THE REGIONS THE CRISIS GOVERNANCE AND THE FUTURE

THE REGIONS, THE CRISIS, GOVERNANCE AND THE FUTURE OF EUROPEAN POLICIES CPMR Policital Bureau, Odessa, June 12 th 2009

SUMMARY 1. Overview of global economic situation 2. Impact of the crisis on EU Regions • Survey • Policy Workshop and Manifesto 3. Regional policy • Barca report • Preparing Göteborg General Assembly

1. OVERVIEW OF GLOBAL ECONOMIC SITUATION Based on forecasts from EU DG ECOFIN, International Monetary Fund, OECD, World Bank Based on main available indicators: GDP, employment, wages, investments

THE EU IN THE WORLD: LOSING MOMENTUM GDP growth: 2009 as a black year for most advanced economies + Russia and Brazil Asian economies to continue growing even though at lower speed

THE EU IN THE WORLD: LOSING MOMENTUM GDP/head horizon 2014: EU and Japan losing track of the US, China accelerating convergence during the crisis

THE EU IN THE WORLD: LOSING MOMENTUM Share of world GDP: the US and EU losing momentum, China and India catching up

WITHIN THE EU: VERY DIVERSE PICTURES ÄOnly 1 EU country with positive GDP growth in 2009 (CY) Ä14 countries will remain in recession in 2010 (grey zones)

WITHIN THE EU: VERY DIVERSE PICTURES ÄOnly 4 EU countries with a GDP/head higher in 2010 than in 2008 (CY, PL, SK, EL) ÄIn LU and IE, each citizen will have 4. 000 to 5. 000 US$ in his pocket

WITHIN THE EU: VERY DIVERSE PICTURES ÄUnemployment raising in all EU countries ÄUnemployment rate above 10% in 12 EU countries in 2010, above 20% in Spain

WITHIN THE EU: VERY DIVERSE PICTURES ÄThe Lisbon strategy 70% employment target missed after having been achieved in 2006 ÄBack to the 2000 situation…

WITHIN THE EU: VERY DIVERSE PICTURES ÄReal wages growth slowing down in most EU countries ÄConsecutive decrease in real wages in 2009/2010 in 4 countries (LT, EE, IE, LV)

UNCERTAIN OUTLOOK FOR 2010 AND BEYOND ÄWorsening forecasts for 2010 (GDP, employment and investments)

VARIOUS PERCEPTIONS OF THE SITUATION ÄCitizens feeling concerned for mid-term perspectives (Source: Eurobarometer jan/feb 09)

VARIOUS PERCEPTIONS OF THE SITUATION ÄMarkets comforted by G 20 decisions and national recovery plans (Eurostoxx 50)

2. IMPACT OF THE CRISIS ON EU REGIONS Ä CPMR Regions participating in the survey

2. IMPACT OF THE CRISIS ON EU REGIONS ÄDiverse regional profiles ÄDifficulties to get quantitative data > Qualitative answers

2. IMPACT OF THE CRISIS ON EU REGIONS ÄMost Regions medium or strongly impacted No impact -Shetland Is. Low impact -Aberdeen --Ionia Nisia -Stockholm Medium generalized impact Medium-strong impact on few specific sectors Strong generalized impact -Anatoliki Mak. Thraki -Podlaskie -Itä-Uusimaa -Primorsko-goranska -Region Midtjylland -Principado de Asturias -Friuli V. Giulia -PACA; -Basse Normandie -Österbotten -Päijät-Häme -Västra Götaland -Nordland -Blekinge County -Bretagne -Toscana -Puglia -Illes Balears -Castillia y León -Cornwall -Hampshire -Lisboa-Vale do Tejo -Somerset -Wales -East of England • Some Regions expect the crisis to unfold only in the coming months • Export-oriented and mono-sector Regions as well as declining industrial districts first and strongly hit • Differenciated impacts within Regions according to economic specificities

2. IMPACT OF THE CRISIS ON EU REGIONS

2. IMPACT OF THE CRISIS ON EU REGIONS Ä Few sectors left unaffected but a same economic sector can be very differently impacted according to the Region in which it is set

2. IMPACT OF THE CRISIS ON EU REGIONS Ä Unemployment to severely affect the majority of surveyed regions (17), however the social outwards signs of the crisis are numerous. . .

2. IMPACT OF THE CRISIS ON EU REGIONS Ä A broad range of regional responses raising the key question of governance

2. IMPACT OF THE CRISIS ON EU REGIONS Ä According to competences and budgets, +/- formal measures packages (7 adopted a formal recovery plan) including Budgetary / Fiscal measures • Support to public investment (short and long term) • Support to businesses / SMEs (access to credit with guarantee funds or preferential loan schemes) • Support to labour market (passive and active employment policies) • Social interventions Regulatory measures • Reduction of administrative burden for businesses • Improve efficiency in public spending Advisory measures and services • For the business community • For citizens Governance measures • Strengthening existing partnerships • Creating new partnerships / ad hoc mechanisms

2. IMPACT OF THE CRISIS ON EU REGIONS ÄDifferent approaches towards the use of Strucutral Funds in sustaining recovery Approach Reasoning Regions 1. The SF are not counter-cyclical measures; 2. The measures contained in the operational programs are still valid Ionian Is. 3 SF amount for a very small share of regional investments Päijät-Häme 4. Only delivery on the ground is likely to be re-adapted East of England (ESF) 5. OPs may be changed in the future should circumstances dictate Ops have not been changed Österbotten Västra Götaland Ionia Nisia East of England (ESF) Puglia Asturias Ops needs a radical readjustment 1 A certain re-prioritization of interventions along with speeding-up of project approvals and implementation is needed 2 Some shift in priorities have been made/will be made to readjust the Ops to the changed economic conditions Ops needs to be partially revised A. Mak-Thraki Podlaskie Toscana B. Normandie (ERDF) Lisboa-Vale do Tejo Itä-Uusimaa (ESF) The Structural Funds system should be made more flexible to make it easier for the private sector to access to fund. Cornwall

2. IMPACT OF THE CRISIS ON EU REGIONS Ä CPMR initiatives CPMR Policy Workshop, 16 th July, Brussels Manifesto: 10 signing Regions, 2 asking for amendments CPMR Seminar « Impact of the crisis on post 2013 EU policies: what the regions expect » , Marseille, 27 th November 2009 Going on surveying regional situations?

3. IMPACT ON THE DEBATE ON REGIONAL POLICY POST 2013 Ä On the one hand… Low Structural Funds consumption rates (7% in average) used as argument by opposants to Objective 2 The crisis will have unpredictible impacts on GDP levels 2010/2011: which basis for regional policy envelopes calculation? The « Barca » report proposes DG Regio embarrased with the « Barca » report: a CPMR Contribution?

3. IMPACT ON THE DEBATE ON REGIONAL POLICY POST 2013 Ä On the other hand… DG Regio embarrased with the « Barca » report supporting a modernized cohesion policy for all EU Regions …but still shows no clear vision / ideas for the future CPMR preparing its proposals for the Gothenburg AGM