EU Member States
not in the
Schengen area
Candidate Countries
Countries in the
Schengen area,
not EU Member
States and not
Candidate Countries

Free Movement of EU Nationals
• Free movement of workers is a fundamental principle enshrined in Article 45 of the

Treaty of the European Union
• EU citizens are entitled to:
• look for a job in another EU country
• work there without needing a work permit
• reside there for that purpose
• stay there even after employment has finished
• enjoy equal treatment with nationals in access to employment, working
conditions and all other social and tax advantages
• EU nationals may also have certain types of health & social security coverage
transferred to the country in which they go to seek work (Social Security
Coordination)
• Rules on social security coordination do not replace national systems with a
single European one. All countries are free to decide who is to be insured
under their laws, which benefits are granted and under what conditions. The
EU provides common rules to protect social security rights when moving within
Europe (see http://ec.europa.eu/social/main.jsp?langId=en&catId=850)

Migration Policy on Accession Countries
Individual governments of countries that were already part of the EU can decide
themselves whether they want to apply restrictions to workers from accession countries.
However:
• Not allowed to restrict general freedom to travel, only right to work in another
country as an employed person.
• For the first two years after a country joined the EU, national law and policies of
countries that were already part of the EU determines access to the labor market of
workers from accession country so that they may need a work permit. If a country
wants to continue to apply these restrictions for three more years, it must inform the
EU Commission before the end of the first two years.
• After that, countries can continue to apply restrictions for another two years if they
inform the Commission of serious disturbances in their labor market; all restrictions
must end after 7 years.
• Workers who are subject to national restrictions must be given priority over workers
from non-EU countries. Once they are legally employed in another EU country,
workers are entitled to equal treatment with national workers of the country where
they are working.
• The countries whose nationals face such restrictions may impose equivalent
restrictions on workers from that country.


• Countries with 7 year moratorium for labor

migration
Austria, Germany, Italy
• Countries with 2 year freeze
Luxembourg, Greece, Finland, Belgium
• Countries with quotas
Netherlands, Portugal
• Countries with no restrictions but with conditions on
social security and welfare shopping, and reservations
on right to refuse work permits
France, Ireland, Denmark, Sweden, UK, Spain

Migration Policy on Bulgaria & Romania
The following EU countries continue to impose restrictions on the right of Bulgarian and
Romanian nationals to work there:
Austria Belgium
work permits may be issued to workers after a requires Bulgarian and Romanian workers to
labor market test for 67 professions for which obtain a work permit. Work permits are issued
there is a shortage of labor. without a labor market test for jobs in
professions for which there is a shortage of labor,
in particular low-qualified jobs such as drivers,
gardeners, cashiers or masons.
Germany France
eased restrictions and does not require a work requires Bulgarian and Romanian workers to
permit for: obtain a work permit but has a simplified
• skilled workers with a university degree procedure for 150 occupations for which a work
whose employment corresponds to their permit is issued regardless of the labor market
professional qualification; situation.
• seasonal work;
• professional in-firm training.

UK Luxembourg
requires Bulgarian and Romanian workers to requires Bulgarian and Romanian workers to
have a work permit. The employer must apply obtain a work permit but has introduced
for the permit (except for certain categories of simplified procedures for work in agriculture,
employment) and the worker must apply for an viticulture, the hotel and catering industry and
"accession worker card". Low-skilled workers are for people with specific qualifications in the
restricted to existing quota schemes in the financial sector..
agricultural and food processing sectors. Skilled
workers can work if they qualify for a work
permit, or under the Highly Skilled Migrant
Programme.
Malta Netherlands
grants work permits for positions that require requires Bulgarian and Romanian workers to
qualified and/or experienced workers and for obtain a work permit, but will issue permits
those occupations for which there is a shortage provided:
of workers. • no workers are available in the Netherlands
or other EU countries;
• the employer can offer proper working
conditions and accommodation.
Temporary exemptions may be granted for
sectors in which there is a labor shortage
Ireland Spain
requires Bulgarian and Romanian workers to request to restrict its labor market to
obtain a work permit. Romanian workers until 31 December 2012
due to serious disturbances on its labor
market. Request was approved by EU
Commission

Migration Policy towards Non-EU Nationals
• Non-EU nationals may have the right to work in an EU country or to be treated

equally with EU nationals as regards conditions of work. These rights depend on their
status as family members of EU nationals and on their own nationality.
• Although these countries are not members of the EU, their nationals can work in the
EU on the same footing as EU nationals, since they belong to the European Economic
Area or have special agreements with the EU
• Iceland, Liechtenstein & Norway
• Switzerland
• Algeria, Morocco, Tunisia
• Russia
• Albania, Croatia, the former Yugoslav Republic of Macedonia, Montenegro
• Andorra, San Marino
• 79 countries of the African, Caribbean and Pacific Group of States (ACP)
• Turkey

Migration Policy towards Non-EU Nationals
• For nationals of other countries – that have no agreement with the EU – the right
to work in an EU country mainly depends on the laws of that country, unless they
are members of an EU national's family.
• However, EU rules cover the following areas for workers from all non-EU countries:
• non-EU nationals who are long-term residents in the EU
• the right to family reunification
• admission for non-EU researchers
• admission for students, exchange pupils, unpaid training or voluntary service
• the rights of highly-skilled workers from outside the EU (EU blue card scheme)

Green Paper on Migration Policy towards Third Country
Nationals
Concern of the Green Paper

 Better health, increased life expectancy and
lower fertility rates will lead to remarkable
demographic changes.
 Problem ageing population: not enough
workers to pay for retired people’s pensions.
 Fear that the fertility rate will stay under the
level needed to maintain the population for the
coming years.
Making A European Market/ N.Dytianquin 23

Green Paper on Migration Policy towards Third Country
Nationals –2
 Between now and 2030, the EU will lose 20.8

million (6.8 percent) people of working age as
the number of over-65s will rise by more than 50
percent and the number of people aged
between 15-64 will decrease by nearly 7 percent.
Immigration Solution
 Positive: it is the only thing that keeps the European
population growing for the moment.
 Negative: it cannot substitute for economic reforms,
modernize pension systems, raise the retirement
age and provide jobs.

Green Paper on Migration Policy towards Third
Country Nationals –3
Source: European Union (2012), The 2012 Ageing Report. Downloaded from
http://ec.europa.eu/economy_finance/publications/european_economy/2012/pdf/ee-2012-2_en.pdf


• Extent of harmonization for admission of migrant
workers
horizontal approach (present system)
sectoral approach (skills in specific sectors/industries)
fast track procedure (common database, green card system?)
• Preference of long-term residents and returning workers
over new arrivals
• Job specificity of admission systems
• Occupational and locational mobility of migrant workers
• Combined work and residence permits
• Migrant workers’ rights and accompanying measures on
assimilation
• Return and cooperation with country of origin
brain circulation

BLUE CARD SYSTEM
• Out of the Green Paper, the EU Paraliament proposed the launching of the blue
card system in October 2007
• But with the blue card system, will EU be able to attract third country nationals?

EU Social and Employment Policy
Economics of social policy

Evolution of EU social policy
Social Charter
EU policy to fight unemployment
EU policy to fight poverty and social exclusion

ECONOMICS OF SOCIAL POLICY
 Social policy refers to various measures to regulate the labor
market but also measures to combat poverty and social exclusion and
to improve education, training, housing and health care. Improving
access to employment is one aspect of social policy to reduce
poverty.
 Two schools of thought:
 Free trade would result in convergence of incomes and
wages and therefore harmonization of social standards is
unnecessary
 Social standards will be at the lowest level (social
dumping) and there will be a race to the bottom to level
the playing field so social policy is needed

EVOLUTION OF EU SOCIAL POLICY
 1958-1973
 Low profile of social policy with principal goal to
promote labor mobility. Entailed coordinating national
security systems of member states to guarantee rights
of emigrant workers
 1974-1985
 First Social Action Program after oil crisis aimed at
attainment of full employment, harmonization of
living standards, greater involvement of employer and
employee organizations

EVOLUTION OF EU SOCIAL POLICY - 2
 1985-1992
 More active social policy thru European Social Space by
Delors which included
 social dialogue
 drawing up of Social Charter
 creation of ‘Europe of the citizens’ to reduce democratic deficit
 Worker participation in firm decision-making
 1993-onwards
 Social Charter became basis for Social Chapter in Maastricht Treaty
 Amsterdam Treaty included 3 new objectives of social policy (social
protection, social dialogue, combating social exclusion)
 Nice Treaty adopted European Social Agenda (employment potential,
social exclusion, enlargement)

SOCIAL CHARTER
 Objectives of Social Charter

 Improvement of living and working conditions’
 Right to freedom of movement
 Right to employment with adequate remuneration
 Right to social protection
 Right to freedom and collective bargaining
 Right to vocational training
 Right of men and women to equal treatment
 Right to information, consultation and worker participation
 Right to health protection and safety at workplace
 Protection of children and adolescents
 Specific measures for the disabled

EU POLICY TO FIGHT UNEMPLOYMENT
 Amsterdam Treaty sets out main EU employment

policy:
 Coordinated strategy of member states towards
unemployment
 Employment is a matter of common concern
 Objective of high employment taken into account
in EU policy making
 Multilateral surveillance
 Council or Commission proposal to member
states for urgent action’
 Establishment of employee committee as forum
of debate

EU POLICY TO FIGHT UNEMPLOYMENT - 2
 Extraordinary European Council in 1997 organized around

four pillars
 Improving ‘employability’
 Encouraging adaptability
 Equal opportunities (gender equality, disabled)
 Developing entrepreneurship (Lisbon objectives of 67%
target labor force participation rate by 2005 and 70% by
2010, and mid-term target of 57% women employed

UNEMPLOYMENT RATES IN THE EU
• In March 2012, unemployment rate

rose to 10.2 % in the EU.
• 20 Member States recorded rises in
unemployment rates, and seven saw
decreases.
• Most significant rises were seen at the
periphery of the EU: Greece (21.7 % in
January 2012), Spain (24.1 % in March
2012), Cyprus (10.0 %), Portugal (15.3
%) and Italy (9.8 %).
• The three countries exhibiting the
lowest unemployment rates: Austria at
4.0 % in March; Luxembourg (5.2%)
and the Netherlands (5.0%)




INITIATIVES ON EUROPEAN EMPLOYMENT STRATEGY
New Skills for New Jobs

• The New Skills for New Jobs initiative sets out to:
• Promote better anticipation of future skills needs
• Develop better matching between skills and labor market needs
• Bridge the gap between the worlds of education and work
http://ec.europa.eu/social/main.jsp?catId=822&langId=en
Flexicurity
• Flexicurity is an integrated strategy for enhancing flexibility and security in the labor
market. It attempts to reconcile employers' need for a flexible workforce with
workers' need for security – confidence that they will not face long periods of
unemployment.
• Common principles of flexicurity
• flexible and reliable contractual arrangements
• comprehensive lifelong learning strategies
• effective active labor market policies
• modern social security systems
http://ec.europa.eu/social/main.jsp?catId=102&langId=en

EU POLICY TO FIGHT POVERTY AND SOCIAL EXCLUSION
 Social exclusion means discrimination and marginalization at the work

place.
 Lisbon ‘Open Method of Coordination’ to fight poverty and social
exclusion over 2000-2010 with following features:
 Common objectives
 National action plans
 Joint reports and regular monitoring
 Common indicators
 Community Action program
 Nice Summit agreed on 4 EU-level objectives
 Promote participation and access to stable and quality jobs
 Prevent risk of exclusion from new knowledge & technology
 Help vulnerable people
 Mainstream fight against exclusion

EU POLICY TO FIGHT POVERTY AND SOCIAL EXCLUSION
The overarching objectives of the Open Method of co-ordination for social

protection and social inclusion are to promote:
• social cohesion, equality between men and women and equal opportunities
for all through adequate, accessible, financially sustainable, adaptable and
efficient social protection systems and social inclusion policies;
• effective and mutual interaction between the Lisbon objectives of greater
economic growth, more and better jobs and greater social cohesion, and with
the EU's Sustainable Development Strategy;
• good governance, transparency and the involvement of stakeholders in the
design, implementation and monitoring of policy.

EUROPEAN SOCIAL FUND (ESF)
• The ESF is a means to create more and better jobs
• The European Social Fund (ESF) is one of the EU's Structural Funds, set up to
reduce differences in prosperity and living standards across EU Member
States and regions, and therefore promoting economic and social cohesion.
• The ESF is devoted to promoting employment in the EU. It helps Member
States make Europe's workforce and companies better equipped to face
new, global challenges.
• Funding is spread across the Member States and regions, in particular those
where economic development is less advanced.
• It is a key element of the EU's strategy for Growth and Jobs targeted at
improving the lives of EU citizens by giving them better skills and better job
prospects.
• Over the period 2007-2013 some €75 billion will be distributed to the EU
Member States and regions to achieve its goals.
http://ec.europa.eu/social/main.jsp?langId=en&catId=325

EUROPEAN SOCIAL FUND (ESF)
• The ESF in perspective
• The Strategy for Growth and Jobs is the main EU strategy for ensuring the
prosperity and well-being of Europe and Europeans, today and tomorrow. In this
context, the European Employment Strategy brings together the 27 Member
States to work at increasing Europe's capacity to create more good jobs and to
provide people with the skills to fill them. It guides the ESF which spends European
money on achieving these goals.
• The ESF in partnership
• The ESF strategy and budget is negotiated and decided between the EU Member
States, the European Parliament and the Commission. On this basis, seven-year
Operational Programmes are planned by Member States together with the
European Commission.
• These Operational Programmes are then implemented through a wide range of
organizations, both in the public and private sector. These organizations include
national, regional and local authorities, educational and training institutions, non-
governmental organizations (NGOs) and the voluntary sector, as well as social
partners, for example trade unions and works councils, industry and professional
associations, and individual companies

EU Regional Policy
Economics of regional policy

Goals of regional policy
Evolution of EU regional policy
Structural and Cohesion Funds
Measurement of regional disparities
Core-periphery patterns in the EU
Enlargement and Regional Policy

ECONOMICS OF REGIONAL POLICY
 Two opposing views about regional economic policy
 Convergence of regional disparities occur in system of freely

operating functioning markets, principle of comparative
advantage and specialization, free trade of goods and services
and effects of factor mobility leading to factor price
equalization plus catch-up implications of Solow growth model
 Divergence of regional disparities accompany the integration

process due to agglomeration effects and tendency of
technological innovation to occur in clusters, and circular
causality of new geography approach

ECONOMICS OF REGIONAL POLICY-2
 Convergence theory
 Strong version: common level of economic growth
will be achieved in the long-run regardless of initial
conditions, national monetary and fiscal policies and
institutions provided technology adoption and
diffusion is not restrained
 Weak version: Adoption of technological innovations

drives economic growth but can be disrupted by wrong
set of political and institutional conditions

ECONOMICS OF REGIONAL POLICY-3
 Divergence theory
 Strong version: Economies of agglomeration
(geographic concentration of large number of activities
attracted by infrastructure, availability of skilled labor,
financial institutions, and proximity of markets (save
on transport costs)) and economies of localization (
geographic concentration of plants in same industry
and advantages gained by linkages and specialization)
dominate.
 Weak version: Some minimum threshold level of

endowments in human capital, infrastructure, R&D
activity and financial deepening must be obtained to
sustain growth.
ECONOMICS OF REGIONAL POLICY- 4
Evidence of regional convergence or divergence
 Empirical evidence shows neither strong divergence

or converge is taking place
 Convergence in growth rates in taking place
especially of Southern accession countries (Spain,
Ireland, Portugal and Greece)
Regions receiving structural and cohesion funds are
not behaving any different from other regions

• Beta-convergence refers to a process in which poor regions grow faster than rich
ones and therefore catch up on them.
• The concept of Beta-convergence is directly related to neo-classical growth

theory (Solow, 1956) where one key assumption is that factors of production, in
particular capital, are subject to diminishing returns. Accordingly, the growth
process should lead economies to a long-run steady-state characterized by a
rate of growth which depends only on the (exogenous) rates of technological
progress and labor force growth. Diminishing returns also implies that the
growth rate of poor economies should be higher and their income and/or GDP
per head levels should catch up with those of richer economies.
• Beta-convergence process is taking place among EU regions, at both EU-15 and

EU-27 level; the speed of convergence is not constant in time, with low values
found during the 1980’s and higher values observed for periods before and after
that decade.

• Sigma-convergence simply refers to a reduction of disparities among regions in time.

• Convergence between EU-15 regions was strong to mid-1990s, but process since
then has slowed down. From 1980 to 1996, the evolution of disparities among EU-15
regions indeed shows a clear downward trend with coefficient of variation falling
from 0.33 to 0.28.
• Disparities continue to decrease rapidly among EU-27 regions, the coefficient of
variation falling from 0.43 in 1995 to 0.35 in 2005. This has led many observers to
conclude that if convergence is still at work within the EU-27, it is due to the fact that
the poorest regions in the new Member States are catching up on the Union’s richest
ones, while among EU-15 regions convergence is no longer taking place.

Why regional disparities tend to persist
 Natural process of adjustment is slow and conditions of
neoclassical convergence theory implied by Solow growth
model are not always fulfilled (e.g., capital and labor not
perfectly mobile, gaps in production technology between
regions, economies of scale and obstacles to free market
mechanism)
 Cumulative gravity mechanism (new industry and trade
attracted to where it already exists)
 Low productivity regions no longer shielded by exchange
rate policy
 Agglomeration effects

GOALS OF REGIONAL POLICY
 To create conditions for balanced and sustainable economic growth
throughout the EU
 To achieve economic and social cohesion and solidarity between
member states
 To foster convergence of economic performance of least developed
member states and regions
 To reduce economic and social disparities
One region in four has a GDP (Gross Domestic Product) per inhabitant under
75% of the average of the EU-27
 To meet challenges of the 21st century
”What kind of Europe do we want – for ourselves and for future generations? A dynamic Europe
that leads the world in science and technology? A productive Europe where everyone has a job?
A caring Europe where the sick, the elderly and the handicapped are looked after? A just Europe
where there is no discrimination and everyone has equal access to jobs and education? A clean,
green Europe that cares for its own environment and helps meet the global challenges too? A
Europe of values that we share and care for? I want all of those things and, moreover, I believe
they are within our grasp.”
Extract from a speech delivered by Commissioner Danuta Hübner in Warsaw on 17 October 2006

REGIONAL POLICY
GDP per capita in EU-27
GDP per capita in PPS (PPP shares) in 2008

REGIONAL POLICY
One in 4 regions are below EU average
GDP per capita in % of EU average (PPP shares) in 2007

REGIONAL DISPARITIES IN EU-27: GDP/CAPITA 2005
Source:
http://ec.europa.eu/regional_policy/what/index_en.cfm

Main justifications for activist EU regional policy
 Equity and fairness

 Economic efficiency
 Reducing deadweight loss from high unemployment
 Balanced growth
 Allocation of EU Budget

EVOLUTION OF EU REGIONAL POLICY
 1958-1975
 Nor real Community policy and regional policies
widely implemented at national level. European
Investment Bank created to resolve problems of
Mezzogiorno region in Italy
 1975-1988
 ERDF created in 1975 to correct for UK budgetary
imbalance
 Mediterranean package introduced in 1978 to
increase farm support under CAP for Mediterranean
products
 Integrated Mediterranean Program in 1985 to
prepare Portugal and Spain for accession
EVOLUTION OF EU REGIONAL POLICY-2
 1988 onwards
 Under Delors, reform of Structural Funds to promote
economic and social cohesion
 Four principles of Structural Funds introduced:
concentration, partnership, programming, additionality
 1994-1999, main changes to Structural Funds were
 Creation of Cohesion Fund
 Increase in financing thru Structural Funds
 Changes in Objectives
 Introduction of financial instrument for Fisheries
Guidance
 Simplification of procedures
 Increased role for regional/ local authorities

STRUCTURAL AND COHESION FUNDS
 European Regional Development Fund (ERDF)
finances infrastructure, job-creating investments, local
development projects and aid for small farms
 European Social Fund (ESF)
Promotes return of the unemployed and disadvantaged groups to
the work force, thru training and recruitment aid
 Financial Instrument for Fisheries Guidance (FIFG)
Helps adapt and modernize fleets in the fishing industry
 Guidance Section of the European Agricultural Guidance
and Guarantee Fund (EAGGF)
Finances rural development and aid for farmers, mainly in regions
lagging in development
 Cohesion Fund
Provides direct finance for individual projects to improve
environment and develop transport networks.
STRUCTURAL FUND (ERDF)
 Defined priorities of Structural Funds
Objective 1 Convergence
In regions covered by the Convergence objective, ERDF focuses its intervention
on modernising and diversifying economic structures as well as safeguarding or
creating sustainable jobs, with action in the following areas:
o research and technological development (RTD);
o innovation and entrepreneurship;
o information society;
o environment;
o risk prevention;
o tourism;
o culture;
o transport;
o energy;
o education;
o health.
Source: http://ec.europa.eu/regional_policy/thefunds/regional/index_en.cfm

STRUCTURAL FUND (ERDF) - 2
Objective 2 Regional Competitiveness and Employment

For the Regional Competitiveness and Employment objective, the priorities are based on
three sections:
a) innovation and knowledge-based economy: strengthening regional capacities for
research and technological development, fostering innovation and entrepreneurship
and strengthening financial engineering notably for companies involved in knowledge-
based economy;
b) environment and risk prevention: cleaning up polluted areas, boosting energy
efficiency, promoting clean public transport within towns and drawing up plans to
prevent and limit natural and technological risks;
c) access to transport and telecommunications services of general economic interest.

STRUCTURAL FUND (ERDF) - 3
Objective 3 European Territorial Cooperation
For the European Territorial Cooperation objective, the ERDF focuses its aid on three
main areas:
o development of economic and social cross-border activities;
o establishment and development of transnational cooperation, including bilateral
cooperation between maritime regions;
o increasing the efficiency of regional policy through interregional promotion and
cooperation, the networking and exchange of experiences between regional and local
authorities.
The ERDF also gives particular attention to specific territorial characteristics. ERDF
action is designed to reduce economic, environmental and social problems in towns.
Naturally disadvantaged areas geographically speaking (remote, mountainous or
sparsely populated areas) benefit from special treatment. Lastly, the outermost
areas also benefit from specific assistance from the ERDF to address possible
disadvantages due to their remoteness.

COHESION FUND
• The Cohesion Fund is aimed at Member States whose Gross National Income (GNI) per inhabitant is
less than 90% of the Community average. It serves to reduce their economic and social shortfall, as
well as to stabilise their economy. It supports actions in the framework of the Convergence
objective. It is now subject to the same rules of programming, management and monitoring as the
ESF and the ERDF.
• For the 2007-2013 period the Cohesion Fund concerns Bulgaria, Cyprus, the Czech Republic,
Estonia, Greece, Hungary, Latvia, Lithuania, Malta, Poland, Portugal, Romania, Slovakia and Slovenia.
Spain is eligible to a phase-out fund only as its GNI per inhabitant is less than the average of the EU-
15.
• The Cohesion Fund finances activities under the following categories:
o trans-European transport networks, notably priority projects of European interest as identified
by the Union;
o environment; Cohesion Fund can also support projects related to energy or transport, as long
as they clearly present a benefit to the environment: energy efficiency, use of renewable energy,
developing rail transport, supporting inter-modality, strengthening public transport, etc
• The financial assistance of the Cohesion Fund can be suspended by a Council decision (taken by
qualified majority) if a Member State shows excessive public deficit and if it has not resolved the
situation or has not taken the appropriate action to do so.
Source: http://ec.europa.eu/regional_policy/thefunds/cohesion/index_en.cfm

INSTRUMENT FOR PRE-ACCESSION ASSISTANCE (IPA)
• January 2007 onwards, the Instrument for Pre-Accession Assistance (IPA) replaces a series of
European Union programmes and financial instruments for candidate countries or potential
candidate countries, namely PHARE, PHARE CBC, ISPA, SAPARD, CARDS and the financial
instrument for Turkey.
• The IPA is made up of five different components:
o Assistance for transition and institution building;
o Cross-border cooperation (with EU Member States and other countries eligible for IPA);
o Regional development (transport, environment, regional and economic development);
o Human resources (strengthening human capital and combating exclusion);
o Rural development.
• The IPA beneficiary countries are divided into two categories:
o EU candidate countries (Croatia, Turkey and the former Yugoslav Republic of Macedonia)
are eligible for all five components of IPA;
o Potential candidate countries in the Western Balkans (Albania, Bosnia-Herzegovina,
Montenegro, Serbia, and Kosovo are eligible only for the first two components.
Source: http://ec.europa.eu/regional_policy/thefunds/cohesion/index_en.cfm

MEASUREMENT OF REGIONAL DISPARITIES
 Income per capita
 Labor productivity
 Availability and accessibility of jobs
 Standard of living including environment, health service, cultural
infrastructure, leisure activities
Other measures
 Human Development Index of UNDP
 UN Human poverty index
 Index of Sustainable Economic Welfare
 Gini coefficient
 Leisure vs. working hours
 Balance between consumption and investment
 Changes in life expectancy
 Development of new products
 Poverty threshold line
 Long term unemployment
 People in jobless households
EU HUMAN DEVELOPMENT INDEX
• The regions with a high HDI are concentrated in
southern England, southern Germany, the
Netherlands, Scotland and Sweden.
• All French regions, except Picardie and Corse, are
above the EU average.
• Most EU-12 regions and those in Portugal,
Greece and Italy have an HDI below the EU
average, except Praha (CZ), Attiki (EL) and four
Italian regions. In Spain, eight regions are below
and eight above the EU average, with high scores
in Madrid, Navarra and Pais Vasco.
• The top 10 HDI regions include five English
regions, the capital city regions of Sweden and
France, and two regions surrounding Brussels.
• The bottom 10 regions for HDI comprise seven
regions in Romania, two in Hungary and one in
Bulgaria.
Source:
http://ec.europa.eu/regional_policy/sources/docgener/focus/2011
_02_hdev_hpov_indices.pdf
EU POVERTY INDEX
• The highest levels of human poverty (HPI-2)

are registered in
southern Europe, in particular in Portugal,
Spain, Italy, Greece
and Malta.
• The lowest levels of human poverty can be
found in highly, moderately and less developed
Member States – in particular in the Czech
Republic, Sweden, Germany, Slovenia and
Slovakia.
• The top 10 HPI-2 regions include six
Portuguese regions, Malta, two Spanish
regions (Ceuta and Extremadura) and one
Italian region (Campania).
• The 10 regions with the lowest level of HPI-2
include five Czech regions, three Swedish
regions, one Austrian and one German.
Source:
http://ec.europa.eu/regional_policy/sources/docgener/focus/2
011_02_hdev_hpov_indices.pdf

COMBINING EU HDI AND POVERTY INDEX
•The group of high development and low poverty

includes a relatively large number of regions
located in particular in Germany,
Austria, Finland and Sweden. Also, a large
number of regions in the UK and the Netherlands
and a few in Belgium, Denmark and France
achieved the target of low poverty and high
development.
• Eastern European regions in Hungary, Romania
and Bulgaria
also register low levels of poverty measures but
score very poorly
in terms of human development.
Source:
http://ec.europa.eu/regional_policy/sources/docgener/focus/2011_02_hdev_hpov_ind
ices.pdf

REGIONAL LISBON INDEX
•The Lisbon Index measures how far regions

are from eight Lisbon
targets for 2010.
• A region scores 100 if it has reached all eight
targets, while the region farthest away from
all eight targets scores 0.
• On average, EU regions improved their
score by 10 index points
between 2000 and 2007. Over this time, the
ten fastest movers
were: Corse in France (from a very low base),
Comunidad Foral de
Navarra, País Vasco, Cantabria, Extremadura,
Galicia, La Rioja and
Comunidad de Madrid in Spain, Kärnten in
Austria and Liguria in Italy. All these improved
their index by 25 points or more.
Source:http://ec.europa.eu/regional_policy/sources/docgener/focus/2010_03
_lisbon_index.pdf

REGIONAL LISBON INDEX-2
• In both 2007 and 2000, only one EU region

reached the eight Lisbon targets included in the
Lisbon Index. In 2007, it was the Finnish region
Länsi-Suomi, while in 2000 it was the Swedish
region Östra Mellansverige. Although both years
saw only one region reaching all eight targets, EU
regions did move closer to these.
• In 2007, the top ten Lisbon regions contain
three Finnish, four Swedish and three UK regions,
scoring between 94 and 100. The bottom ten
contains four Southern Italian regions, the two
Portuguese island regions, Malta, Corse in France,
Sud-Est in Romania and Észak-Magyarország in
Hungary all scoring less than 20. Nine out of
these ten regions have not reached a single
target. Only Madeira reaches one: the
employment target for people aged 55-64.
Source:http://ec.europa.eu/regional_policy/sources/docgener/focus/2010_03_lisb
on_index.pdf
CORE-PERIPHERY PATTERNS IN EU
 Golden Triangle (London, Paris, Benelux, Frankfurt)
 Blue Banana (Parts of Germany, Switzerland, Austria)
 No regional contrasts in Netherlands, Denmark and Luxembourg

PROJECT INITIATIVE IN REGIONAL POLICY
REGIOSTARS AWARDS
• The objective of the RegioStars Awards is to identify good practices in regional development and to
highlight original and innovative projects which could be attractive and inspiring to other regions.
• In 2011, there were 5 criteria:
I. Economic competitiveness theme
1) Networking and cluster initiatives supporting regional growth and SMEs access to global
markets
Winner: Growth in Environmental Marine Science, Wales, UK (€1,31 million in EU funding from the ERDF)
2) Anticipating economic change
Winner: SLIM (System Management for Innovative Platforms), Northern Mid Sweden (€1,30 million in EU funding
from the ERDF)
II. Low carbon economy theme
3) Promoting sustainable energy in cities (“CityStar” category)
Winner: Amsterdam Smart City, Netherlands (€1,56 million in EU funding from ERDF)
4) Integrated, clean urban transport projects (“CityStar” category)
Winner: Innovative and sustainable mobility in Funchal (CIVITAS MIMOSA), Madeira, Portugal (€2,01 million in EU
funding from the ERDF)
III. Information and communication theme
5) Promotional photo of a co-funded project
Winner: Capelinhos Lighthouse, Azores, Portugal (€3,37 million in EU funding from ERDF)
Source:
http://europa.eu/rapid/pressReleasesAction.do?reference=IP/11/775&format=HTML&aged=0&l
Making A European Market anguage=EN&guiLanguage=en N.Dytianquin 73
University of Maastricht
European Studies program
PROJECT INITIATIVE IN REGIONAL POLICY
REGIOSTARS AWARDS
• In 2012, the awards criteria are:
SMART GROWTH: Innovative projects or schemes supporting service innovation in its different forms.
SUSTAINABLE GROWTH: Investments in ecosystem services and green infrastructure leading to
sustainable regional development.
INCLUSIVE GROWTH: Strategies, initiatives or projects addressing the challenge of demographic
change and supporting active ageing. (2012 is the "European Year of Active Ageing and Solidarity
between Generations")
CITYSTAR CATEGORY: Integrated strategies for the development of deprived urban areas.
INFORMATION AND COMMUNICATION CATEGORY: Informing the public on the internet about
projects benefiting from EU Regional policy.
Source:
http://ec.europa.eu/regional_policy/cooperate/regions_for_economic_change/regios
tars_12_en.cfm#2

ENLARGEMENT AND REGIONAL POLICY
 Impact on Structural Funds is net redistribution towards poorer
accession members
 Only 4 regions of 10 accession members have GDP per capita of 75%
of EU average.
 EU-25 average GDP per capita will be pulled down so that poor
regions of EU-15 will no longer qualify for regional assistance as they
will be out of Objective 1


2013 Policy Domains On EU Equity

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2013 Policy Domains On EU Equity

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Common Policy Domains to

Address Equity Issues

Making A European Market N.Dytianquin 1

Making A European Market N.Dytianquin 2

Migration policy affects the welfare system which is

Social policy deals with policies affecting employment

Regional policy concerns the attainment of balanced

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• Factors influencing decisions to migrate

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Differences in wages will cause laborers from low-wage country B to migrate to

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• Economic immigrants seeking permanent

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• Free movement of workers is a fundamental principle enshrined in Article 45 of the

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• Countries with 7 year moratorium for labor

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• Non-EU nationals may have the right to work in an EU country or to be treated

Making A European Market N.Dytianquin 21

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Concern of the Green Paper

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 Between now and 2030, the EU will lose 20.8

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Economics of social policy

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 Objectives of Social Charter

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 Amsterdam Treaty sets out main EU employment

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 Extraordinary European Council in 1997 organized around

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• In March 2012, unemployment rate

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New Skills for New Jobs

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 Social exclusion means discrimination and marginalization at the work

Making A European Market N.Dytianquin 41

The overarching objectives of the Open Method of co-ordination for social

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Economics of regional policy

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