COMMISSION OF THE EUROPEAN COMMUNITIES
Brussels, 31.1.2001
COM(2001) 24 final
REPORT FROM THE COMMISSION TO THE COUNCIL, THE EUROPEAN
PARLIAMENT, THE ECONOMIC AND SOCIAL COMMITTEE AND THE
COMMITTEE OF THE REGIONS
SECOND REPORT
ON ECONOMIC AND SOCIAL COHESION
IIREPORT FROM THE COMMISSION TO THE COUNCIL, THE EUROPEAN
PARLIAMENT, THE ECONOMIC AND SOCIAL COMMITTEE AND THE
COMMITTEE OF THE REGIONS
SECOND REPORT
ON ECONOMIC AND SOCIAL COHESION
INTRODUCTION
The role of theCohesion ReportArticle159oftheTreatystatesthateverythree yearstheCommissionshould present ‘a report
on the progress made towards achieving economic and social cohesion and on the manner in
which the various means (including different Community policies) provided for in (the)
article have contributedto it.’ This report is the response to this requirement. Article 45 of the
General Regulation on the StructuralFunds specifies the contents ofthe report.
The Commissionadoptedthe First Cohesion Report at the end of1996. This was the basis for
the first Cohesion Forum held in April 1997 and for the proposals contained in ‘Agenda 2000
- for a stronger and wider Union,’ which led to the reform of cohesion policy adopted by the
Council in June 1999.
The Commission has chosen to present the Second Report on Economic and Social Cohesion
at the beginning of 2001, which falls immediately after the first phase of the implementation
of the reform of the Structural Funds, and after certain key decisions have been taken as
regards financial allocations and geographical eligibility for support. It is, therefore, already
possible at this stage to make a broad ex anteassessmentofthepossible impact ofthereform.
The second Report also contains an updating of the regional analysis contained in the Sixth
and last Periodic Report on the situation and development of regions published in 1999. Such
an updating is more necessary than before since the Cohesion Reports replace the Periodic
Reports whichthe Commission has published since the beginning ofthe 1980s.
First analysis of cohesion in an enlarged Union
As the Treatyand the generalRegulationonthe StructuralFunds require, the Report analyses
the changes in cohesion and the factors which contribute to it. Without prejudging the timing,
the proceduresor theorderof countries entering, the working hypothesis adopted relates to an
enlarged Unionof27 Member States.
So far as the data allow, each part of the Report includes consideration of the situation in an
enlarged Union. This should be the context for analysis, rather than in terms of a more static
analysis of the respective situation in the present 15 Member States and the 12 countries with
which accession negotiations are taking place. An analysis of regional features in Turkey, the
13th candidate country with which negotiations have not yet begun, is included separately.
This will be the subject ofa more systematic analysis in future reports after negotiations have
begun.
IIILaunching the debate
The report develops a set of conclusions and recommendations with a view to opening up a
debate on the future of cohesion policy after 2006 in an enlarged European Union. The
Commission is convinced that for the future, important changes will be required to a policy
which was designed for the present Member States. While enlargement is major part of the
explanation for the need for change, it is not the only one in view of the far reaching
economic and social and territorial changes affecting the present EU15. These changes are
also examined inthe report.
The debate which will ensue will involve the EU institutions and agencies, Member States
and regional and local authorities, as well as the relevant economic and social interests, non-
governmental organisations, universities and other academic institutions. The Commission
itself is organising a Cohesion Forum in Brussels on 21 and 22 May 2001 to provide an
opportunityforthe exchange ofideas and discussionoffuture cohesion policy. The candidate
countries willbe fully involved inthis consultationexercise.
At a later stage, the Commission will set out proposals which will then be presented to the
European Parliament and the Council of Ministers for a new cohesion policy to take effect
from1 January2007.
IVSynthesis of the report
oneconomic and social cohesion
Table of contents
PART I:Si tu a ti onan dtr e n d s
PART II : Contribution ofCommunitypolicies to cohesion
PART III : Economic and socialcohesionpolicy: the results
CONCLUSIONS AND RECOMMENDATIONSTEN ISSUES FOR PUBLIC DEBATE ON THE FUTURE OF COHESION POLICY
VSYNTHESIS OFTHE COHESION REPORT
PART I: SituationandtrendsA narrowing of income disparities in theEU15In the EU today, disparities in income (GDP) per head between Member States and, more
particularly, between regions, remain considerable. The average income per head of the 10%
ofpopulation living in the most prosperous regions is, for example, 2.6 times greater than the
bottom10%.
The disparities, however, have narrowed over time. In the three least prosperous Member
States (Greece, Spain and Portugal), average income per head has risen from 68% of the EU
average in 1988 to 79% in 1999, a reduction of a third in the initial gap. Disparities between
regions have narrowed by less, partly because the gaps have widened between regions within
certainMember States.
Lower income per head at regional levelis associated with lower output per person employed,
lower levels of education and training – despite significant progress achieved in recent years -
less research and development activity and innovation, as well as a slower pace of
introduction of the new information and communication technologies. On the other hand,
there has been a marked improvement in relative infrastructure endowment in less prosperous
regions, akeyfactorintheir longer-termdevelopment prospects.
A step change with enlargement
With the enlargement ofthe Union, the economic landscape is set to change significantly. An
analysis of the situation as it stands today points to a doubling of the income gaps between
countries and regions, a doubling inthe sense that ifa Unionof27 existed tomorrow:
– at national level, over one-third of the population would live in countries with
an income per head less than 90 % of the Union average - the current threshold
for eligibility for aid under the Cohesion Fund - compared to one-sixth in the
present EU15.
– at regional level, the average income per head for the bottom 10% of
population, living in the least prosperous regions in EU27, would be only 31%
of the EU27 average. In the EU15 today, the income per head of the bottom
10%ofpopulationequates to 61%ofthe average.
At national level, in a Union of 27 the countries separate into three main groups. The most
prosperous group comprises 12 of the current Member States of the Union – all except
Greece, Spain and Portugal - where income is above average. This is followed by an
intermediate group of Greece, Spain and Portugal, together with Cyprus, Malta, Slovenia and
the CzechRepublic, where income per head is around 80% ofthe EU27 average, with 13% of
the total EU27 population. The real change compared to the Union of today, however, would
be the existence of a third group comprising the 8 remaining candidate countries where
income per head is around 40% of the EU27 average. This is a significant group accounting
for around 16%ofthe populationofthe EU27.
VIAs anexample, infrastructure inthe candidate countries is inadequate in quantityand often of
poor quality, while evidence suggests that labour force skills and the kind of education and
training provided do not match the needs of a modern market economy. As regards transport,
the Transport Infrastructure Needs Assessment estimates the total cost of constructing trans-
European networks in these 12 countries at €90 billion, while several studies put the cost of
complying with Community environmental standards at €50-100 billion, giving an overall
amountof €15-20 billiona year, forthe next 10years, forthetwo sectors.
Insum, the evidence demonstratesthat considerable progress has been achieved in the present
EU15 in reducing income gaps between regions, though on past trends it is likely to take
another generation before regional disparities are eliminated. Enlargement widens the
disparities markedly. Given existing levels of income per head in the candidate countries,
convergence between regions in the enlarged Union would take at least two generations if it
occurredat the same pace.
Employment: some signs of progress
Employment in the EU15 rose by over 2 million during the 1990s, but this was not sufficient
tosignificantly increase the employment rate - the proportion of the population of working
age in employment - which remained at just over 60%, well below the ambitious objective of
70% fixed for 2010 by the Lisbon European Council. The average figure, however, conceals
substantial differences across the Union. Only 4 Member States had an employment rate in
1999 above 70%, while inGreece, it was onlyaround 55% and inSpainand Italy, even lower.
10%ofthe Union’s population lived inregions where wellbelow halfofthose ofworking age
were inemployment (44%).
Despite strong growth of employment of women, mostly in part-time jobs (one woman in
three in the Union works part-time), their employment rate was 19 percentage points below
that of men in 1999. All of the employment growth in the Union over the 1990s was in
services, the largest increases occurring in the most prosperous regions and in high-skilled
jobs. At the same time, because ofskill mismatches, labour shortages are beginning to emerge
in many regions, especially in new sectors of activity and particularly in information
technology.
The persistence of wide gaps in unemployment in theEU15
Disparities in unemployment remain wide in the Union. In 1999, Greece, Spain, France, Italy
and Finland had unemployment rates of more than 10%, at least twice the rate in
Luxembourg, Netherlands, Austria and Portugalwhere the figure in each case was below 5%.
Regional disparities are much more pronounced: the 10% of population in the worst-affected
regions- mostlyregionswheredevelopment was lagging, but someofwhichwere undergoing
restructuring - had an unemployment rate in 1999 of 23%, nearly 8 times the average for
those inthe least-affected regions (3%).
Labour markets in the candidate countries: an incomplete transition
While there are superficial similarities between labour markets in the candidate countries and
the EU15- in1999, unemployment averaged 10.2% in the former 9.3% in the latter, while the
average employment rate was much the same in the two - there are major underlying
differences, which are a legacy of the ongoing process of transition. Five key features areworth highlighting:
VII– womeninthecandidatecountriesarecontinuingto withdraw fromthe labour market,
thoughparticipationrates are stillhigher thanthose in most partsofthe Union;
– employment in traditional industries remains high even after the loss of 25-50% of
jobs over the 1990s;
– agricultural employment, at 22% of the total, is 5 times the average for the Fifteen
(4.5%),though its importance varies markedlybetweenthe countries;
– labour productivityremains lower than inthe EU15;
– employment in services has grown significantly, but at a much higher rate in the
capitalcitiesthaninother partsofthecountries.
In sum, the return of stronger economic growth in the second half of the 1990s has generally
had favourable consequences for employment and unemployment in the EU15 but the effect
in terms of reducing regional disparities in income and employment has been more limited. In
the candidate countries, the transition process remains incomplete, with the risk that
unemployment could rise in many regions in the period ahead. But the outlook for labour
markets in an enlarged Union will be heavily influenced bydemographic trends. In the EU15,
t h e s ew i l ll e a dt oa na g e i n go ft h el a b o u rf o r c ea n dc o u l dr e s u l ti ni td e c l i n i n gi nn u m b e ra f t e r
2010. Inthe candidate countries the pattern is broadly similar, but an important feature here is
the expected growth in the number of young people aged 20-35. In an enlarged Union, this
would be an important balancing factor inanotherwise ageing populationand labour force.
Social cohesion and the incidence of poverty: a persistent problem
In 1996, 18% of the population in the Union, or one in six, had income below the poverty
level.1The countries where the proportion was lowest, Denmark and the Netherlands
(11-12%), are also those with income per head above the EU average. At the other extreme,
20-25% of the population in Portugal and Greece had income below the poverty line. The
contrast is even sharper in respect of long-term, or persistent, poverty which affects only 3%
ofpeople inDenmark and the Netherlands but 12% inPortugaland 10% inGreece.
There are many root causes of poverty and particular groups are especially at risk, including
people with low education, old-age pensioners, the unemployed and others not in work, lone-
parent families and families with large numbers of children. Many poor families have more
thanone ofthese characteristics.
While comparable data forthe candidate countries are not yet available, the evidence suggests
that ruralareas are most affected bypoverty.
The territorial dimension: persistent imbalances
The most important territorial imbalance in the Union today is that between the less
developed regions and the rest. At the same time, spatial disparities in the Union reflect a
more complex reality than indicated by differences in income and employment between
regions. This reality has to do with the potential for development and is implicit in Article 158
1According to the EUROSTAT definition, which is the proportion of the population with income equal
to or below 60% of the median in their own country.
VIIIofthe Treaty, whichrefers tothe need to promote a harmonious development ofthe Union as
aw h ol e .
For the Commission, and for the Member States, this was the rationale behind the European
Spatial Development Perspective (ESDP), which was the first coherent effort to clarify the
nature of the major territorial imbalances across the Union as a whole. These imbalances and
the need to address them assume an added dimension with enlargement, if only because the
land area of the Union will have doubled in relation to the early 1990s once the candidate
countries have entered.
High geographical concentration of activity inthe Union
Economic activity is concentratedina core partofthe Unionsituated in the triangle extending
from North Yorkshire in the UK to Franche-Comté in France and Hamburg in Germany.
While this area accounts for only one-seventh of the Union’s land area, a third of the
population live there and almost half (47%) of income is produced there. In other comparable
economies, like the US, the patternofactivityis more dispersed.
For the EU, this concentration has negative implications not only for peripheral regions but
also for the centralregions themselves, particularly in terms of traffic congestion and pressure
onthe environment and health, which could in the long-termoffset the apparent advantages.
Urban areas: growth centres for achieving polycentric development…
The concentration of population in central areas is reflected in a high degree of urbanisation
and a disproportionately large share of the highly skilled functions associated with the
knowledge economy being located there: business headquarters, research installations and the
most highly qualified workers. The net result is a level of productivity some 2.4 times higher
than in peripheralareas. The counterpart of this concentration is that the Union lacks the kind
of polycentric pattern of activity which is undoubtedly a factor in the territorial cohesion of
the US, in its less pronounced regional disparities in income and employment and, perhaps, in
itscompetitiveness.
…but with pockets of deprivation
The Union’s urban areas, however, are also those where social and economic disparities are
most marked and certain districts have high levels of poverty and exclusion. Differences in
unemployment and dependencyrates, for example, are wider within some cities than between
regions in the Union. (The Commission’s urban audit identified a number of cities where
unemployment varied bya factorof10 betweendistricts.)
Varying circumstances in the rural areas
The extent of rural areas varies significantly between Member States, from the Nordic
countries and Ireland, where two out of every three people live in such areas, to Belgium,
Germanyand the UK, where onlyone ineight does.
The population living in ruralareas is increasing, if to differing degrees, in all Member States
and employment growth is higher there than in the rest of the Union, reflecting their
comparative advantages. Equally, however, many remain in difficulty because of their many
handicaps.
IXBorder regions: the problems shift eastwards
Border regions, which are home to one in four Europeans, often suffer from problems of
accessibility and lack of economic opportunities because of the fracture created by an
international frontier. With the creation of the single market, backed by cross-border
cooperation programmes supported by European funds, for the most part existing internal
border regions no longer show significant differences in income per head and unemployment
compared to the Union as a whole. In general, the same applies to those regions in the EU15
bordering candidate countries, although there are important differences between the regions
concerned. For these regions, the situation could change in the future, in the sense that they
are inthe frontline inthe more competitive circumstances after enlargement.
In the candidate countries, a significantly larger proportion of the population live in border
regions (6 outofevery10 people), than inthe Union, the main problem areas being in the east
along frontierswiththird countries.
Specific areas
Islands and archipelagos, mountain and peripheral areas - including the ‘outermost’ regions -
are an important part of the Union and share many common physical and geo-morphological
characteristics and economic disadvantages. These regions generally suffer accessibility
problems which make their economic integration with the rest of the Union more of a
challenge. Accordingly, a large number already receive EU regional aid - 95% of both
mountainareas and islands are covered byObjective 1 or 2. At the same time, their social and
economic conditions vary widely and two of the most prosperous candidate countries are
islands (Cyprus and Malta).
XPART II: Contribution ofCommunity policiesto economic and socialcohesion
This part of the Report examines the manner to which Community policies have contributed
to cohesion, as stipulated in the Treaty (Article 159), and the implications for enlargement of
theUnion.
1. Economic and monetary integration policies
Economic and Monetary UnionMacroeconomic stability helps to achieve economic convergenceFor high rates of economic growth to be sustained in lagging regions of the Union, it is
important that structural policies are allied to macroeconomic policies which ensure financial
stability. The establishment of a single currency makes the maintenance of such stability
easier to achieve.
Over the 1990s, in the run-up to monetary unification, inflation was reduced considerably in
the cohesion countries, especially in Greece and Portugal, from well above the EU average to
around 2½%. At the same time, growth of GDP was above average in all four cohesion
countries in the second half of the 1990s. Nominal convergence was, therefore, accompanied
byrealconvergence.
This tendency was particularly marked in Ireland, while convergence has occurred more
slowly inSpain and Portugaland more recently inGreece.
The introduction of the Euro makes differences more transparent and capital more mobile
The introduction of the Euro should lead to increased competition and, therefore, to greater
market efficiency. Byreducing transaction costs and interest rate differentials, it should lower
the price of capital and increase its availability in lagging regions. Capital is likely to flow
more easily to areas where the returns are highest, implying that the specific features of
different regions will assume more weight in the competition for finance. The least
competitive regions willtherefore be particularlyexposed.
At the same time, regional variations in labour costs will become more transparent, which
should help to focus attention on underlying differences in productivity, a major cause of
differences inregionalcompetitiveness.
The internalmarket
The decisions taken in 1988 and 1992 to strengthen the Union’s support to regions with
structuraldifficulties were motivated by a recognition that closer economic integration would
not necessarily permit the reduction of regional disparities and could, initially at least, lead to
themwidening. Cohesion policytherefore sought to help less developed regions benefit from
the advantage of European integration and to enable the Union as a whole to fully exploit its
growthpotential.
The progress achieved towards a more integrated economy, now extending to the applicant
countries as well as the present Member States, is reflected, in particular, in convergence of
prices across the Union, expansion of trade and growth of direct investment between
countries.
XIThe extent of price convergence differs between sectors
In contrast to the prices of manufactures, which have tended to converge across the Union,
differencespersist formost services, whichunderlinesthe localnatureofmarkets ina number
of sectors. Convergence towards EU prices also seems to be occurring in the more advanced
candidate countries, at least for traded industrialgoods.
Significantgrowth of trade
The EU economy is becoming more integrated into the global economy as well as internally.
Closer integration is being accompanied by growing similarity in the composition of trade
betweenMemberStates.
Trade flows between the Union and the candidate countries have increased markedly during
the 1990s, reflecting the progressive move towards a free trade area planned for 2002. The
Union already accounts for 60% of total exports of the candidate countries while these
account for 10% of Union exports. The composition of trade between the two suggests that
theydo not compete inthe same type ofproduct.
Growth of foreign direct investment (FDI)
FDI is particularly important in some Member States, especially Ireland, Sweden and the
Beneluxcountries. Mergers and acquisitions, which doubled between 1991 and 1999, account
for a significant part ofthis.
Union direct investment in the applicant countries is also growing considerably. Since such
flows now amount, on average, to around 5% of the GDP of the recipient countries and some
20% ofinvestment, theyhave a major impact ontheir growthand productive potential.
On the other hand, these flows are very small in relation to Union GDP. They seem to be
aimed more at supplying the home market thanat exporting back to the EU and are, therefore,
unlikelyto have a depressing effect onemployment and wages inthe Union.
Tendencies to concentration or dispersion?
A key question concerns the extent to which economic integration is likely to lead to some
sectors of activity concentrating in a few regions to exploit economies of scale. In practice,
there seems to be a general trend towards concentration in manufacturing, but the extent
varies between industries and is occurring at a very slow pace because of the scale of the
investment required to change the locational distribution of activities significantly (Ireland
and Finland, for different reasons, are exceptions). The risk exists that such a concentration
would increase the vulnerability of some regions to external shocks which affect particular
sectors concentratedthere.
The effects of integration andthe needforaccompanying policies
The increased competition generated by closer integration and the diminished possibility of
protecting local industries are likely to put a premium on technical know-how and to reduce
the demand for low skilled workers even further. The response to this should be to raise the
levels of education and training of the work force and to orient training towards the skills
required in growing sectors. Education policy and active policies for employment and social
development therefore have an important role to playin accompanying economic integration.
XIIAt the same time, the candidate countries will need to comply with the requirements of the
‘acquis’ (the body of Community law, including directives, regulations as so on) which is
likely to add to production costs and affect the ability of their businesses to compete with
thoseinthepresent MemberStates.
However according to the studies which have been carried out, enlargement of the single
market to include the candidate countries should have generally beneficial effects for all parts
of the Union, especially for those on the two sides of the border between the old and new
Member States.
Competition policy
Competition policy improves the functioning of the internal market
State aids provided by Member States have a potentially important effect on the regional
distributionofeconomic activity. In the period 1996 to 1998, theyaccounted for 2½% oftotal
public expenditure in the Union or over 1% of EU GDP (in other words, roughly the same
size as the Community budget as a whole) as compared with 0.45% of GDP allocated to EU
structuralpolicies.
The scale of expenditure on them, however, varies significantly between Member States.
Although the gap narrowed in the latter part of the 1990s, it is still the case, according to the
latest figures, that the more prosperous countries spend more than the cohesion countries, so
offsettingtosomeextenttheeffectofEUstructuralpolicies inthe latter.
In an attempt to reduce this negative effect, more objective and transparent criteria were
established by the Commission during the course of 1999-2000 for defining eligibility for
regional aid. As a result, the proportion of the EU population living in regions qualifying for
such aid was reduced from 46.7% to 42.7% and assistance has become more concentrated on
the most disadvantaged areas. Nevertheless, because ofthe decisions made by Member States,
it was not possible to achieve a better correspondence between the regions eligible for EU
structuralsupport andthose assisted byStateaids.
2. The Common AgriculturalPolicy : prices and agriculturalmarkets
Successive reforms have greatly changed the concept of the Common Agricultural Policy
(CAP) and the way it works. During the 1980s, the CAP was directed at reducing official
prices of agricultural produce and compensating for the effects of this on farmers’ income
through direct payments (direct aids), the use of which was generalised under the 1992
reform. A new reform with two important strands was introduced as part of Agenda 2000 .
First, official prices were lowered with the aim of strengthening the competitiveness of the
sector while ensuring a reasonable standard of living for producers. Secondly, a new
framework was established for rural development policy, which became the second pillar of
theCAP.
Significantchanges in thedistribution of expenditure between countries
Accordingly, direct aids and support for rural development have accounted for a growing
share of total expenditure on agriculture, while only 29% of spending under the EAGGF-
Guarantee went onmarket support and paymentsto exportersin1998 as against 82% in1992.
XIIIThe CAP, through market support measures and direct aid in particular, involves large
transfers betweenMember States as wellas betweensectorsofeconomic activityand between
socialgroups.
In 1998, as in 1993, net transfers were positive for three of the four cohesion countries.
Portugal, however, traditionally a low beneficiary, remained a net contributor, despite its
share of total agricultural expenditure rising from 0.6% to 1.6%. The change in the scale of
net transfers, however, differed between Member States. In absolute terms and in relation to
their agricultural area, three Member States (France, Germany and Spain) absorb over half of
EAGGF-Guarantee expenditure. On the other hand, if transfers are expressed in relation to
agriculturalemployment, DenmarkandBelgiumarethe mainbeneficiaries.
But very different regional effects
The level of support to agriculture has increased in relation to the number employed in all
regions of the Union, largely because of a continuing fall in employment. Overall, the 1992
reform has not radically altered the distribution of support between regions, although it has
increased the amount going to regions producing cereals, oil seed and beef, so to many
regions in France, Spain and Ireland. Support to producers is lower in the least prosperous
regions.
There remains a marked difference between the southern and the northern regions in respect
of the economic size of agricultural holdings. The average size of those located in the 20
regions with the smallest size of holding (all situated in the south) declined by just over 2%
between 1993 and 1997. At the same time, it grew by almost 25% in the 20 regions with the
largest size ofholding, allthese being in the north.
3. Horizontal policies
Employment policy andthe development ofhuman resourcesAlthough Member States are responsible for developing and implementing employment
policies, there is a clear need for coordination, elaboration of common objectives and
exchange of information at the Union level. This is the reason why a European Employment
Strategywas launched inthe TreatyofAmsterdam in1997, withprioritybeing given to active
labour market measures. Its most visible component is the ‘Luxembourg process,’ within
which the ‘employment guidelines,’ adopted by the Council each year, are translated into
‘National Action Plans’ (NAPs) in each Member State. These are then evaluated annually in
the ‘Joint Employment Report,’adoptedbythe Commissionand the Council.
The Luxembourg process
The Luxembourg process is based on four operational pillars: employability of the labour
force; development of entrepreunership; adaptability of enterprises and those in employment
and support for equal opportunities. The objective of policy is two-fold: to reduce
unemployment and increase employment, in part to ensure the long-term sustainability of the
European social model. These objectives were confirmed bythe European Councils in Lisbon
and Nice.
In addition, after the Nice European Council, a process for the coordination of national plans
for social inclusion was begun.
XIVAlthough it is difficult to identify the specific contribution of the Employment Strategy, the
favourable employment developments which have occurred in the recent past seemto suggest
that a virtuous circle has been created, in which Member State macroeconomic policies of
stabilityand structuralreformare an important part.
Regional disparities in employment andunemployment
Labour market performance continues to vary widely between regions, which suggests the
need forthedevelopmentofaregionaland localemployment strategy.
Labour shortages are beginning to appear in a number of Member States at the same time as
unemployment remains high, reflecting the mismatchbetweenthe jobs onoffer and the labour
skills available. This requires action both to raise the level of education and training and to
direct it to towards sectors of activity in which the demand for labour is growing, while
ensuring that priority is given to groups at risk. Despite the general increase in levels of
education, too many young people still leave schoolwithout adequate qualifications. There is
also a need to reduce the risk of exclusion of those with low skills from the technological
revolution. All the NAPs include specific measures aimed at target groups for tackling this
problem.
Improvements can be identified in the way Member States address equal opportunities,
especiallyin FinlandandIreland. Nevertheless, morecouldbedone inmanycountries.
2002: Evaluationandnewproposals
In the proposed employment guidelines for 2001, the Commission has focused on achieving
full employment, the role of the social partners, continuing training throughout a person’s
working life and social inclusion. An overall evaluation of the results of the strategy and of
the objectives willbe carried out in2002.
Environmentalpolicy
The pursuit of economic and social cohesion and the protection of the environment are
complementary objectives. Even though environmental protection may initially increase the
costs of production or, more accurately, make them more visible, the effect should not be
overestimated. The cost of implementing all the directives on water and waste treatment as
wellasthe measuresresulting fromthe Kyoto conference should amount toonlyaround 0.5%
ofUnionGDP.
Environmental protection should not be regarded solely as imposing costs on the economy,
but equallyas a means ofimproving the qualityoflife, especiallyinproblemurbanareas.
Higher costs, but also advantagesfor least prosperous regions…
In the case of policies on water and waste, which are critical for environmental protection,
there needs to be considerable investment totackle problems in the cohesion countries and the
least prosperous regions. The Structuraland Cohesion Funds will help cover the cost of this in
lagging regions and bring standards up tothose elsewhere.
XV… for the weakest social groups…
The cost of environmentalprotection, as in the case of implementing the framework directive
on water, will sometimes fall on the weakest members of society, because of the transfer of
some of the costs involved on to users, notably on to households and farmers, under the
‘polluter pays’principle.
The measures involved, however, also contribute to social cohesion, in respect of public
health and in terms of the jobs created. Although the likely effect on employment seems
modest at the Union level, several tens of thousands of jobs could, nevertheless, be created
over the next few years as a result ofthe directives onwater and wastetreatment.
…andfor the candidate countries
The candidate countries face the same problems as the cohesion countries but to a greater
extent, particularly in respect of waste treatment. The Union is already helping to finance the
investment required through ISPA and after accession, this will be one of the priorities for the
Cohesion Fund.
4. OtherCommunity policies
Research and developmentThe Community research and technological development policy (RTD) is focused on the
pursuit ofexcellence in order to strengthen the Union’s position in relation to its international
competitors. In terms of territorial balance, the establishment of a European Research Area
opens up further prospects for integrating researchand regionaldevelopment.
A more even distribution of knowledge…
By requiring the involvement of partners from several Member States, the Framework
Programme helps improving the exchange of knowledge and the joint development of
technologies. The proportionofprojects involving at least one participant froman Objective 1
region has risen from 27% in 1994 to 41% in 1998. In the cohesion countries, however,
participants tend to be located in the centres of excellence in the capital cities or most
prosperous regions.
…greater mobility of researchers…
The cohesion countries are well represented in programmes designed to encourage the
mobility of researchers, many of whom are given an opportunity to spend time in non
cohesion countries’. This, however, should not lead to a brain drain towards central areas,
where research is already concentrated, which could compromise balanced territorial
development inEurope, a problemwhich might also arise inthe candidate countries.
…and a needfor newapproaches in disadvantaged regions
It is important to create in lagging regions the proper framework conditions for research and
innovation. Improvements in the international career opportunities of young researchers and
an increase in RTD resources are not sufficient by themselves to expand their innovative
capacity. Inthese regions, it is important to createmore career opportunities for researchers.
XVITransport policy
The objective of the common transport policy is to ensure access throughout the Union to
suitable transport services whichrespond to user demand.
More efficientuse of resources
With the entry of new Member States, there will be an even greater need to use Community
resources more efficiently, which means better assessment of alternative projects, increased
mobilisation of private sources of finance, greater utilisation of existing capacity,
improvements in the quality of service and more respect for the environment. On this last
point, new technologies, like intelligent transport systems and intermodal equipment, can
radicallyreduce the negative effects oftransport.
The trans-European transport networks
The trans-European transport networks are improving access to remote peripheral regions and
islands, opening up border areasthroughthe construction of new routes across natural barriers
and achieving a better balance ofactivityalong the coastline.
Community measures need to be aimed at ensuring the mobilisation of public and private
organisations and companies to carryout the investment required for constructing the network
defined in the 1996 Guidelines.2It is also necessary, however, to introduce major
modifications to the guidelines. A first step has been made in this direction by including ports
in the plans and other changes are foreseen to equip lagging regions and to improve the
distribution ofthe major traffic flows in the Union. There is also a need to tackle the growth
of goods transport by road which threatens sensitive areas and already congested routes for
long distance haulage, this means putting in place a genuine European freight network, based
so far aspossibleonrailandwaterway.
The continued construction of high-speed lines coupled with a trans-European network of
airports will provide fast international travel which is essential for reducing the territorial
fragmentation of the Union, while the progressive introduction of quality and safety standards
harmonisedattheEUlevelisalso amajor aimofpolicy.
Trans-European transport networks, therefore, have an important effect on territorial
development andregionaldisparities, as wellas onthe distributionofactivity, the functioning
of the labour market and trade flows, as emphasised by the European Spatial Development
Perspective (ESDP).
Energy policy
Energy: an importantfactor incompetitiveness and sustainable developmentThere should be no marked differences between regions in the availability of energy and
prices. Despite the efforts undertaken, however, there is not yet a single market for energy in
theUnion.
2Decision 1692/96/CE.
XVIICommon rules for environmental protection are still in embryonic form and their
implementation could have positive or negative effects on particular sectors of activity and
regions. Sustainable development requires an intensification of programmes for increasing
energy efficiency – but also an improvement in the means for managing and controlling
atmospheric emissions and the application of market mechanisms to encourage this. There is
also a needto introduce legislationwhichencourages the use ofrenewable energysources.
Dependency and the needfor diversification
The extent ofdependence onexternalsources is a constraint ondevelopment inthe Union as a
whole. This dependency, which is set to increase if the use of renewable sources and more
rational energy use are not encouraged sufficiently, could well penalise lagging regions the
most inthe event ofa supplyshock.
Enterprise policy
The Lisbon European Council set the Union the objective of becoming the ‘most competitive
and dynamic, knowledge-based economy in the world.’ To attain such a goal, and to support
employment creation, requires entrepreneurship to be encouraged and an environment
favourable to change and innovationto be developed.
Enterprise policy is intended to help achieve this objective for the whole of the Union,
without distinguishing ap r i o r i between different areas. Nevertheless, certain measures
address problems which particularly affect lagging regions. These include help in accessing
risk and start-up capital (especially for SMEs), policies for the diffusion of innovation and
entrepreneurial best practice, and support for tourism, often a key sector for the development
ofthese regions.
Common fisheriespolicy
The Common Fisheries Policyis focused on four major areas: the conservation of fish stocks,
the restructuring of the fleet, the organisation of markets and fishing agreements with third
countries. While the sector is small relative to the EU economy as a whole (accounting for
only0.2% ofGDP and 0.4% ofemployment in 1997), concentration in coastal and peripheral
areas (including the outermost areas) gives it a particular importance for regional
development. These areas are in many cases disadvantaged, 70% of fishermen and 60% of
totalemployment inthe sector being located inObjective 1 regions in1997.
Because of this concentration, many of the measures supported by the Common Fisheries
Policy, which are intended to strengthen the competitiveness of the sector, contribute to
economic and social cohesion, particularly fishing agreements with third countries as well as
measures on fish farming and processing.
The restoration of a sustainable balance between fish stocks and fishing will necessitate a
significant reduction in capacity, catches and the number of fishermen. Accompanying social
and economic measures to maintain employment in areas dependent on fishing and their
viability (restructuring within and outside the sector, vocational retraining, and so on) will
become increasingly necessary. This is the aim of the Financial Instrument for fisheries
Guidance (FIFG).
XVIIIPART III: Economic and socialcohesion policy: the results
Over the ten years since the reform of the Structural Funds, significant progress has been
made in terms ofconvergence and cohesion in the Union.
Impact ofstructuralpolicy since 1989
Increased financingThe finance made available throughthe Funds almost doubled between 1989 and 1999, rising
from 0.27% of EU GDP to 0.46%. The transfers were most pronounced in the cohesion
countries, the main beneficiaries, equivalent to over 10 years to 1.5% of GDP in Spain, 3.3%
in Portugal and 3.5% in Greece. In Greece and Portugal, Community transfers represent over
10% of investment.
Increased financial andgeographical concentration
Following the decisions taken by the Berlin Council in the perspective of the first stages of
enlargement, the amount of finance allocated to cohesion policy in the present 15 Member
States will be reduced by 2006 back to the level in 1992 – 0.31% of GDP of the present
EU15.
The concentrationoffinance in lagging regions will, nevertheless, enable the average amount
of aid per head to be maintained for the period 2000 to 2006 at the same level as in 1999.
Overall, 60% of the total of the Structural and Cohesion Funds will be allocated to Member
States, which, together, account for no more than 20% of EU GDP and 70% will be
concentrated in lagging regions.3
The geographical concentration of Structural Fund intervention on the regions most in
difficulty has never before been as high, only 41% of the EU15 population living in regions
eligible under Objective 1 (lagging regions) and Objective 2 (regions undergoing
restructuring) in 2006. Nevertheless, concentration is limited, on the one hand, by the high
degree of fragmentation of areas eligible under the new Objective 2 and, on the other, by the
lack ofcoherence with the map ofState regional aids.
The impact of structural policies: positive but uneven effects
Between 1988 and 1998, the difference in income per head between Objective 1 regions and
the EU average narrowed by one-sixth, GDP per head in PPS in the former increasing from
63% ofthe average to 70%. Within this generaltrend, a number ofregions, in particular those
in Ireland, the new German Länder and Lisbon, have performed better than the average.
Nevertheless, rates of employment and unemployment at the regional level have shown little
signofconverging.
In the case of Objective 2 and 5b regions, available data seem to indicate that employment
and unemployment tend to have changed in a more favourable way than in the rest of the
Union. In particular, the average unemployment rate in Objective 2 areas declined by 2.2
percentage points over the period as compared with1.3 points inthe Unionas a whole.
3Regions whereGDP per headis below75% oftheEUaverage.
XIXOver the period 1989 to 1999, structural intervention had a significant effect in Greece and
Portugal, GDP atthe end ofthe period being anestimated 9.9% higher inthe former and 8.5%
higher in the latter as result of intervention. The effect was less in Ireland (3.7%) and Spain
(3.1%), the Structural and Cohesion Funds forming a smaller proportion of GDP there. This
significant contribution to growth was accompanied by more limited effects on the level of
unemployment especially inIreland and Spain.
Strengthening factors underlying competitiveness
The Structuraland Cohesion Funds do not only stimulate demand by increasing income in the
regions assisted. By supporting investment in infrastructure and human capital, they also
increase their competitiveness and productivity and so help to expand income over the long-
term. Structural intervention, therefore, tackles the root causes of regional imbalance and is
aimed at strengthening the factors which provide the basis for sustained growth. Improving
systems of transport, supporting SMEs, RDT and innovative capacity, strengthening
education systems and improving the environment have, therefore, been the main focus of
intervention.
Transport infrastructure has expanded significantly, investment co-financed by the Structural
and Cohesion Funds achieving time savings of, for example, 20% in Spain, through an
improvement inthe motorwaynetwork, and 70% inPortugalinthe case ofrail freight.
Around a sixth of firms located in Objective 1 regions were recipients of support to SMEs,
creating over 300,000 new jobs. In the case of Objective 3, the rate of placement of people
who had followed a training programme varied between 25% and 50% according to the
countryandthegroupstargeted.
Improving employability in theUnion
While the human resource measures taken under Objective 1 have contributed to the
development of the regions concerned, those taken under Objective 3 have helped young
people, the long-term unemployed and those threatened by exclusion to find employment.
However, the modest scale of Community funding in relation to national expenditure has
often weakened the specific targeting of measures in a context in which national employment
priorities tend to take precedence. Although co-financed measures tend to be more effective
the more theyare concentrated onthose who have the greatest difficulty finding employment,
targeting on the most vulnerable groups has remained limited. Nevertheless, over the period
1994 to 1999, the placement rate of recipients who participated in training measures
increased, the rate varying between 30% and 80%. As regards Objective 4, which had a slow
and difficult start, some of the evaluations undertaken suggest that the benefits were divided
between an improvement in the competitiveness of firms and an increase in the skills of some
categories ofworker.
Community Initiatives: their cross-border and transnational nature increases the added value
for theCommunity
Community Initiatives have enabled a common approach to recurring problems in the Union
to be developed. The development of cross-border and transnational cooperation, under
INTERREG, and the strengthening of partnership at local level, which is a feature of
LEADERandURBAN, areofmost significance intermsofCommunityaddedvalue.
XXStructural Funds procedures : increased efficiency of publicintervention
Medium-termstrategic programming has had a significant influence on national and regional
development policies.
The StructuralFunds have also helped spread the use ofevaluation ofpublic intervention and
of linking the results achieved more clearly to the finance allocated. The advances made in
this respect, however, varybetweenMember States.
Community assistance is an effective means of mobilising private capital as well as loans,
especially from the European Investment Bank, as witnessed by major infrastructure projects
inGreece.
The principle of partnership has enabled local elected representatives, social and economic
organisations, non-government organisations and associations to be more involved in
decision-making. However, apart from the formal respect for the obligation, the extent of
partnership inpractice has differed greatly.
Financial procedures have often proved complex and a source ofpayment delays.
Prospects forthe 2000-2006programming period
A renewed effort toensure the added-value of Community intervention
With the new regulatory system for the 2000 to 2006 period, the Commission has attempted
to increase the added-value of Community intervention and to improve its visibility on the
ground. Four elements are worth highlighting:
– a better formulation of Union priorities with the adoption by the Commission of
guidelines for Structural Funds intervention, even if these guidelines remain
‘indicative’ at the request ofthe Member States;
– the obligation, as clearly indicated in the legislation, to mobilise partnership at
different stagesofthe programming process ;
– the formulation and diffusion of ideas on Community policy, notably through the
establishment of the European Spatial Development Perspective (ESDP), published
in1999 ;
– taking into account the employment strategy, to reinforce and to improve jobquality.
Prospects for Objective 1 regions
Because ofthe slight reduction in assistance in relation to the preceding period decided bythe
Berlin European Council, the effect of structural intervention on economic growth will be
smaller than in the past, especially in Spain, Portugal and, above all, in Ireland. The effects on
investment, however, will remain significant, especially in Portugaland Greece, giving rise to
long-termgains inproductivity.
Inother Objective 1 areas, especiallythe new GermanLänder and the Mezzogiorno, the effect
of the Structural Funds on the supply side should be significant, though smaller than in the
previous period.
XXIA strategyfocused on thefactors underlying competitiveness
The Communityguidelines have made it possible to adjust the focus ofregionaldevelopment
strategies for the 2000 to 2006 period. In general, there is increased emphasis on structural
factors underlying competitiveness which determine the long-term growth of Objective 1
regions, inparticular, researchand innovation, informationtechnologyand humancapital.
Other modifications involve, for example, an improved balance between means of transport in
favour of rail, a reduction in direct payments to firms and greater attention given to
environmental considerations and sustainable development in the formulation of policy, to
urbanareas and to equalopportunities.
The challenge of more effective management
The role of evaluation was strengthened by the 1999 reform, especially through the
introduction of the performance reserve which will be allocated in 2003 on the basis of the
results of the mid-term evaluation. Evaluation has, therefore, become a management
instrument in its own right.
It is premature to draw lessons from the simplification resulting from the new regulatory
system. Indeed, the process of approving programmes by the Commission has not yet been
completed. The Commission’s role has been refocused on the strategic aspects of
programming. Accordingly, in the negotiations with the Member States and regions
concerned, it examines the priorities proposed particularly carefully while decentralising
implementation largelyto the Member States and the relevant administrative authorities.
A first assessment of the effects of decentralisation will only be possible after a few years.
The focus of this should be on verifying whether decentralisation has benefited Member
States and regions and on identifying the measures which need to be taken in order further to
increase simplification inprogramming and management.
XXIICONCLUSIONS AND RECOMMENDATIONS
IntroductionThe evidence examined in this report shows that over the previous programming periods
(1989-93 and 1994-99) Community cohesion policies have had some notable success. This is
perhaps most visible in the case of the regions where development is lagging behind, where
there has beena generalprocess ofcatching up ineconomic and socialterms.
At the same time, looking ahead to the next period of Community regional polices, after the
end ofthe current planning period in2006, the analysis in this report suggests the need to take
particular account of:
– the important increase in social, economic and territorial disparities resulting from
enlargement;
– the far-reaching effects of ongoing social and economic trends such as globalisation,
the radical transformation of the European economy towards knowledge-based
activities, the changing structureofpopulationand so on.
In addition, a future reform of cohesion policies should take the opportunity to increase the
added value and the visibility of Community policy. Ideally, reform should be accompanied
by a strengthening of the effort to ensure that the other Community policies contribute to
cohesion as much as possible, consistent with the pursuit of the objectives which they are
principallydesigned to achieve.
Drawing onthe analysis ofthe report,the following sections attempt to set out the main issues
to be addressed in order to prepare the basis for a debate on the future of cohesion policies.
Here, it is important to place the main issues in their correct logical order. Past experience of
reforming cohesion policy reveals an increasing tendency for discussion at Member State
(Council) level to concentrate on financial aspects. For example, in the negotiations on the
financial perspectives for 2000 to 2006 (‘Agenda 2000’), discussions on cohesion policy
probably focused more on the amount and division of funding between Member States than
on the content of the policy. Arguably, a more logical order would be to begin with the
content - and, in particular, to identify priorities for future cohesion policies - before going on
to address issues relating tothe deliverysystemand financialallocations.
Promoting the factorsdetermining convergence
To remain credible, Community cohesion policy must support those actions that are most
likely to contribute to the reduction of the economic, social and territorial disparities in the
Union. A system based simply on fiscal transfers is not enough and the Union must support
the factors that play a decisive role in promoting competitiveness and help to reduce the
profound imbalances affecting its territory. In short, supporting investment in physical and
human capital must remain the key objective of Community cohesion policy before and after
enlargement.
Beyond this broad statement, it is not easy to identify the priorities, especially in the longer-
termperspective ofthe period post-2006. Forexample, a decade ago few could have imagined
the role and significance that the new information technologies would assume in today’s
economy and society. Today, it is difficult to imagine an economic and social development
strategywhich would not have the promotion ofthese technologies as a major component. In
XXIIIspite of the difficulties, there are, at the same time, certain points of reference for considering
future priorities.
In general, it is evident that the level of productivity is a key factor in the process of growth
and the convergence, in real terms, of national and regional economies. Productivity is
determined to a major extent by the quality of human resources, physical infrastructure
endowment and the capacityfor innovation.
The qualityofthe labour force is determined, inpart, bythe levelof education and, in part, by
the updating of knowledge and skills throughout working life. The evidence suggests that
matching the available skillsofthe workforce with those required byan economy undergoing
fundamental change has become a major problem. The demographic outlook, and its likely
consequences in terms of falling numbers in the labour force in the next decade in the EU15,
can only add to this problem, although the demographic imbalances are less marked in a
Union of27 in view ofthe rising numbers of young people in the candidate countries. Making
the best use ofallits humanresources is clearlya major long-termchallenge tothe Union.
An adequate endowment of physical infrastructure of a high standard remains a necessary
condition for economic development. Within the Union, while the regional gaps have closed
in certain sectors such as telecommunications or road transport, more remains to be done in
others (for example rail transport, centres of research, etc), especially in the least developed
regions. In the candidate countries, the information is incomplete but the assessments
available at present point to major gaps in key economic infrastructures. Priority needs to be
given to promoting the development of the major trans-European networks in transport,
telecommunications and energyand their connectionwithregionalsecondarynetworks.
Investment in knowledge and in new communication technologies is likely to continue to be
the basis of long-term growth in Europe. This is a positive factor for the Union as a whole,
although the new activities associated with the knowledge society are tending to concentrate
in certain urban centres giving rise to a dense network which inter-connects the economies of
Europe’s centralheartland. In order to avoid a widening of the imbalance between centre and
periphery, a long-standing feature of the EU15, ongoing investment in the new technologies
will be needed in order to link the peripheral regions into the major European networks,
including the ‘new periphery’ resulting from enlargement to the East and South. Moving to a
knowledge based economy and societydepends also on an integrated approach combining the
various dimensions of knowledge: education, training, research and development, innovation
and the informationsociety.
Finally, strengthening the capacity to innovate requires a greater focus on the environment in
which businesses operate. In particular, there is a need to improve the interaction between
firms, especiallysmall firms, and researchcentres, universities and public bodies.
A key reference pointforfuture actions: environment and sustainable development
Efforts to raise productivity and promote growth for one generation must not, however, be at
the expense of the next. In other words, the development path followed must also be a
sustainable one , a generalpoint which needs to be reflected inallinvestment decisions.
A key consideration is that economic development can only be secured in the long-term by
the prudent use of natural resources. In this regard, the availability and quality of water areparticular problems in the Mediterranean. Cooperation between countries is one way of
XXIVaddressing water problems but certainly not the only one. Investment in waste water
treatment,waterpricing,environmentalcontrolofemissions intothewaterareothers.
In addition, it is important to encourage investment which serves to limit the damage which
industry, agriculture and households can do to the environment, which means, in particular,
the construction of facilities for treating wastewater and household and industrial waste.
Investment in this area is a priority in the candidate countries.
Identifying priorities foreconomic and socialcohesion
According to the Treaty, the Community must act ‘to promote overall harmonious
development’ with the particular aim of ‘reducing disparities between the levels of
development of the various regions and the backwardness of the least favoured regions or
islands, including ruralareas’(Article 158).
Based on the analyses in the report with regard to the long-term problems as well as the
opportunities, facing the Union, it is possible to identify certain priorities with an economic,
socialorterritorialdimension for future cohesionpolicy.
Among the priorities which have an important territorial dimension ,the following are
suggested for illustrative purposes:
•The least developed regions. This remains the principal priority of EU cohesion policy
and the analysis of the report confirms that there are major gaps in income and opportunity
between the least developed regions and the rest of the Union, although a process of
gradual convergence is discernible within the EU15. With enlargement, however, the gaps
widenonce again.
– With the reduction of gaps in endowments in certain types of infrastructure in
the less developed regions of the EU15, less emphasis will need to be placed
on basic investment and more on raising business competitiveness. Basic
infrastructureneedsremainconsiderable inthecandidatecountries.
– The challenge for all of these regions in an enlarged Union is one of creating
an innovative environment based around a qualified workforce, research and
development andthe informationsociety.
– Even if the human resource gaps are closing, eliminating the weight of the past
intermsofthe lowlevelofqualificationoftheadult labourforce is a long-term
challenge in the EU15. In the candidate countries, the challenge is to adapt
rapidlythe workforceto a modern market economy.
•The urban question , which is at the heart of economic, social and territorial change.
Cities are a key location for the pursuit of a strategy for cohesion and sustainable
development.
– Many kinds of disparity are concentrated in cities, where problem areas in
which exclusion and deep poverty prevail are in close proximity to areas of
highprosperity.
– It is inthe urbanareas where the environmentalpressures are the most acute.
XXV– Cities are economic centres for the development of the surrounding suburban
and ruralareas.
– Networksof large cities canstimulate a more balanced and polycentric formof
development inwhichmedium-sizedtownsandcitiescanplayakeyrole.
•The diversification of rural areas. These areas continue to experience large-scale
changes. Their future depends in large measure on their links with other areas, including
towns and cities.
– Agriculture is no longer a major source of employment though it continues to
be the main user of rural land as well as the key determinant of the quality of
the countryside and the environment.
– The revitalisation of rural areas and the maintenance of population depend on
the development ofnew activities outside agriculture, notablyin services.
– Cohesion policy must play the major role in the diversification of the rural
economy, complementing rural development policies financed by the CAP
which is focused on adapting agriculture to new economic realities as well as
onstrengthening the competitiveness ofruralareas.
•Cross-border, transnational and interregional cooperation. This is a priority par
excellence for the Union in order to promote integration and reduce the economic and
social fragmentation created by national borders. The internal market and cross-border
cooperation have enabled border regions to become more integrated with the rest of the
Union.
– The internalborder regions ofthe EU15 have, with the support ofINTERREG,
developed new forms of cooperation which the elimination of frontiers alone
would not have been sufficient to create. Their social and economic situation
has improved significantly over recent years, with closer integration into the
internal market.
– With enlargement, there will be a renewed need for cross-border measures to
promote cooperation betweenthe candidate countries and the Union, as well to
assist the regions within the candidate countries that share common frontiers
with third countries to the east and to the south, including the Mediterranean
rim.
– The Unionshould promotetransnationalcooperationareas, within a framework
adapted to the development of networking between regional and local
economies and to new forms ofadministration.
•Areas undergoing industrial restructuring. The return of sustained growth across the
European continent has to some extent hidden the often serious territorial and regional
effectsofindustrialrestructuring.
– Job losses are continuing in many industries such as textiles, cars, coal and
steel production, as well as some service sectors. In this regard, the
liberalisation of trade in 2005 for textile imports represents a particular
challenge.
XXVI– Where such sectors are concentrated geographically, there can be severe
consequences for the local and regional economy, with the need to promote
new opportunities and the retraining ofworkers who lose their jobs.
– While encouraging economic diversification, territorial policy should also take
account ofthe distributionofactivityacross the different parts ofthe Union.
•Areas with severe geographical or natural handicaps . In certain parts of the Union,
efforts to achieve full integration with the rest of the European economy run into difficulty
because ofparticular geographicalor naturalhandicaps.
– These areas – outermost regions, islands, mountain areas, peripheral areas,
areas with very low population density – are often a key component of the
Union’s environmentaland culturalheritage.
– There are oftenacute difficulties in maintaining population.
– Additional costs for basic services including transport can impede economic
development.
Among the priorities under economic and social cohesion policy relating to employment and
socialpolicy, whichhavebothageneralandregionaldimension, are:
•More and better jobs . the rate of job creation in some parts of the Union remains low,
while significant skill gaps persist to constrain economic and social convergence between
regions.
– A more strategic approachto employment policyacross the EU could provide a
valuable framework for coordinating Community intervention. Negotiations
over current ESF programmes have demonstrated the value of a strategic
dimensionasprovidedbytheEuropeanEmployment Strategy.
– Employment policy needs to adopt a proactive approach to anticipate the
effects of industrialchange.
– There needs to be more targeting on the specific requirements of both
individuals and particular regions, given that a major factor underlying
disparities in prosperity across the Union is the difference in the qualifications
and skills ofthe labour force.
•Supporting the New Economy and the Knowledge Society . The impact of the new
economy is far-reaching in terms of both the pace of change and its consequences for
policy. The dangers of an emerging digital divide highlight the need to tackle risks of
exclusion fromthe informationsociety.
– Life-long learning is an essential response to economic change. It is important,
however, that access to this is not confined to those already in the most highly
qualified jobs.
– There must be a more affordable access to the tools of the information society
accompanied byICT literacy.
XXVII– Over the past three decades, the level of educational attainment in the Union
has increased markedly, especially in the least developed regions. But there
remains scope for improvement in their education and training systems to
reduce the emerging digital divide. This applies also to the candidate countries
where vocational training systems in particular are often poorly adapted to the
needs ofnew sectors.
•Promoting social inclusion : The level of poverty and social exclusion remains
unacceptably high in the European Union. Many of the causes can be traced directly to the
labour market and to the failure of policy to address the needs of those without the skills
necessarytocompete forjobs.
– Better access to the labour market, creation of new employment opportunities
and skill development are of major importance in the fight against social
exclusion.
– In order to address the deep-seated problem of pockets of social exclusion,
labour market policies are becoming increasingly localised, involving broader
local partnerships and responding to specific local needs. Local employment
development, the ‘third element’ in the European Employment Strategy, could
be strengthened in future Communitypolicy.
– The concept of policy additionality (extending or deepening national policy)
must be applied to social inclusion policies and could be supplemented with the
concept of ‘ policy territoriality’ aimed at increasing the spatial concentration
ofscarce resources to achieve a greater impact.
•Equality of opportunity . Discrimination in all its forms is a waste of talent and resources
inasituationwheretheevidencepointstothegrowing needtomake the best use ofa work
force set to decline in the coming years. Equal access to the labour market is both a
fundamentalright and a sound economic policy.
– A strong policy commitment to the creation of a labour market open to all is
essential to cohesion.
– Policies to promote and support the participation of women in the labour
market are a keypartofthe employment ratetargets set at Lisbon.
– The most significant progress will come about reducing narrowing the
employment gap between men and women.
While the above target areas are not entirely new in themselves, theyrepresent a difference of
approach compared to that which has been characteristic of the priority ‘Objectives’ up to
now. It is an approach inspired to some extent by the experience of certain Community
Initiatives such as URBAN or LEADER which have shown how efforts focused on a clearly
defined European priority can, if deployed at the right level, attract a great deal of interest,
generate new thinking and activities. An aspect not to be ignored is that these actions, where
they have been operated successfully, have probably done most to create a positive image of
Union cohesion policy among its citizens.
XXVIIIThe priorityareas should not be seenas a simple substitutes for the existing Objectives. Given
the rapid pace of economic change, and the challenges that it poses, the formulation of future
policy - and perhaps the territorial dimension in particular - needs to take account not only
existing problems but, more importantly, to anticipate future ones. Accordingly, there is a
basic need for a cohesion policy which has a more global and longer-term vision and which
seekstofollowaproactiveapproach. Thiswouldalso meanthat futurepolicywould focus not
just onproblems but also onopportunities for economic and social cohesion and the reduction
ofterritorialimbalances.
This was the kind of approach that characterised the work undertaken by the Member States
and the Commission on the European Spatial Development Perspective (adopted in Potsdam
in 1999) which had as an objective the promotion of more balanced territorial development in
Europe. Inspired by this work, the Commission could at a later stage propose a strategy for
territorialdevelopmenttothe other institutions ofthe Unionas a basis for future policyin this
field.
In sum, future cohesion policy should be targeted on the factors that promote convergence
and ona limited number ofpriorities of Community interest, in order to achieve concentration
ofscarce resources.
How should the delivery system for future economic and social cohesion policy be
organised ?
While Agenda 2000 achieved many advances in improving the delivery system which are set
out in the report, the new circumstances of enlargement, the reshaping of priorities and the
need to continue to the drive to achieve greater value-for-money call for further reflection on
the means by which the policy is delivered. At this stage it is only possible to address the
broad issues and consider options. The third cohesion report in three year’s time would have
the role of specifying more clearly how the next generation of cohesion policies should be
delivered.
The principal issues addressed in the following sections are as follows:
– the effective targeting (‘concentration’) of the limited resources available in an
enlarged Union
– the particular challenge ofenlargement inthe current period
– cohesionpolicy inanenlarged Unionafter 2006, including certain financialaspects.The effective targeting ofthe limited resources available in an enlarged Union
The starting point is that a future cohesion policy needs to be able to address not onlythe new
Member States and regions, but also the regions in the present EU15 where the analysis of the
report confirmthe existence ofoftenprofound regionaland territorialdisparities.
It is clear, however, that when the next programming period begins in 2007, the presence of
new Member States composed almost entirely of regions with a general need for support for
economic development, will necessitate a massive refocusing of the effort in order to achieve
a significant catching up within a reasonable period. At the same time, the least developed
regions ofEU15 will have ongoing needs even if theyappear less severe in relative terms.
XXIXThe basic principle must be the same as in the past in that limited resources must be
concentrated on a limited number of problems of Community interest and areas, in order to
achieve the necessarycritical mass.
Maintainingpriority support forregionswhere development islagging behind
For the less prosperous regions, the maintenance of direct zoning (see box), for reasons of
objectivity and transparency, represents the most appropriate method for concentrating
supportonregions most indifficulty.
The use of GDP per head (measured in terms of purchasing power standards - PPS) as a
criterion and its level of application (NUTS 2 regions) still seem to be appropriate, as
indicated by the comparative analysis presented in the first part of the report. For reasons of
transparencyand efficiency, however, there is a need to determine the principles which should
applyto the definitionofstatisticalterritorialunits – ie the regions.
Howshould the threshold for eligibility beset?
The eligibility threshold (currently set at 75% of the EU average GDP per head, see box)
needs to be decided on the basis of the following two considerations. First, enlargement will
automatically reduce the average level of GDP per head in the Union substantially. On the
latest data available (1998), the applicationofa threshold of75% ofGDP per head in a Union
of 27 Member States would reduce the population in the present EU15 eligible for Objective
1 assistance by more than half. This raises the question of how to treat regions in EU15 that
have improved in relative terms even if underlying conditions are the same as before
enlargement.
Secondly, disparities between lagging regions in the enlarged EU would be wider than at
present, with some regions having a level of GDP per head of three-quarters of the EU
average and others only around a quarter. The number of regions involved is not only greater,
they have more profound needs.
XXXMethods of definingeligible regions and areas
The different Objectives and Community Initiatives of the Structural Funds are currently
targetedeither vertically(regionally) or horizontally(bytheme).
Horizontaltargeting applies to the present Objective 3 financed by the European Social Fund,
which has become the Community instrument for supporting the European Employment
Strategy at national level. Following this approach, actions aimed at improving national
education and training systems can be supported across the whole of the Union, within the
limit ofthe resources available.
A regionaltargeting approach begins with the definition of a list of eligible regions and areas.
Actions can be supported only within these localities. In practice, two methods have been
applied inthis respect:
Direct regional zoning
The Commission constructs an exclusive list of areas eligible for support. These can be
defined in cooperation with the national authorities, as in the case of the present Objective 2,
orbythe Commissionalone onthe basis ofstatisticalcriteria applying tothe Communityas a
whole, as for the current Objective 1.
This method enables intervention to be concentrated in eligible areas in a direct and
transparent way. In the case of Objective 1, the use of the criterion of low GDP per head
(defined as less than 75% of the EU average), expressed in terms of purchasing power
standards, which is a simple, comparable and relatively robust indicator, has enabled the list
ofregions receiving assistance during the 2000-2006 periodto be drawnup objectively.
Direct zoning, however, lacks flexibility in the face of changing regional circumstances,
which, in the case of Objective 2, has led to the Commission being directly involved in the
definition of very detailed maps, a task for which its competence and the legitimacy of its
involvement are in doubt. In particular, outside the larger, least developed regions of the
Union, the Commission has insufficient statistical and other information necessary to identify
problem areas, a difficulty which has been compounded by the increasing complexity of the
problems themselves and their spatialdistribution.
Indirect zoning
In this method, eligible areas are decided by national governments on the basis of a set of
parameters established bythe Commission. This is the approach adopted bysome Community
Initiatives.
Indirect zoning has the advantage of being flexible and can resolve difficulties experienced
under Objective 2, so long as the resources available attain the critical mass needed to be
effective (as inthe case ofURBAN). This method can also be applied to horizontally-targeted
policies, and some Member States have chosen on their own initiative to introduce regional
targeting of intervention under Objective 3.
Insofar as there is cofinancement by the state, it is important that state aid rules (both
geographicaland sectoral) are respected.
XXXIFour options for determining eligibilityand temporary support
Inthe light ofthe foregoing, the exercise of Communitycohesion policy in relation to lagging
regionscouldtakeoneofthefollowing fourforms:
– the application of the present threshold of 75% irrespective of the number of
countries joining the Union. This option on its own would eliminate a large number
of regions in EU15. Their future eligibility for EU support would depend on the
priorities and criteria for supportoutside the least developed regions.
– the same approach, but where all regions above this threshold but currently eligible
under Objective 1 should receive temporary support (phasing-out), the level being
higher the closer their GDP to the eligibility threshold. Two levels of temporary
support could be envisaged, one for regions which, because of the extent of their
convergence at the end of the 2000-2006 period, would no longer be regarded as
having lagging development in an EU15, the other, set at a higher level, for those
whichwouldhavebeenbelowthe75%thresholdwithoutenlargement;
– the setting of a GDP per head threshold higher than 75% of the average, at a level
which would reduce or even eliminate the automatic effect of excluding those
regions in the EU15 simply because of the reduction in the average EU GDP per
head after enlargement. It should also, however, be set at a level which excludes
those regions which would no longer qualify at the end of the current programming
period inanEU15 without enlargement;
– the fixing oftwo thresholds ofeligibility, one for the regions in EU15 and one for the
candidate countries, and leading de facto to two categories of lagging region. This
could have a similar result to the previous solution in financial terms in a situation
where the aid intensityper head fromUnion funds is related to regionalprosperity.
A further consideration relates to cofinancing rates (the ratio of Community to national
support). After enlargement, the prosperity gap within the group of regions defined as least
developed would be so large that a specialmaximumco-financing rate might be need to be set
(relatively high) level to reflect the lower prosperity, and national budgetary capacity, of the
verypoorest Member States concerned.
A distribution offinance according toobjective criteria
In the light of the needs, it would be difficult to sustain the case for a reduction in the
resources allocated to the lagging regions – including any temporary support – as a share of
the total funds available.
The essentialquestion is that ofhow to ensure that the distributionof financial resources is as
objective as possible according to needs. The decisions in this field under Agenda 2000
reflect considerable progress with regard to the use of objective criteria applied across the
Community, at least as far as the least developed regions are concerned. This was one the
more significant outcomes of the implementation of Agenda 2000. This way of proceeding
should be maintained inthe future,asamajorelement ofthecohesion‘acquis.’
XXXIIBut anumber ofquestions need to be addressed, including the following:
– Should the existing criteria which have been used - population, regional and national
prosperity and unemployment - be extended in the next round to include the
employment rate, given the present prospects for the labour market and the
conclusions ofthe LisbonEuropeanCouncilonthis?This is a question to consider in
the light of the way the level of structural unemployment develops in Objective 1
regions over the next few years. At present, many of these regions still have a very
highrateofunemployment.
– Should the structural gaps between the regions and the Community average become
partofthecriteria forallocating funds?
– Should the performance reserve become a more significant part of the Structure
Funds? It would almost certainly be desirable to strengthen the conditionality
attached tothis instrument to achieve the expected results, including in relation to the
pursuit ofgood financialmanagement.
Maintaining the momentum in favour of an objective methodology depends heavily on the
joint efforts of the Commission’s statistical office, Eurostat, and national statistical offices to
improve the quality of the harmonised data at the Community level. The extension of data
series to cover the candidate countries, and to make available data on purchasing power
standards at regionallevel, are major priorities for the success of future exercises to determine
thenext list ofregions inwhichdevelopment is lagging.
Forthe rest ofthe territory: indirect zoning?
Lagging regions are not the only ones with structuralproblems. Cohesion policyalso needs to
continue providing support to other parts of the Union to encourage actions of common
interest. But in the light of the greater limitations on resources compared to the least
developed regions, anappropriate means oftargeting is essential.
In the light of the problems that have emerged in the direct zoning of aid under Objective 2
for the period 2000-06, it would seem that the process of concentration could be more
satisfactorily achieved by opting for an indirect zoning method. Here, the defining feature is
that the concentration of resources is an integral part of the programming process (see Box).
The Commission would no longer set rigid eligibility criteria, only a lower limit on the level
of overall public financial support – from Community and national sources - in order to
ensure that the resources mobilised achieve the critical mass to have a real impact (as under
the URBAN Initiative).
In such circumstances, the programming of the different priority domains would need to be
undertaken on the basis of an allocation of resources by Member State. There are a number
ways in which this could be done, but the simplest would probably consist of a national
allocation according to population (outside the least developed regions) adjusted by an
appropriateindicator,orindicators,ofsocio-economic conditions. Onthe basis ofthe national
allocation the Member States would programme actions at national and regional level,
drawing from a limited number of the priority areas of the sort illustrated above. A strategic
vision of the priorities and opportunities drawn up by the Commission with regard to the
subjects of Community interest would play an important role in setting the efforts in eachMember State in a Community context.
XXXIIIConsideration also needs to be given to the national and/or transnational methods of
programming, focusing especially on the role of the Member States and the Commission, on
the conduct of partnership, on the techniques required for territorial analysis and on the
criteria for guiding Communityaction.
Particular cases
The present border regions in the Union have in general reached much the same level of
development as the rest of the Union, as shown in Part I of this report. This fact demonstrates
the value of past Community intervention in this area. There is therefore a case for including
cross-border cooperation programmes in the general programming of the Structural Funds
(“mainstreaming”).
Borderregionswithlaggingdevelopment would,ofcourse, beeligible forsupport inthe same
wayas anyother region iftheycomplywiththe generalcriteria adopted.
Theoutermost regions oftheUnionhaveparticularhandicaps as result oftheir distance from
the rest of the Union and their special position is reflected in the Treaty. Article 299(2), as a
policy instrument, allows the European Union to maintain and reinforce actions to promote
the integration of the outermost regions into the Community , taking account of their unique
character. To this end, in March 2000 the Commission established a strategy for sustainable
development inthe outermost regions. It has already introduced new initiatives in the fields of
StateAids, agriculture, the StructuralFunds, tax and customs policy, as wellas promoting the
co-ordination of the Structural Funds and the European Development Fund in the areas
containing these regions. The Commission has undertaken to consider how their needs should
be best reflected in future cohesion policies.
The particularchallenge of enlargement inthe current period
Since the reform of the Structural Funds in 1988, the management of Community cohesion
policyin terms of monitoring, evaluationand controlhas beensteadilyreinforced.
This is the context in which the candidate countries are preparing to join the Union. At
present, the pre-accession instruments are assisting their preparations, while the PHARE
programme will in the future devote a large part of its resources to Objective 1 type
programmes, within a medium-term planning framework, which although ‘indicative’ will
prepare the way for the overall strategic programming of future Community support from the
StructuralFunds.
The Commission must take all necessary steps to ensure that, as in the case of the EU15,
programmes take account of the situation and the specific difficulties in the new Member
States. It should aim to help the authorities concerned to define their programmes in the light
ofCommunitypriorities.
The question of theadministrative capacity of thecandidate countries
The implementation of regional development policy is a new task for the authorities in the
candidate countries, which have limited funds at their disposal. Indeed, there is no tradition of
such a policy, and the decentralisation which it implies, in countries used to centralised
planning arrangements.
XXXIVThe process of administrative construction (or 'institutional building') is therefore very
important, especially as compared with previous occasions of Union enlargement, when all
that was required was the simple adaptation of policies and national legislation to the need to
implementtheStructuralFunds.
The first objective is to create a policy at the national level. This was the subject of a special
assistance programme (SPP) enabling the candidate countries to prepare, with the support of
PHARE, forthe implementationofthe StructuralFunds byestablishing a competent authority
and the necessary procedures, particularly for coordination between Ministries. Budgetary
procedures also need to be put in place to enable them to co-finance programmes and to
manageandcontroltheuseofCommunityresources.
There is a need, in addition, to support decentralisation, which is related to the general effort
to achieve three major objectives – the consolidation of democracy, the development of
partnership and an increase in economic efficiency.
The second aspect is the definition of an intervention strategy aimed at ensuring the effective
use of Structural Fund resources and at reducing development disparities in global terms and
withincountriestoavoidtheriskofexcessiveconcentration.
The candidate countries also have to build the administrative capacity to define strategies,
prepare programmes and manage the corresponding budgets, particularly the funds which
come from the Community budget, under the same conditions as the present Member States.
During the accession negotiations, the Commission will examine very closely the ability of
the candidate countries to meet all the conditions required for them to be able to receive
financialtransfers.
Thefinancial resources up to the end of 2006
Given that there will be a number of new Member States during the current planning period
2000-06, there are certain matters to be considered in relation to finance during this period.
The first relates to the financial perspectives until 2006 decided by the Member States at the
European Council in Berlin, including a package to support both interventions in EU15 as
well as in the candidate countries for the period before and after accession. After the
EuropeanCouncil inNice in December 2000, it seems likely that the first accessions willtake
place in 2003-2004. This enlargement scenario differs from that which was the basis of the
Berlin decision. It will therefore be necessary to take account of the effective date of
accession of new Member States. A phasing-in system may be necessary for the assisted
regions in the future Member States, where Structural Funds would be progressively
increased over time, in line with their capacity to absorb aid, as was indeed the case during
thetwo previous planning periods.
A second matter concerns the distribution of resources between the Cohesion Fund and the
StructuralFunds. These funds will, in effect, succeed ISPA, in the first case, and PHARE and
SAPARD, in the second (with a ratio at present of one-third and two-thirds, respectively, in
termsoftheir financialweight). Allocating a higher proportion, sayone-third, tothe Cohesion
Fund seems to be justified by the needs of the countries concerned in respect of transport
infrastructure andthe environment.
Two other considerations argue for a larger weight being accorded initially to the Cohesion
Fund in the candidate countries in relation to the proportion allocated to the present Member
States. First, a management-by-project approach might prove to be more suited to the
XXXVauthorities who still lack programming experience; secondly, the high rate of co-financing
and the fact that the principle of additionality does not apply to the Cohesion Fund would
facilitatethe absorptionofCommunityfunding.
The distribution of Structural and Cohesion Fund resources between the new Member States
will be determined according to the same principles, methods and objective criteria as applied
tothe present Member States.
Cohesion policy in anenlarged Union after2006, including certain financialaspects.
As the report explains, important modifications to the different aspects of the management of
cohesion policy were made during the adoption of Agenda 2000. These were aimed at
increasing decentralisation, promoting partnerships and integrating evaluation more
effectively into the decision-making process. More rigorous financial management and
control, based on a clearer and more meaningful division of responsibilities between the
Member States and the Commission, was also introduced. On this last point, the objective is
to reduce significantly the incidence of fraud, but above all of irregularities which represent
the overwhelming majorityofthe cases brought to the attention ofthe Commission.
The new system is only now beginning to be applied. The next Cohesion Report will contain
a first assessment of results of the changes, but certain elements can already be outlined,
which need to be further examined in the context of the preparation of the new planning
period after 2006.
In relation to partnership , there has been a growing tendency to decentralise decision-
making as regards national and Community policies. There is a undoubtedly a need to
strengthen the role of regional and local authorities and of those on the ground by, for
example, programming at the local level when appropriate. In addition, if in the future
indirect zoning is the method retained for targeting resources, it would be essential that it is
accompanied byguarantees regarding the involvement ofregionaland localauthorities.
Programming of actions could operate in two phases. In a first step, the Commission could
set out a global strategy comprising the different economic, social and territorial dimensions
in partnership with the Member States at national level and transnational level with a view to
identifying priorities including those of particular Community interest. This would help to
determine how finance is allocated by priority. Afterwards, programming would be
decentralised to the appropriate level, for example at regional, urbanor transnational level.
For lagging regions, integrated programming remains a major means of obtaining positive
results intermsoftheir economic, socialandterritorialdevelopment.
It is may be possible to make use of a call for tender procedure for the implementation of
some programmes, enabling the best proposals to be selected completely transparently. The
selection could be made at different levels (regional, national or transnational and in
cooperation with the Commission) which would strengthen the links between the results
achieved and the finance allocated.
The principle of additionality (requiring Community funds to add to, rather than substitute
for, national funds) was simplified considerably for the period 2000-06. Experience will
confirm if it has become more effective as a way of contributing to the added value of
Community cohesion policy. At the same time, it remains a highly aggregate figure in the
XXXVIsense that it does not apply to individual programmes, but to all programmes under a single
Obj ecti v ei nagi venMem berSta te.
It is therefore lacking in transparency, and it might be worth considering the possibility of
calculating additionality at the programme level rather than (as at present) at the Member
State levelespecially for programmes aimed at the less developed regions. At the same time,
it is important not to underestimate the difficulties in terms the availability of data that this
would imply, a traditional constraint on attempts at improvement in this field. The
methodology will be evaluated in the light of the experiences in the implementation of the
additionalityprinciple whichwilltake place in2003 and 2005.
Evaluation has now been firmly established definitively as an integral part of programming
procedures. The ‘performance reserve’ is one of the important innovations brought about by
Agenda 2000. As already discussed, the link between the finance allocated and the results
achieved needs to be strengthened.
Improving the coherence between the Cohesion Fund and the Structural Funds
The Cohesion Fund, which was established by the Treaty is targeted on Member States in
which GNP per head is less than 90% of the Community average and which have established
a programme for macro-economic convergence. As a complement to the Structural Funds, it
has proved a useful instrument for promoting investment and in helping the cohesion
countries to catchup.
Matters for consideration for the future concern the amount of financial resources which
should be allocated to the Fund in absolute terms and to strengthen the coordination of the
support provided withthat provided bythe StructuralFunds.
The Treaty limits the Cohesion Fund to the financing of investment projects in transport
networks and the environment. While the Cohesion Fund applies at national level, there
would be clear advantages inselecting projects so as notto increase regionaldisparities and to
avoid excessive concentration inthe more prosperous capitalcities and surrounding regions.
At present, the share of the Cohesion Fund in total expenditure on structural policies in the
Member States concerned is around 18%. Whether the same balance between the Cohesion
Fund and the Structural Funds is appropriate to the new Member States is a matter for further
consideration, possiblyafter atransitionperiod.
The allocation of the resources of the Cohesion Fund between recipient countries should be
decided on the basis of purely objective criteria as in the case of the Structural Funds at
present. The need for objectivity will become more important for all Member States after the
accessionofnew countries.
In order to strengthen the coordination between actions supported by the Cohesion Fund and
those supported bythe StructuralFunds, the two should be made part of a unique framework.
For cohesion countries, the Cohesion Fund should become the only instrument for financing
largetransport andenvironmentalprojects inlaggingregions.
The financialaspects ofcohesion policy in an enlarged Union after2006
The evidence presented in the report on national, regional and social disparities demonstrate
thatthere is an increased need for cohesionpolicyin an enlarged Union. The analysis in Part I
of the main report shows that economic and social disparities within the Union will widen
XXXVIIconsiderably with enlargement. The challenge of maintaining economic and social cohesion
willtherefore increase.
Inevitablythe bulk of the financial effort would be addressed to the new Member States. In a
realsense, the size of the global financialpackage will determine the level of ambition on the
part of the Union in tackling problems which persist in the EU15, especially in its lagging
regions. It is withinthis frameworkthat discussiononthe budget for cohesionpolicy has to be
set.
While it is premature to put forward budgetary proposals for cohesion policy after 2006 -
which in any event would have to be considered as part of a global discussion on future
Community policies - it is appropriate to recall a few figures and to give a few reference
points to assist debate.
Betweenthe 1988 reformand 1999, the Unionstrengthened its cohesionpolicy interms ofthe
financial resources devoted to it in absolute terms and relative to the Community budget as a
whole. Under Agenda 2000, the Commission initial proposal was to maintain the level of
financial support reached in 1999 for the EU15 (0.46% of GDP) throughout the 2000-2006
period.
In the event, the European Council in Berlin allocated €213 billion to structural measures in
the 15 Member States for the 2000-2006 period, an average of €30 billion a year. The
resources given as pre-accession aid ( €3 billion) and the sums reserved for the countries
which join between 2002 and 2006 form an additional part of the overall package for
cohesion policy. In addition, cohesion policy for new Member States after accession was set
at aprogressivelyincreasing figure reaching €12 billion in 2006. These decisions together set
the totalamount in effect at 0.45% of the GDP in the enlarged Union of 21 Member States in
2006, virtuallythe same as at the beginning ofthe period for EU15.
The same percentage needs not necessarily be taken as a reference point for future cohesion
funding but it must be clear that, in order to remain credible, regional and cohesion policy
needs to deployresources commensurate withneeds inthe circumstances whichprevail.
Enlargement and the ceilingon transfers
Under the current rules for the period 2000-06, transfers from the Structural and Cohesion
F u n d sa r el i m i t e du pt oam a x i m u mof4 %o fn a ti o n a lG D Pay e a ri na l lM e m b e rS t a t e s .A sa
figure determined inrelationtothe situation inthe present Member States, in an effort to keep
the transfer from the Union to levels that can be managed by the recipient administrations, it
is a ceiling that will have important consequences for some of the least prosperous candidate
countries when they join the Union.
Inthe new context, the following constraints must therefore be reconciled:
– Addressing the cohesion objective, especially the enormous development needs of
the candidate countries;
– Taking proper account of the absorption capacity of these countries in economic,
financial and administrative terms.
Taking full account of the relative prosperity of the countries concerned would give rise to
significant risks as regards their absorption capacity and the balance of public expenditure.
Consequently, addressing the question of the ceiling would only be relevant in exceptional
XXXVIIIcircumstances, such as in the case of projects financed by the Cohesion Fund which represent
a particular Communityinterest.
Continuing pre-accession for other candidate countries
Assistance for pre-accession, modified if necessary, should continue to apply to the candidate
countries which have not yet joined the Union on the 1st January, 2007. The amount of
finance required should be the subject of an objective evaluation in relation to needs, the
capacityfor absorptionand the number ofcountries inreceipt ofthe support.
Increasing the contribution ofotherpolicies
Community policies have their own objectives and their effect on cohesion is difficult to
assess in a number of cases, but it is necessary, as a complement to a stronger geographical
and thematic concentration of the Funds, to reinforce synergies and the complementarity
between cohesion and other communitypolicies.
Certain community policies contribute indirectly to economic and social cohesion by helping
to create more favourable conditions for development in less prosperous Member States and
regions.
This is true of Economic and Monetary Union which helps to achieve macroeconomic
stability in the cohesion countries in particular which, because it is favourable for investment
and economic growth, is a necessary, thoughnot asufficient, condition for realconvergence.
The same is true of the internal market, which, together with structural reforms, has an
important influence on social cohesion across regions. The Union is undertaking a major
effort to reform product, capital and labour markets. The reduction of the disparities between
regions requires investment aimed at increasing the economic potential of the less developed
regions.
Faster growth does not automatically lead to closer regional integration and reduced income
inequalities. Accordingly, further reforms, a reduction in barriers to competition in some
markets, especially in services, and the support of cohesion policy are needed to reap the full
benefits fromthe catch-up process in some Member States and to reduce existing inequalities
betweenregions.
EMU like the internal market needs to be complemented by accompanying policies so that all
Member States and regions can benefit fully from economic and monetary integration. In this
respect, maintaining structuralspending which complements the StructuralFunds, particularly
in the fields of education, training and employment, as well as research and technological
development, isessentialfortheoveralleffectivenessofcohesionpolicy.
Competition and cohesion policies are complementary, since the ceiling imposed on regional
State Aids benefits the less prosperous countries most of all. This thrust of policy needs to be
pushed further to establish more equitable conditions for competition, while taking account of
theroleplayed byservicesofgeneralinterest interritorialcohesion.
The European Employment Strategy, is necessary for cohesion. It should, however, be
adapted to different regional and local circumstances in order to respond better to the very
different performances of labour markets. This objective has already been taken into account
in the measures supported by the Structural Funds for the period 2000 to 2006. But national
XXXIXbudgets do not identify clearly the way in which strategic objectives are translated into
financialcommitments, which makes it difficult to detect sucha move.
Other Community policies have a major effecton theterritorial structure of the Union
The Common Agricultural Policy has largely achieved the objectives set, which focus on
improving the competitiveness of European agriculture. The change in the CAP means that it
benefits some cohesion countries today more than before, but its contribution to territorial
cohesion remains very variable and depends on regional systems of agricultural production.
The second pillar ofthe CAP, ruraldevelopment policy, needs to be on a quite different scale,
especiallyin areas whichare affected most bythe continuing changes inagriculturalpolicy.
In some small coastal areas, fisheries accounts for a significant share of employment. For the
Common Fisheries Policy, the challenge is to restore a sustainable balance between fish
stocks and fishing. Since activities linked to fishing are concentrated in less favoured areas,
accompanying social and economic policies are required to enable diversification to take
place.
The trans-European transport networks are an instrument of territorial development and can
have a significant effect on regional disparities as highlighted by the European Spatial
Development Perspective (ESDP). There needs, however, to be greater complementarity
between the policy on large networks and Structural Fund programmes and when the
guidelines for trans-European networks are revised, more account should be taken of the
cohesionobjective.
All the analysis carried out in the Cohesion Report shows the importance of research and
innovation for competitiveness. Despite some progress under the 5th Framework Programme,
research and development (RTD) is still concentrated in the most central and competitive
regions. To make the EuropeanResearchArea a concrete reality, the emphasis needs to be put
on the regional dimension of RTD through networking and improving the coordination with
the StructuralFunds. The challenge here is to ensure that lagging regions become full partners
inthis area.
Environmental policy, with economic and social cohesion, is one of three pillars of
sustainable development. The design of this policy should give more consideration to
territorial disparities and specific features as well as to the financial effect on regions of the
measures envisaged.
The Community budgetary system and cohesion
As regards the overall Union Budget, a balance between contributions and the distribution of
expenditure for each Member State is not an objective in itself. Individual Member State
contributions are, however, becoming more proportional to GNP. Union expenditure reflects
the content and priorities of Community policies, only cohesion spending being inversely
relatedto regionalGDP per head.
XLStrengthening the contribution of other policies to the cohesion effort
With enlargement, the globalisation of the economy and the development of the knowledge
society, the Union is facing unprecedented economic and social changes. It is, therefore,
necessary for other Community policies to increase their contribution to economic and social
cohesion, as foreseen inthe Treaty.
It is important to consider the response to the greater need for coherence, complementarity
and efficiency of Community policies and the instruments necessary to make this happen.
This consideration forms part ofthe workinitiated bythe White Paper on Governance.
XLI10 QUESTIONS forPUBLIC DEBATE on the FUTURE ofCOHESION POLICY
1) What will be the role of cohesion policy in an enlarged Union of nearly 30 Member
States ina context ofrapid economic and social change? How is it possible to further
economic convergence and preserve the Europeanmodelofsociety?
2) How should Community policies be made more coherent? How should the
contribution ofother Community policies to the pursuit ofcohesion be improved?
3) How should cohesion policy be modified in preparation for an unprecedented
expansion of the Union? Should cohesion policy also address territorial cohesion in
order totake better accountofthe major spatialimbalances inthe Union?
4) How can cohesion policy be focussed on measures which have a high Community
added value ?
5) What should be the priorities to bring about balanced and sustainable territorial
development in the Union?
6) How should the economic convergence of lagging regions of the Union be
encouraged?
7) What kindofCommunityinterventionisrequired forotherregions?
8 ) W h a tm e t h o d ss h o u l db eu s e dt od e t e r m i n et h ed i v i s i o no ff u n d sb e t w e e nM e m b e r
States and betweenregions?
9) What principlesshouldgovernthe implementationofCommunityintervention?
10) What should be the response to increased needs with regard to the economic, social
and territorialdimensionsofcohesion?
Second Report on Economic and Social Cohesion
Part I – Situation and trends
I.1 Economic cohesion .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 3
I.2 Social cohesion.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 13I.3 Territorial cohesion: towards a more balanced development .  .  .  .  .  .  .  .  .  .  . 29I.4 Factors determining real convergence .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 37
Part II – Contribution of Community policies to cohesion
II.1 Economic and Monetary Union (EMU).  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 69II.2 Internal market .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 73II.3 Competition policy .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 79II.4 The Common Agricultural Policy: price and market policies .  .  .  .  .  .  .  .  .  . 81II.5 Employment, human resource development and cohesion .  .  .  .  .  .  .  .  .  . 89II.6 Environment policy .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 93II.7 Research and Development policy .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 99II.8 Transport policy.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 105II.9 Energy policy .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 107II.10 Enterprise policy .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 109II.11 The Common Fisheries Policy .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 113
Part III — The EU Budget and the contribution of structural policies to economic
and social cohesion
III.1 The EU Budget and economic and social cohesion .  .  .  .  .  .  .  .  .  .  .  .  .  . 117III.2 The contribution of structural policies to economic and social cohesion:
results and prospects.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 121
Regional features in Turkey .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 157
The Statistical Annex to this report will be published as a separate document. References in the text to tables,
graphs and maps in the Annex, which are all prefixed by the letter ‘A’, relate to this document.
i
iiSecond Report on Economic and Social Cohesion
Part I — Situation and trends
I.1 Economic cohesion .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 3
I.2 Social cohesion .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 13I.3 Territorial cohesion: towards a more balanced development .  .  .  .  .  . 29I.4 Factors determining real convergence .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 37
1
2Part I — Situation and trends
I.1  Economic cohesion
Overview of the European economy
The EU economy today is heavily reliant on services,
which now account for 67% of output and 66% of em -
ployment, in both cases up by 5 percentage points
from 10 years ago. Correspondingly, the importanceof manufacturing and agriculture is tending to de -
cline. This shift towards the service sector is likely to
continue, while agriculture and manufacturing willcontinue to experience consolidation of production inhigher value added activities and a fall in output andemployment in others. In most applicant countries,output and jobs are still concentrated in agricultureand manufacturing, and within these in lower value-added subsectors, suggesting more restructuring inthe future.
Growing trade and foreign direct investment have
meant a gradual opening up of national economies inthe EU towards both other Member States and therest of the world. In 1999, exports amounted to 32% ofEU GDP and imports to 31%. Both figures are thehighest recorded since statistics began to be col -
lected in the modern era, confirming the long-term
growth in trade in the EU, despite fluctuations over thebusiness cycle. Both are forecast to increase furtherin the future. Some 60% of trade was within the EU, il -
lustrating the dependence of EU countries on each
other, though, at the same time, interdependencewith the rest of the world is also increasing.
The EU will continue to experience significant
changes in the competitive environment over the nextfew years, which will affect the economy in generaland cohesion in particular:
•continuing economic pressure from globalisa -
tion, increasing international competition andrestructuring within particular sectors. Since sec -
tors tend to be concentrated in particular regions
and to involve particular social groups, restruc -
turing is likely to pose a challenge to both regional
and social cohesion. In addition, sinceglobalisation tends to bring with it more stand -
ardisation and uniformity, it is important for the
opportunities which it opens up to be balancedwith the need to maintain cultural identities in dif -
ferent parts of the EU;
•enlargement and the challenge of integrating the
applicant countries into the EU. Although en-largement will in the long-term be universally ben-eficial, it is likely in the short-term to bringpressure for restructuring, as firms in applicantcountries face increased competition, in a con-text where their low income and output alreadypose challenges to cohesion;
•the information revolution. In a real sense, infor -
mation technology is tending to reduce the physi -
cal isolation of peripheral parts of the Union and
increase their ‘virtual’ isolation, insofar as the keyto development is access to the technology,rather than access to markets. The key barriersare, therefore, low education and social factors,rather than transport costs. Although the changeis as yet more potential than actual, it is likely tobecome much more of a reality in the comingyears. It may well have a beneficial effect on re -
gional cohesion, bringing the disadvantaged pe -
riphery closer to the centre, but it could be
damaging for social cohesion. Education will be -
come increasingly important to avoid a division of
society between the technologically literate‘haves’ and the technologically illiterate‘have-nots’.
3
Divergence and convergence
in economic performance
Disparities between Member States
remain despite strong convergence
The present EU can be divided into two groups of
countries in terms of gross domestic output (see Ta -
ble A.1 in the Annex). There is a clear gap between
Spain, Greece and Portugal, where GDP per head,measured in terms of purchasing power standards toindicate relative levels of wealth, is only 67-82% of theEU average, and the other Member States, where it issimilar to or above average.
This is despite significant convergence achieved by
these three countries over the past decade. As agroup, their GDP per head rose from 68% of the EUaverage in 1988 to 79% in 1999. Individually, the gapbetween Spain and Greece and the EU average nar -
rowed by 9-10 percentage points in each case, and
for Portugal by 17 percentage points. Although theoverall gap in GDP per head of the three countrieswith the rest of the EU was reduced by a third over thisperiod, at this rate of convergence, it would still takeanother 20-30 years for it to be eliminated completely.This underlines the long-term nature of the conver-gence process, though whether it takes more or lesstime to achieve complete convergence depends onwhether and to what extent there is a change in un -
derlying conditions and in the context in which growth
takes place.
An encouraging sign in this respect is the strong per -
formance of Ireland, which 10 years ago was in -
cluded in the least prosperous group of countries with
GDP per head of only 70% of the EU average but nowhas a level 14% above average.
An important point to emphasise in this context is that
convergence of GDP per head in terms of PPS de -
pends not only on differential rates of output growth,
on GDP growing faster in the cohesion countries thanin other Member States, but also on relative price de -
velopments, which affect the PPS adjustment (see
Box on GDP and other measures of the regionaleconomy).
Disparities between regions
have narrowed but by less
Disparities are even wider between regions in the EU
1
(Map 1 and Table 1). The 10% of regions with the
highest GDP per head consist largely of northerncapital cities and the most prosperous southern Ger-man and northern Italian regions. Broadening this tothe top 25% leads to the inclusion of many UK re-gions, some Austrian, Belgian and Dutch regions and
4I.1  Economic cohesion
 
050100150200250300
BDKDELEFIRLILNLAPFINSUKBGCYCZEEHULTLVPLROSISK050100150200250300Index EU26=1001 GDP per head (PPS) by country and regional extremes, 1998
Bruxelles/ 
Brussels 
Antwerpen
HainautHamburg
Oberbayern
ChemnitzSterea 
Ellada
IpeirosComunidad 
de Madrid
ExtremaduraÎle de France
Languedoc-
RoussillonSouthern 
and 
Eastern
Border, 
Midland 
and 
WesternTrentino-
Alto 
AdigeUtrecht
CalabriaFlevolandWien
Salzburg
BurgenlandLisboa/Vale 
do Tejo
AçoresUusimaa 
(Suuralue)
Stockholm
Itä-SuomiVästsverigeInner London
Berks, Bucks & 
Oxfordshire
Cornwall & 
Isles of Scilly
Yugoiztoche
Yuzhen TsentralenPraha
Jihozapad
StredoceskyKozep-
Magyarorszag
Eszak-AlfoldMazowiecki
LubelskieBucuresti
Nord-EstBratislavský 
Kraj
Západné 
Slov.
Východné 
SlovenskoEU26 excludes Malta
5I.1  Economic cohesion
Guyane (F)Guadeloupe
(F)Martinique
(F)Réunion
(F)Canarias (E)
Açores (P)
Madeira
(P)
Kypros
Index, EU26 = 100
< 30
30 - 50
50 - 75
75 - 100
100 - 125
≥125
no dataSource: Eurostat
0 100 500 kmSIG16SIG16
© MEGRIN for the administrative boundaries1  GDP per head by region (PPS), 1998
Madrid and Rome (Lazio). The bottom 10% of regions
consist predominantly of those in Greece and theFrench DOMs and also include some regions in Por -
tugal, Spain and southern Italy, while the bottom 25%
include many other Spanish and Portuguese regions,the remaining part of Southern Italy and Eastern Ger -
many, as well as some peripheral regions in France
and the UK.
The contrast between the top and bottom 10% is
stark. The regions at the top have an average GDPper head 60% above the EU average, or 45% if re -
gions where commuting is important are excluded,
2
while those at the bottom have a level nearly 40% be -
low. In other words, in the top 10% of regions, GDP
per head is around 2 ½times that in the bottom 10%.
Similarly, the top 25% of regions have a level twicethat of the bottom 25% and account for a third of totalEU GDP as against a sixth in the case of the latter.
However, there was significant convergence over the
period 1988 to 1998 (see Map A.1). In the bottom 10%of regions, GDP per head rose from 55% of the EU av-erage to 60%, though in the bottom 25%, it only rosefrom 66% of average to 68%. (These increases arenot as dramatic as reported in the 6th Periodic Re-port, where the top and bottom regions were definedmerely in terms of numbers of regions instead of thepopulation they cover.)
Again, this underlines the long-term nature of conver-
gence, since the gap between the bottom 10% of re -
gions and the EU average narrowed by only 11% over
these 10 years.
Regional disparities within countries
are large, but may be stabilising
In addition to regional disparities across the EU as a
whole, there are in many cases large disparitieswithin individual Member States (see Table A.2 andGraph 1). The divided economies of Italy and Ger -
many are obvious examples, but in most countries,
one region, or a few of them, have levels of GDP perhead far above, or below, the national average. Capi -
tal cities, such as London or Paris (Ile de France),
tend, in particular, to have levels much higher thanaverage,
3while in many remote and rural regions,
such as Ipeiros in Greece, Calabria in Italy andAçores in Portugal, GDP per head is well below that
elsewhere. This firmly demonstrates the fact thatcountries cannot be treated as homogenouseconomies and that it is important to consider re-
gional as well as national features and trends.
The tendency observed in the First Cohesion Report,
for regional disparities in GDP per head to widen overtime seems still to hold in a significant number of Mem-ber States but in some others, disparities between re-gions have narrowed a little (see Table A.3 and Graph2). Nevertheless, the recent reduction in disparitieswhich has occurred in a few Member States may sim -
ply be cyclical, since lagging regions tend to converge
more in periods of growth than during recessions.
4
6I.1  Economic cohesion
 
0102030
1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 19980102030
Without new L änderPPS (EU=100 ), standard deviation2 Disparities in GDP per head, 1987-98
New NUTS 
breakdownEU15 (by region)
EU15 (by Member State)Table 1  The most and least prosperous
regions in the Union, 1988-1998
GDP per head (PPS) as % of EU average
Regions EU15 EU27
1988 1998 1998
10% + 155,3 160,9 176,9
10% - 55,1 61,0 31,1
ratio 2,8 2,6 5,7
25% + 134,1 137,1 152,0
25% - 66,6 68,3 44,3
ratio 2,0 2,0 3,4
10% + and 25% + : the regions with the highest GDP per
head (PPS), accounting for 10% and 25% respectively of to -
tal population in the Union
10% - and 25% - : the regions with the lowest GDP per head
(PPS), accounting for 10% and 25% respectively of total
population in the Union
Source: Eurostat, calculations DGRegio
Moreover, substantial disparities remain, especially in
some of the less prosperous Member States.
For example, while GDP per head does not differ much
between regions in Greece, a gap has opened up in re -
cent years between the main centres of economic ac -
tivity around Athens and Thessaloniki and the rest of
the country. Indeed, since the closure of land routes tothe rest of the EU through the former Yugoslavia, theport and airports in Athens are the main entry and exitpoints for trade with the rest of the world. In conse -
quence, the regions in the remote and mountainous in -
terior remain the poorest in the EU mainland.
In Spain, the second largest country in terms of land
area in the EU, the pattern of development is also var -
ied. GDP per head remains relatively high in Madrid
and Catalu ña and has risen further over the past de -
cade. Other regions in the north, notably Navarra and
Pais Vasco, have also performed well, but those in theremote north-east and underdeveloped south havetended to do less well, GDP growing by less than theEU average in the former and hardly at all in the latter,which are among the least developed parts of the EU.Accordingly, regional disparities in Spain have wid-ened further.
Disparities are also wide in Portugal, development
being concentrated along the coastal strip, in Lisboa,Oporto and the Algarve, though disparities have nar -
rowed over the past 10 years.
Migration has been a feature in Sweden and Finland,
from the sparsely populated, remote regions in thenorth –as well as from the east in the latter –as eco -
nomic recession hit hard in the early 1990s. Outward
migration has continued since then, despite the par -
tial recovery in GDP per head.
Disparities are both wide and long-standing between
the north and south of Italy. Despite the economic up -
turn elsewhere, GDP per head in the Mezzogiorno
has continued to stagnate at around 60-70% of theEU average. Only in Basilicata has growth over thepast decade been significant and even here, GDPper head only rose from 63% of the EU average to72% between 1988 and 1998.
GDP per head in terms of PPS in the new German
Länder, where growth was very rapid in the first few
years following unification, was also around 68-70%of the EU average in 1998.
Disparities double in scale with
the inclusion of applicant countries
It is instructive to examine the disparities which would
exist in the Union at present if all the applicant
7I.1  Economic cohesion
 
050100150200250
LDKIRL NLABDSUKFINIF ECYPSIELCZ HUSKPLEELTLVROBG
ApplicantsEU15050100150200250Index, EU26 = 100 3 GDP per head (PPS), 1999
Average group 1Average group 2Average EU26Average group 3
countries5were considered together with the existing
15 Member States. However, it is recognised that bythe time these countries actually enter the Union theirGDP per head could be higher than at present, de -
pending on their economic performance in the inter -
vening period and the effect of accession itself on
this.
It also has to be recognised that there are significant
differences between the candidate countries, notonly in terms of GDP per head but also in terms of theireconomic performance since the transition was initi -
ated, which in part reflects the pace and extent of re -
forms during this period (see Box).
Three groups of countries can be distinguished in the
EU of 27 in terms of GDP per head instead of the pres -
ent two (Graph 3). The existing EU Member States,
apart from Spain, Greece and Portugal, form the firstgroup with GDP per head 20% above the new aver -
age. These three cohesion countries plus Cyprus, the
Czech Republic, Slovenia and almost certainly Malta(though no PPS figures are available) form thesecond group, with GDP per head between 68% (the
Czech Republic) and 95% (Spain) of the EU 27 aver -
age, while the remaining 8 applicant countries form
the third group, with GDP per head below this (and,on average, only 40% of the EU27 average, though56-58% for Slovakia and Hungary).
Enlargement will, therefore, pose a challenge to co -
hesion in two ways (Table 2). First, it will more than
double the population living in regions with GDP perhead of less than 75% of the present EU average –
EUR 20,213 per head –from 71 million to 174 million,
or from 19% of the EU15 total to 36% of the EU27 total(or to 26% of the EU27 total if the EU average GDP perhead is reduced to that of the 27 countries, ie EUR16,504).
Secondly, it will increase the intensity, or scale of dis -
parity. In 1998, GDP per head in the lagging regions
of the Union averaged 66% of the present EU aver -
age. In lagging regions in the applicant countries, it
was much less than this (around 37% of the presentEU average), so that the two groups of regions
8I.1  Economic cohesion
Recent economic developments in the candidate countries
The long-term growth potential of the candidate coun-tries is substantial and this is likely to benefit the presentEU Member States in future years.
The economic performance of the candidate countries
in Central Europe has, in most cases, improved signifi -
cantly since the mid-1990s, though because of the
growth of the EU over this period, there has been littleconvergence in terms of GDP per head. At the sametime, regional disparities within the countries havetended to widen, especially between the capital citiesplus the regions bordering the EU and eastern areas.Future policies will need to tackle these disparities.
While GDP growth in the candidate countries taken to -
gether (but excluding Turkey) was only 2.2% in 1999,
that is less than in the EU15, in five of them (Slovenia,Hungary, Cyprus, Poland and Malta), it exceeded 4%.
Apart from Romania (and Turkey), inflation has stabi -
lised at around 10% a year or even below, though the
relatively slow reduction of inflation in Hungary and Po -
land remains a concern.
While the balance of payments on current account has
improved in a number of countries, the deficit remainssignificant in Estonia, Latvia, Lithuania and Poland.Deficits have been financed to a large extent by capital
inflows linked to privatisation, but new investment hasalso increased in a number of countries.
Despite efforts to reduce the budget deficit in most
countries, public finance sustainability remains a causeof concern.
The privatisation of large enterprises is underway in
Hungary, the Czech Republic, Estonia and Bulgariaand, to a lesser extent, in Latvia. In Poland, the rate ofprivatisation has been sustained but restructuring hasonly just begun in the iron and steel industry and agri -
culture. In banking, privatisation has progressed in the
Czech Republic, Bulgaria, Latvia and Slovakia, as wellas in energy supply and telecommunications.
The macroeconomic situation in the candidate coun -
tries is mixed, with favourable aspects (growth poten -
tial, FDI, the growth and shift of trade flows and even
inflation) and others which are weaker (the current ac -
count deficit, unemployment and the budget deficit).
But the situation in these countries cannot be compareddirectly with that in the present EU Member States,given their starting point and the importance ofrestructuring.
together had a GDP per head of less than half (48%)
the average.
On the basis of the present data, the statistical effect
of including the 12 applicant countries is to reducethe EU average GDP per head by 18%. As a result ofthis hypothetical exercise, 27 of the regions in the ex -
isting EU with some 49 million inhabitants are raised
above 75% of the average of the 27 countries. This, ofcourse, does nothing in itself to resolve the develop -
ment problems of the regions concerned, it just signi -
fies that their relative position is improved by the entry
of regions even worse off than themselves.
Given the present data and assuming that the EU
were suddenly expanded by 12 Member States, thechallenge to cohesion, therefore, in an EU27 can besaid to be twice as widespread and twice as large inscale as at present. The challenge, moreover, is likelyto persist for a long time. If the applicant countrieswere to experience the same rate of growth as the co -
hesion countries over the past decade, their present
level of GDP per head implies a convergence pro-cess lasting for at least two generations. Even with thekind of growth experienced in Ireland over the pastdecade, it would take 20 years before they reached90% of EU15 GDP per head.
Regional disparities also
double with enlargement
The inclusion of the 12 applicant countries has virtu -
ally no effect on the identity of the regions with the
highest GDP per head in the Union,
6but completely
changes the composition, and relative level of in -
come, of the regions with the lowest level. The bottom
10% of regions (in terms of population) in an enlargedEU consist entirely of those in eastern Poland, Bul -
garia and Romania together with Lithuania and Lat -
via. The 25% of regions with the
lowest GDP per head comprisealmost all the regions in the ap -
plicant countries and most of
those in Greece, A çores and
Madeira in Portugal andAndalucia and Extremadura inSpain.
It is noteworthy that very few re -
gions from the current EU ap -
pear in the list of the least
prosperous regions of anenlarged Union. It is also noteworthy how much GDP
per head of the 10% of the bottom regions is reduced,falling from 61% of the EU average at present to only31% of the average for an enlarged EU. Whereas atpresent, only Ipeiros in Greece has an income lessthan half the EU average, in an enlarged EU, some 79million people would live in regions with GDP perhead less than in Ipeiros.
As in the case of disparities between countries, the
ratio of GDP per head in the top regions to that in thebottom in the enlarged Union is around double the ra -
tio for the present EU. The top 25% of regions in an en -
larged EU, therefore, would have an average level of
GDP per head of 3.3 times that of the bottom 25% asagainst a ratio of 1.9 in the present EU, while the top10% of regions after enlargement have a level 5.3times the bottom 10% as compared with a ratio of 2.4at present.
Trends towards convergenceThe use of different economic models to explore
trends in regional development can be helpful both inindicating the likely outcome in future years if thesetrends remain the same, and if regional economiescontinue to perform as in the past, and in identifyingthe key factors that need to change if convergence inGDP per head is to occur. Three main conclusionsemerge from these models.
First, if past trends continue, it will take a number of
decades for regional disparities in the present EU tobe eliminated.
Secondly, there can be no guarantee that such an
elimination will occur. More specifically, while re -
gional economies might converge over time to their
own equilibrium level of GDP, given the underlying
9I.1  Economic cohesion
Table 2  Summary statistics for regions below 75% of EU
GDP per head, 1998
Index used In EU15 In EU26
EU15=100
EUR 20213EU15=100
EUR 20213EU26 = 100
EUR 16504
Number of regions falling below 75 % 46 97 70
Population in those regions (millions) 71 174 125
Population as a proportion of EU15/26 19% 36% 26%
Average GDP/head (PPS) of regionsfalling below 75%66 48 46
EU26 excludes Malta
Source: Eurostat, calculations DG REGIO
conditions which prevail and their own factor endow -
ments, there is no necessary reason why this process
in itself should lead to a convergence towards the EUlevel of GDP per head and to a reduction in regionaldisparities in these terms in the Union. The only way tobe sure of the latter is if there is a change in the under -
lying conditions themselves and in relative factor en -
dowments (in terms of capital of all kinds and different
labour force skills). The primary objective of regionaland structural policies is precisely to bring aboutsuch a change.
Thirdly, it is of key importance for convergence of re -
gions towards the average EU level of GDP per head
that disparities in human capital endowment –ie in
the skills of the labour force –are eliminated, or at
least significantly reduced. This implies, in turn, aneed both to improve education and training systemsin lagging regions and to widen access to these, aswell as a need for enterprises in these regions to usethe potential skills available more effectively and toadapt more rapidly to changes in technology and inthe organisation of work.
10I.1  Economic cohesion
GDP and other measures of the regionaleconomy
GDP per head in terms of PPS is the key indicator forassessing levels of economic development in re -
gions and disparities in this. Its position is enshrined
in the Structural Funds regulations and in Article87(3)a of the Treaty on competition policy, both ofwhich have been unanimously approved by theMember States. It is also conventionally used by nu -
merous international institutions (including the
World Bank, IMF, OECD and UN) as well as universi -
ties and research institutes, central banks and pri -
vate enterprises as the single most useful measure
of economic performance. The reasons for this in -
clude the following:
GDP is, almost by definition, the best measure of
the output of the regional economy.
Leaving aside problems of commuting, which are
significant only in a few cases, and of income fromcapital, it is a good proxy for regional income be -
fore public and private transfers. For cohesion
purposes, it is important, at least initially, to mea-sure the regional income taking account only ofwhat is generated locally without including trans-fers from outside or those going outside. To givean obvious example, a region which had a lowlevel of production might well have a much higherlevel of final income because of large social secu-rity transfers, but it would still be a less favouredregion.
GDP per head is statistically robust and is usually
readily available at regional level for a reasonableperiod of time.
Since price levels vary considerably between
countries at prevailing exchange rates, it is nec -
essary to adjust for this in order to measure the
real command over goods and services of a givensum of money. Expressing GDP in terms of pur -
chasing power standards (PPS) is a means of
making such a correction.
At present, the PPS adjustment is calculated on the
basis of national price levels and, therefore, leavesout of account regional differences in prices, whichcan be significant particularly where there are widevariations in income between regions. The cost ofliving, for example, is much higher in the north of It -
aly than in the south and, in principle, this should be
allowed for in the regional GDP per head figures.
11I.1  Economic cohesion
Despite the usefulness of GDP per head at PPS, it is of
interest to consider other measures of the regionaleconomy (see Table A.4).
Changes in GDP per head in PPS over timeIt is important to recognise that GDP per head in PPS
terms can change in one economy relative to anothernot only because of a difference in the rate of GDPgrowth in real terms (so-called ‘real’convergence) but
also because of a change in relative price levels. Thispotentially complicates the analysis of changes overtime insofar as a relative increase in GDP per headwhich arises from a reduction in the relative price level –
or from a re-estimation of the PPS adjustment –might
have slightly different implications than one which re -
sults from a relative growth in real GDP.
GDP without the PPS adjustment:
wider disparities, but a similar pattern
The simplest alternative indicator is to measure GDP
per head in Euros rather than PPS. This shows the mar -
ket value of output in each region rather than real in-
come levels (see Map A.2).
Such a measure increases the scale of differences be-
tween regions. Since price levels are positively corre-lated with the wealth of a region, low GDP per head inless prosperous regions tends to be partly offset by alower cost of living.
The most striking change is for regions with GDP per
head furthest from the EU average. The level in Portugalas whole falls from 76% of the EU average (in PPSterms) to just 50%, below that of Greece. Conversely, inSweden and Denmark, where the cost of living is veryhigh, GDP per head is markedly higher when measuredin terms of Euros (23% higher in the latter).
Extending the comparison to include the applicant coun -
tries, their average GDP per head is reduced from 38% of
the EU15 average in PPS terms to just 16% in Euro terms.The lowest levels of GDP per head are in eastern areas.Even in Slovenia, GDP per head in Euros is little more than45% of the EU average as opposed to nearly 71% in PPSterms.
GNP: allowing for income transfersAs stated above, GDP has the advantage of excluding
income transfers and so relates more closely to the in -
come generated within an economy. Such transfers,
however, are not confined to those made for redistri -
butive reasons but also include remissions or receipts
of income by both individuals and companies, whichcan significantly affect the income available for
expenditure on goods and services in an economy. Re -
missions from migrant workers have been an important
source of income for a number of countries and regionsin the past (such as southern Italy, for example), whilethe repatriation of profits by foreign-owned enterprises,and the receipt of profits earned abroad, are equally im -
portant in a number of economies at the present time.
These flows of income to and from abroad are includedin the measure of gross national product or GNP.
Unfortunately, data are not available for GNP by region
in the Union, largely because of the difficulties of mea -
suring income flows at this level. Nevertheless, data for
GNP at national level are available and these showsome differences from those for GDP for a few MemberStates. In particular, GNP for Ireland was over 13% lessthan GDP reflecting the importance of profits earned byforeign-owned enterprises, which are not necessarilyspent in Ireland (though equally, neither do they neces -
sarily go out of the country). In 1999, therefore, GNP per
head in Ireland in terms of PPS was below the EU aver -
age whereas GDP per head was well above.
For similar reasons, GNP in Luxembourg was also sub-
stantially lower than GDP, by almost 10%. In other Mem-ber States, however, apart from Greece where inflowsfrom abroad added just under 3% to income, the differ-ence between GDP and GNP was around 2% or less.
Median consumption: an indicator of
the standard of living of the average household
Median consumption per head, measured in PPS terms, is
another useful indicator. This is derived from householdbudget surveys and measures the goods and servicespurchased by households and individuals rather than pro -
duced in the economy. In contrast to GDP, it, therefore, in -
cludes imports and excludes exports, which can be quite
significant at the regional level. It also implicitly excludesincome transferred abroad; which as noted above is sig -
nificant in the case of Ireland.
Since the distribution of incomes is generally quite
skewed, the median income is less than the mean andmore indicative of a typical household or person. Be -
cause consumption tends to fall below income by more,
the higher the growth in the economy, it will usually lagbehind GDP per head as economies converge.
The indicator, however, is not available in the EU at a re -
gional level. Nevertheless, national comparisons are in -
teresting. Portugal has the lowest level, with a typical
consumption of only 58% of the EU average, largely be -
cause of the skewness of income distribution. The other
two cohesion countries –Greece and Spain –however,
12I.1  Economic cohesion
1 In the First Cohesion Report and in the Fifth and Sixth Periodic Reports, the top and bottom 10 and 25 regions were used to measure
disparities. Since the NUTS regions vary in size, however, this is liable to give misleading results over time if the population coveredby the regions in question changes significantly. This is all the more the case with the addition of the applicant countries, whichincreases the number of NUTS 2 regions to 260. The figures reported in the text therefore relate to the regions with the highest andlowest levels of GDP per head which account for 10% or 25% of population in the EU.
2 These are regions which are considered by Eurostat to have relatively high or low GDP per head largely because of commuting,
which accordingly omits cases where GDP is produced to a significant extent by people living outside the region or where thepeople living in a region derive their income to a significant extent from elsewhere. See Eurostat (2000) ‘Statistics in focus ’, Theme 1,
1/2000.
3 Some of this is due to commuting and the non-inclusion of people contributing to GDP in the population figures.4 See the Box in section 1.1 of the 6
thPeriodic Report for a fuller explanation of this effect.
5 These are Estonia, Latvia, Lithuania, Poland, the Czech Republic, Slovakia, Hungary, Slovenia, Romania, Bulgaria, Cyprus and
Malta.
6 The notable exception being the inclusion of Prague, where part of the high GDP per head is almost certainly due to commuting.7 For further reading on the theory and practice of green accounts, see World Bank (1996) ‘Green national accounts: policy uses and
empirical experience ’.
8 See Eurostat (1999) ‘Towards environmental pressure indicators for the EU ’and Eurostat (forthcoming) ‘Towards an environmental
accounting framework for the EU ’.
9 World Bank (1995) ‘Monitoring environmental progress ’.have very similar levels of median consumption and
GDP in relation to the rest of the EU.
Green accounting: closer to implementation,
but much work remains before it is operational
A final concept of interest is ‘green accounting ’, the at -
tempt to incorporate environmental costs into economic
figures. The case for green accounting is that the normalmeasure of GDP, calculated at market prices, leaves outof account the depletion of exhaustible resources andother costs imposed on the environment by productionand associated activities.
7Green accounting is, therefore,
an attempt to measure the ‘true costs ’of the loss of scarce
resources and the environmental damage caused by pro -
duction and to incorporate explicit estimates of these, in
terms, for example, of the cost of developing alternativeresources or cleaning up the environment, in the calcula -
tion of GDP.
The problem of putting monetary values on items which
are to a large extent intangible is, however, severe and asyet no generally accepted estimates have been producedof‘green ’GDP. A more limited approach is to produce es -
timates of the pollution produced in particular sectors or todistinguish environmental expenditure and to list these fig-
ures alongside the relevant part of the national accountsas an addendum item. This, however, tends to mean thatsuch estimates are viewed as very much subsidiary to theGDP figures. The Commission has opted for an intermedi-ate approach, that of satellite accounts for specific assets,such as forests, mineral stocks, water reserves and airquality. Where possible, monetary values are calculated
for specific aspects of each, such as the value of forests,in terms of the timber they produce or the recreation theyprovide, or the costs of cleaning up water reserves to aparticular standard. Otherwise physical values are calcu -
lated, such as for CO
2emissions.
Collaboration over the past three years between the Re -
gional Policy and Environment DGs and Eurostat in the
Commission and various national statistical offices8has
begun to yield results and a comprehensive dataset onthe environment is in the process of being produced andcategorised by different kind of asset, though there aremany gaps, especially in respect of monetary values. Thisis generating some surprising results. For instance, for -
ests in the EU (valued at around EUR 400 billion) are worth
twice as much as total oil and gas reserves (around EUR200 billion). This, moreover, counts only their value interms of timber and the figure would be much higher if it in -
cluded their intrinsic or recreational value.
This is consistent with World Bank estimates
9that, even
in rich countries, total natural assets were, on average,worth as much as, or more than, total physical assetssuch as buildings or machinery.
However, there is still much to be done to make the most
of such estimates. It is planned gradually to producethem more systematically and regularly and to generatea consistent time series. A regional breakdown, how-ever, is a long way off.
I.2  Social cohesion
For the past three years, there has been strong em -
ployment growth across the Union, which has both re -
duced unemployment significantly and provided job
opportunities for people entering the labour marketfor the first time or returning after a spell of inactivity.Most of the jobs created have been in services, as inprevious years, the majority in advanced businessand communal services –health care, education,
recreational and cultural activities –many of which
demand a high level of skill and education from thepeople who perform them.
At the same time, partly because of the shift towards
advanced services and high-skilled jobs, labourshortages have begun to emerge on a significantscale in many parts of the economy, even in areaswhere unemployment remains relatively high. Theseshortages are likely to get worse as the recovery pro-ceeds, particularly in information technology wherethe demand for labour is growing rapidly and wherealready a substantial number of jobs remain unfilled.Unless they are effectively addressed, they will tendincreasingly to slow down the pace of development.
Nevertheless, there remain substantial disparities in
levels of employment and rates of unemployment be -
tween different parts of the Union as well as between
different social groups, which manifest themselves inpockets of deprivation and exclusion.
Employment and unemployment
Unemployment and the labour market
Unemployment in the EU is declining at present, re -
flecting the continuing growth of the economy and la -
bour market reforms, which seem to be associatedwith an increased rate of net job creation for a given
growth in GDP. The rate has, therefore, fallen from10.7% in 1997 to 8.3% in August 2000 and is set to fallbelow 8% in 2001, a level last seen before the reces -
sion of the early 1990s. Despite this encouraging
trend, unemployment remains unacceptably high inmany parts of the EU, though if economic growth canbe sustained at its present rate, over the coming de -
cade it could gradually cease to be the major eco -
nomic problem facing the EU, which it has been forthe past 20-25 years.
Since the early-1970s, unemployment has increased
rapidly during recessions but fallen more slowly dur-ing periods of economic recovery, while regional dis-parities in levels have remained significant (seeGraph A.1 in the Annex). However, over the period ofrecovery since 1994, when unemployment in the EUreached a peak of 11.2%, the process of job creationhas increasingly gained strength. Nevertheless, it istoo early to be sure whether the cycle of falling unem -
ployment followed by a rebound to a higher level is at
an end. This depends on both maintaining economic
13 
-2-10123456
-2-10123456
1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997Employment
GDP lagged 2 quartersAnnual % change4 Growth of employment and GDP in the 
Union, 1975-98
growth at around its present level, or preferably
above, which in itself should result in a high rate of netjob creation (Graph 4), and increasing the employ -
ment-intensity of growth above the long-term trend of
the past 20 years.
Unemployment combined
with growing skill shortages
At the same time as unemployment is falling, labour
shortages are emerging as an increasingly importantobstacle to growth right across the EU. This was re -
ported explicitly in the National Action Plans for 2000
of Belgium, Denmark, Ireland, the Netherlands, Fin -
land, Sweden and Italy, though in the last, predomi -
nantly in the north of the country. Moreover, recent
surveys of employers in other Member States have inmost cases pointed to the difficulty of recruiting staffwith the requisite skills as a major problem hinderingexpansion.
The coincidence of relatively high levels of unemploy-
ment and labour shortages ought not to come as asurprise. It essentially reflects the highly differenti-ated nature of the labour market and the lack of co-herence between the growth of demand for labourand the skills on offer among those looking for a job.Indeed, recruitment difficulties tend to be reported inparticular sectors even in periods of recession. As re-covery gathers pace and as unemployment falls –or,
more accurately, as the excess supply of labour di-minishes –it is only to be expected that labour short -
ages, or skill bottlenecks, will become more serious,
the more so, naturally, in regions where unemploy -
ment is relatively low, but also in other areas where
the skills of the unemployed do not match the de -
mand of employers. If economic growth at present
rates is sustained over the longer term, the problem ofskills imbalance could well be compounded by theprojected slowdown in labour force growth, or de -
cline in some regions, over the next 10-15 years (see
the section on demographic trends below).
Although recruitment difficulties are at present re -
ported in some parts of the Union in all sectors, from
information technology to agriculture and retailing, itis evident that there is a growing shortage of workerswith IT skills in all Member States. According to theCommission report on job opportunities in the Infor -
mation Society, up to 500,000 jobs are currently va -
cant because of the lack of people with the requisite
skills to fill them. Studies suggest that the problem islikely to get worse in the future, as, indeed, is the case
in other parts of the world, the US especially. In thelonger term, therefore, this could come to exercise anincreasing constraint on economic growth and em -
ployment creation in the EU. It is a problem which can
be tackled both by expanding the number of peopletrained in IT skills and adapting education and train -
ing systems to accomplish this and by encouraging
the inward migration of those with the necessaryskills, or the education to acquire them, from othercountries (an approach at present being followed bythe US).
Wide disparities in employment
remain between Member States ...
As economic recovery continued in the EU, employ -
ment increased by over 2 million in 1999, or by 1.4%,
slightly higher than in 1998 (1.3%) and the highestgrowth rate of the 1990s. The number employed in1999 was, therefore, for the first time higher than in1991 at the start of the recession. The employmentrate, however –the proportion of those aged 15 to 64
in work –at 62.1% was still slightly lower than at the
beginning of the decade.
Despite a general improvement in labour market con-
ditions, large differences still exist between MemberStates. Between 1997 and 1999, employment growthvaried from over 3% a year in Ireland and Spain to un -
der 1% a year in Germany, Italy and Austria. In gen -
eral, those Member States with above average GDP
growth also recorded relatively high growth ofemployment.
Since 1994, there has only been a slight narrowing of
disparities in employment rates across the Union,stemming partly from relatively large increases in em -
ployment in Ireland and Spain, where the proportion
of working-age population in work is below average.This convergence is likely to continue if economic re -
covery is sustained, though above average employ -
ment growth needs to spread to Italy and Greece, in
particular, if disparities are to be narrowed signifi -
cantly. In 1999, the employment rate was below 60%
in Spain and Belgium (if only slightly), while it ex -
ceeded 70%, the target set for the EU in 2010 by the
Lisbon Summit, in Denmark, the Netherlands, Swe -
den and the UK.
14I.2  Social cohesion
... but are even wider between regions
Disparities in employment are even more substantial
between regions than between countries within theEU. In 1999, the employment rate in the top 10% of re -
gions in the EU (defined as those with the highest
rates accounting for 10% of total population) aver -
aged 77%, whereas the employment rate in the bot -
tom 10% (defined in an equivalent way) averaged
under 44%. As at the beginning of the decade, mostof the regions in the top group are located in the UK,most of those at the bottom in Italy and Spain (Map 2).
The extent of regional disparities varies significantly
between Member States. While they are very narrowin some countries (the Netherlands, Austria and Swe -
den), they are extremely wide in others (particularly It -
aly, where the gap between high employment regions
in the North and low employment regions in the Southis over 25 percentage points, but also Spain and Por -
tugal – around 15 points).
There is little sign of any marked reduction in dispari-
ties over the 1990s. While across the EU as a whole,they have narrowed since 1997, this followed a wid-ening over the early 1990s (see Graph A.2). In Italy,Portugal and, to a lesser extent, Spain, the gap in re-gional employment rates appears to have widenedover the period of recovery. Moreover, in Greece, em-ployment rates fell in most regions over the 1990s.
Achieving a more balanced development in terms of
employment remains one of the biggest challengesfor the Union in the future and one which is likely to re -
quire continued policy intervention, in developing re -
gions, to help strengthen their economic base, and in
those undergoing restructuring, to help smooth theshift to growing sectors of activity.
The gender gap in employment remains
pronounced despite gains made by women
The number of women in employment has risen
strongly in the EU over the past ten years. As a result,the gap in employment rates between men andwomen narrowed significantly over the 1990s, bysome 5 percentage points, though in 1999, it was stillsome 19 percentage points. Moreover, it should benoted that over 70% of net additional jobs going towomen between 1994 and 1999 were part-time. In thelatter year, around a third of all women in employmentin the EU worked part-time as opposed to 6% of men.The gender gap is even wider in many Member States
and regions. In regions with a high rate of net job cre -
ation, both men and women tend to benefit by being
able to find employment, while job shortages in lowemployment regions generally seem to hit womenharder than men. The gender gap is, therefore, nar -
rowest in the three Nordic countries and the UK and
widest in Italy, Spain and Greece.
The small gap in many –but by no means all –parts of
Northern Europe reflects, on the one hand, a longertradition of gender equality, positive social attitudestowards women working and child-care provision. Onthe other hand, it also reflects a high proportion ofpart-time employment among women (see Map A.3).Indeed, the relative number of women with full-timejobs in lagging regions is not very much lower than inthe rest of the EU.
The growth of part-time working is closely related to
the development of the service sector, in which firmstend to be more flexible over working hours but inwhich there is also a growing need to employ peopleat weekends and in the evenings. Women thereforehave more possibility for combining paid employ-ment and family responsibilities, so increasing theirability to pursue working careers.
Large-scale job losses in agricultureEmployment in agriculture in the EU has declined
markedly, from 7.6% of the total employed in 1988 to5.6% in 1993 and 4.4% in 1999. The largest declinebetween 1993 and 1999 occurred in Ireland (by 4.5percentage points) and Greece (4.3 points).
The importance of multiple jobs has also remained
much the same, 28.7% of farmers having a paid joboutside agriculture in 1997. In Sweden, Finland andGermany, the figure was over 45%. In the southernMember States, where 26% of farmers had multiplejobs, almost 63% of the work force was employedpart-time.
Services are key to employment growthOver the past 25 years, all of the rise in employment in
the EU has occurred in services while jobs in industryand agriculture have declined. Over the period of1994 to 1999, the share of employment in servicesrose by some 2 ½percentage points, continuing a
long-term shift of both employment and output
15I.2  Social cohesion
16I.2  Social cohesion
% of population aged 15-64< 56.056.0 - 60.260.2 - 64.464.4 - 68.6≥68.6
no dataEU26 = 62.3Standard deviation = 8.4
D (Sachsen): NUTS1SK: 1998 Sources: Eurostat and NSI
IRL, BG: NUTS0% of female population aged 15-64< 45.145.1 - 50.750.7 - 56.356.3 - 61.9≥61.9
no dataaverage = 53.5Standard deviation = 11.2
D (Sachsen): NUTS1SK: 1998IRL: NUTS0% of male population aged 15-64< 66.366.3 - 69.769.7 - 73.173.1 - 76.5≥76.5
no dataaverage = 71.4Standard deviation = 6.9
D (Sachsen): NUTS1SK: 1998IRL: NUTS0
250
01250 km© MEGRIN for the administrative boundaries
2  Employment rates, 1999
Total Female Male
towards this sector, which is evident in all Member
States.
Employment growth in services, however, has been
lower in the EU over the 1990s than in the US and thishas been combined with more job losses in agricultureand industry. Indeed, in the EU, growth of employmentin industry has been relatively small even over the pe -
riod of economic recovery since 1994, though this is
partly due to a significant reduction in Germany, wherethe pace of recovery has been modest.
The development of services has occurred at differ -
ent rates across the Union. In 1999, the general pat -
tern of employment (Map 3) is for the highest
employment regions –predominantly located in the
UK, Netherlands and the three Nordic countries –to
have a large share of jobs in services, and the lowestemployment regions –largely located in the Mediter -
ranean –to have a high concentration of jobs in agri -
culture. In between, there are regions with a high
share of employment in industry –predominantly lo-
cated in an arc covering eastern France, parts of Ger-many and northern Italy.
Overall, services account for a major part of dispari-
ties in employment rates across the EU. Most of theadditional jobs which exist in high employment re-gions as compared with low employment ones are inservices, though mostly in the more advanced sec-tors, education, health care, business and financialservices, where skill and education requirements arerelatively high. This underlines the importance of awell-educated work force for boosting employmentas well as the development of the knowledge-basedeconomy.
Regional disparities in unemployment
remain pronounced
Unemployment varies substantially between regions
in the EU (Map 4). Despite economic recovery, unem -
ployment rates were still over 20% in some parts of
southern Europe in 1999. There were also, however, anumber of areas in northern Europe undergoing re -
structuring, where rates were well over 15%.
Regional disparities in unemployment have widened
over the 1990s, following the reduction which oc -
curred in the high employment growth years of the
late 1980s. While economic recovery has reduceddisparities slightly since 1995, it has so far failed tooffset the widening during the earlier period of reces -
sion. Accordingly, while unemployment in regions
where rates were lowest (taking those accounting for10% of total population) averaged 3% in 1999, muchthe same as in the early 1970s, it averaged 23% inthose where rates were highest (excluding the FrenchDOMs), much higher than 25 years ago.
The regions with the lowest unemployment in the EU
were much the same in 1999 as 10 years before, aswere those where rates were highest. Much the sameis true in Member States, where regional differencesare similarly wide (Graph 5). As in the case of employ -
ment rates, differences between regions are greatest
in Italy, where, in 1999, the rate in those with the high -
est levels (in the south) was almost 25 percentage
points higher than in those with the lowest (in thenorth). On the other hand, in all regions of Austria, theNetherlands and Portugal, unemployment was belowthe EU average.
Long-term unemployment falling
but still a serious problem
The fall in unemployment in recent years has been ac-
companied by a reduction in long-term unemploy-ment. Between 1997 and 1999, the number of peoplewho had been out of work for a year or more declinedby more than overall unemployment, from 49% to46% of the total unemployed, suggesting that activelabour market measures combined with high rates ofnet job creation have improved access to employ -
ment for those most disadvantaged on the labour
market.
The rate of long-term unemployment in the EU, how -
ever, is still higher than at the beginning of the 1990s. It
is particularly high in southern Italy, in a number ofGreek regions and in Belgium, where over 60% ofthose out of work were long-term unemployed in 1999.By contrast, the proportion was under 20% in a numberof regions in Austria, the UK and Finland (Map 5).
Overall, long-term unemployment is much higher in
regions with high overall unemployment and has de -
clined hardly at all over the economic recovery in the
lagging regions. This reflects the persistence ofstructural problems in these areas, such as mis -
matches between the jobs on offer and the skills avail -
able on the labour market, which are unlikely to be
resolved simply by higher rates of economic growthat the national or EU level, which need to be
17I.2  Social cohesion
18I.2  Social cohesion
% total employment< 1.51.5 - 6.06.0 - 10.510.5 - 15.0≥15.0
no dataEU26 = 8.3Standard deviation = 11.2
EL, RO, SK: 1998BG, LT, LV: 1997D (Sachsen): NUTS1 Sources: Eurostat and NSI
IRL: NUTS0% total employment< 24.3524.35 - 28.0528.05 - 31.7531.75 - 35.45≥35.45
no dataEU26 = 29.9Standard deviation = 7.4EL, RO, SK: 1998BG, LT, LV: 1997D (Sachsen): NUTS1IRL: NUTS0% total employment< 52.3552.35 - 58.6558.65 - 64.9564.95 - 71.25≥71.25
no dataEU26 = 61.8Standard deviation = 12.6
EL, RO, SK: 1998BG, LT, LV: 1997D (Sachsen): NUTS1IRL: NUTS0
250
01250 km© MEGRIN for the administrative boundaries
3  Employment by sector, 1999
Agriculture IndustryServices
19I.2  Social cohesion
Guyane (F)Guadeloupe
(F)Martinique
(F)Réunion
(F)Canarias (E)
Açores (P)
Madeira
(P)
Kypros
% of labour force
< 5.55
5.55 - 8.25
8.25 - 10.95
10.95 - 13.65
≥13.65EU7 = 9.6
Standard deviation = 5.4
D (Sachsen) and F (DOM): NUTS1
Sources: Eurostat and NSI
0 100 500 kmSIG16SIG16
© MEGRIN for the administrative boundaries4  Unemployment rates by region, 1999
combined with active measures to improve the em -
ployability of those affected and help them adapt to
structural change.
Unemployment of young people
declining in EU ...
Rates of unemployment in the EU remain much higher
for young people under 25 than for older people andfor women as opposed to men. Young people in thelabour force are almost twice as likely to be unem -
ployed as those of 25 and over. In Spain, Finland and
Italy, youth unemployment was over 30% in 1999 andin some regions in southern Italy and Spain, over 50%(Map 5).
Despite the fact that most of the net additional jobs
created over the past 10 years have gone to women,job growth has only just kept pace with the rising num -
ber of women joining the labour market. Conse -
quently, unemployment among women is still much
higher than for men in most parts of the EU, with ratesfor women exceeding 35% in parts of Spain and Italy.
While unemployment of young people has declined
by more than for those of 25 and over during the pe-riod of recovery, the rate for women has fallen by lessthan for men. Unlike in the case of the long-term un-employed, however, both young people and womenhave experienced a fall in unemployment in the most
lagging regions.
Labour market developments
in the candidate countries
In recent years, the data available on employment
and related developments in the candidate countrieshave improved significantly with the introduction of la -
bour force surveys in most of them, on the same basis
and adopting the same conventions as the EU LabourForce Survey conducted by Eurostat. However careshould be taken in interpreting the figures which re -
sult from these surveys because, even though the
conventions are the same, they reflect a different un -
derlying reality.
In the candidate countries of Central Europe (CECs),
employment has fallen significantly since the begin -
ning of the transition as a result of a large fall in output
as well as restructuring. In the CECs as a whole, thenumber employed is estimated to have fallen by15-20% between 1989 and 1997, with the largest falloccurring in the early years of transition (1989 to1993). By 1994-95, conditions had stabilised and in anumber of countries, employment began to rise,though by not nearly enough to compensate for theearlier job losses. In 1998 and 1999, economic
20I.2  Social cohesion
 
0102030
BDKDELEFIRLILNLAPFINSUKBGCYCZEEHU LTLVMT PLROSISK0102030% labour force5 Unemployment rates by country and regional extremes, 1999
Vlaams 
BrabantHainaut
Ober-
bayernDessau
Ionia 
NisiaDytiki 
Makedonia
La 
RiojaAndaluc ía
AlsaceLanguedoc-
Roussillon
Southern 
and 
EasternBorder, 
Midland 
and 
Western
Trentino-
Alto 
AdigeCalabria
UtrechtGroningen
Wien
Ober-
österr.Centro Alentejo
ÅlanItä-Suomi
StockholmMellersta 
Norrland
Berks, Bucks & 
OxfordshireInner 
London
Yugooz
apadenYugoiztochen
PrahaOstravsky
Nyugat-
DunantulEszak-
Magyarorszag
MazowieckieWarminsko-
Mazurskie
BucurestiSud-Est
Bratislavsk ý 
KrajVýchodn é 
Slovensko
21I.2  Social cohesion
% of total unemployed< 3333 - 4040 - 4747 - 54≥54
no dataBG, SK: 1998; IRL: 1997 Source: Eurostat IRL: NUTS0% of youth labour force, 15- 24
< 9.29.2 - 15.615.6 - 22.022.0 - 28.4≥28.4
no dataEU27 = 18.8Standard deviation = 12.8
CY, MT: 1998D (Sachsen) and F (DOM): NUTS1 Sources: Eurostat and NSI% of female labour force
< 5.355.35 - 9.059.05 - 12.7512.75 - 16.45≥16.45
no dataEU25 = 10.9Standard deviation = 7.3
MT: 1998D (Sachsen) and F (DOM): NUTS1 Sources: Eurostat and NSI
250
01250 km© MEGRIN for the administrative boundaries
5  Unemployment, 1999
Long-term unemploymentYouth unemployment rateFemale unemployment rate
growth slowed down again and employment began
to fall in most countries, most especially in the CzechRepublic, Slovakia and Estonia. In Hungary, how -
ever, partly because of the earlier implementation of
economic and labour market reforms than in othercountries, GDP continued to grow and employmentincreased by around 3% a year between 1997 and1999.
In 1999, the overall employment rate of the candidate
countries averaged just under 61% of working-agepopulation, only slightly lower than in the EU. Dispar -
ities in employment rates, however, widened be -
tween countries over the 1990s as employment fell,
the scale of decline reflecting, on the one hand, thesuccess of the transition and, on the other, the extentto which jobs remained protected against marketforces, as well as the extent of employment in subsis -
tence agriculture. In 1999, the employment rate
ranged from some 54% in Bulgaria to 66% in theCzech Republic.
Regional disparities in employment in the candidate
countries are narrower than in the EU, but still sub-stantial. In the top 10% of regions (defined, as above,as those with the highest rates accounting for 10% oftheir total working-age population), the employmentrate averaged almost 70%, in the bottom 10%, it wasunder 52%. Disparities are also wide in a number ofcountries, reflecting the difference between the capi -
tal city region and the others (in Slovakia, the gap be -
tween the top and bottom 10% of regions was 17
percentage points).
Employment of women in the CECs has, in many
cases, declined by less than that of men over the tran -
sition period, partly because of the concentration of
jobs losses in industry, partly because of the growthof service activities. Although the employment rate ofmen exceeds that of women in all candidate coun -
tries, the gender gap has remained smaller than in
most EU Member States. Moreover, many fewerwomen work part-time in the former than in the latterand the difference between men and women is muchless pronounced. (Overall, some 8% of all those inemployment work part-time in the candidate coun -
tries as opposed to 18% in the EU and women ac -
count for only 58% of all part-timers as against 80% in
the EU.)The changing sectoral pattern of
employment in candidate countries
Economic transition in the CECs implies a marked
shift in the sectoral pattern of employment, thoughcomparison of the present structure with that in theEU suggests that there is still a long way to go. Thereremain significant differences between regions bothin the structure of employment and in unemployment(see Box).
Employment in industry is estimated to have fallen by
between 25-50% in the CECs over the 1990s, but de -
spite this, the proportion of workers employed in de -
clining industries in many regions remains high.
Many regions with high employment in agriculture
have also suffered a disproportionate loss of jobs,though agricultural employment in most candidatecountries remains far above the level in the EU. In1999, taking the countries together, it accounted foralmost 22% of the total as against only 4.5% in the EU,indicating that the process of modernisation has stillto be undertaken and that potentially severe social aswell as economic problems remain to be tackled inthe future.
Employment in services has risen significantly in all
candidate countries, though by not nearly enough tocompensate for the job losses in industry and agricul-ture. Services account for only around 46% of the totalin work in the region as a whole compared with 66% inthe EU, which indicates the scale of the change whichlies ahead.
Overall, many regions in the CECs have a less diversi -
fied employment structure than their counterparts in
the EU and, at the same time, have to contend withproblems of high unemployment, poor infrastructure,low investment and lack of enterprise. The objectivesof future regional policy in the CECs are, therefore, todiversify the sectoral pattern of economic activity, tostrengthen infrastructure and support facilities, toidentify locational advantages and development po -
tential and to remove obstacles to growth.
Poverty
There has been growing concern about the issue of
social cohesion over the past few years. Disparities
22I.2  Social cohesion
between social groups and the overall dispersion of
income seem to have widened in the 1980s and early1990s, and this is often attributed to economic devel -
opments, in particular, globalisation, increasing com -
petition on world markets, the information revolution
and the resultant restructuring of the economy, aswell as demographic trends and changes in society.The trend seems to have slowed down or even re -
versed itself since the mid-1990s, but disparities be -
tween social groups remain unacceptably high.
Social cohesion is not only an important goal in its
own right, but it is also a key factor contributing toeconomic success. Regions which are unable to mo -
bilise the economic potential of large sections of their
population are handicapped in the increasingly com -
petitive global market place, while disparities can
breed social unrest which itself can damage eco -
nomic performance.
Poverty high, especially
in the cohesion countries
There are various definitions of poverty. The UN mil -
lennium summit, for example, defined an absolute
measure of poverty as a state in which someone has
23I.2  Social cohesion
Four types of regional labour market developments in the CECs
Unemployment rates in the CECs were only slightlyhigher than in the EU in 1999 (10.2% on average asagainst 9.3%). Unemployment, however, varie signifi -
cantly from region to region. Overall, four types of region
in terms of labour market developments can bedistinguished:
The major metropolitan areas (most notably the capi -
tal cities) have experienced a significant rise in em -
ployment in the service sector and benefit from
favourable geographical location, a high level of in -
vestment, a skilled labour force and better infrastruc -
ture endowment. These regions enjoy lower
unemployment and higher wage levels compared toother regions. Job growth is fuelled mostly by newlyestablished private-owned small and medium-sizedenterprises and foreign investment. Most prominentexamples are urban centres such as Prague,Bratislava and Budapest which have the lowest un -
employment rates and the highest share of employ -
ment in services in their countries.
The Western border regions, in part included in the
above group, which were in an unfavourable, periph-eral position during the previous regime, but whichhave benefited from their location since the transitionbegan. Proximity to the EU, relatively well developedinfrastructure, low labour costs combined with labourforce skills have all contributed to stimulate marketsand encourage investment. In addition, they havebenefited from increased trade (such as cross-bor-der retail) and tourism. In Hungary, western regionshave witnessed falling unemployment in recent yearsand a positive inflow of investment as have those inSlovakia and the Czech Republic. Even Polish re -
gions bordering Germany which have relatively high
unemployment rates tend to have a more diversifiedindustrial structure and more SMEs than other parts of
the country. Overall, most of the Western border re -
gions show a long-term positive trend in employment
and economic development.
The majority of the most disadvantaged regions are
the rural regions located at the Eastern periphery ofan enlarged EU. These tend to have relatively poor in -
frastructure, little investment and unfavourable eco -
nomic structure characterised by a predominance of
agriculture and low educational attainment of the la -
bour force. The partial return to subsistence farming
and outward migration has slowed down the rise inunemployment in some cases. In most of these re -
gions, employment is falling. Structural reforms in ag -
riculture are likely to lead to large-scale job losses in
future years.
Old industrial regions have been most adversely af -
fected by economic transition. These have been se -
verely affected by privatisation, enterprise
restructuring and closures, the reorientation of tradefrom secure markets and the loss of subsidies. Thedecline of heavy industry has played a significant rolein widening disparities in the CECs. These regionshave failed to create new job opportunities and to at-tract new business or foreign investment. Most ofthese regions have high rates of unemployment anddifficulties of re-integrating workers into the labourmarket because of their low and outdated qualifica-tions. The most prominent example is the industrialnorth and west of Poland which has experiencedlarge-scale decline. Many of the regions have yet toundergo significant restructuring which remains amajor challenge and could cause serious social andeconomic problems.
less than $1 a day to live on. Few people if any in the
EU are in this position, though given price levels andthe nature of the economy and society in the Union, asum of significantly more than this would be neces -
sary to prevent someone living in absolute poverty
here. What this sum should be is very difficult to de -
fine. Partly because of this, it has long been decided
that a relative measure is more relevant for assessingpoverty in the Union, in the sense that this is more in -
dicative of deprivation in relation to the living stan -
dards of people generally. Accordingly, the focus
tends to be on the proportion of the population with in -
comes below a certain level relative to the average,
though again there is scope for disagreement aboutthe appropriate level to take.
1
In practice, the main measure of poverty used in theEU at present is the Eurostat definition: the percent -
age of people with an income of 60% or less of the
median income in the country in which they live.
2Al-
though this means that the poverty line, in terms of ab -
solute values, differs between countries, it is
indicative of relative deprivation in the countryconcerned.
Using this measure, 18%, or more than one in six, of
people in the EU had an income below the povertylevel in 1995. This proportion does not seem to havechanged much in recent years, though the figureswhich exist on a comparable basis are only for the pe-riod 1993 to 1995, which is too short to determinemuch about changes. While early indications are thatthe proportion might have declined since 1995, thisremains to be confirmed.The countries in which the proportion of people with
poverty levels of income is lowest are Denmark, Lux -
embourg, the Netherlands and Austria (and probably
Finland and Sweden as well, though they did not par -
ticipate in the 1996 European Community Household
Panel survey on which the figures are based). Notonly are the poverty rates in these four countries onlyaround 11-12%, but this is relative to a national in -
come which is higher than the EU average (Graph 6).
At the other extreme, the countries where the poverty
rate is highest are Portugal and Greece, in which21-22% of the population have income below the pov -
erty line. This understates the scale of the problem in
an EU context, since these two countries have thelowest level of median income in the Union. A furtherpoint of interest is the persistence of poverty, as indi -
cated by the proportion of people with income below
the poverty line in each of the three years for whichcomparable data are available. This is clearly moreimportant than the figure for a single year, which mayreflect only a temporary state of affairs for some ofthose concerned. Persistent poverty in the EU isslightly less than half the figure for a single year, 7% ofthe people covered between 1993 and 1995 havingan income below 60% of the median in each of thesethree years, as opposed to 17% in 1995 (the figurebeing lower than that quoted earlier because not allthe people were surveyed every year).
There is some tendency for the persistence of poverty
to be disproportionately higher in countries with highpoverty rates in 1995. In Denmark and the Nether -
lands, persistent poverty affected only 3% of the pop -
ulation, only a quarter of the proportion in 1995, which
means that not only is poverty low in these two coun -
tries, but for most, it is a temporary state of affairs.
Conversely, in Portugal, which had the highest levelof poverty in 1995, more than half (12% of the popula -
tion) were affected by persistent poverty, while in
Greece, the figure was only slightly less (10% of thepopulation). The main exception to the general rela -
tionship is the UK, where the proportion with income
below the poverty line in 1995 was relatively high(19%), but where only 7% of people had income be -
low this level in each of the three years.
For the candidate countries in Central Europe, there
are no comparable data available. The studies whichhave been undertaken, however, suggest that the fig -
ures might be higher than in the EU as income disper -
sion has widened over the 1990s due to the reduction
24I.2  Social cohesion
 
03691215182124
DK L NL A D F B E IRL I UK EL P EU03691215182124Below threshold in 1995
Below threshold for 3 consecutive years% population6 Population with income below the poverty 
line, 1995
A : no data for persistent poverty; 
FIN, S: no data
in employment and a decline in real wages of the less
skilled. They also show that poverty in rural areas, onwhich research has been carried out, is a seriousproblem (see Box ‘Rural income and poverty in the
candidate countries ’).
Factors linked to poverty: unemployment,
low education and one parent families
The causes of poverty are numerous, but here are a
few factors which are strongly associated with low in -
come, particularly on a persistent basis (see Table
A.5). In the EU, six categories of people are at particu -
lar risk of having a poverty level of income: the unem -
ployed, lone parent families, those with low
education, those in retirement, families with manychildren and those of working-age not in employment(because of disability, for example).
A number of people fall into more than one of these
groups. For example, a large proportion of the unem -
ployed have low education. The first three character-
istics, however, are the most noteworthy. In the EU asa whole –though not necessarily in individual Mem-
ber States –the unemployed and lone parents are
three times more likely than people generally to fallbelow the poverty line, reflecting in both cases theloss of income from employment (a disproportionatenumber of lone parents are not in work). Many ofthese and others with low incomes have low educa-tional attainment. Moreover, the information revolu-tion is likely to mean that poor education will becomea more important determinant of poverty in the future.
The main characteristics of those with poverty levels
of income differ between Member States, reflectingvariations in both social policy and social structure.For example, the unemployed are at particular risk inthe UK, where they are four times more likely to havelow incomes than people generally, while in Den -
mark, they are only slightly more at risk than average.
This reflects the more comprehensive and generousunemployment benefit system in the latter than theformer. Nearly half (46%) of lone parents and theirchildren have poverty levels of income, largely be -
cause they are not in paid employment, though the
situation varies markedly from one country to another,reflecting, in particular, levels of childcare provisionand support. The families concerned are most at riskin the UK and Ireland, where they are 5 or 6 timesmore likely than average to have income below 60%of the median. Conversely, they are at relatively lowrisk in Portugal, Spain, France Belgium and Italy –in-
deed, in Italy (where the risk of poverty is highest for
large families), they are at no more risk than otherhouseholds.
Links between education and earnings:
the implications of a single marketfor graduates for cohesion countries
The link between education and income levels is of
particular interest (see Graph A.3). While in all Mem -
ber States, income increases significantly with edu -
cational attainment levels, people with university
education or the equivalent tend to have similar in -
come levels (adjusted for cost of living) across the
EU, which suggests perhaps the emergence of a sin -
gle market for graduates. Although many obstacles
remain, such as a lack of transferability of qualifica -
tions or language difficulties, there are signs of in -
creased international mobility among young
graduates, in particular. A possible effect of this is atrend towards equalisation of graduate pay acrosscountries, while earnings of those with lower qualifi-cations continue to vary . The widening income gapwhich results in the less prosperous countries mayput increasing pressure on social cohesion.
An uncertain long-term trendThe factors underlying poverty levels of income give
mixed messages for long-term trends in social cohe -
sion. On the one hand, continued economic growth
and higher levels of employment may reduce the pro -
portion of people with low income, insofar as the rela -
tive numbers without earnings from work are
reduced. On the other, social trends mean that thenumber of lone parent families may continue to in -
crease. Moreover, while education levels are rising
across the EU, especially in the lagging regions, thegrowing dependency on information technology, andthe high level of general education which is a precon -
dition for being able to use this effectively, threatens
to put those with low education levels at an increasingdisadvantage.
Transfers: an important weapon
in the fight against social exclusion
Social transfers (other than pensions), which account
for 9% of total household income in the EU, make asignificant contribution to maintaining social
25I.2  Social cohesion
cohesion. Over half go to the poorest 20% of the pop -
ulation and make up over half their final income.
The effect of social transfers is evident if the proportion
of people below the poverty line is compared with whatit would be in the absence of transfers (Graph 7 and, inAnnex, Graph A.4). In most Member States, transfers(in this case including pensions, some of which arefrom private sources) reduce the poverty rate by30-40%.
3In Denmark, the figure is higher, while in Italy
and Greece, and to a lesser extent Portugal, socialbenefits have much smaller effects on the distributionof income, reflecting both their smaller scale and lesstargeting on those with the lowest incomes.
In the UK and Ireland, in both of which social transfers
reduce poverty rates substantially, the high propor -
tion of people with low income is to a large extent due
to a wide dispersion of income before transfers,which in turn reflects the wide dispersion of wages (asrevealed, for example, by the Eurostat, Structure ofEarnings Survey for 1995).
Despite the contribution of social transfers to maintain-
ing social cohesion, it should be emphasised that, re-tirement pensions apart, they tend to tackle thesymptoms rather than the underlying causes of pov-erty. As such, they do not in themselves provide along-term solution to the problem. It is therefore impor-tant for them to be accompanied by structural mea-sures aimed at tackling the root causes, in particular,unemployment, low education and inadequate skills, alack of child-care support facilities and so on, which willalso help to increase the growth potential of the econ -
omy.
26I.2  Social cohesion
 
05101520253035
DK L NL A D F B E IRL I UK EL P05101520253035Total, before transfers
After transfers% population7 Population with income below the poverty 
line before and after transfers, 1995Rural income and poverty in candidate
countries
In most countries, agricultural income has declinedsignificantly since the beginning of transition. Thishas been particularly marked in Poland, Slovakiaand Romania. There are a number of reasons for thistrend. First, at the beginning of transition, there wasa sharp adjustment to world market prices, wheretrade was liberalised leading to a reallocation of re -
sources in the agricultural sector. This was associ -
ated with declining terms of trade as input prices
rose and producer prices fell. In many countriesfarmers reduced intensity of input use and shifted,particularly in sectors dominated by small scalefarming, towards labour-intensive production sys -
tems. Low opportunity costs of labour, linked to
more general economic restructuring and lack of al -
ternative sources of employment in rural areas sup -
ported this tendency. The result has meant that farm
incomes, which before transition were at or abovenational wage levels, are now in many countriesconsiderably lower than national wage levels.
The picture is, nevertheless, varied across the can-
didate countries. Agricultural income per labour unithas remained relatively high in the Czech Republicand Hungary and to a lesser extent in Slovakia. Incontrast, incomes are far lower in the remainingcountries, particularly in Poland and Romania, re-flecting very high levels of employment in agricul-ture combined with low productivity. In all candidatecountries, current evidence would suggest that ag-ricultural labour incomes are considerably lowerthan in the European Union, even when adjusted forpurchasing power. In contrast, income per hectareremains relatively high in almost all countries exceptPoland and the Baltic States, particularly when thepurchasing power of farm income per hectare iscompared with the EU. It is, therefore, important tostress the considerable variations in factor combi -
nations and income potential across the CECs.
Without major restructuring, the prospects for agri -
cultural labour income in these countries are poor
for macroeconomic reasons, and in particular, dueto real exchange rate developments. First, eco -
nomic growth in the CECs, increasing labour costs
and real appreciation of exchange rates will in -
crease the competitive pressure on agriculture.
Secondly, these trends will be associated with a rel -
ative fall in purchasing power of agricultural in -
comes. In order to maintain sustainable income
levels agriculture will require major restructuring.On the other hand, an increase in labour opportunity
27I.2  Social cohesion
costs in the rest of the economy will provide an incentive
for labour to move out of agriculture. This will dependlargely on reducing structural impediments to labouradjustment. In this context, it is important to note that un -
employment in many rural areas remains high despite
satisfactory growth rates in the economy as a whole.
These low levels of agricultural income per labour unit
translate into significant rural poverty. Recent researchfrom the World Bank suggests that poverty as definedby the population below 50% of average income is con -
siderably more concentrated in rural areas in Poland,
Romania, Lithuania, Latvia and Bulgaria (Graph 8).Even in Hungary, where agricultural incomes are com -
paratively high, significant rural poverty exists. As the
World Bank study shows there are many reasons out -
side the agricultural sector that create vulnerability to
poverty in rural areas –low levels of human capital, lack
of infrastructure, lack of alternative sources of invest -
ment and peripherality. 
010203040506070
BG CZ EE HU LV LT PL RO010203040506070Households in rural areas
Households with < 50% average income in rural areas
Households with < 33% average income in rural areas% total households8 Concentration of poverty in rural areas in 
CECs
1 There is scope for debate about whether the level of income taken should be in relation to average income in the EU or individual
Member States or even regions. In practice, there are various problems with comparisons based on an EU-wide average incomelevel, since the measure tends to be dominated by the large differences in average income between Member States rather thanreflecting differences in the dispersion of income within these. In other words, a measure of poverty calculated in relation to averageincome in the EU largely indicates differences in national rather than individual levels of income. At the same time, irrespective of themerits or otherwise of measuring poverty on a regional basis, the data are simply not available to do so.
2 In the First Cohesion Report, the previous definition used by Eurostat was used to determine the poverty line, ie an income per head
of 50% or less than the mean. In practice, for most countries the two measures give similar results. However, the new definition ispreferable, especially for making comparisons over time, because the median is a more stable measure of average income than themean in that, since it relates to someone in the middle of the income distribution, it is not affected by extreme values. The figuresreported in the text are derived from the European Community Household Panel. It should be noted that data for Belgium are atpresent being revised.
3 It is interesting to compare this with the reduction in regional disparities due to transfers. The First Cohesion Report found that total
government expenditure, including social spending, reduced interregional disparities in Member States by 10-30%, ie by less thanthe reduction achieved in interpersonal disparities, which are generally more of a focus of national policy.
28I.2  Social cohesion
I.4  Factors determining real convergence
Productivity, competitiveness
and economic performance
Competitiveness is often viewed as a key indicator of
the success or failure of policy. The term literally re -
fers to producers competing with each other in the
same market. However, there is a related concept ofthe economic performance of regions and countries,which can also be termed ‘competitiveness. ’
Despite the fact that there are competitive and un-
competitive firms in every region, there are commonfeatures which affect the competitiveness of all firmslocated there. These features include physical andsocial infrastructure, the skills of the work force, an in-stitutional framework and a culture conducive (or notconducive) to innovation and the efficiency of publicinstitutions (especially managerial capacity at the re -
gional level). In addition, success breeds success;
the presence of strongly competitive firms in a regiontends to stimulate other firms and to encourage fur -
ther investment.
Over recent years, a standard definition of regional
and national competitiveness has begun to emerge,which relates to the achievement of ‘high and rising
standards of living and high rates of employment on asustainable basis. ’
1Although traditional measures of
competitiveness tend to focus on GDP per head,there are other important factors affecting economicperformance. The Lisbon summit underlined the cru -
cial link between Europe ’s economic strength and its
social model. Effectively targeted social protectionhelps economies adapt to change. By promotinggreater social cohesion it can help reduce the under-use of human resources. It is also important to keep inmind the contribution of other factors such as thequality of the natural environment, quality ofhealthcare, social services and so on. Indicators of
this type help enrich our understanding of economicdevelopment, though further work is needed to de -
velop better measures of progress in these areas.
In practice, GDP per head can be broken down into
two main components: the employment rate, or theproportion of working-age population in work, andproductivity, or GDP per person employed. Since ahigh level of one does not necessarily go with a highlevel of the other, they are considered separately be-low, both in aggregate and by sector, before examin-ing investment and other key factors underlyingproductivity.
Trends in regional economic performance
For the EU as a whole, economic performance overthe past 25 years has tended to be stronger in termsof productivity and often weak in terms of employ -
ment. This has sometimes led to concerns about ‘job-
less growth ’, though, in practice, employment has
always increased when GDP growth has been morethan 2% a year or so. The problem has been maintain -
ing this rate of growth over the long-term. Over the de -
cade 1989 to 1999, for example, annual growth
averaged 1.9%, but because GDP per person em -
ployed rose by 1.4%, employment increased by only
0.5% a year. In the long-term, achieving high employ -
ment growth and high productivity growth are not
necessarily in conflict with each other. Indeed, to theextent that productivity growth increases competi -
tiveness and, therefore, enables higher growth of
GDP to be achieved, they are complementary. Thechallenge in lagging regions, however, is to developa mix of policies which boost productivity without ad -
versely affecting levels of employment.
37
While in most, but not all, lagging regions, employ -
ment levels are less than in the rest of the EU, in all of
them, productivity is below average. Two maingroups can be distinguished:
•those with employment rates similar to, or in a few
cases above, the EU average, which need tocatch up in terms of productivity, measured byGDP per person employed. These are mostly inPortugal, Greece and the eastern part of Ger -
many, where in the first, productivity is typically
only around 40% of the EU average and in theother two, around 60% of the average.
•those lagging in terms of both productivity and
employment. These include most regions inSpain and southern Italy, where employmentrates can be as low as 40% as against an EU av -
erage of over 60%. In these cases, low employ -
ment is, exceptionally, a more important reason
for low GDP per head than low productivity.
Sectoral analysis: low productivity in agricultureThe sectoral structure of economic activity shows an
interesting pattern, if sectors are divided into agricul-ture; industry (mainly manufacturing); distribution,transport and hotels and catering; business and fi-nancial services and non-market and other services(principally health, education and public administra-tion) (see Table A.18 and Map 8). Productivity is high-est in business and financial services, grossvalue-added per person employed in the EU beingover twice the average for the economy as a whole.
2It
is slightly above average in industry and just belowaverage in distribution, transport and hotels and innon-market and other services.
3In agriculture, pro -
ductivity is only around half the average for all
sectors.
Poor performance often linked to
concentration in less productive sectors
In all three of the cohesion countries, overall employ -
ment rates are low to a large extent because of low
employment in business and financial services,where productivity is relatively high (though thisshould be interpreted with caution because of highvalue-added in the protected financial services sec -
tor). On the other hand, the share of employment in
distribution, transport and hotels and in non-marketand other services is similar to the EU average, as isthe level of productivity. Employment is much higher
than elsewhere in agriculture where productivity isvery low.
This pattern is reflected at the regional level (Map 9).
Three sets of regions can be distinguished in the EUof 27 Member States (though not all fit the classifica -
tion neatly):
•lagging regions with a high employment in agri -
culture, often an above average share of employ -
ment in industry and low employment in services.
These are notably in the southern Member Statesand in Central European countries, except for theCzech Republic, Slovakia and Hungary. Whileagricultural employment in the EU is under 5% ofthe total, in some regions in Spain and Portugal, itis over 15% and in regions in Greece and themost eastern parts of the applicant countries,over 20%;
•regions with high employment in industry. Many
of these are concentrated in a central arc, stretch-ing from the West Midlands in England, easternFrance and northern Spain, through southernGermany and northern Italy to the Czech Repub-lic, Slovakia and Slovenia. Although many ofthese regions are prosperous, many are not, re-flecting the significant variation in value-addedbetween manufacturing industries;
•regions with high employment in services. These
are regions where the share of employment in thissector is 70% or more. Most of these regions areprosperous and include a number of capital citiesin the north of the EU, but the group also includesregions in southern France, Spain and Italy,which have relatively low levels of GDP per headand where employment is concentrated in basicservices, many of them catering for the touristtrade.
The long-term trend towards services and
the restructuring required in lagging regions
Over many years, there has been a tendency in the
Union for employment in agriculture and industry todecline –though in the latter, the number employed
has stabilised in recent years, even if the share hascontinued to fall –and for employment in services to
expand. This trend, however, as noted above, hassome way to go in many regions, particularly in
38I.4  Factors determining real convergence
39I.4  Factors determining real convergence
Index, EU15 = 100< 99 - 3939 - 6969 - 99≥99
no dataaverage = 54.1Standard deviation = 59.2England: average of NUTS1 regions
Source: Eurostat UK: NUTS1IRL, PL, RO: NUTS0Index, EU15 = 100< 57.557.5 - 76.576.5 - 95.595.5 - 114.5≥114.5
no dataaverage = 86.0Standard deviation = 38.1
England: average of NUTS1 regions
UK: NUTS1IRL, PL, RO: NUTS0Index, EU15 = 100< 6868 - 8484 - 100100 - 116≥116
no dataaverage = 91.9Standard deviation = 31.1
England: average of NUTS1 regions
UK: NUTS1IRL, PL, RO: NUTS0
250
01250 km© MEGRIN for the administrative boundaries
8  GDP per person employed, 1998
Agriculture IndustryServices
40I.4  Factors determining real convergence
Guyane (F)Guadeloupe
(F)Martinique
(F)Réunion
(F)Canarias (E)
Açores (P)
Madeira
(P)
Kypros
Agriculture (top 10%)
Agriculture (top 25%)
Industry (top 10%)
Industry (top 25%)
Services (top 10%)
Services (top 25%)Top 10% and 25% of total population
EL, RO, SK: 1998BG, LT, LV: 1997D (Sachsen): NUTS1Sources: Eurostat and NSI
0 100 500 kmSIG16SIG16
© MEGRIN for the administrative boundaries9  Regions with highest agricultural, industrial or service employment, 1999
lagging ones. Indeed, even in the most prosperous
regions, employment in services is still growing. Be -
tween 1990 and 1999, employment in services in the
EU increased by some 12 million, while in the rest ofthe economy it declined by 9 million. Most of this de -
cline occurred during the recession years of the early
1990s, though during the recovery since 1994, agri -
cultural employment has continued to fall (by around
1.3 million), while employment in industry has re -
mained broadly unchanged. In the lagging regions,
there will be a continuing shift of employment out ofagriculture on a substantial scale in future years,though not necessarily job losses in industry. Indeed,in some regions, employment in manufacturing, es -
pecially where it is still below the EU average, might
well increase, as it has tended to do in recent years. Inthe central industrial regions, on the other hand, em -
ployment in manufacturing in many cases could de -
cline, at least as a share of the total, though in many of
these a shift has already occurred to highvalue-added activities, as noted below.
The restructuring of employment in future years is
likely to be even greater in the candidate countries,where jobs in many regions remain concentrated inagriculture and/or industry.
It should be noted in this context (see maps of em-
ployment and productivity by sector) that the shift inemployment out of industry, and to a lesser degreeout of agriculture, in the more prosperous regions inthe EU has not necessarily been accompanied by asimilar decline in the share of value-added generatedin these sectors. Indeed, in many cases, productivityhas increased significantly in industry, as employ -
ment has concentrated in high value-added activi -
ties. This demonstrates the potential for maintaining a
small but highly competitive manufacturing sector asa key part of the regional economy.
Shifts of activity within sectors as
important as shifts between them
An important aspect of lagging economic develop -
ment in the less prosperous regions in the EU is the
concentration of activity in low value-added sectors(though, it should be emphasised, productivity in thesame sector can vary significantly across the Union).This reflects differences in both the efficiency of per -
forming the same activities and the degree ofconcentration in higher or lower value-added parts of
the broad sectors concerned.
For example, business and financial services have
relatively high value-added per person employed inthe cohesion countries (as in some of the candidatecountries), which partly reflects high interest rates(which push up value-added in financial services)and low competition, but also perhaps the under-de -
veloped nature of these services in relation to poten -
tial demand. On the other hand, manufacturing,
which has an above average level of value-added perperson employed in most countries, has relatively lowproductivity in the three cohesion countries (as wellas in most of the candidate countries). This differencein part reflects a tendency for high value-added andhigh-tech parts of manufacturing to concentrate inthe more prosperous Member States.
4
In agriculture, value-added per person employed isaround 80-90% of the EU average for all sectors in themore prosperous countries, but only 40% of this inSpain, 25% in Greece and just 13% in Portugal (and16% in Austria). (In the candidate countries, the figureis even lower.) These figures reflect both the need fordiversification into higher value-added activities andthe long-term potential for significant productivitygrowth in the sector.
Demography and migration
Population in the EU is set to decline ...
At the beginning of 2000, the population in the EU
stood at 376 million, substantially less than in China(1.2 billion) or India (1 billion), but significantly morethan in the US (272 million) or Japan (126 million). As -
suming trends in birth and death rates and in migra -
tion continue, EU population is projected to grow very
slowly between 2000 and 2005 (by only 0.2% a year)and then hardly at all (by under 0.1% a year) from thenuntil 2022, when it is expected to start declining. In2010, therefore, population is forecast to reach 385million and in 2025 to be only slightly higher (388 mil -
lion). From 2008, population is set show a natural de -
cline but this will be offset for a few years by net
inward migration.
Trends in population, however, vary markedly be -
tween different parts of the Union. While population is
41I.4  Factors determining real convergence
still growing in most regions even if slowly, in some,
predominantly in Spain, Italy, Germany and theNordic countries, it is already declining (see MapA.11). Between 2000 and 2010, more regions in Ger -
many and Italy are projected to show a decline, in ad -
dition to some in France, the UK and Austria. On the
other hand, population is expected to continue in -
creasing at a relatively high rate in a number of re -
gions in southern Spain, the south of France and
Greece as well as in parts of Germany, the Nether -
lands and the UK.
By 2025, almost 90 of the 200 or so regions, defined at
the NUTS 2 level, accounting for half of all the peopleliving in the EU, are projected to be experiencingpopulation decline, including all those in Italy but alsoa number in virtually all Member States.
... as it is in the candidate countriesDemographic trends are even more adverse in the
candidate countries. While in most of the 12 coun-tries, population grew at a relatively high rate in the1970s and 1980s, due to high fertility rates and in-creasing life expectancy, in the 1990s, fertility ratesfell dramatically and life expectancy declined. In ad-dition, there was significant outward migration, withonly the Czech Republic, Malta and Cyprus experi-encing a net inward movement over the period 1990to 1999 (see Map A.12).
As a result, population growth has already begun to
fall in most of the countries. In 8 of the 12, populationdeclined over the 1990s. Between 1995 and 1997, itfell in 32 out of the 52 regions, defined at the NUTS 2level and there was net outward migration in 31 ofthem. In the wider European area, therefore, and in -
cluding these countries with the existing EU Member
States, population decline is likely to occur severalyears earlier than indicated above. (The projectionsfor the 12 countries are based on UN forecasts.
5)
Regions with declining populationDemographic trends are affected by social and eco -
nomic developments. Migration flows, in particular,
are related to regional differences in labour marketconditions, people moving from areas of low jobgrowth to ones with more employment opportunities,and, over the longer-term, such differences can alsoaffect birth and death rates.Declining regions in the EU are, therefore, character -
ised by low income levels, high unemployment and a
large proportion of the work force employed in agri -
culture and industry (see Graph A.9). In addition, they
tend to have a relatively small number of young peo -
ple, reflecting their migration to other areas as well
as low fertility rates, and a low density of popula -
tion, reflecting the rural nature of many of them. There
are, however, notable exceptions to the latter,since a number of densely-populated regions (egBrussels and Attiki, where Athens is located) havealso experienced a reduction in population in recentyears. Indeed, a tendency to ‘suburbanisation ’, the
movement out of city centres to the suburbs andneighbouring regions, which is often described as‘urban sprawl ’, is evident in many major conurbations
across Europe.
Population ageing in the EU will accelerate ...Population in the EU is ageing rapidly. With low birth
rates, the proportion of young people under 15 hasdeclined for a number of years and is projected tocontinue to do so in the future, falling from 17% in1998 to 14.5% in 2025. By contrast, the proportion ofthose aged 65 and over is rising significantly and isset to increase even faster after 2010 as thebaby-boom generation begins to reach this age. Ac-cordingly, the proportion is projected to increasefrom around 16% of total population in 1998 to 22% by2025. Moreover, within this, the relative number ofpeople of 80 and older is rising faster still.
These trends will have important consequences for
social welfare and taxation systems across the EU. Inparticular, the prospect is for a growing number ofpeople above retirement age who will need to be sup -
ported by those in employment. All Member States
will experience an increase in the old-age depend -
ency rate (the number aged 65 and over relative to
those of working-age, taken here as 15 to 64), but theextent of this is likely to vary significantly betweenthem. The most marked increases are expected to bein Italy, Sweden, Finland and Germany and the small -
est in Ireland, Portugal and Luxembourg.
The trend is likely to be similar, if less pronounced, for
the overall dependency rate, the total above and be -
low working-age in relation to those of working-age,
despite the projected decline in the number ofchildren
6(Map 10). At present, there are some 49 po -
tential dependants in the EU for every 100 people of
42I.4  Factors determining real convergence
working age; in 2025, there are expected to be 58.
The number is projected to be particularly high inmost regions in France, Sweden and Finland.
The retirement of ‘baby-boomers ’together with the
declining number of young people is set to reduceworking-age population in the EU from around 2010onwards, and this is projected to fall from around 251million now to some 243 million in 2025. At the sametime, the average age of those of 15 to 64 willincrease.
... as it will in the candidate countriesThe pace of population ageing in the enlarged EU, ie
including the candidate countries as well as the exist -
ing Member States, might be slower, but only slightly.
In most candidate countries, active policies of en -
couraging population growth during the 1970s and
1980s were reversed in the 1990s. While the averageage of their populations is lower than in the EU atpresent, it is likely to increase rapidly over the next 25years, as falling fertility rates reduce the relative num-ber of young people under 15 in all countries apartfrom Malta. By 2025, the proportion of young peoplein total population is, therefore, projected to be evenless than in the present EU.
On the other hand, the proportion of people aged 65
and over in these countries is, on average, less than inthe EU at present. Accordingly, old-age dependencyrates are also lower and, in many regions, well belowthose in EU Member States, with the exception of Ire -
land (Map 10).
The relative number of elderly people will also in -
crease substantially, though only in the Czech Re -
public is the number expected to rise above the EU
average by 2020. Nevertheless, both the averageold-age dependency rate and the average overall de -
pendency rate are expected to be only marginally
lower in an enlarged EU than indicated above.
The same is true of the prospective decline in work -
ing-age population, which is projected to occur from
about the same time in the candidate countries as inthe present EU. The number of people aged 15 to 64is expected to rise slightly from the present 72 millionuntil 2009 and then to fall to 66 million in 2025.Working-age population in an enlarged EU is, there -
fore, likely to reach a peak of 328 million in 2010 and
to decline to 309 million by 2025. As in the EU, theaverage age of those of 15 to 64 in the candidates
countries will also increase, though at a slightlyslower rate than in existing Member States.
The labour force in the EU
is set to decline and to age ...
The trends in working-age population described
above will inevitably affect the growth and age struc -
ture of the labour force in the EU, though this will be in -
fluenced as much by changes in participation as by
demography. These, in turn, will be determined by arange of economic and social factors, most espe -
cially by the availability of jobs, but also by education
developments, social attitudes towards women work -
ing, the availability of child-care support, the age of
retirement, the details of pension schemes, the struc -
ture of households and so on.
If current demographic and participation trends per -
sist, the labour force is projected to grow in the EU up
to 2010, when it will reach 183 million.
7Thereafter, it
will start to decline, falling to some 175 million by2025. The onset of decline, however, is likely to differsignificantly between regions (Map 11). Neverthe-less, in almost all regions in the EU, the number ofeconomically active people is expected to be fallingby 2025, though at widely differing rates. The declineis projected to be particularly marked in Italy, Ger-many and Spain, the labour force falling by over 1 mil-lion in each case.
Because of demographic trends and possible
changes in participation, the relative number of peo -
ple of 50 and over in the labour force is expected to in -
crease in all Member States, from an average of
around 20% of the total now to 30% in the early 2020s.In the Nordic countries, where participation is not ex -
pected to change much, the increase in this propor -
tion is likely to be relatively small, while in Italy and
Spain, where birth rates are low and participationrates of women could increase markedly, it might besubstantial.
... which could have profound
economic consequences
As noted above, these trends could have far-reach -
ing economic consequences, especially for the
sustainability of social protection and health care sys -
tems, which will be put under increasing pressure by
the growth in the number of elderly people.
43I.4  Factors determining real convergence
44I.4  Factors determining real convergence
< 4343 - 4747 - 5151 - 55> 55no data< 1212 - 1414 - 1616 - 18> 18no data< 1919 - 2222 - 2525 - 28≥28
no dataScotland: NUTS1
Scotland: NUTS1
Scotland: NUTS1 Source: EurostatIRL: NUTS0
IRL: NUTS0
IRL: NUTS0250
01250 km© MEGRIN for the administrative boundaries
10 Age dependency, 1998
Total age dependency rateProportion of population aged 65 years and over Old age dependency rate%
%
%
45I.4  Factors determining real convergence
Guyane (F)Guadeloupe
(F)Martinique
(F)Réunion
(F)Canarias (E)
Açores (P)
Madeira
(P)
Periods
Not before 2025
Between 2015 and 2025
Between 2005 and 2015
Between 1995 and 2005
0 100 500 km11  Projected decline in the labour force
Accordingly, attention needs to focus on the possibil -
ity of increasing participation among older people as
well among women, the prime source of labour forcegrowth in the future.
At the same time, such a possibility brings into focus
the problem of maintaining, updating and extendingthe skills of the people concerned, which is already aconcern given the ageing of the work force. In manycountries, the pursuit of early retirement policies upuntil recently have enabled this problem to be ig -
nored. Moreover, the perception that returns to the
training of older workers are relatively low, whateverthe reality, means that employers are often reluctantto undertake the necessary investment. This reluc -
tance tends to be compounded by the perceived dif -
ficulties of the training process and of older workers
learning new skills. These difficulties, however, canbe greatly reduced if the training of such workers be -
comes part of a process of lifelong learning, which in
turn means that people acquire new skills throughouttheir working lives and are accustomed to doing so.This kind of development, which requires a change inattitudes as well as in working practices, is essential ifthe potential of older workers is to be effectivelytapped, which could prove vital for EU producers toremain competitive on world markets.
It is equally important to ensure that women –or in-
deed men –returning to work after a period of ab -
sence due to family reasons have access to the
training they need to update their skills and learn newmethods of working, so that they can both find suit -
able jobs and contribute effectively to the develop -
ment of the EU economy.
The prospective decline in the number of young peo -
ple might have the effect of diminishing youth unem -
ployment, though this in the long-term depends more
on their skills and the rate of job growth than on num -
bers
per se . The decline in young people entering the
labour market has been accompanied by an increasein the number remaining in education and initial voca -
tional training longer. In a knowledge-based econ -
omy, it is essential that this trend continues. At the
same time, the growing recognition of the importanceof workplace training as well as formal tuition meansthat in a number of countries the labour force partici -
pation of young people is increasing as they combine
paid employment with continued education.Whatever measures are taken to increase participa -
tion, the extent to which it increases for women and
older workers as well as young people, ultimately de -
pends on the rate of job growth, which in turn is likely
to depend on the pace of economic development.(The process, it should be emphasised, is not solelyone-way, since more skilled and enterprising peoplejoining the labour market is itself likely to boost com -
petitiveness and economic growth.) This will deter -
mine whether unemployment declines and job
shortages emerge or whether, despite the fallingnumber of people of working age, unemployment inthe Union increases again.
The labour force in many parts of northern Italy is, for
example, projected to decline significantly in futureyears on the basis of past trends and, indeed, labourshortages are already beginning to emerge. In thelonger-term, however, if economic growth and net jobcreation can be sustained at high levels, this mightencourage more people –women in particular whose
participation is well below the EU average in mostareas –to join the labour force and ease shortages.
(Participation of women in northern Italy hasincreased markedly over the past 10-15 years,whereas in southern Italy, where job growth has beendepressed, it has hardly changed.)
Inward migration could increase but
it should not be overemphasised ...
Recent studies conclude that large-scale migration
flows from the candidate countries are unlikely to oc -
cur and should not be overemphasised in the en -
largement agenda. Since, however, convergence of
income per head in the CECs to EU levels will be along process, migration is almost certain to increaseonce free movement is possible. Estimates are thatnet migration to the EU could amount to some335,000 a year immediately after entry barriers are re -
moved, but that this would fall to below 150,000 within
a decade.
8At this time, the number of people living in
the EU from the CECs could reach 2.9 million and an -
other 10 years later, 3.7 million, rising to a peak of 3.9
million 30 years after the introduction of free move -
ment of labour. This implies a growth in CEC nationals
resident in the existing EU Member States from 0.2%of total population in 1998 to only just over 1% in 30years time. On these estimates, concern that mi -
grants from the CECs will swamp EU labour markets
are, therefore, ill-founded.
46I.4  Factors determining real convergence
People moving from the CECs are likely to go mainly
to Germany and Austria, where the numbers are al -
ready high. Estimates are that some 65% will go to the
former, 12% to the latter, and within these countries,primarily to border regions and centres of economicactivity –in Germany, to southern regions bordering
the Czech Republic rather than to the new L änder, in
Austria, to eastern areas. Regions bordering theCECs are also likely to experience increased tempo -
rary inward migration and commuting. This concen -
tration could, however, give rise to social tensions in
the areas concerned.
... and could ease labour shortagesPerhaps the most interesting and potentially impor -
tant conclusion from recent studies is that, unlike the
EU, many CECs are likely to experience a significantgrowth in younger people aged 20 to 35 over the nextdecade or so. This represents an opportunity for theenlarged EU, insofar as it gives employers the possi -
bility of taking on young people with high education
attainment levels. Indeed, if economic recovery con-tinues at the pace currently expected, then it will alsobe a time when skill shortages are likely to becomemore acute.
In fact, there is also evidence in the EU of labour
shortages in less skilled activities in a number of re-gions, even in some where unemployment is rela-tively high. Immigrants could potentially help torelieve shortages in these areas as well, though it isimportant that adequate measures are introduced atthe same time to integrate those concerned into thelocal community and prevent them becoming sociallyexcluded.
In this regard, a recent Commission Communication
on a Community Immigration Policy (COM(2000)757)proposed the adoption of a controlled immigrationpolicy as one of the responses to the problems im -
plied by demographic trends and pointed to the po -
tential contribution of immigration to the European
Employment Strategy.
Although the outflow of young people might tend to
damage the development potential of the regionsfrom which they move in the short to medium-term,especially as those moving are likely to include a dis -
proportionate number of the most highly educated,
their subsequent return, with the expertise andknow-how they have acquired, could give a major
stimulus to development in the CECs.
Nor is enlargement likely to pose
serious problems for EU labour markets
It is unlikely that the free labour movement will have a
major effect on EU labour markets as a whole, though itcould affect Member States differentially according tothe specific circumstances which exist. CECs at pres -
ent are small in economic terms, which means that in -
creased imports from them are likely to affect prices in
goods markets, and so wages and employment, onlyto a limited extent. According to a recent study, for ex -
ample, immigration averaging some 200,000 a year
over the next 15 years would reduce earnings by under1%.
9In border regions, however, the effect on labour
markets could be more significant, as it could be insectors which are most exposed to competition fromCEC imports, though equally there are potential gainsfrom the proximity of new markets.
Investment
Investment the key to growthin candidate countries
Indicators of investment are a good barometer of the
growth potential of an economy
10(see Graphs A.10
and A.11). Investment (as measured by gross fixedcapital formation) is higher in relation to GDP in the ap -
plicant countries than in current EU Member States –
25% of GDP as against 20% in 1998. It is essential forthis differential to be maintained or even increased ifthe applicant countries are to achieve the high growthrates necessary to catch up with the EU economies.High investment
per se is no guarantee of success –it
must be well targeted and coupled with technical prog -
ress (see below) –but it is a necessary condition.
The level of investment, however, differs significantly
between applicant countries. In the Czech Republic,Slovakia and Poland, investment is as high as 30% ofGDP. By contrast, in the countries with the lowest lev -
els of GDP per head, it is generally much less (only
around 11 ½% of GDP in Bulgaria in 1998).
In the Union, Portugal, the country with the second
lowest level of GDP per head, has the highest invest -
ment in relation to GDP (28%), while in Spain and
47I.4  Factors determining real convergence
Greece, as well as Ireland, it is also well above the EU
average. Sweden, on the other hand, with GDP perhead around the EU average, has the lowest level(17% of GDP).
The capital stock: lagging economies
still have much catching up to do
In judging the effect of capital formation on economic
performance, it is important to consider not just cur -
rent investment flows, but also the accumulated stock
of capital which these have built up over time.
11The
data on this, however, involve a high degree of esti -
mation and should be regarded as indicative only.
Nevertheless, some interesting conclusions can bedrawn.
The main observation is that more prosperous coun -
tries have a larger stock of capital than less prosper -
ous ones. In the three cohesion countries, capital
stock in 1999 is estimated at only EUR 33,000 perhead as opposed to EUR 54,000 in the EU as a wholeand EUR 75- 80,000 in Denmark, Germany and Aus-tria (see Table A.19 and Graphs A.12 and A.13). Thecohesion countries, therefore, have only 60% of thecapital per head available in the EU as a whole.
Since the capital stock is built up over a great many
years, it tends to change only slowly and is dominatedby past investment. This is most clearly so for build-ings, which can be used effectively for decades,though even machinery and equipment can oftenhave a useful life of 10 years or more.Nevertheless, because of the higher rate of invest -
ment, the gap between the cohesion countries and
the rest of the EU is narrowing, if slowly –10 years ago
capital stock in the former averaged only 54%of that in the EU as a whole. However, while the cohe -
sion countries are catching up in relative terms, in
absolute terms they still spent less than the EU aver -
age on investment per head of population over the
past decade –EUR 10,000 as opposed to EUR
13,000.
Investment in knowledge:
the basis for long-term growth
While capital expenditure on physical assets is im -
portant, intangible investment in research and devel -
opment, education and information technology is
becoming even more important for economic devel -
opment in the Union.
Growth over the long-term, therefore, is attributable
not to just to an increase in the fixed capital stock, butmore significantly to technical improvements whichincrease the efficiency with which capital –and la-
bour –is used.
12Moreover, the information revolution
means that investment in technological advance islikely to become even more important in the knowl-edge-based economy of the future.
It is, therefore, important to review the extent of invest-
ment in knowledge across the EU as well as in fixed as-sets. This gives rise to somewhat different conclusions,since many of the countries with below average rates of
fixed investment are among the largestinvestors in technology. In particular,Sweden, with the lowest fixed invest -
ment rate in the EU, has the highest rate
of investment in knowledge (Graph 9).France, the UK and Finland are similarlylow investors in physical assets but highinvestors in knowledge.
On the other hand, the three cohesion
countries, as well as Ireland, spendless than average on investment inknowledge. While their high rate of ex -
penditure on fixed capital formation is
closing the gap in their capital stockwith the rest of the EU, their low invest -
ment in less tangible assets is not a se -
cure basis for longer-term growth in a
digital age.
48I.4  Factors determining real convergence
 
03691215
LELI
IRLEPBDNLAUKFFIN DKS
EU3EU15
DK/FIN/S03691215
R&D private sector
R&D public sector
Private education (*)
Education% GDP9 Investment in knowledge
(*) Including church and voluntary sector
Definition of public and private varies between countries
L: R&D data not availableB: Education data for Flanders region onlyA: Breakdown of R&D not available
Infrastructure endowment
Most public investment in Member States as well as
that supported by the Structural Funds goes on infra -
structure. An adequate endowment of infrastructure
is a necessary, but not sufficient, condition for theeconomic development and competitiveness of a re -
gion, an important factor determining both the loca -
tion of economic activity and the kinds of activity or
sector which develop. Investment in infrastructure isessential for reducing the effect of distance betweenregions, especially between those on the peripheryand those in the centre. Other conditions, however,need to be met in parallel if the increase in accessibil -
ity in peripheral regions is not to become a threat
rather than an opportunity.
Transport infrastructure
Transport infrastructure, in particular, plays an impor-tant role in reducing regional disparities and improvingthe competitiveness of regions by facilitating trade andthe movement of labour. Improvements in infrastruc-ture reduce both the time and the cost of transportinggoods and so increase productivity and alter the com-parative advantage of being located in different re-gions. Equally, they have a similar effect on ‘travel to
work’time, so extending the boundaries of local labour
markets and increasing effective labour supply.
Transport infrastructure, however, remains largely
the responsibility of government and is still an impor -
tant component of structural and regional policy. De -
spite the privatisation of particular means of transport
over recent years (especially high-speed rail andmotorways), the cost of investment in basic infra -
structure remains too high to be covered by the pri -
vate sector. In addition, when deciding investment in
new infrastructure, the subsequent recurrent cost ofmaintenance should be taken into account.
Road transport remains dominantRoads are the predominant means of travel. In 1997,
they accounted for 86% of all journeys made in the EU(measuring these in terms of passenger miles) and94% of those made by land. Moreover, the transpor -
tation of goods by road is continuing to increase, ac -
counting for 43% of all transport of goods in 1997
(measured in terms of freight-miles) as against 31% in1970. Excluding that carried by air and sea, they ac -
counted for 74% of all freight transported in the EU,
while only 14% went by rail and 12% by inland water -
way and pipeline.
The development of motorways has increased the
density of road transport. Although the scale of theroad network at Union level has remained broadly un -
changed, the length of motorways increased by 40%
over the 10 years 1988 to 1998, due notably to growthin the 4 cohesion countries, where many roads havebeen converted to motorways. Over this period, thedensity of motorways
13in these four countries taken
together rose from below the Union average (43%) toaround the same level, the largest increase occurringin Spain, where the density rose from 63% of the aver -
age to 136%. On the other hand, while there was also
substantial growth in Ireland and Greece, density isstill well below the average (12% of the average in Ire -
land in 1998 as against under 2% in 1988, and 17% in
Greece as opposed to their being no motorways at allin 1988).
At the regional level, growth has followed a similar
pattern. Although the density of motorways remainshigher in central or the most developed regions ineach country than in Objective 1 or peripheral re-gions, growth has been concentrated in the latter.
Motorway networks are less developed in the Nordic
countries (in Finland, density is only 41% of the EU av-erage and in Sweden, 65%), especially in the mostnortherly, sparsely populated regions covered byObjective 1, reflecting their geographical, and demo -
graphic, features.
The EU average, however, should not be regarded in
itself as an objective to be reached in some kind ofmechanical way. Every region has its own specificneeds in this regard, in terms of both the overall scaleof transport networks and particular modes of trans -
port. A minimum level of transport infrastructure is
necessary for regional competitiveness, but this is notnecessarily the same level in all regions. Moreover,quality and safety may be just as important for devel -
opment (Graphs 10 and 11).
Reduction in rail transport despite modernisationThe importance of rail transport in the Union has di -
minished in spite of the modernisation of the network
in a number of countries. In 1997, rail accounted for
49I.4  Factors determining real convergence
6% of all passenger travel in the EU as against 10% in
1970. The decline in freight transport by rail has beeneven more pronounced, falling from 21% in 1970 to8½% in 1997, and between 1990 and 1997, the
amount of goods carried by rail fell by 7% whereasthe amount carried by road rose by 29%.
The decline of traffic has been accompanied by a slight
decline in the size of the rail network, as measured bythe miles of track, and little reduction in either nationalor regional disparities in the EU. Indeed, in the cohe -
sion countries, rail density
14declined from 66% of the
EU average in 1988 to 61% in 1998, due in particular tothe closure of many lines in Spain and Portugal.
Nevertheless, the rail network has been modernised
to some extent in the cohesion countries. In 1999,24% of lines were double track as against 17% 10years earlier and 39% were electrified, up from 32% in1988. The rate of modernisation was highest in Spain,while in Greece both the length and standard of trackremained very low (45% of the EU average as regardsrail density, with only 12% of lines double track and nolines at all electrified). This, however, is due in somepart to the geographical features of the country –the
large number of islands and the mountainous areas(see Graphs A.14-A.16).
Sea transport: vital for island and coastal regionsThe cost of infrastructure investment for sea transport
is limited to the construction, maintenance and mod -
ernisation of ports which tends to be much less costlythan road construction. In addition, although slow,
sea and inland waterway transport is the least costlyand most envoronmentally-friendly form. Nor is it
affected by problems of congestion or capacity.
Sea transport accounted for 70% of the transportation
of EU visible exports in 1997 and 30% of intra-Com -
munity trade. By contrast, only 7% of freight in the EU
went by inland waterway.
Sea transport remains particularly important for trans -
portation around the coasts of the EU and between
the mainland and the many islands, even after theconstruction of several fixed links –the Oresund and
the Channel Tunnel, in particular. In 1998, it ac -
counted for 41% of all freight transported in the EU,
both within and between Member States. The UK wasresponsible for 20% of this, Italy for 16% and the fourcohesion countries together for 22%.
The volume of traffic going through the main ports in -
creased significantly between 1990 and 1998, espe -
cially through those of medium size, including, in
particular, Algeciras in Andalucia and Dublin, thoughtraffic is still well below that handled by the largestports in northern Europe, Rotterdam (where it is 10times larger) and Antwerpen (3 times larger).
More notably, the growth of container ports has been
more evenly spread across Europe. Five of the 12largest ports in the EU are in the Mediterranean, in-cluding Giora Tauro in Italy, and these have experi-enced higher growth than those in northern Europe.The bulk of container freight is transported by roadfrom and to the ports, except in Belgium and the Neth -
erlands, where more goes by inland waterway. In
France and Germany, although rivers and canals are
50I.4  Factors determining real convergence
 
050100150200250300350400
B DK D EL E F IRL I L NL A P FIN S UK EU0501001502002503003504001988 all regions
1988 Objective 1 regions
1998 all regions
1998 Objective 1 regionsIndex EU all regions=10011 Motorway index, 1988 and 1998  
050100150200250300350400450
B DK D EL E F IRL I L NL A P FIN S UK EU0501001502002503003504004501988 all regions
1988 Objective 1 regions
1998 all regions
1998 Objective 1 regionsIndex EU all regions=10010 Roads index, 1988 and 1998
not used to their full potential, there is a relatively high
use of rail. By contrast, in the cohesion countries, al -
most all container transport is by road (89% to 98%).
The importance of intermodal transport is still very low
in the EU as a whole. Only 12% of goods are con -
veyed from ports to inland destinations by means
other than road (see Table A.20).
Transport systems in the candidate countries:
outdated infrastructure developingdifferently than in the EU
Although the same broad tendencies are apparent in
the candidate countries as in the Union, in terms ofshifts between modes of transport, the starting-pointand the overall development of transport there is verydifferent. In the first place, the volume of traffic stag -
nated during the 1980s and declined markedly dur -
ing the 1990s, reflecting similar trends in the
economy and in trade. The volume of freight trans -
ported fell by 22% between 1980 and 1998, whereas
it grew by 52% in the Union over the same period.
As in the Union, however, road transport has become
predominant. Despite the overall decline in the vol-ume of goods transported, freight going by road in-creased by 19% between these years, though this isstill much less than in the Union where it doubled.Moreover, in 1998, only 47% of freight went by roadas against 74% in the Union, while rail transport,though in decline, remained important, accountingfor 42% of the total as against 14% in the Union. In -
deed, most freight still goes by rail in the Baltic States
and Slovakia, whereas much the larger part goes byroad in the Czech Republic and Bulgaria.
So far as sea transport is concerned, the main ports in
the CECs are Constance, in Romania, Ventspils inLatvia and Gdansk and Szceczin in Poland. Theamount of traffic going through these is similar to thathandled by the medium-sized ports in the Mediterra -
nean and only 5-10% of that handled by Antwerpen.
Nevertheless, the Baltic ports are growing rapidly.
Inland waterways are of marginal importance except
in Romania and Slovakia, where they account for over10% of all goods transported.
Transport infrastructure in the candidate countries is
in overall terms less extensive than in the Union, andthe rail network, though representing a largerproportion of the total, is in a poor state. In an en -
larged Union of 27 countries, the main features of the
system in the candidate countries are as follow:
•in the case of roads, all the countries, except Es -
tonia, Lithuania and Poland, have a significantly
less extensive network than the EU average. InPoland, it is similar to that in Ireland, while in Esto -
nia and Lithuania as well as in the Czech Republic
and Slovakia, it is more extensive than in three ofthe cohesion countries (see Graph A.17);
•there are in general many fewer motorways than
in either the EU as a whole or the cohesion coun -
tries. While motorway construction over the past
10 years has increased markedly in the Union,and in the cohesion countries, in particular, it wasminimal in the candidate countries. The density ofmotorways is highest in Slovenia and Lithuania,where it exceeds that of Portugal, whereas in Po -
land, which like Ireland is well endowed with
roads, they are almost non-existent;
•railways are the most developed means of trans-
port. The total length of track is in general greaterthan in the EU and almost double that in the cohe-sion countries. In the Czech Republic, it is twicethe EU average and in Hungary, Slovakia, Latviaand Poland, 1 ½times. Nevertheless, in terms of
the standard of the network, the comparison ismuch less favourable. The proportion of electri -
fied lines is well below the EU average except in
Bulgaria and Poland, while, as in the cohesioncountries, there are also many fewer double-trackand high-speed lines.
The main problems to address, therefore, if transport
networks are to further territorial balance in an en -
larged EU, are:
•the ageing of the infrastructure in the candidate
countries because of lack of investment in the1980s and 1990s;
•the need to integrate networks in the candidate
countries into the EU transport system as a wholeas well as in the trans-European networks;
•the need to strengthen the intermodal aspect of
transport systems, especially as regards links be -
tween ports in peripheral regions and less
51I.4  Factors determining real convergence
favoured areas inland. In contrast to the candi -
date countries, infrastructure in the cohesion
countries tends to be modern and better inte -
grated with that in the rest of the EU, because of
the large-scale investment in the 1990s. Never -
theless, the rail network remains less developed
than elsewhere and links between differentmodes of transport, which,
inter alia , are impor -
tant for internal communication within less fa -
voured regions, are inadequate.
Energy
The availability of energy in a region, the flexibility of
supply in terms of the diversity of different sourcesand a high degree of self-sufficiency are important forregional development, in that they help define the lim -
its to growth and employment. In addition, the type of
output produced, the consumption of energy per unitof output and the capacity to reduce environmentalpollution will determine the ability of a region to de-velop in a sustainable way.
Over the past 10 years, energy consumption in the
Union has continued to increase as GDP has grown.Energy intensity, measured by the amount of energyused per unit of output has declined, though less sig-nificantly than in the 1980s. Between 1988 and 1998,GDP in the EU grew by 25% in real terms while energyconsumption increased by 6%, a reduction in energyintensity.
Consumption of energy per head of population in the
Union increased by 1.6% between 1988 and 1998,the rise being particularly marked in the cohesioncountries, which started the period with a level underhalf the EU average but which increased consump -
tion by almost 40% over these 12 years. This increase
was largely the result of their economic growth andthe energy intensity of consumption. This was espe -
cially the case in Portugal and Greece, the two coun -
tries with the worst performance in terms of energy
use. Even though consumption per head in these twocountries remains well below the EU average, mainlybecause of the their low level of GDP per head, con -
sumption per unit of GDP increased substantially in -
stead of declining as elsewhere. High economic
growth in Spain was accompanied by an increase ofover 30% in total consumption of energy and a smallrise in the energy intensity of consumption. This, nev -
ertheless, remains below the EU average, as it doesin Ireland, which experienced a significant reduction
in the energy intensity of consumption (of 33%)(seeGraph A.18).
Water and the environment
For economic development to be maintained over thelong-term it also needs to be sustainable in environ -
mental terms. If the growth of an economy has dam -
aging effects on the environment, this will ultimately
limit its development. Accordingly, the availability ofresources and the measures taken to protect the en -
vironment are factors which determine the long-run
performance of regional economies and which,therefore, merit special attention.
Reserves and use of waterIn the EU, estimates of renewable water reserves are
relatively low –around 3,200 cubic metres per head
of population a year as compared with an average inthe world as a whole of 7,300. Nevertheless, the Euro-pean countries have adequate reserves in overallterms, since the annual rate of abstraction is onlyaround 660 cubic metres per head.
The distribution of reserves, however, varies signifi-
cantly between regions. Reserves per head are 5times greater than average in Finland and Sweden,as well as Norway, and 3 ½times greater in Ireland,
while they are only around half or less of the averagein Denmark, Belgium and Germany (see Graph A.19).In relation to land area, the variation in reserves iswider still. In Norway, they are 60 times larger than inSpain, 30 times larger than in Sicily, eastern Greece,the central parts of Poland and Hungary and the ar -
eas around the Romanian-Bulgarian border.The
availability of water reserves, however, depends notonly on their quantity but also on the level of use,which depends, in turn, on a number of factors, suchas the kind of industrial and agricultural production,the level of household consumption and the potentialfor treatment and re-use of waste water. Across Eu -
rope as a whole (including the candidate countries
and the European Economic Area as well as the EU),the overall rate of abstraction a year is only 16% ofavailable reserves. Moreover, since a large part of thewater abstracted is returned to the original source,net final consumption amounts to only 5% of reserves.In the EU, the situation is slightly less favourable, the
52I.4  Factors determining real convergence
annual rate of abstraction amounting to 21% of re -
serves and the net rate to just under 7%.
Water use varies significantly between Member
States. The rate of consumption is relatively high inBelgium (43% of reserves) and Germany (35%) be -
cause of population density and high industrial use.
In the Mediterranean countries, agricultural irrigationis responsible for most of the water extracted. InSpain, where the annual rate of abstraction is over30% of reserves, 60% goes to agriculture, in Portugal,52% and in Italy, 50%, while in Greece, the figure is ashigh as 80%. In Greece and Portugal, however, theoverall rate of abstraction is relatively low (under 10%of reserves).
Nevertheless, it is the extent to which water ab -
stracted is returned to its source which also deter -
mines the relative abundance or scarcity of reserves
in each country. While more than 80% of water ab -
stracted is returned to source in Belgium and Ger -
many, in Spain and Italy, the figure is only 40% (see
Graph A.20).
The treatment of waste water
and household waste
Improvements in irrigation techniques in agriculture
and in the treatment of waste water from industry anddomestic consumers have increased the efficiencywith which water reserves are used. In agriculture inthe Mediterranean, new irrigation methods are en -
abling water to be re-used as well as treated, while
the treatment of salt water is also likely to improve therelative situation in southern Europe.
Given that most of the population in Europe lives in
towns and cities, it is important to pay as much atten -
tion to the damage that household waste disposal
can do to the environment, as that caused by industryand agriculture. A policy of creating public aware -
ness and of putting in place the necessary infrastruc -
ture to treat water and dispose of waste is essential to
reduce the pressure on the environment.
So far as the treatment of domestic water is con -
cerned, 90% of the population in the EU is connected
to main water supply and 70% to main drainage.There are, however, large regional variations.Whereas in northern Europe as a whole, 90% of thepopulation is connected to a main drainage systemfor treating waste water, in the cohesion countries, theproportion varies from 27% in Portugal to 58% in
Greece (see Graph A.21). Moreover, in Belgium, it isonly 32%. In the candidate countries, 40% of the pop -
ulation is not connected to a main water supply sys -
tem and only 42% of waste water is treated, and only a
small proportion of this to the level required by Com -
munity standards.
Household waste is treated in very different ways in
different parts of the Union, in terms of whether it is in -
cinerated, recycled, buried or simply dumped. Al -
though the southern Member States tend to produce
much lower levels of household waste than the rest ofthe EU (see Graph A.22), they also have much less inthe way of treatment systems. Whereas 60% ofhousehold waste was recycled in the EU as a whole in1995, and 80% in Germany and France, in Greece,the figure was only 5%, in Portugal, 30% and in Spain45%.
Although the candidate countries have already intro -
duced recycling of waste on a relatively large scale in
order to compensate for their shortage of primary re-sources, nearly all of them are having difficulty meet-ing the recycling targets set out in the Communitydirective (50% of waste recycled by 2001 for currentMember States). Recycling installations have notbeen modernised and a number have even had to beclosed down because of lack of public funds. TheCzech Republic, for example, currently recycles only15% of the packaging waste produced, Slovenia,29%, and Hungary, 32%. The situation is likely to de -
teriorate further in the future as the higher rate of eco -
nomic growth, which will probably occur, could
increase the amount of waste produced (accordingto the European Environmental Agency Report for1999). In consequence, the support of structuralmeasures in this area is required in order to sustaineconomic development in the enlarged Union.
Human resource development
The competitiveness of an economy depends, asnoted above, not only on its physical capital, but alsoon the knowledge possessed by its entrepreneursand labour force. Effective educational and trainingsystems are, therefore, important for raising produc -
tivity and fostering economic growth. There are, how -
ever, striking differences in education and training
across Europe.
53I.4  Factors determining real convergence
Significant variations in educational attainment
levels between Member States
Despite the gradual reduction of educational dispari -
ties over the past 30 years, there is still a large gap in
educational attainment levels between the cohesioncountries and the rest of the Union. In particular, in theformer a large proportion of the population aged 25 to59 has only a low education level, ie no educationalqualifications beyond compulsory schooling (1999:75% in Portugal, some 65% in Spain and around halfin Greece and Ireland). The same is true for Italy,where more than half of those in this age group havelow education.
By contrast, in the three Nordic countries, Belgium
and the UK, more than a quarter of those aged 25 to59 has a high (or tertiary) level of educational attain -
ment (university degree or the equivalent) (Map 12).
The applicant countries: higher educational needs
than figures indicate
In the Central European candidate countries, a large
proportion of the population aged 25 to 59 has an up-per secondary level of education, particularly in theCzech Republic and Poland, where the figure is over70%.
Recent studies, however, offer a less optimistic as -
sessment and suggest that the high proportion of
people with educational attainment levels beyond el -
ementary schooling is mainly due to lower vocational
schools offering a basic form of training: ‘The fact of
having a relatively high number of workers with edu -
cational attainment above elementary schooling was
mainly a by-product of the presence in these coun -
tries of lower vocational schools offering generally
one to two years of training in narrowly defined occu -
pations up to the completion of compulsory school -
ing. These lower vocational schools were actually
part of the basic schools and were indeed not evenformally considered as part of the secondary systemof these countries. ’
15In addition, there is a question
mark over the quality and nature of vocational trainingat upper secondary level, which in many casesseems outdated. This underlines the need for devel -
oping appropriate human resources strategies in
these countries in order to avoid low skills slowingdown economic and social development.Growing number of qualified young people
Technological advance and continuing globalisation
are increasing the demand for skilled labour. The ed -
ucational attainment level of young people in the EU
has been rising continuously for the past 30 years ormore. In 1999, only 27% of young people aged 25 to34 in the EU had no qualifications beyond compul -
sory schooling as compared with 48% in the in the 50
to 59 age group. Similarly, 49% of those aged 25 to 34had upper secondary level education as against only35% of the 50 to 59 age group, while 24% of 25 to 34year-olds had a university degree or equivalent asopposed to 17% of those aged 50 to 59. It is expectedthat the number of people enrolled in higher educa -
tion will double in the next ten years and this will strain
the higher education systems in Europe.
The increase in educational attainment levels is evi -
dent in all Member States. It is particularly marked in
the cohesion countries, as well as in Italy, where aver -
age education levels of older people are relatively
low. The proportion of 25 to 34 year olds in the cohe-sion countries with an upper secondary level qualifi-cation in 1999 was twice as high as among thoseaged 50 to 59 and the difference was similar in thecase of tertiary education (Graph 12). As a result, thegap in attainment levels between Member States isnarrowing.
At the same time, there is a stronger upward trend in
the education attainment levels of women than menand in almost all Member States women in the youn -
ger age groups have attained a higher level of educa -
tion than their male counterparts.
Nevertheless, the number of young people who leave
the education system prematurely with only the mostbasic skills is still substantial; these young people areunable to respond adequately to the demand of acontinuous updating of knowledge and competen -
cies throughout life, which is needed due to the accel -
erating pace of technological, scientific and
economic evolution of society.
In the European Union, an average of 22% of young
people between 18 and 24 years old only acquirelower secondary education at most.
16Some Member
States lie significantly above this average. Further -
more, there are also alarmingly high rates in certain
urban or peripheral areas as well as in disadvantagedsocial groups.
54I.4  Factors determining real convergence
55I.4  Factors determining real convergence
% of total population aged 25-59<  19.9519.95 -  28.6528.65 -  37.3537.35 -  46.05≥46.05
no dataaverage = 33.0Standard deviation = 17.45
D (Sachsen): NUTS1 Source: Eurostat (LFS)% of total population aged 25-59<  35.335.3 -  43.543.5 -  51.751.7 -  59.9≥59.9
no dataaverage = 47.6Standard deviation = 16.4
D (Sachsen): NUTS1% of total population aged 25-59<  13.2513.25 -  17.3517.35 -  21.4521.45 -  25.55≥25.55
no dataaverage = 19.4Standard deviation = 8.24D (Sachsen): NUTS1
250
01250 km© MEGRIN for the administrative boundaries
12  Educational attainment levels, 1999
Low Medium High
The problem is most serious in Portugal where over
45% of 18 to 24 year-olds fail to go on from compul -
sory schooling to further education or vocational
training.
In the learning society, social stratification is increas -
ingly based on a division between the haves and
have-nots in terms of skills and qualifications. Drop -
ping out from school, therefore, has much more last -
ing consequences than it had in the past, since it can
mark an individual for life and greatly narrow therange of career choices open to them. Schools are atthe centre of the learning society and life-long learn -
ing begins there.
Failure at school affects all sections of society, but not
all equally. Surveys show that those dropping out ofschool come predominantly from low-income familieswhere there is a history of failure. Many come frombroken homes or from immigrant or refugee familieswhich have not integrated successfully. Dropping outof school is, therefore, related to a range of social,health, family and financial factors. Although it is onlyone element of a cumulative process of social depri-vation, it is often the critical one which deprives youngpeople of the skills, qualifications and social contactsrequired to succeed or even to play a meaningful rolein society.
The fight against school failure is at the heart of the
debate on educational reform; it is essential for sus-taining a knowledge-based economy and formaintaining a cohesive society and a democracy in
which everyone can participate.
An increase in education level is also evident in the
candidate countries. In most of them, the proportionof people aged 25 to 34 with upper secondary educa -
tion is significantly higher than among those aged 50
to 59 years, though the proportion with tertiary leveleducation is much the same and remains relativelylow among young people. Enrolment rates in universi -
ties are, therefore, in general significantly lower than
in the EU.
Employment prospects
rise with level of education
In almost all EU Member States, the level of education
is an important determinant of finding employment.Except for Greece, and to a lesser extent Portugal,unemployment in the EU is much lower among thosewith high educational attainment levels than thosewith lower ones. In 1999, the average rate of unem -
ployment of those aged 25 to 59 with a tertiary level ofeducation was 5% as against 8% for those with upper
secondary level and 12% for those with only basicschooling. In some Member States, unemploymentrates of people with low education were 3 to 4 timeshigher than for those with high education (Graph 13).
The link between education and employment rates is
even closer, especially for women. This is because alarge proportion of women with low education –and a
significant proportion of men –are not part of the la -
bour force at all. In other words, educa -
tion levels affect not only the chances
of being unemployed, but also of beingeconomically active.
A similar pattern is evident in the candi -
date countries. The difference in unem -
ployment rates between those with
differing levels of education is verymarked in the Czech Republic, Hun -
gary, Poland and Slovakia, where
those with a low educational attainmentlevel are up to 7 times more likely to beunemployed than those with a highattainment.
In Greece, Spain and Italy, in particu -
lar, as well as in most of the candi -
date countries, however, a
56I.4  Factors determining real convergence
 
0510152025303540
BDKDELE FIRLILNLA PFINSUK CZ EEHU LV PLROSI051015202530354025-34 50-59% population in age group12 Population with university or equivalent 
qualifications by age group, 1999
BG, CY, LT, MT, SK: no data
significant number of young people aged 25 to 34
with a high level of education have difficulty findinga job after completing their studies, which con -
trasts sharply with the position of older people with
similar qualifications.
It should also be emphasised that differences in em -
ployment prospects between men and women per -
sist. Women with a given level of education are more
likely to be unemployed than men with a similar levelin most parts of the EU. Inequalities are particularlymarked in Greece, Spain and Italy. By contrast, inmost of the candidate countries, women seem to be inless of an unequal position than in the EU.
Finally, it should be noted that there is a clear positive
relationship between levels of educational qualifica -
tions and earnings. In all Member States, those em -
ployed full-time with tertiary education earn
significantly more on average than those with uppersecondary education. The difference is over 50% inGermany, France and Austria, and 100% in Portugal.The difference in earnings between those with uppersecondary and those with lower secondary educationis much less in most Member States (10-20%), but stillsignificant.
Access to continuing training still varies markedly
between Member States
Continuing education and training are essential
both for the job prospects of individuals and formaintaining the competitiveness of a modern
economy. While indicators suggest
that participation in job-related train -
ing for those in employment has in -
creased throughout Europe, they
also show that participation in train -
ing is still relatively low and that there
are still large disparities betweenMember States. In 1999, only justover 10% of employees in the EU cov -
ered in the Labour Force Survey
(LFS) had undertaken any training atall during the previous four weeks.Participation rates varied from under5% in around half the Member Statesto over 20% in Netherlands, Den -
mark, Finland and Sweden. Although
these figures involve a high degree ofuncertainty and are not fully compa -
rable between countries, they indi -cate that access to training is almost certainly less
in the cohesion countries than elsewhere.
Although it took no account of the quality and rele -
vance of training, a recent OECD survey suggests
that the duration of job-related training also varies sig -
nificantly between the countries covered. Annual
hours of training undertaken by employees, there -
fore, ranged from 27 in Belgium (Flanders only) to 57
in the Netherlands.
17
LFS evidence suggests in addition that youngerworkers tend to receive more training than older ones.Whereas only 2.5% of those aged 55 to 59 in the EUhad participated in training or education in the refer -
ence weeks, the figure for those aged 25 to 29 was
10% and for those aged 30 to 34, 8%. Moreover, thereseems to be a clear link between educational attain -
ment levels and access to training, in all Member
States, those with high education having much moreopportunity to receive training than those with lowerlevels. Greater efforts are, therefore, needed to pre -
vent the problems of people with low initial education
being compounded by having only limited access tocontinuing training.
Adaptation of educational systems to ICT has
started, but still has some way to go
For students to make a smooth transition into the
modern labour market, they need to be exposed to in-formation and communications technology (ICT) inschool. Although the integration of ICT into the
57I.4  Factors determining real convergence
 
0510152025
BDKDELEFIRLILNLAPFINSUKCZEEHULTLVPLROSIE150510152025Lower Secondary
Upper secondary
Tertiary% labour force13 Unemployment rates by education level, 1999
BG, CY, MT, SK: no data
education system is becoming increasingly wide -
spread across the EU, as Member States implement
the conclusions of the Lisbon Council and theeLearning initiative, which called for a strengtheningof ICT in systems of education, ICT is included in theprimary and lower secondary curriculum in the major -
ity of EU and candidate countries. The extent of prog -
ress in this area is, however, difficult to assess. While
national data exist, there are no EU harmonised dataavailable.
A pilot OECD study suggests that access to ICT in edu -
cation, measured by the number of students per com -
puter, varies significantly across the EU.
18While
primary schools in Finland, Sweden, and Denmark typ -
ically have between 11 and 14 students per computer,
the figure in Italy and Portugal ranges from 50 to 150. Insecondary schools, whereas there are an average of 7students per computer in Sweden, Finland and Ireland,in Portugal, the figure is 65. In both primary and sec -
ondary schools, access to computers is lower in almost
all Member States than in the US.
Innovation and RDT
Innovation ‘is a means by which less favoured regions
can move immediately alongside the developed re-
gions, not by attempting to imitate what the latter have
already achieved but by trying to lay the groundwork,
in accordance with their own features and require -
ments (...), for adapting to the conditions of competi -
tiveness in a global economy. ‘19
It is widely accepted today that the ability of regional
economies to withstand competition and adapt to tech -
nical change is related to their capacity to innovate.
This, of course, is not new, but the increasing impor -
tance of knowledge (as compared with natural re -
sources, physical capital and labour supply) in
determining economic performance puts technologyand innovation high on the regional developmentagenda.
The Lisbon European Council reiterated the impor -
tance of research and development, and innovation,
for economic growth, employment creation and so -
cial cohesion. It emphasised the need to create a Eu -
ropean research and innovation area and asked the
Commission and Member States to carry out a seriesof measures in order to meet the aims set out in theCommission Communication, ‘Towards a European
Research Area. ’
The importance of innovation was highlighted by
the European Council, which called for,
inter alia, a
challenging programme for enhancing innovationand economic reform. The Commission ’s communi -
cation on ‘Innovation Policy in a knowledge-driven
economy ’
20set broad policy guidelines for enhancing
innovation in the EU. As innovation has come to beunderstood as a key element in economic develop -
ment policy, so the importance of the regional dimen -
sion has been increasingly recognised. Many
measures are most effectively conceived at a re -
gional level, where the needs of enterprises, and the
environment in which they operate, can best beassessed.
Understanding of the process by which technology
and innovation affects regional development hasevolved over time. Rather than innovation being seenas a linear process from basic research to commer-cial success, a more interactive model has emerged,which recognises the importance of the environmentin which firms, and SMEs in particular, operate. In-deed, since SMEs lack the articulation of businessfunctions of large firms, they have to rely more onmaking use of capabilities external to the firm.
Innovation has, therefore, been associated with con-
cepts of network formation and management and ofclustering. In this respect, it no longer depends solelyon how firms, universities, research institutes andregulators perform, but, increasingly, on how theywork together, particularly at the regional level.
In the EU today, the capacity to innovate varies signifi -
cantly from one region to another, both in quantitative
and qualitative terms. To give an insight into these vari -
ations, the Commission presented in September
2000
21a first outline of a European innovation score -
board, which indicates the extent of disparities in this
area across the EU. Certain Member States, particu -
larly the Nordic ones, scored quite highly, sometimes
even higher than the US. In terms of the number of indi -
cators with values significantly above the EU average,
Sweden had the highest score (with 12 out the 16 indi -
cators, 20% or more above average), followed by Fin -
land (8), Denmark and Germany (both 7).
The following examines, first, the structure of na -
tional scientific and technological systems and,
58I.4  Factors determining real convergence
second, how the capacity for innovation varies across
the EU.
Though converging, significant
differences remain at the national level ...
Expenditure on research and technological develop -
ment (RTD) relative to GDP has increased in recent
years in the cohesion countries, but, Ireland apart, therise has not been enough to close the gap with therest of the Union significantly. The technology gapbetween the cohesion countries and the four MemberStates where expenditure is highest (Germany,France, Sweden and Finland) has widened ratherthan narrowed (Table 5).
Business expenditure on RTD declined relative to
overall expenditure in Portugal, Greece andSpain between 1995 and 1998, as it did in the EUas a whole, though it rose in the top four MemberStates, and even more so in Ireland. As a result,the gap in innovation between the former threecohesion countries and the latter five could widenfurther, which could, in turn, reduce the chances oftheir competitiveness in EU or world marketsimproving.
Government expenditure also fell in Greece and
Spain, though this was in line with developments else-where in the Union, while it remained unchanged inPortugal. The increase in overall expenditure in thesethree cohesion countries was, therefore, due to a risein spending on higher education, which can be seenas a prerequisite for raising the skills of their labourforce.
The significant gap in RTD expenditure which exists
between the cohesion countries and other MemberStates, especially in terms of business spending, in -
dicates a need for more
encouragement for firmsto undertake research ac -
tivities and, accordingly,
the adaptation of RTD poli -
cies to this end. This
means taking a broaderview than simply redistrib -
uting EU expenditure on
RTD to these countries. Inlagging regions, in partic -
ular, attempts need to be
made to increase: thecapacity of businesses to absorb new technology
and know-how developed elsewhere; the capabilityof the work force to use this technology and adapt tonew techniques; the entrepreneurial spirit to seek outnew market opportunities and the availability of riskcapital for innovation (see Table A.21).
The few data available on the candidate countries
22
suggest that since the beginning of the 1990s, the
funds available for RTD have been reduced (appliedresearch more so than science), competition forfunds has increased and the demand for public RTDhas fallen markedly. In 1995, RTD intensity in mostcountries was similar to that in the cohesion countries,while in Slovakia, Slovenia and the Czech Republic,both public and private expenditure on RTD wascloser to the EU average.
The human resource potential in RTD in many of the
candidate countries is relatively strong, as a legacy ofthe major role accorded to RTD under the socialistsystem, which means that they are well placed tocatch up with present EU Member States, so long asthere is a fundamental restructuring of the RTD sys-tem (see Map A.13).
... particularly in terms of human resourcesThe quality of human resources is the major factor be-
hind the invention and diffusion of technology and it isa precondition for increasing the capacity of a giveneconomy to absorb new innovations. The differencein this respect between the most advanced countriesin the EU and the cohesion countries has been re -
duced during the 1990s, but it remains the case that
the former have around three times as many researchstaff in firms as the latter.
59I.4  Factors determining real convergence
Table 5  Expenditure on RTD in the cohesion countries and
the rest of the EU, 1995-98
P EL E IRL EU Top 4
Gross expenditure on RTD/GDP ↑↑↑ ↑ ↑ ↓↑
Business expenditure on RTD/ gross
expenditure on RTD↓↓ ↓ ↓ ↑ ↑ ↓↑
Government expenditure on
RTD/gross expenditure on RTD= ↓ ↓ ↓↓↓↓
Higher education in RTD/gross
expenditure on RTD↑↑ ↑↑ ↑ ↑ =
Explanation of symbols: = stable, ↑rise, ↑↑large rise, ↓reduction, ↓↓large reduction
Firms in the most developed regions can count on
better-targeted public assistance schemes
A third dimension of the ‘technology gap ’takes the
form of differences across the Union in the quality andquantity of schemes for public assistance. In the caseof public assistance for innovation, measured interms of state aid to RTD in manufacturing, in the mostdeveloped Member States the amount provided overthe period 1995 to 1997 was over 10 times larger rela -
tive to employment than in the lagging countries. In
Denmark, Finland, France, Austria, Germany and theBenelux countries, the figure in each case was abovethe EU average, while in the cohesion countries, itwas under 60% of the average. In addition, in the lat -
ter a much smaller share of state aids is allocated
to RTD than in other parts of the Union, even thoughtheir RTD and innovation needs are greater thanelsewhere.
Patent activity reflects differences
in national innovation systems
Patent applications have long been used as mea-
sures of innovative activity, the output of RTD and theextent of the links between the scientific system andthe productive sector. This indicator for the cohesioncountries is well below the EU average, despite someconvergence over the 1990s. Patent applications inSpain, Portugal and Greece amounted to 20% of theEU average in 1998 as against 10% in 1989 (Map 13).
In sum, therefore, the scientific and technological
systems in cohesion countries are characterised bylow RTD intensity, over-representation of the publicsector, low involvement of the private sector, weaklinks with business and low levels of technologytransfer.
Such differences give rise to problems as regards
providing support since they suggest that injectionsof aid would bolster the existing (public-oriented) sys -
tem, so perpetuating and even reinforcing the struc -
tural problems of the system itself. In consequence,
regional development policies should focus onstrengthening the environment in which firms operateand, in particular, the link between the scientific sys -
tem and business.Technological capacity highly
concentrated at the regional level ...
The regional distribution of innovative capacity in the
EU reflects the structure of national scientific andtechnological systems, though regional differenceswithin Member States serve to widen disparities evenfurther.
There is a strong concentration of RTD and innovation
in the most advanced regions of the EU, the top tenregions (in Germany, the UK, France and Finland) ac -
counting for around a third of all expenditure in the
Union. At the same time, 17 of the 25 regions with thelowest RTD intensity (less than 25% of the EU aver -
age) are Objective 1 regions. Similar disparities are
evident for business expenditure, human resourcesand patent applications.
Interregional differences are particularly large in the
cohesion countries. In Greece, for example, over halfof RTD expenditure is incurred in Attiki (where Athensis located), which is also responsible for two-thirds ofpatent applications. In Spain, over three-quarters ofbusiness RTD is located in just three regions (30% inMadrid alone).
... so affecting the innovative
nature of economic activity
High RTD intensity in the private sector and efficient
links between the scientific sector and businessesare key to innovation and, in turn, economic growth. Inalmost all the top 25 regions in terms of employmentin high-tech sectors (over 12% of the total), RTD inten -
sity is also relatively high. In the 25 regions with the
lowest RTD intensity, employment in high-tech sec -
tors (4% or less of the total) is very low. According to
the preliminary results of the second Community Sur -
vey on Innovation, the former group of regions are
those with the highest innovation intensity in manu -
facturing, the highest number of enterprises with in -
novation activities and the highest turnover from
innovative products. Most regions in Greece, Spainand Portugal, on the other hand, are at the other ex -
treme (see Map A.14).
The importance of the regulatory,
organisational and institutional environment
These structural differences in science and technol -
ogy alone cannot explain the weakness of the
60I.4  Factors determining real convergence
61I.4  Factors determining real convergence
Guyane (F)Guadeloupe
(F)Martinique
(F)Réunion
(F)Canarias (E)
Açores (P)
Madeira
(P)
Number per million inhabitants
< 30
30 - 90
90 - 150
150 - 210
≥210
no dataEUR15 = 119.4
Standard deviation = 116.3
D (Sachsen): NUTS1
Source: Eurostat
0 100 500 kmSIG16SIG16
© MEGRIN for the administrative boundaries13  European patent applications, average 1997 to 1999
structure of economic activity in lagging regions.
There is increasing consensus that the failure of firmsin the regions concerned to innovate is not due pri -
marily to scientific or technological problems, but to
shortcomings in the regulatory, institutional and or -
ganisational environment in which firms have to
operate.
In the less favoured regions, this environment is often
characterised by a combination of structural weak -
nesses, such as lack of a dynamic business services
sector, a poorly developed financial system, weaklinks between the public and private sectors, sectoralspecialisation in traditional industries with little incli -
nation to innovate, low levels of public support for in -
novation and aid schemes which are poorly adapted
to the needs of local SMEs. In view of this, a primaryaim of regional policy should be to help develop newforms of organisation and institutional cooperation,and so improve the ‘structural ’competitiveness of
firms located in lagging regions, and encourage re -
sources to be shifted into more dynamic and innova -
tive areas of economic activity.
The knowledge economy
Information and communication technology (ICT) is
at the base of the knowledge economy. This makes itpossible to store, process and circulate a growingamount of data rapidly and inexpensively and is an in -
creasingly important source of productivity gains.
The transition towards the information society, how -
ever, is not just about technology. The change in -
volved is potentially the most far-reaching since the
Industrial Revolution and deeply affects the organisa -
tion of both the economy and society. Managing this
change is one of the main challenges facing the Un -
ion today.
To this end, the European Commission ’s‘
eEurope –
An Information Society for all ’Initiative, endorsed by
the European Council in Lisbon in March 2000, isaimed at increasing the rate of uptake of digital tech -
nologies and at ensuring that everyone has the nec -
essary skills to use them.
On average, EU countries spend an estimated 6% of
GDP on ICT (see Graph A.23). Information and com -
munication industries are growing by more than 5percentage points faster than other sectors, in real
terms, effectively driving economic growth in theEU.
23ICT industries accounted for around 4% of em -
ployment in the EU in 1997,24and it is estimated that
one in every four new jobs is created in ICT or relatedsectors.
25If the attention is widened to encompass
the so-called ‘knowledge-based sectors ’these have
accounted for around a quarter of employment andfor most of the growth in jobs in recent years.
26
Liberalisation of the market combined with increas -
ingly rapid technological innovation is favouring com -
petition in telecommunication provision, bringing
down costs and enhancing the choice and quality ofservices in most parts of the EU. The price of access -
ing Internet has dropped sharply in the recent past,
though price remains a barrier to more widespreaduse in some countries.
The potential is enormousElectronic commerce (e-commerce) is expanding
rapidly, forcing firms to rethink their business pro-cesses and creating, at the same time, new forms oforganisation, including new types of market and dif-ferent kinds of business relationships. Internet-basedbusiness to business (B2B) e-commerce, the maincomponent, estimated at 80% of the total now and90% by 2003, is developing fast and it is estimatedthat it will increase by over 90% a year over the period1999-2003.
27
The use of e-commerce technologies in B2B relation -
ships can increase efficiency through reducing and
rationalising business processes. The effects are al -
ready apparent in product design (shortening the de -
sign process and increasing customisation
possibilities and the standardisation of parts), andproduction and logistics (lower inventory costs, fasterproduction, lower supply costs). The spread of B2Brelationships in the US is estimated to have the poten -
tial for reducing business costs by between 13% and
23%.
28While the e-commerce market is less devel -
oped in the EU, a reduction in operating costs aver -
aging 18% and in the cost of sales of 15% is expected
(see Graph A.24).
How regions adopt and master ICTs
is key to their economic performance
ICT penetration, defined as the value of ICT
expenditure29as a share of GDP, is an important
62I.4  Factors determining real convergence
measure of a country ’s transition towards the Informa -
tion Society as well as of its innovative capacity and
competitiveness. The difference in terms of this mea -
sure between cohesion countries and other EU Mem -
ber States is small and tending to narrow –the highest
rate of growth in expenditure over the period 1991 to1999 occurred in Greece, together with Italy. In abso -
lute terms, however, given their low level of GDP, co -
hesion countries will have to invest relatively large
amounts in ICT in the future in order to catch up.
Though improvements in the standard of information
and telecommunication infrastructure is a key deter -
minant of the capacity to participate in the Information
Society, other factors play an equally, and increas -
ingly, important role, such as public awareness, the
level of educational attainment, the role played by thepublic sector in promoting the Information Societyand the organisational and investment capacity offirms.
The telecommunication
infrastructure gap is closing
Over the past 20 years, differences between Member
States in access to a fixed-line telephone have nar-rowed significantly (Graph 14). In most EU countries,the proportion of households with a telephone line isaround the EU average of 92%, but it is still as low as69% in Portugal as against 97% in Sweden.
30While
the figure in Finland is only 78%, this is compensatedto a significant extent by the large proportion ofhouseholds with a mobile telephone and no fixed-linephone (18%, almost five times the EUaverage). The same phenomenon isalso evident, though to a lesser extent,in Portugal (12%) and Ireland (whereonly 84% of households have afixed-line phone), but a fifth of Portu -
guese households and a tenth of Irish
households do not have access to tele -
phone services at home at all as
against an EU average of just 4%. Nev -
ertheless, there are marked differ -
ences between regions –of over 15
percentage points –in the proportion
of households with fixed lines in Ger -
many, France and Italy.
In the candidate countries, the total
number of telephone lines per 100 in -
habitants is less than half the EUaverage, though in both Slovenia and, to a lesser ex -
tent, Estonia, the number is higher.
31
Mobile phones and cable may
provide alternative access to Internet ...
Though variations exist in the penetration of mobile
telephones across the EU, differences do not reflectrelative levels of prosperity. All the Nordic countrieshave a relatively high rate of penetration as does Italy,but in Greece, Spain, and Portugal, the rate is alsoaround the EU average or above. Most countries,however, including the cohesion countries, whichhave a relatively low ownership of PCs and/or limitedInternet access, have high levels of telephone use,which opens up the possibility of using mobilephones to access the Internet in the future.
It is evident that the high use of mobile phones in the
Nordic countries is partly a consequence of their geo -
graphical features and the dispersion of population
over large areas. In the southern Member States, bycontrast, the rapid growth in use reflects the low qual-ity, or lack, of fixed lines (see Graph A.25).
Perhaps unexpectedly, the use of mobile phones is
somewhat lower in rural areas (39% of households)than in urban areas (45%).
The rate of penetration of mobile phones in the candi-
date countries at the end of the 1990s was onlyaround a quarter of the EU average, though increas -
ing rapidly (at 108% a year between 1996 and 1999).
63I.4  Factors determining real convergence
 
020406080100120140
SFINLDKIFUK SLNLAE15ELPDIRLBEEECZHU LVLTBGCECPLRO0102030405060Total number of lines per 100 people (left axis)
Mobile  phones as % total lines (right axis)14 Telephone lines and mobile phone penetration, 
1998/99
Technology in this area is developing fast, offering
new means of access to the Internet –through third
generation mobile services with greater band-width –
as well as ISDN, xDSL, cable and digital TV connec -
tions. Since in the future, the level of broadband ac -
cess is likely to become much more important for
business and household Internet use, the availabilityof this will be a key issue.
... but access to the Information
Society remains uneven
There are significant differences across the Union in
the use of PCs at home and in access to the Internet(Graph 15). France apart, there seems to be a clearNorth-South divide in the rate of internet connection.In Greece, Spain, Portugal and Italy as well as Ire -
land, the rate is half the EU average of 12%, while in
the Nordic countries, it is well over 20% (in Sweden,51%). In Greece, Portugal and Ireland, PC ownershipis also low.
In the candidate countries, the number of PCs per
100 people has increased steadily. Three groups ofcountries can be distinguished: Slovenia, with a ratesimilar to the EU average; Poland and the Czech Re-public among others, with rates similar to the cohe-sion countries; and Romania and Bulgaria , with ratesof between 10% and 25% of the EU average.
In the EU, there is also clear evidence of a social di-
vide, with high income households being six timesmore likely to be connected to the Internet than low in -
come ones. In addition, a higher proportion of house -
holds in urban areas (13-15%) is connected to
Internet than in rural areas (8%). These differences,however, seem to arise more from lack of awarenessabout the possibilities offered by the Internet thanfrom the cost (45% of EU households without accessreport not being interested and 9% not to know aboutthe Internet at all, as against 11% citing cost as a rea -
son for non-connection).Business use of the Internet is relatively high in a num -
ber of Member States, especially in the Nordic coun -
tries, though marked variations remain across the EU.
For example, 76% of SMEs in Sweden are connectedto the Internet but only 16% in Portugal.
32While SMEs
surveyed recently, reported that they were moder -
ately well informed about the potential of the Internet,
a third did not have access. In cohesion countries, thenumber without access is higher than elsewhere inthe EU, which is in line with the Commission analysisthat low awareness of the potential benefits and op -
portunities and a scarcity of ICT skills, along with the
often weak content of software at present, are themain barriers to the development of the InformationSociety.
The focus of structural policy in this area should,
therefore, be on strengthening the demand side, andin particular, the capacity of firms, institutions and in -
dividuals to use ICT effectively.
64I.4  Factors determining real convergence
 
010203040506070
S DK NL L B FIN UK F D A E I P IRL EL EU15010203040506070PC but not Internet
Internet% population15 Access to PC equipment and the internet, 
1999
1 European Commission (2000), ‘The competitiveness of European industry ’. See also European Commission (1999) ‘The Sixth
Periodic Report on the Regions ’(section 2 on competitiveness), OECD (1996) ‘Industrial competitiveness ’, Oxford Review of
Economic Policy (1996) ‘International competitiveness ’ Vol. 12, no.3.
2 EU13 figure, until the UK and IRL present their statistics. The UK is due in the coming months, IRL may not come at all (presentation of
these figures is optional and not a regulatory requirement).
3 In non-market services, the figure for productivity should be interpreted with caution since the public sector does not generate profits
and, therefore, value-added consists entirely of wages and salaries.
4 See, for example, Midelfart-Knarvik, Overman, Redding and Venables (1999) ‘The location of European industry ’.
5 These projections do not take account of future EU membership, which could affect the underlying trends, particularly of migration,
though most of this movement is likely to occur between these countries and the existing EU Member States, but also, in thelonger-term, birth and death rates.
65I.4  Factors determining real convergence
6 These rates, it should be noted, are only demographic indicators. While they reflect the problems implied for social welfare and
taxation systems, there are other equally important factors which need to be taken into account, particularly the number of people ofworking age who are actually in employment and paying taxes and social contributions.
7 Based on the latest Eurostat regional labour force scenarios, compiled in 1998, which are combined with the population projections
produced in 1997. The scenarios cover 204 regions NUTS 2 level regions in the EU over the period 1995 to 2025. The baselinescenario which is referred to in the text assumes the continuation of most current trends but some reduction in regional imbalances.
8 European Integration Consortium (DIW/CEPR/FIEF/IAS/IGIER) 2000, The Impact of Eastern Enlargement on employment and labour
markets in the EU Member States, study for DG Employment and Social Affairs of the European Commission; Berlin/Milan.
9 Bauer, T. and Zimmermann, K.(1999): Assessment of possible migration pressure and its labour market impact following EU
enlargement to Central and Eastern Europe, Study for the UK Department of Education and Employment, IZA and CEPR,Bonn/London, Germany/UK.
10 Gross fixed capital Formation is investment net of disposals. Gross refers to the fact that it does not take into account depreciation or
consumption of capital. Fixed means that only investment which is used for more than a year is considered.
11 Gross capital stock is calculated by cumulating past investment and deducting the cumulated value of investment that has been
retired. Net capital stock includes depreciation and is thus probably the better measure.
12 eg Abramovitz (1989) ‘Thinking about growth ’.
13 Density is measured by a composite index which indicates a region ’s endowment in relation to the EU average. Specifically, it is an
arithmetic average of the number of miles of motorway relative to its land area and population.
14 Measured in the same way as for roads, by a composite index of the length of track in a region relative to its land area and population
in relation to the EU average.
15 See study on ‘The impact of eastern enlargement on employment and the labour market in the EU Member States ’(part B Strategic
Report, chapter 3.3).
16 Eurostat, Labour Market Survey 1998.17 See OECD: Education at a glance 2000, p.195ff.18 See OECD: Education policy analysis 1999, p.49ff. The study only provides 1997/98 data for the following 10 EU Member States:
Belgium (Flemish Community), Denmark, Finland, France, Ireland, Italy, Netherlands, Portugal, Sweden, UK.
19 CEC (1995), ‘Green Paper on Innovation ’, European Commission, Luxembourg.
20 COM(2000)567 of 20 September 2000.21 Innovation policy in a knowledge-driven economy – COM (2000) 567 of 20 September 2000.
22 ‘Impact of the enlargement of the EU towards the associated Central and Eastern European countries on RTD-innovation and
structural policies ’, European Communities 1999.
23 ‘Job opportunities in the Information Society ’, CEC 1998, p. 4.
24 ‘Measuring the ICT Sector ’, OECD (2000). The ICT sector is defined on the basis of 11 ISIC classes. For manufacturing, the products
of an ICT industry must ‘be intended to fulfil the function of information processing and communication including transmission and
display or must use electronic processing to detect, measure and/or record physical phenomena or to control a physical process. ’
For services, the industry ‘must be intended to enable the function of information processing and communication by electronic
means. ’
25 Information Society industries include content industries (eg publishing, audio-visual, advertising) and ICT-related industries (eg
computer and software, computer-related services, telecomminications equipment and services).
26 See Employment in Europe, 2000, Chapter 3.27 Based on International Data Corporation (IDC) data, Internet Commerce Market Model, 1999.28 Goldman Sachs US (1999), ‘B2B: 2B or not 2B, e-commerce/internet ’ Goldman Sachs Investment Research.
29 ICT expenditure includes IT hardware, software and services, telecommunication equipment and telecommunication services, at
market value.
30 Gallup Residential Survey (2000).31 European Survey of Information Society (ESIS) in Central and Eastern European countries, CEC 1999.32 The Gallup survey of small and medium-sized enterprises (SMEs) (2000) .
66I.4  Factors determining real convergence
Part II – Contribution of Community policies to cohesion
II.1 Economic and Monetary Union (EMU) .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 69
II.2 Internal market .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 73II.3 Competition policy .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 79II.4 The Common Agricultural Policy: price and market policies .  .  .  .  . 81II.5 Employment, human resource development and cohesion.  .  .  .  .  . 89II.6 Environment policy .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 93II.7 Research and Development policy.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 99II.8 Transport policy .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 105II.9 Energy policy .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 107II.10 Enterprise policy.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 109II.11 The Common Fisheries Policy .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 113
67
68Part II – Contribution of Community policies to cohesion
II.1  Economic and Monetary Union (EMU)
Based on the rationale that macroeconomic stability
is conducive to higher real growth and that MemberStates ’economic policies should be consistent within
a currency area, the EC Treaty defines several criteriaof economic convergence which need to be met in or -
der to participate in the Euro. Having reached a high
degree of sustainable convergence regarding pricestability, the government financial position (deficitand debt), exchange rates and long-term inter -
est-rates, the Council decided in May 1998 that11 Member States could adopt the Euro as from
1 January 1999. Among those 11 Member Statesthree are cohesion countries (Spain, Ireland andPortugal) and the fourth cohesion country, Greece,has joined the Euro area at the beginning of the year2001.
Enhanced stability in the cohesion countries would
have been more difficult to achieve outside the frame -
work of EMU. This framework is based on coordina -
tion and surveillance of economic policies pursued
by Member States, which have the main responsibil -
ity for these. The results achieved by the cohesioncountries in terms of stabilisation since the beginning
of the 1990s have been impressive, in particular inGreece and Portugal where inflation rates in 1990were 20% and 13% respectively. The historicallyunique degree of stability in the cohesion countriesprovides improved conditions for private investment,which have already contributed to above EU averagegrowth rates in recent years. Cohesion countries ’per-
formance in terms of nominal convergence, ex -
pressed by low inflation rates, and real convergence,expressed in above EU average real GDP growth,
have occurred in parallel during the second half of the1990s (Graphs 16 and 17). This trend has been par-ticularly strong in the case of Ireland which is a goodexample of how real and nominal convergence gohand in hand since the mid-1980s, when a long-termstrategy of a consistent, stability-oriented macroeco-nomic policy-mix was started (see Box). Catching-upwas somewhat slower in Spain and Portugal. InGreece, important achievements in nominal conver -
gence since the mid-1990s have translated into a
positive growth differential
vis-à-visthe EU which had
not been the case since the 1970s.
69 
0510152025
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 20000510152025
Greece
Spain
Ireland
PortugalAnnual % change17 Price inflation in cohesion countries, 1990-99  
-4-2024681012
-4-2024681012
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000Greece
Spain
Ireland
Portugal
    EU15 Annual % change (in real terms)16 GDP growth in cohesion countries, 1990-99
In order to ensure that these achievements in terms of
stabilisation are not merely temporary, procedures ofmultilateral economic surveillance and coordinationhave been reinforced within the EU, which encom -
pass different areas of economic policy, such as bud -
getary policies, employment policies, structural
reform and macroeconomic dialogue with the socialpartners. Given the achievements in macroeconomicstability, more emphasis has now been put on thesmooth functioning of product, capital and labourmarkets which allow the full benefits of EMU in termsof growth and cohesion to be realised. Although tak -
ing place at varying speeds in different Member
States, the liberalisation of markets and theprivatisation of public enterprises have not only con -
tributed to budgetary consolidation by reducing the
need for subsidies, but –even more importantly –
have also improved the overall efficiency and com -
petitiveness of these economies. Without sufficiently
open and flexible markets, Ireland ’s high growth rates
would hardly have been sustainable. The creation ofmore efficient product and capital markets in the1990s has enabled the Portuguese economy to moverapidly towards macroeconomic stabilisation withoutcreating major imbalances. Labour market reforms inSpain in the second half of the 1990s have contrib-uted to higher growth in both employment and GDP.Nevertheless, structural reforms in the cohesioncountries, particularly in Greece, need to be furtherreinforced.
The introduction of the Euro also benefits growth due
to increasing market integration through the lowertransaction costs achieved from eliminating the needfor currency exchange and the associated risk, aswell as the costs of comparing prices. An idea of thesize of the initial regional effects of monetary unioncan be gained from the trade-related exchange costsestimated for 1994.
1The estimates were produced by
multiplying the trade of each region with otherEuro-area countries by the respective bid-offerspreads between currencies participating in the Euro(Figure A.15). The results suggest that it is nationalrather than regional characteristics which determinethe scale of economies and that exchange costs arehigh in regions where:
•exchange rate volatility
vis-à-visthe stable core of
the Deutschmark area had been high, whichmeans, in particular, for regions in Spain, Ireland,Italy, Portugal and Finland;•the share of foreign trade with other Euro-area
countries is high, which is especially the case forthe six founding members of the EuropeanCommunity;
•the share of production of manufacturing goods
is high, as in the north-east of Spain, the east ofFrance, the north-east of Belgium, the north-eastof Italy and the north of Portugal; by contrast, inmajor cities and peripheral regions, where ser -
vices predominate, exchange cost savings are
relatively small.
These initial or static effects of the introduction of the
Euro will trigger dynamic effects on the structure ofproduction as competition increases, economies ofscale are realised, products become more diversifiedand the pace of innovation and growth is accelerated.Accordingly, there are likely to be changes in regionalmarkets for goods, capital and labour. Some specificeffects of monetary union on capital and labour mar -
ket integration are worth mentioning.
Lower transaction costs are likely to affect the price
and availability of capital, since interest rate differen-tials between participating Member States will be re-duced because of the disappearance of exchangerate risk premiums and an increase in the efficiency offinancial markets which were previously fragmented.Since January 1999, financial markets in the Euroarea all trade in Euros, the most visible sign of mone-tary union. Capital can more easily be transferredwithin the EU to investment in locations where it yieldsthe highest return, which is no longer subject to theuncertainty caused by the possibility of exchangerate fluctuation. As a result, the specific characteris -
tics of different regions assume more weight in the
competition for mobile capital.
A widespread concern regarding the impact of the
Euro on labour markets is that by making it easier tocompare wages in participating countries, greatertransparency could lead to them being equalised.However, wage differences between countries reflectunderlying differences in productivity. Regional com -
petitiveness depends not only on labour costs as
such, but on costs in relation to labour productivity(i.e. on unit labour costs) among many other factors.
70II.1  Economic and Monetary Union (EMU)
71II.1  Economic and Monetary Union (EMU)
The Irish experience
The basis of the recent performance of the Irish econ -
omy was established during the 1980s, though the most
striking results did not appear until the mid-1990s. In es -
sence, it was the fear of an unsustainable growth in pub -
lic debt and in debt interest –particularly because a
large part of debt was in foreign hands (over 40% in1987) –which sparked a rethink of policy and a move to -
wards budgetary consolidation.
Budgetary consolidation was achieved mainly by con -
trolling public expenditure which was reduced from
50% of GDP to around 30% –in part through a reduction
in debt interest –and which served to transform a bud -
get deficit of over 10% of GDP in 1985 into a surplus.
At the same time, tax reductions and fiscal reform
played an important role in the tripartite agreementsreached between Government, trade unions and em -
ployers (on four occasions since 1988), which enabled
a growth of labour costs to be achieved which was com -
patible with low inflation and a substantial improvement
in competitiveness. Moreover, because the growth inreal terms was well below the growth of productivity, italso led to a marked increase in the profitability of in-vestment. Despite pay restraint, real wages were able togrow significantly, especially in the second half of the1990s, fuelling a strong increase in private consumptionand domestic demand.
Budgetary consolidation and wage moderation en-
abled the Maastricht criteria to be fulfilled and monetaryconditions to be eased. This, together with conver -
gence of interest rates towards the level required by
EMU, the strengthening of competitiveness and in -
creased profitability created particularly favourable
conditions for rapid growth of output and employmentduring the latter part of the 1990s, without endangeringprice stability.Because of the improvement in competitiveness,
growth was export-led from the beginning. Moreover,investment progressively became a more importantsource of growth as capacity utilisation increased, prof -
itability rose and monetary conditions eased. Between
1994 and 2000, investment increased by over 13% ayear, rising from around 16% of GDP to 25%.
Foreign direct investment (FDI), which remained a key
objective of development strategy, was important notonly in expanding the capital stock but also in transfer -
ring technology. This led to clusters of highly competi -
tive and dynamic foreign-owned manufacturing
companies being established, particularly in electron -
ics and pharmaceuticals, and more recently, in interna -
tionally traded services, such as financial services and
call centres.
The macroeconomic policies pursued were coupled
with an active structural policy, including training of thework force to avoid high rates of growth being con -
strained by shortages of skilled labour. Growth of the la-
bour force was stimulated by reform of the tax andsocial protection systems as well as by the return of emi-grants. The employment rate, therefore, increased fromaround 52 ½% of working-age population in 1985 to
62½% in 1999.
The other element which deserves emphasis is the con-
tribution of the Structural Funds, which not only in-creased the net capital inflow into the economy butmore importantly co-financed structural measures forregional development, expansion of infrastructure andincreased training of the work force. Ireland demon -
strates what can be achieved if Structural Funds assis -
tance is integrated into a coherent policy which, in
particular, maintains healthy macroeconomic condi -
tions and which is supported by social consensus. It is
an example of ‘good practice ’ of the first order.
1 Hallet, Martin 1999, The Regional impact of the single currency, in Manfred M. Fischer and Peter Nijkamp (eds.), ‘Spatial dynamics of
European integration – Regional and policy issues at the turn of the century ’, Springer-Verlag: Berlin, pp. 94-109.
72II.1  Economic and Monetary Union (EMU)
II.2  Internal market
Integration and structural policies
This section examines, first, the extent of economic
integration in the wider Europe –in both the existing
EU Member States and the candidate countries –in
terms of the convergence of price levels, the expan -
sion of trade and the growth of direct investment. Sec -
ondly, it considers whether the structure of economic
activity, in terms of its distribution between sectors, isbecoming more or less similar between countries andregions, which reflects the extent to which these arebecoming more or less specialised in the productionof particular goods and services. Thirdly, it examinesthe possible social effects of closer integration.
Competing economic theories suggest that, on bal-
ance, closer integration should lead to a narrowing ofdisparities between the economies involved. How -
ever, such convergence is by no means assured and
where it occurs, it could take a longer time than is so -
cially or politically acceptable. The analysis of the
previous chapter confirms that differences in income(GDP) per head both between Member States and re -
gions appear, in fact, to have been reduced over
time.
Within the global trend, there have been significant
differences of experience, and while catching up hasbeen rapid for some parts of the Union, for others, thegaps have failed to close. Attributing cause and ef -
fect to these developments is difficult. In effect, they
have coincided with, on the one hand, moves towardseconomic and monetary union, and, on the otherhand, the introduction of cohesion policies to in -
crease investment in the weaker parts of the Union
under the Structural Funds. In Part III of this Report,the impact of the latter policies is examined in moredetail.Price differences,
trade and investment flows
Narrowing price differences
As economic integration proceeds, costs of transac -
tions between markets tend to decline so narrowing
price differences. In the Union, the evidence sug-gests that prices across the Union are indeed becom-ing more similar (as shown by a recent study basedon a Eurostat price survey of 270 product groups
1).
This is particularly so for manufactured goods, whichare generally subject to trade, though in some cases–motor vehicles, for example –prices still differ mark-
edly between Member States. Price differences con-tinue to exist, however, for most services, includinghousing, and non-traded goods, reflecting the varia -
tion in local market conditions (see Table A.22 in
Annex).
Evidence also suggests that prices of industrial
goods, especially machinery and equipment, insome of the more advanced Central European coun -
tries have already become similar to those in the EU,
which is perhaps to be expected given that a largepart of the market is supplied by imports from theUnion.
Conditions in financial markets in the EU, which were
already becoming integrated during the 1990s, havebecome increasingly similar since the introduction ofthe Euro. This is particularly evident as regards nomi -
nal long-term interest rates, which reflect both expec -
tations of future inflation rates and conditions on
capital markets, which have converged to much thesame level (see Graph A.26).
73
Cohesion country trade patterns approaching
those in the more prosperous Member States
Trade between EU Member States continued to ex -
pand during the 1990s, the increase being particu -
larly pronounced for Finland and Sweden following
their accession to the EU. At the same time, there wasan even stronger increase in the trade of all MemberStates, especially Ireland, with countries outside theUnion. This reflects two factors: first, the continuedprocess of globalisation and the further reduction oftrade barriers in the context of the Uruguay round,secondly, the higher rate of growth of markets in therest of the world, especially the US, than in the EU(see Graphs A.27-A.29). The EU economies, there -
fore, seem to be becoming more closely integrated
into the global economy at the same time as their inte -
gration with each other continues to increase.
The effects of economic integration can also be seen
in the changing pattern of trade, which tends to be -
come more similar between countries as they be-
come more interdependent. The evidence on tradeflows indicates that the extent of intra-industry trade(which measures the similarity of the composition ofexports and imports) is high for all EU Member States.This index, calculated for the EU12 (ie the euro-zone)countries ’intra-EU trade from 1988 to 1998, shows
that Greece, Ireland and Portugal still have a consid-erably lower degree of intra-industry trade than allother countries, which is suggestive of the existenceof a ‘development gap ’regarding their productive
structure. In Portugal, however, intra-industry tradehas increased significantly even though the index isstill lower than for all other countries except Greece.For most other countries, the index has increased,with the biggest increase having taken place forSpain, which has now a higher level than many otherMember States (see Graph A.30).
CECs are not competing in the same sections
of the market as EU Member States
Trade between the EU Member States and the 13
candidate countries (ie including Turkey) expandedrapidly over the 1990s, boosted in part by Europeanagreements, and the former have become by a longway the most important trade partners of the latter.Between 1993 and 1999, the value of trade betweenthe two groups of country multiplied by almost threetimes, to EUR 210 billion. The candidate countries to -
gether accounted for 13.7% of the total externalexports of the Eu in 1999. The EU trade surplus with
them declined significantly in 1999 but still stood atEUR 25.8 billion, 45% of it with Poland and 20% withTurkey. Both the EU share of CEC exports and theshare of EU goods in CEC imports have continued toincrease. The figures are highest in Hungary, wherethe EU share of imports was 64% in 1999, while 76%of Hungarian exports went to the EU, and in Estonia,where the figures were 65% and 73%, respectively.Growth in both these shares is also evident in theother countries, even in those, like Latvia and Lithua -
nia, where they were relatively low.
The provisions on free trade in the European agree -
ments with the 10 CECs have opened the way to their
economic integration with the EU, and the additionalagreements on agriculture, recently adopted, will ad -
vance this further. As a result, the proportion of agri -
cultural trade exempt from duty has more than
doubled from 36% to 81%, in the case of imports intothe EU, and from 18% to 39%, in the case of exports tothe CECs. Moreover, it has been agreed to pursue ne -
gotiations with each of the countries with a view to in-
creasing these figures further.
In general, all countries are likely to gain from an ex-
pansion of trade, particularly those which have al-ready established trade relations and closeinterdependencies in certain sectors, which tend tobe those closest to the EU, on the one hand (Hungary,the Czech Republic, Poland and Slovakia), and to theCECs, on the other hand (Austria, Germany and theNordic countries)(see Graphs A.31 and A.32).
The composition of trade between the EU and the
CECs broadly conforms with expectations, given re -
spective comparative advantages. EU exports are
more concentrated than CEC exports in high-techand advanced manufactures where labour skills areimportant. For most CECs, exports largely consist ofrelatively labour-intensive products, especially in thecase of Romania, Poland and Slovakia, as well as re -
source-intensive ones, especially as regards the Bal -
tic States and Bulgaria. On the other hand, the
composition of exports of Slovenia, Hungary and theCzech Republic are more similar to their imports fromthe EU and consist to a larger extent of high-techproducts (engineering goods and vehicles,especially).
Moreover, for the latter countries especially, intra-in -
dustry trade has grown relative to inter-industry trade
74II.2  Internal market
over the 1990s. Nevertheless, a detailed analysis of
the kinds of product traded within commodity groupsreveals that EU exports are concentrated in higherunit value, higher quality section of the market, wherelabour force skills and R&D are important, whereasthe CECs specialise in the lower price and lower qual -
ity end of the market, producing, for example, compo -
nents which are then exported to the EU for assembly
into final products. Of the CECs, only Hungary ap -
pears to be moving towards more technology- and
skill-intensive engineering industries.
The conclusion seems to be that most of the CECs are
not yet effectively competing in the same sections ofthe market with even the southern EU Member States,given the large differences in unit values between theexports of the two which exist. This suggests that thefear among the latter that enlargement could result ina large loss of their export markets is misplaced.
Trade accompanied by growing
Foreign Direct Investment in the EU ...
Economic integration occurs not only through trade
but through foreign direct investment (FDI), by busi-nesses setting up branches in other countries, to gainaccess to the market –especially important as re-
gards services –and to take advantage of lower pro-
duction costs. Provisional data from Eurostat (on FDIaveraged over the years 1998 and 1999) indicate thatFDI inflows are larger for Ireland, Sweden and theBenelux countries relative to GDP than for other Mem -
ber States, though in the case of Ireland and the Neth -
erlands, most of this originates from countries outside
the EU (see Graphs A.33 and A.34).
A large part of FDI takes the form of mergers and acqui -
sitions, the number of which almost doubled between
1991 and 1999 (from 2872 to 5572, most of the in -
crease taking place since the recovery in 1994). The
number of mergers between EU companies, or be -
tween companies where an EU company is a bidder,
has risen significantly in recent years, suggesting amove towards increased concentration of economicactivity and a strong desire of companies to becomelarger, perhaps to be able to compete more effectivelyin international markets (see Graph A.35).
… with important flows into the EastEU companies are responsible for most of FDI flows
into CECs, which increased significantly during thesecond half of the 1990s. Although the scale of flows
is negligible in relation to the GDP of EU MemberStates, it is substantial in relation to the GDP of the re -
cipient countries (annual flows amounting to around
5% of GDP of CECs) and is responsible for a largepart of their total capital investment (around 20%). Assuch, FDI has had a major impact on growth and pro -
ductive potential.
Much of this FDI, however, has been concentrated in
three countries, Hungary, the Czech Republic andPoland, each of these accounting for 25-30% of thetotal (see Graph A.36). Although FDI figures are notreported at the regional level in a comparable way,selected data show that capital cities and their sur -
rounding regions and the industrialised regions bor -
dering the EU received a disproportionate share of
investment (two-thirds of FDI to Hungary went to Bu -
dapest, 62% of the total going to Slovakia went to the
Bratislava region, almost half of flows to Latvia went toRiga and the Tallinn area accounted for 80-90 % ofFDI going to Estonia).
2
FDI flows unlikely to affectemployment and wages in the EU
According to most studies, the main motive for invest-
ing in CECs is to gain access to their markets. The factthat over half of investment is in non-traded sectorsdemonstrates this, but it also seems to be the case sofar as investment in traded sectors is concerned. Thisview is also supported by the fact that most FDI takesthe form of mergers and acquisitions of existing com -
panies rather than investment in ‘green field ’sites (i.e.
in new production facilities). Accordingly, it wouldseem that investment in CEC ought not to affect em -
ployment and wages in the EU greatly and that it com -
plements, rather than replaces, exports from the EU.
The impact of integration:
concentration or specialisation?
There is an ongoing debate as to whether closer eco -
nomic integration, and in particular, the introduction of
a single currency into a Single Market, is likely to in -
crease or reduce the degree of regional specialisation,
which is important for assessing whether or not regionsare likely to become more or less vulnerable to sec -
tor-specific shocks. The evidence of the US, at least so
far as manufacturing is concerned, points to speciali -
sation increasing,
3but it cannot necessarily be as -
75II.2  Internal market
sumed that US experience will be replicated in Europe.
This uncertainty is reinforced by the fact that studies sofar have tended to focus on manufacturing industry,where the factors giving rise to increased concentra -
tion and agglomeration –in the form of economies of
scale in production and proximity to suppliers andother producers in the same industry –are most evi -
dent. In practice, however, manufacturing is becoming
less important in the Union in terms of both GDP andemployment, accounting for only around a quarter ofthe latter, and the future location of economic activity inthe EU will depend critically on the location pattern of anumber of key services (the ‘new economy ’), which will
not necessarily follow that of manufacturing.
Differing trends in regional
concentration of sectors
Studies confirm that manufacturing activity in the
Member States is slowly becoming more concen -
trated.
4The trend is not uniform, however. A number
of industries that were initially spatially dispersedhave become more concentrated, mainly unskilledlabour-intensive ones with declining output or slowrates of growth (textiles, clothing and footwear, in par-ticular), which have become more concentrated insouthern Europe. For the regions dependent on thesesectors today, there is an increased vulnerability toeconomic shocks similar to that which has provokedeconomic restructuring in the northern regions overrecent decades. At the same time, around half of me-dium and high tech industries that were initially spa -
tially concentrated remained so (aircraft, motor
vehicles, electrical engineering, for example), whileothers with a highly skilled labour force and with rela -
tively high rates of growth (office machinery, radio, TV
and communications, precision instruments, for ex -
ample) became more dispersed. The latter have typi -
cally spread from the central part of the Union to
Ireland, Finland and southern Member States (seeTable A.23).
Analysis of the forces underlying the changes indi -
cates that resource endowment and market potential
(proximity to main markets) are of key importance.Within the former, endowment of capital, the drivingforce behind the location of capital-intensive indus -
tries in the 1970s, seems to have lost importance in
relation to the availability of an educated labour force,which has become key to determining the location ofskill-intensive industries in the 1980s and 1990s. Aseducational attainment levels are likely to becomemore similar across the Union, this should be a factor
working against increased spatial concentration. Atthe same time, market potential has become increas -
ingly important for the location of industries with
strong forward and backward linkages, central loca -
tions attracting industries higher up the value-added
chain. On the other hand, the importance of marketpotential for industries with large potential economiesof scale has declined markedly over the period.
Services an increasingly important
but complicating factor
Analysis at the regional level and the inclusion of ser -
vices in the picture seems to alter the conclusions,
though so far the analysis conducted has incorpo -
rated only very broad service sectors so that the re -
sults need to be interpreted with caution. Not
surprisingly, when a few broadly defined service sec -
tors are included, regions appear to have become
more similar in terms of the sectoral structure of theireconomic activity, since all regions have experi-enced a shift towards services. Whether this result isrepeated once services are disaggregated muchmore and once business services, in which job cre-ation has been especially high, are distinguished, re-mains to be investigated, although it is perhapssignificant that the broad category of market ser-vices, together with financial services, seems at pres-ent to be relatively highly concentrated.
Nevertheless, whatever the locational forces at work,
a general conclusion of the studies carried out is thatthe structure of economic activity tends to be slow tochange, because of the scale of investment requiredover the long-term to alter the pattern markedly. Overthe past 20-30 years, therefore, the sectoral distribu -
tion of economic activity has not changed greatly in
most Member States and regions. There are, how -
ever, exceptions, such as Ireland, where growth has
been more rapid and FDI much higher than else -
where, or Finland, where the decline in GDP in the
early 1990s and the subsequent restructuring of eco -
nomic activity, caused in part by the collapse of the
former Soviet Union, have been greater than in otherparts of the Union.
The social effects of integration
While increased specialisation will tend to favourthose employed in the sectors for which demand is
76II.2  Internal market
expanding in the different economies –highly-skilled
workers in the more advanced economies, low-skilled workers in the less advanced ones, where pro -
duction is concentrated in low-wage, labour-inten -
sive activities –in reality, as seen above, the outcome
is unlikely to be this simple. Most trade in the EU is ofan intra-industry kind, where similar goods are ex -
changed, and this is likely to become increasingly the
case in future years.
In practice, the decline in demand for low-skilled
workers, and the consequent social problemscaused by their unemployment, tends to result fromtechnological advance, which favours the morehighly skilled, and highly educated, more than fromtrade. This implies that the problem for policy is not toseek to slow down the process of integration, but toincrease the education and skill levels of workers, aswell as to increase the relevance of what they aretaught for the jobs for which demand is expanding.
A recent World Bank study of income distribution in
80 countries over four decades provides encourag-ing evidence that there is a close relationship be-tween overall growth and the average income of thepoorest 20% of the population, and that this is thecase irrespective of the degree of openness to for-eign trade.
5At the same time, in many countries, the
relative position of the poorest in society has not im-proved greatly over this period, and in some it has de-teriorated. Similarly, the distribution of income is moreunequal in the US than in Europe and social exclusionis no less of a problem (though it seems to arise fromdifferent sources, from a withdrawal from the workforce and low rates of pay more than from unemploy -
ment) despite the closer economic integration be -
tween regions.
This suggests, as in the case of regional conver -
gence, that the policies accompanying closereconomic integration, in this case social protection
and active labour market policies, have an importantrole to play in determining the outcome. Closer inte -
gration creates a more favourable environment for a
reduction in social inequalities, but it does not neces -
sarily ensure that such a reduction is realised.
Concluding remarks
The conclusion which seems to emerge from this
analysis is that the process of economic integrationtends to favour a general trend towards a narrowingof disparities. Nevertheless, economic theory sug -
gests that this is conditional on integration being
complete whereas partial integration may well haveadverse effects. European policies to establish eco -
nomic and monetary union and the breaking down of
barriers appear to have contributed positively to con -
vergence, not least, by promoting greater macroeco -
nomic stability, increased internal trade through
lowering transaction costs in their widest sense andmore competition, all of which are favourable to eco-nomic growth.
6
At the same time, the impact at the level of individualregions is unpredictable, given that faster growth isinevitably accompanied by economic restructuringand given the multiplicity of factors –social and politi-
cal as well as economic –that contribute to economic
development. In these circumstances, it seems es-sential to adopt a wide-ranging approach with a num -
ber of different measures aimed at tackling the
factors which determine competitiveness. This is thepolitical conclusion on which the Member States haveagreed, as reflected in successive generations ofstructural policies that are the subject of analysis inPart III of the report.
77II.2  Internal market
1 European Commission, Market integration and differences in price levels between EU Member States, in ‘The EU Economy –1999
Review ’, (European Economy) Brussels/Luxembourg 1999.
2 Cf. DIW/ EPRC, ‘The Impact of EU Enlargement on Cohesion ’, draft final report of a study for the Regional Policy DG of the European
Commission, Berlin and Glasgow 2000, p. 39f.
3 See Paul R. Krugman, Lessons of Massachusetts for EMU, in Francisco Torres/ Francesco Giavazzi (eds.), ‘Adjustment and growth
in the European Monetary Union ’, Cambridge 1993, pp. 241-269.
4 Karen-Helene Midelfart-Knarvik/ Henry Overman/ Stephen Redding/ Anthony J. Venables, ‘The Location of European Industry ’;
report prepared for the Economic and Financial Affairs DG of the European Commission, Economic Paper No. 142, Brussels 2000. Inspite of some differences in data and methodology, many of the results have been confirmed by another study carried out for theCommission: Karl Aiginger/ Michael B öheim/ Klaus Gugler/ Michael Pfaffermayr/ Yvonne Wolfmayr-Schnitzer (WIFO):
‘Specialisation and (Geographic) Concentration of European Manufacturing ’; Enterprise DG Working Paper No. 1; Background
paper for the ‘The Competitiveness of European Industry: 1999 Report ’, Brussels 1999.
5 David Dollar / Aart Kraay 2000, ‘Growth Is Good for the Poor ’, The World Bank, Development Research Group, Washington D. C.,
March 2000; (can be downloaded from www.worldbank.org/research).
78II.2  Internal market
6 While the high costs of accessing markets initially lead firms to be geographically dispersed and to produce for local markets, their
eventual reduction makes central regions more attractive. The proximity of a large market and the realisation of economies of scalecan lead to a process of agglomeration. However, full integration which results in the near elimination of transaction costs can makeperipheral regions, which have maintained their low cost advantage, attractive locations for firms.
II.3  Competition policy
The provision of State aid is one of the instruments at
the disposal of national and regional authorities to influ -
ence the spatial distribution of economic activity. The
results of the Eighth Survey on State aid in the EU1show
that State aid still occupies a central place in the indus -
trial and regional policies of most Member States. Over
the period 1996 to 1998, the total amount of State aidgranted in the Union averaged EUR 79.8 billion a year,or 2.4% of total government expenditure (though thiswas slightly less than over the period 1994 to 1996 –
see Table 6).
The results of the Survey show that there are signifi-
cant disparities between Member States in the grant-ing of State aid. In terms of all three indicatorspresented in the table below, the difference between
the lowest and the highest level is three to one.
The following features are apparent:
•expenditure on State aid per person employed
and per head of population in the four cohesioncountries in terms of Euros has remained well be -
low the EU average, and well below that in many
of the more prosperous Member States, such asGermany, Italy, France and Belgium, though thegap deminished over the period 1994 to 1998; inthe period 1996 to 1998, the cohesion countriesaccounted for 10.5% of total expenditure on Stateaid in the EU as against 9.5% in the period 1994 to1996;
79Table 6  Overall national aid in Member States 1994-1996 and 1996-1998
% GDP
(at 1997 prices)EUR per person
employedEUR per head % Government
expenditure
1994-96 1996-98 1994-96 1996-98 1994-96 1996-98 1994-96 1996-98
Austria 0.65 0.65 342 353 143 147 1.17 1.23
Belgium 1.26 1.18 698 677 255 249 2.33 2.26
Denmark 0.99 0.94 526 513 257 257 1.60 1.59
Germany 1.97 1.45 1.007 786 430 327 3.96 2.95
Greece 1.36 1.24 352 334 131 125 2.38 2.25
Spain 1.14 0.98 367 318 132 120 2.47 2.22
Finland 0.50 0.47 249 248 96 97 0.85 0.85
France 1.11 1.13 588 618 225 237 2.02 2.08
Ireland 0.88 0.99 389 497 137 188 2.12 2.66
Italy 1.83 1.57 809 712 314 276 3.38 3.04
Luxembourg 0.99 0.53 624 343 324 188 2.24 1.27
Netherlands 0.65 0.62 362 349 127 126 1.23 1.24
Portugal 1.37 1.63 260 323 117 148 2.98 3.44
Sweden 0.99 0.78 476 388 220 178 1.49 1.24
UK 0.54 0.52 227 223 99 100 1.17 1.20
EU15 1.32 1.12 591 526 235 214 2.54 2.35
Excluding agriculture and Structural Funds expenditure
•the volume of State aid has declined in recent
years, especially in the more prosperous MemberStates, where expenditure per head and per per -
son employed is above the EU average. The main
exception is France, where in recent years, ex -
penditure increased significantly, in both abso -
lute and relative terms.
Given its effect on the regional distribution of eco -
nomic activity and income, the control of State aid will
remain a key instrument of Community cohesion pol -
icy. Allowing high levels of State aid in the most pros -
perous Member States and regions would undermine
the effectiveness of both Community and national re -
gional policy efforts in support of the weakest regions.
Financial assistance to support businesses in the lat -
ter is vital to correct regional disparities, and it is im -
portant that the effectiveness of this is not
compromised by the granting of disproportionateState aid elsewhere. Strict control of State aid should,therefore, be regarded as an essential complementof Structural Funds support for the less favouredregions.
Regional State aid is by far the largest single category
of State aid in the EU. Between 1996 and 1998, Mem-ber States granted EUR 18.8 billion in State aid for re-gional purposes, which represented 57.6% of allState aid granted to industry and services in the Un-ion. In the 1990s, there was a proliferation of regionalaid measures throughout the Community, and a grad-ual extension of the areas qualifying for regional aid,giving rise to a real danger of the effectiveness of re -
gional aid being undermined as a means of furthering
economic and social cohesion.
At the end of 1997, the Commission adopted new
Guidelines on national regional aid, with the aim ofstrengthening control over its deployment. Theseconsolidated the criteria used to assess the compati -
bility of national regional aid measures and clarified
the rules for the demarcation of regions qualifying foraid under Article 87(3)(a) and (c) of the Treaty. Mem -
ber States were invited to bring their existing regional
aid systems into line with the new rules by the year2000.
A key element of the exercise was the review of re -
gional aid maps in each country, with a view tobringing about a sizeable reduction in the coverage
of aid. In the course of 1999-2000, new regional aidmaps were established for each Member State. Themain aims were achieved, in that the new maps weredefined on the basis of a transparent and objectivemethod which ensured equal treatment for all Mem -
ber States. At the same time, the total population in
the EU covered by regional aid was reduced from46.7% to 42.7%. A strict application of the eligibilitycriteria has resulted in a tighter demarcation of the as -
sisted regions, enabling Member States to focus re -
gional assistance on the regions suffering the most
severe economic problems and so increasing itseffectiveness.
A final element to take into account is the role that ser -
vices of general economic interest can play in lag -
ging regions, as stated in Article 16 of the Treaty.
80II.3  Competition policy
1 Commission of the European Communities, Eighth survey on State aid in the European Union, COM(2000)205 Final, 14.4.2000.
II.4 The Common Agricultural Policy: price and market
policies
Political and budgetary aspects
Developments, current situation and prospects
In expenditure terms the Common Agricultural Policy
(CAP) is the most important policy of the EU. The CAPreform of 1992 and the
Agenda 2000 reform initiated
a shift from price support policies to direct paymentsfor farmers based on historical yields.
In July 1997, the publication of
Agenda 2000 pre-
sented a new reform of the CAP. A number of key pri-orities were defined, including securing thecompetitiveness of the agricultural sector, encourag-ing cultivation methods which contributed towardsmaintaining and improving rural areas and land-scapes and protecting the sources of farmers ’in-
come, while at the same time encouraging the
development of the rural economy as a whole. The re -
form included two important strands. First, official
prices were reduced. Secondly, a new frameworkwas established for rural development policy, whichwas regarded as the central element in the reformand, from then on, as the second pillar of the CAP.
Budgetary aspectsIn 1998, the Guidance and Guarantee sections of the
EAGGF, ie the source of the overall financing of thetwo pillars of the CAP, accounted for 54.6% of the Eu -
ropean Union budget, or EUR 43.3 billion. Price and
market support from the Guarantee section of EAGGFalone represented 48.9% of total Community expen -
diture, or EUR 38.7 billion (all the following references
in this section to the EAGGF are to the Guarantee sec -
tion). The prospects for the period 2000 to 2006 are
for a broadly unchanged level of overall agriculturalexpenditure but for a reduction in relative terms, to
EUR 44.8 billion in 2002, 46.8% of total appropria -
tions, and EUR 42.5 billion in 2006, 46.0% (Graph 18).
Since the 1992 reform, direct payments for assis -
tance and, to a lesser extent, the amount going to ru -
ral development, represent growing shares of total
expenditure on agriculture at the expense of spend-ing on market support and payments to exports. Thelatter two categories accounted for only 29% of totalexpenditure in 1998 as against 82% in 1992 (seeGraph A.37 in Annex).
The substitution of direct aid payments for market
support has increased the share of subsidies in agri-cultural income. In 1998, subsidies represented, onaverage, 28.6% of agricultural income in the Union asagainst 15% in 1990 and 5% in 1980. Overall, theyhave contributed to stabilising income.
81 
01020304050607080
19831984198519861987198819891990199119921993199419951996199719981999200020012002200320042005200601020304050EAGGF-Guidance
EAGGF-Guarantee
EAGGF as % of Community budget (right axis)EUR billion18 EAGGF expenditure, 1983-2000, and forecasts 
for 2001-06
For 2001-06, no breakdown available between EAGGF-Guarantee and EAGGF-Guidance%
France (23.2%) and, to a lesser extent, Germany
(14.3%) remain the main beneficiaries of the EAGGF.Since 1998, Spain (13.7%) has taken third place aheadof Italy. These three countries receive more than half oftotal EAGGF expenditure. For the rest, the share of Por -
tugal, though low, has increased over the past 10
years, from 0.6% to 1.6% (see Table A.24).
The ranking of Member States, however, is changed
considerably if expenditure is related to the numbersemployed in agriculture. The cohesion countries, ex -
cept for Ireland, are at the bottom of the list because
of the large numbers employed. Where, as in theMediterranean, a more labour-intensive type of pro -
duction predominates (in Greece, Spain, Italy and
Portugal), some 8 ½% of employment is in agriculture,
due in part to smaller average farm size. EAGGF ex -
penditure per person employed, however, has
tended to increase over the past 10 years, as employ -
ment has declined, and the gap between countries
receiving the least (Portugal in particular) and themost has narrowed (see Table A.25).
Contribution of agricultural price and
market support to national cohesion
The impact of the CAP –or at least the first pillar –on
cohesion is linked to the large redistribution of incomeamong European citizens stemming from transfersbetween social groups, sectors, regions and MemberStates. The current shift from price support to directpayments implies a shift in transfer flows. This hasdistributional implications for consumers and taxpay -
ers. With market price support, low income consum -
ers pay a disproportionate share of transfers relative
to their share of income and they are, therefore, ex -
pected to benefit from reduced domestic price levels.
The CAP also involves large transfers between Mem -
ber States and regions. The amount of such transfers
can be calculated from budgetary information togetherwith estimates of the effect of international trade.
1
The patterns of transfers between Member States in1998 was very similar to that in 1993: net contributorsand net beneficiaries were the same (see TableA.26). In 1998, net transfers were positive for 5 Mem -
ber States, three of which were cohesion countries
(Spain, Ireland and Greece). The change in the scaleof such transfers differs between Member States. Theamount rose considerably for Spain and Francebetween 1993 and 1998, largely because of in -
creases in direct payments (especially to cereal pro -
ducers). The rise was smaller for Ireland and was the
result of positive trade transfers, high payments tobeef and veal producers and a small contribution tothe agricultural budget. The amount of net transferdeclined for Greece and Denmark, though it re -
mained positive –for Greece, largely because of di -
rect payments and a low budgetary contribution, for
Denmark, because of positive trade transfers.
The remaining 10 Member States are net contributors
to the CAP. Portugal is the only cohesion country forwhich net transfers were negative in 1998 as well as in1993, the result of a low level of direct payments re -
ceived and of a high level of protection against im -
ports. Except for the Netherlands, which receives a
low level of direct payments, the net contribution of allthese countries declined between 1993 and 1998.
Contribution of agricultural price and
market support to regional cohesion
Regions play an increasingly important role in the op-
eration of the CAP, even if this differs markedly be-tween Member States. In general, regions areresponsible, on the one hand, for measures relatingto rural land use (environmental protection, agri-tourism and infrastructure, for example) and, on theother, for providing support for specific agriculturalsub-sectors. In this regard, differences betweenMember States are large: While Italian regions man -
age around 70% of the agricultural budget in Italy,
agricultural measures undertaken by French depart -
ments (which are much larger than those undertaken
by regions) account for only around 2% of the budgetin France.
The effect of the 1992 reformProducers of cereals, oil seed and meat have bene -
fited from the direct payments introduced under the
1992 reform. This system provided compensation forthe loss resulting from the alignment of European toworld prices and,
ipso facto , prevented income from
agriculture falling in a number of regions and even ledto an increase in some cases. The regions affectedmost by the new system were the cereal-producingareas of France (Centre, Poitou-Charentes), Ger -
many (Bayern), Spain (Castilla y Le ón, Castilla-la
Mancha) and Portugal (Alentejo) as well as the
82II.4  The Common Agricultural Policy: price and market policies
83II.4  The Common Agricultural Policy: price and market policies
Guyane (F)Guadeloupe
(F)Martinique
(F)Réunion
(F)Canarias (E)
Açores (P)
Madeira
(P)
EUR/AWU (1985 constant prices)
< 3000
3000 - 5000
5000 - 10000
10000 - 15000
≥15000
no dataCAP direct payments plus other transfers
Source: Eurostat - De RoseB, D, NL, UK : NUTS1
IRL, A, FIN : NUTS0
0 100 500 kmSIG16SIG16
© MEGRIN for the administrative boundaries14  CAP total support per A WU, 1995-1996
Note: AWU = annual work unit
livestock areas of Ireland, the UK (Scotland, Wales,
South West), France (Basse-Normandie) and Ger -
many (Bayern). The result was an increased level of
support in terms of the amount of aid in relation to ag -
ricultural employment (Map 14).
Production aids are also used for other products,
such as olive oil, so providing support to many pro -
ducers in the Mediterranean regions, and cotton, pro -
duced mainly in Greece. There have, in addition,
been improvements, this time due to market forces, inwine-growing regions as well as in those producingfruit and vegetables: La Rioja and Andalucia in Spain,Puglia in Italy, Aquitaine in France as well as many re -
gions in the Netherlands and Baden-W ürttemberg in
Germany. In general, Mediterranean products haveproved to be relatively competitive on world marketsand their share in total agricultural output has in -
creased, due partly to the modernisation of distribu -
tion systems in a number of coastal regions.
Total transfers to agriculture, including indirect as
well as direct payments, have increased in relation tothe number employed in all regions of the Union, thelargest rise occurring in French regions (especiallythose producing cereals) and those in the newLänder in Germany. In terms of assistance relative to
agricultural land area, regions in Greece receive thehighest level of support in the Union.
Overall, the reform did not radically alter the distribu-
tion of support between European regions. In 1996,as in 1991-92, the regions where the level of supportper person employed in agriculture is relatively low inrelation to the gross value-added per person em -
ployed are located in the Netherlands, Portugal,
Spain, Italy and Greece (ie they are situated on thebottom right-hand side of Graph A.38).
At the same time, the reduction in market price sup -
port most affected the regions with a high level of
value-added per person employed, which led to amore equitable distribution of aid between regions.Moreover, a number of regions continued to receivemuch the same level of support following the reform,direct payments compensating for the reduction inmarket price support, while others experienced a re -
duction. The result is a weakening of the relationship
between the level of aid to regions and agriculturalperformance. Wine-growing regions, for example,like those producing fruit and vegetables, succeededin maintaining, or increasing, their agriculturalincome, despite benefiting only to a very limited ex -
tent from direct and indirect aid.
Although the 1992 reform led to a more equitable dis -
tribution of support across regions, it also became
more dispersed. The distribution of transfers in rela -
tion to GDP per head (Graph A.39, which shows the
cumulative proportion of transfers in relation to thepopulation of regions ordered by GDP per head)shows that:
•the effect of the CAP is negative in the least pros -
perous regions, which account for around 20% of
EU population (the graph showing that these re -
ceive less in transfers than their relative level of
GDP per head);
•the regions benefiting most are those between
the 2nd and 6th deciles in terms of GDP per head.
Contribution of agricultural price and
market support to social cohesion
Over the past few years, a number of different models
of agricultural production have developed, distin-guished by their structure, methods and aims:
•a‘productive ’model, geared towards interna-
tional markets and increasingly concentrated in afew areas in the Union. Taking gross value-addedper annual work unit as a measure of productivity,the highest values are found in Denmark, Cham -
pagne-Ardenne and Picardie in France and
Sachsen-Anhalt in Germany;
•an‘adaptive ’model, concentrated in particular
regions and on particular products and targetedon local or national markets. This form of agricul -
ture is based on traditional, local produce and is a
response to an increasing demand for higherquality among consumers;
•a‘transition ’model, which is subject to increasing
constraints and permanent change, with farmerscontinuously changing their methods of produc -
tion and what they produce in response to the
development of large agricultural markets, in -
creased competition and the ever greater pres -
sure from agri-food chains;
84II.4  The Common Agricultural Policy: price and market policies
•a‘marginalisation ’model, characterised by struc -
tures of production which are increasingly unsta -
ble and precarious and which, if they are not
capable of adapting, are set sooner or later to dis -
appear. Taking farms below 4 ESU2as an indicator
of precariousness, the regions in question includeCentro in Portugal, Valle d ’Aosta, Abruzzi,
Basilicata and Molise in Italy and Galicia in Spain.
This typology of models is confirmed by an analysis of
the average economic size of agricultural holdings in1997 and the change between 1993 and 1997 for the20 regions with the lowest and the highest levels (seeTable A.27). There is a marked distinction between thesouthern and the northern regions. The 20 regions withthe smallest size of holding are all situated in Greece,Spain, Italy and Portugal, Moreover, the average eco -
nomic size of agricultural holdings declined over the
4-year period by 2.2%, while it increased in the top 20regions, all located in the north, by 24.6%. Furthermore,employment in agriculture tends to be higher in the re -
gions with small holdings, such as in Crete, where al-
most 38% of employment was in agriculture in 1997,where the average size of holdings was only 4.7 ESUand where this declined by 10% over the period.
Although the 1992 reform reduced expenditure on
market support in favour of direct payments, the dis-tribution of support in relation to farm size remainsinequitable, since support is still fixed on a ‘per hect -
are’basis (which means that support increases with
economic size). Before the reform, the system of sup -
port favoured farms with a certain level of production
and,
de facto , of a relatively large size (of 16 ESU and
over). Although direct payments have become moreimportant since the reform, the main beneficiaries re -
main the large holdings (over 40 ESU). The inequality
of the distribution of support is seen even moreacutely if account is taken of the fact that 10% of hold -
ings in the EU account for two-thirds of the total stan -
dard gross margin and half account for 95%. The
CAP, therefore, continues to support the develop -
ment of large specialised units at the expense of
small and medium-sized farms, which play a majorsocial and economic role in a number of regions(Graph 19).
The enlargement perspective
The inclusion of the 10 Central European candidatecountries in the Union (ie leaving aside Cyprus andMalta) would lead to:
•an increase of 2.4 times in the number employed
in agriculture (from 6.9 million in 1998 to 16.6million);
85II.4  The Common Agricultural Policy: price and market policies
Table 7  Value-added and employment in agriculture in the Union and the CECs
Value-added Employment Value-added Employment
EUR mn % 000s % EUR mn % 000s %
Belgium 3233 1.4 95 2.4 Bulgaria 2308 21.1 770 24.4
Denmark 4449 2.9 90 3.3 Cyprus 356 4.4 30 10.2
Germany 23724 1.2 1034 2.9 Estonia 294 6.3 54 8.8
Greece 8813 8.1 704 17.8 Hungary 2323 5.5 263 7.0
Spain 21897 4.2 1020 7.4 Latvia 235 4.3 172 17.2
France 39876 3.1 968 4.3 Lithuania 986 10.3 345 21.4
Ireland 4105 5.4 136 8.5 Malta 85 2.7 : :
Italy 32167 3.0 1118 5.4 Poland 6735 4.8 2704 18.1
Luxembourg 117 0.7 3 1.9 Slovak Republic 841 4.6 179 8.1
Netherlands 10742 3.1 232 3.0 Czech Republic 2277 4.6 250 5.3
Austria 4354 2.3 229 6.2 Romania 6405 17.4 4851 44.0
Portugal 3765 3.9 611 12.6 Slovenia 715 4.1 96 10.8
Finland 4289 3.7 148 6.4
Sweden 4538 2.1 121 3.0
UK 15566 1.2 421 1.6 CEC 12 / 11 23559 6.8 9715 22.0
EU15 181635 2.4 6930 4.5 EU 27 / 26 205194 2.6 16645 8.4
Source: National Accounts; Labour Force Survey; National Statistical Institutes; calculations DG REGIO
•an increase of 12.7% in the gross value-added of
the agricultural sector (in Euros);
•an increase of 5.4% in total agricultural imports
(intra- plus extra-Community) and of 4.9% inexports.
With almost 10 million people employed, agriculture
in the Central European countries is a considerablylarger source of jobs than in the EU. Productivity,measured in terms of valued-added per person em -
ployed, is, however, only 9% of the level in the Union.
Nevertheless, in relative terms, the contribution of ag -
riculture to GDP, as to employment, is much larger in
the CECs –particularly in Romania and Bulgaria –
than in the EU (Table 7).
Although data from current Agricultural Eco -
nomic Accounts in the CECs make accurate compari -
sons difficult, it is possible to identify broad
differences between the candidate countries and theUnion.
•In Poland and Romania, very low labour produc-
tivity reflects the large proportion of micro andsmall farms in total production combined with arelatively high density of labour per hectare.These types of structure, inherited from thepre-transition period in Poland and to a lesserextent Romania, reflect the presence of consider-able labour intensive and semi-subsistenceagriculture. Bulgaria is perhaps more polar -
ised between small-scale labour-intensive farm -
ing and large-scale extensive cereals
production.•In Hungary, the Czech Republic and Slovakia, la -
bour productivity is higher reflecting the impor -
tance of large structures and the development
towards more market oriented farms. In Slovenialevels of value-added are significantly increasedby market price support policies.
•The Baltic States lies somewhere between the
two groups. Here, recent low levels of productiv -
ity reflect the significant recession and restructur -
ing which have occured in recent years.
In all cases, low productivity per hectare and per
labour unit correspond to a high labour/capital ra -
tio in comparison with the European Union and a
comparatively low level of input use (Graph 20).This reflects relative factor costs in the CECs aswell as barriers to investment. In the Czech Repub -
lic, Poland and Hungary, capital per employee is
no more than a third of that in France, if commercialholdings alone are taken into account. This fallssubstantially, particularly in Poland, if smaller hold-ings are included. In these countries, national sta-tistics suggest that there is perhaps one tractor forevery 20 agricultural workers.
Structures and subsistence farmingA common feature of countries where, before 1989,
agriculture was largely collective is the gradual clos-ing of the gap between, on the one hand, large collec-tive or state-owned holdings and, on the other, verysmall private units (like those in mountain areas in Ro -
mania). The average size of remaining state-run hold -
ings, including private cooperatives, is declining
86II.4  The Common Agricultural Policy: price and market policies
 
020406080100
BG CZ EE HU LV LT PL RO SI SK020406080100Value-added per hectare of utilised agricultural area
Value-added per person employedIndex, EU=100 (in Euros)20 Value-added in agriculture in Central 
European countries, 1998 
020004000600080001000012000
0 -<4 4-<8 8-<16 16-<40 40-<100  >= 100 All size0200040006000800010000120001990/92 1995/97EUR/AWU at 1985 values19 Production subsidies per AWU by group of 
farms classified by ESU, 1990-92 and 1995-97
AWU = Annual Work Unit 
ESU = European Size Unit
considerably, while that of private holdings is gradu -
ally increasing.
In Poland and Slovenia, where the private sector was
already important before the transition in 1989, struc -
tural change is less pronounced. In Poland, the size
of private holdings is only increasing slightly as theland from state-owned farms is privatised, though, ingeneral, their small size represents a handicap in thelonger term (see Table A.28).
Increasingly, this distinction between small private
holdings and large collective farms is being replacedby a dualism between market oriented competitivefarms and a semi-subsistence sector. This latter is afactor contributing to low levels of productivity, lack ofmarket orientation and resistance to structuralchange in a number of candidate countries. Althoughno standard definition of subsistence farming exists,it is generally associated with small holding size, fam -
ily agricultural work as a part-time or supporting activ-
ity, high levels of on-farm consumption as well as animportant role in extended family structures.
Subsistence farming is not a new phenomenon in the
CECs. Household plots played an important role inthe pre-transition period. However, its scale has in-creased since transition, reflecting a response toeconomic and social adjustment. The importance ofsubsistence farming varies markedly between coun -
tries remaining significant in Romania, Bulgaria and
Poland. In contrast, it plays only a small role in Hun -
gary, the Czech Republic and Lithuania.
Subsistence farming defined in these terms reflects,
therefore, both historical factors but equally a rationalresponse to high levels of rural unemployment, low in -
comes and the nature of social security systems. For
example, more than a million Polish farmers receivean agricultural pension, absorbing the major part ofthe agricultural budget. Such social security transfersplay an important part in agricultural household in -
come and could easily account for more than half of
total agricultural household income in some coun -
tries. Subsistence farming can, therefore, play an im -
portant role in overall family welfare and, equally, in
absorbing labour where alternative sources of em -
ployment are scarce. However, rural poverty remains
a considerable problem in the CECs (see Box in PartI, Social cohesion).Market support policies
In general, data from the OECD suggest that current
market support policies in the CECs, with the excep -
tion of Slovenia, and to a lesser extent Poland, have
had little effect on agricultural value-added and sec -
toral income. It should be emphasised that due to the
acknowledged limitations of these data, conclusionsshould be seen as indicative of broad trends. On av -
erage, the CECs have moved from a position of nega -
tive market support over the past years to a situation
close to neutrality. This, however, may hide implicitmarket support due to significant differences in qual -
ity between domestic production and world markets,
particularly in the livestock sector. On the other hand,it also reflects price competitiveness and (in somecases) policy choices to maintain low prices, particu -
larly in the cereals sector. In this respect, cereals and
oilseed play an important role in final agricultural out -
put, particularly for large producers such as Hungary
and Romania. Macroeconomic restructuring and ex -
change rates trend play an equally important role,
particularly in Bulgaria and Romania. The picture inmost countries is, therefore, of low levels of supportgradually increasing over time, with the exception ofSlovenia which has levels of support similar to thosein the Union.
When the structure of market price support is exam-
ined by hectare or livestock unit (see Graph A.40),levels of support for oilseed and cereals are generallylow or negative in the candidate countriess with thenotable exception of wheat in Poland. Despite of con -
siderable policy intervention, price support in the live -
stock sector has not raised domestic prices
significantly above world prices, although there is animplicit transfer due to quality differences particularlyfor beef and pork. The only areas of major ,supportare for sugar and milk. Here, as in the EU, support forsugar is relatively concentrated. It is notable that theapplication of EU prices to the CECs would increaselevels of market price support without raising them toEU levels. This reflects lower yields per hectare andper livestock unit.
The effect of current market support policy in the can -
didate countries on national cohesion and farm in -
comes in most countries is relatively small given the
low level of transfers from consumers to producers,with the exception of milk and, perhaps, sugar. How -
ever, there are significant transfers in Slovenia and in
some sectors in other countries such as Poland. As
87II.4  The Common Agricultural Policy: price and market policies
prices move towards EU levels and production in -
creases, these transfers will also increase, with corre -
sponding effects on income, although it is not unclear
how this will affect the semi-subsistence sector.
ProspectsEnlargement towards to Central Europe gives rise to a
number of challenges as regards national and re -
gional disparities in the Union. The overall impact on
EU15 growth and employment is likely to be small.But achieving productivity gains in the CECs anddealing with the consequences of such gains in ruralareas, particularly from labour adjustment, is very im -
portant. Agricultural and rural development policies
are particularly significant here, given the importantrole of agriculture in many areas.
Enlargement will clearly widen disparities in the EU
between rural areas and between these and urbanareas. Price convergence between the CECs and theEU15 will increase transfers from consumers to pro -
ducers in the CECs, but these positive effects on
farming income may be offset by a range of factorsundermining the competitiveness of CEC agriculture(eg real exchange rate appreciation). It should benoted, however, that these processes reflect broadereconomic adjustment and are already underway inthe pre-accession period.
Many CECs are characterised by a dualistic structure
of farms. For the more market oriented farms, the keychallenge would appear to be the need for betterfunctioning factor markets. On the other hand, thesmall size of holdings farm structures and high levelsof employment in agriculture pose particular chal -
lenges for improving the efficiency of the sector, par -
ticularly since the social costs of so doing appear to
be high.
In a number of countries, and particularly in Romania
and Bulgaria, where employment in agriculture hasincreased in both absolute and relative terms, therehas been migration from urban to rural areas as eco -
nomic conditions have worsened. Agriculture has,
therefore, been important in absorbing the shock andhas enabled essential needs to be met. The small sizeof farms, low labour productivity and incomes, lack ofalternative employment and reliance on subsistence
farming can be contributory causes of rural poverty.Nevertheless, subsistence farming can also play animportant role in maintaining agricultural and ruralhousehold income and may, in some cases, comple -
ment social security or, indeed, substitute for labour
market measures. At the same time, however, subsis -
tence farming has created a problem of under-em -
ployment, which remains to be tackled in the future
by attempting to achieve a more balanced and diver -
sified development of the areas in question. In this
respect, the creation of alternative sources of em -
ployment and functioning labour markets would ap -
pear as important as improved general skill levels.
88II.4  The Common Agricultural Policy: price and market policies
1 For preliminary estimates, see ‘First Report on Economic and Social Cohesion ’.
2 Economic size is conventionally expressed in terms of the European Size Unit (ESU), corresponding to a standard gross margin
(SGM) –the difference between gross agricultural output and the costs associated with that output –of EUR 1200. The Farm
Accountancy Data Network considers ‘very small ’ holdings to be those below 4 ESU.
II.5 Employment, human resource development and
cohesion
The European Employment Strategy (EES) was
launched only a few years ago at the end of 1997 andis built on several processes. The Union ’s role is a co -
ordinating one, the Member States remaining respon -
sible for the design and delivery of employment
policy.
A new operational framework,
particularly in the Luxembourg process ...
The Luxembourg process embodies a number of ele-
ments which are important for its success:
•First, it is founded on commonly defined objec-
tives, which are based on shared values amongthe Member States and cover issues which arefelt to be of common concern for employmentpolicy.
•These objectives are transparent and, therefore,
open to public scrutiny and criticism.
•A number of appropriate ways to measure prog -
ress towards the desired outcomes are defined
either in terms of quantitative or qualitativeindicators.
•As the focus is on outcomes at the EU level, the
definition of the means and conditions underwhich programmes and policies are imple -
mented is left to individual Member States, which
are responsible for their own employment policy.
•Peer pressure through annual examination and
comparative review is used to steer the course ofpolicy and enhance the effectiveness of action.This method establishes a balance between EU Union
level coordination in the definition of common objec -
tives and outcomes and Member State responsibilities
in deciding the detailed content of policy.
... which represents a new method of coordinationThe European Employment Strategy is based on a
number of key principles, which distinguishes the‘Luxembourg ’open method of coordination from pre-
vious attempts to develop a credible European ap-proach to employment policy. These principles are:
•Subsidiarity. The definition of the means and con-
ditions under which programmes and policies areimplemented is left to individual Member States.
•Convergence. Commonly agreed employment
objectives are pursued through concerted ac -
tion, where each Member State contributes to
raising the EU average performance. This princi -
ple has been made more concrete still by the Lis -
bon European Council in March 2000, where full
employment was adopted as an overriding goalof the Union, together with the objectives of rais -
ing the overall employment rate in the EU from
62% to 70% by 2010 and the employment rate ofwomen from 52 ½% to over 60%.
•Management by objectives.
•Country monitoring.
•An integrated approach. The Luxembourg pro -
cess does not involve only Ministries of Labour
and Employment, but commits national
89
governments as a whole as well as a wide range
of other interested parties.
Objectives
The objectives of the Luxembourg process are givenoperational meaning in the Employment Guidelines ’
four pillars: employability (enhancing the chances ofindividuals to remain in, enter or re-enter the labourmarket, providing early assistance to the unem -
ployed, preparing young people for the world of work,
making the tax-benefit and training systems moreemployment friendly), entrepreneurship (developinga culture of enterprise, making it easier to start andrun businesses), adaptability (helping employeesand enterprises to be more flexible, modernising thelegal and organisational framework of employment),equal opportunities (developing pro-active policieswhich will enable more women to take up employ -
ment, at all levels and in all sectors, better reconcile
work and family life and facilitate a return to work aftera period of absence).
The force of RecommendationsThe instrument of Recommendations –first used for
2000 –has demonstrated its value in focusing Mem-
ber State efforts on key challenges. Most MemberStates have taken action to respond to the Recom-mendations addressed to them. The 52 Recommen-dations adopted for 2000 referred to youthunemployment, long-term unemployment, disincen -
tives to employment embodied in the tax or benefit
systems, the employment potential of the service sec -
tor, social partnership, gender gaps and statistical
systems. Most of the Recommendations have beenkept (entirely or in amended form), because their im -
plementation exceeds the timeframe of a single year;
8 Recommendations were dropped because suffi -
cient progress had been made –as regards services
(Belgium, Germany, Ireland, Italy), the administrativeburden on companies (Spain), statistical systems(Germany, UK) and social partnership (France). NewRecommendations were included, putting additionalemphasis on two new priority issues, which deserveincreasing policy attention: achieving a more bal -
anced policy-mix across the four pillars through a
more comprehensive approach and lifelong learning.For 2001, the Commission proposes to address theRecommendations to Member States (see Table A.29in Annex).A learning strategy, reviewing itself ...
It is noteworthy that the Luxembourg process itself is
subject to critical assessment. In 2000, a ‘Mid-term
Review ’was carried out in order to identify the im -
provements it initiated and the weaker points where
further action could be needed. The review identifiedsome important changes and successes (in particu -
lar, it brought the employment challenge and the em -
ployment objectives to the forefront of European and
national debate, linked economic and social policymore closely together, created an integrated frame -
work for structural reform, led to increased involve -
ment of a wide range of actors and to greater
transparency of employment policies and increasedpolitical accountability), while enabling the Guide -
lines to be refocused on the main Lisbon objectives.
But it also identified a number of continuingchallenges.
Despite overall improvement, regional differences in
labour market performance remain substantial andhave increased further in some Member States.
The regional pattern of employment has changed lit-
tle since 1980, and there appears to be little evidenceof a more balanced distribution of net job creation be-tween regions.
The Employment Guidelines took account of this situ -
ation from the outset and drew attention to the role of
local and regional authorities in employment policy.As noted in the Joint Employment Report 2000, theimportance of action at local and regional level is in -
creasingly recognised by Member States, but more
needs to be done to increase cooperation betweenthe different levels of government to develop a com -
prehensive regional and local employment strategy;
regional and local authorities and other local actorsneed to become more involved in the design and im -
plementation of the relevant guidelines, so adding a
local dimension to the EES. This point is reflected inthe proposed Guideline 12.
1
Labour market bottlenecks are emerging in a numberof Member States. These call for targeted action toimprove employability, both in general and of peopleat risk of social exclusion, in particular. Educationsystems and continuing training are of crucialimportance.
90II.5  Employment, human resource development and cohesion
Despite improvements in education systems (often
supported in Objective 1 regions by the StructuralFunds), a number of young people still leave educa -
tion too early with too few qualifications. This can lead
to difficulties adapting to technological change andto social exclusion. The cohesion countries face thegreatest difficulties in this respect. Measures to com -
bat early school leaving feature in all of the National
Action Plans (NAPs) produced for 2000, except thatof Spain. Most Member States have broadened sup -
port for young people with learning difficulties. Many
have introduced specific measures aimed at targetgroups (people with disabilities, ethnic minorities,disadvantaged young people) and at areas wheredrop-out rates are high. For example, France, theNetherlands, Portugal, Sweden, and the UK have es -
tablished special educational action zones designed
to keep young people in education and training , to in -
crease rates of achievement and tackle social
exclusion.
The clear benefits from the Information Society repre -
sent a threat for those excluded from the IT revolution.
The Lisbon Summit highlighted the major effortsneeded to ensure that all share in these benefits.There are a number of examples of efforts in MemberStates (Greece, Portugal) to provide education andtraining for people with learning difficulties throughICT and to develop special support to improve ICTskills for unskilled workers and for those in specificsectors. This should promote social inclusion in theMember States concerned. Action, however, is un -
even across the Union and more needs to be done.
All the NAPs put employment policies for people with
disabilities firmly on the policy agenda. In many Mem -
ber States, there has been a shift in emphasis away
from programmes targeted at those with disabilitiestowards a more mainstream approach, which en -
courages them to participate in general active labour
market programmes. However, there are specificmeasures in a number of Member States. Three of thecohesion countries (Portugal, Greece and Spain)have set targets for the participation of people withdisabilities in training and other employabilitymeasures.
There is also some evidence from the NAPs for 2000
to suggest that Member States are taking greater ac -
count of the needs of ethnic minorities in the develop -
ment of employment policy. Nevertheless, there are
differences between Member States both in theinterpretation of what is meant by ethnic minorities
and in the policy-mix between promoting direct inte -
gration in the labour market and measures to fight dis -
crimination. Most tend to focus on integration.
However, a few Member States adopt a mix of the two(Denmark, Sweden, UK). In some Member States(France and Portugal), there has been a public de -
bate on discrimination at work, reflecting consultation
undertaken at the EU level by the Commission on theimplementation of Article 13 of the Treaty
.
The horizontal objective of gender mainstreaminghas been only partly implemented and policies stilltend to be presented as gender-neutral.
Over the five years to 1999, almost two-thirds of the
6.8 million net additional jobs in the EU were taken bywomen. However, over 70% of these jobs werepart-time. Other labour market indicators suggestthat there is still some way to go to achieve greaterequality of opportunity in the labour market.
The NAPs confirm that Member States have improved
their implementation of gender mainstreaming. How-ever, although there has been some progress in im-proving the gender-impact analysis of policyinitiatives (particularly in Finland and Ireland), manycountries appear to lack plans or measures in thisregard.
It has not been easy in all cases to coordinate the Lux-
embourg process with the budget process, whichtranslates the objectives, commitments and mea -
sures envisaged into (possibly multi-annual) budget -
ary allocations.
Similarly, there remains the challenge of integrating,
at the national level, the contribution of other instru -
ments, such as the European Structural Funds (and in
particular, the European Social Fund), into the imple -
mentation of the NAPs.
The translation of the objectives within the adaptabil -
ity pillar into action is lagging behind. Much of the ac -
tion under this pillar is the responsibility of the social
partners, who have a major stake in contributing tomore and better jobs and whose cooperation isneeded for implementing measures in the workplace.Not all Member States make it easy for the social part -
ners to be involved, and many NAPs, through inade -
quate reporting, fail to reflect activity and initiatives
actually taking place. Nonetheless, the onus is on the
91II.5  Employment, human resource development and cohesion
social partners to become more active, and more
transparently so, in this regard. In order to encourageprogress, the Employment Guidelines 2001 invite thesocial partners to create ‘a process within the pro -
cess ’, ie to be responsible for the development of,
and reporting on, actions within their remit which areconsistent with the overall objectives in the Employ -
ment Guidelines.
... adapting to new circumstances ...The Commission proposal for the Employment
Guidelines 2001 has also been influenced by the Lis -
bon Summit conclusions. Overriding strategic priori -
ties have been included in an introductory section.
The new emphasis put on full employment, the role ofthe social partners, lifelong learning, educational at -
tainment and social inclusion have also been taken
into account. Some of the Guidelines have been ra -
tionalised (eg lifelong learning is now addressed in
one instead of several Guidelines) or clarified (eg thepotential role of local and regional authorities in em -
ployment policy) and more concrete targets have
been included. New issues, such as labour marketbottlenecks and undeclared work, have beenaddressed.
... and preparing for the futureThe Luxembourg process is treaty based (Article
128) and as such there is no time limit defined. In2002, the overall results of the strategy and its objec -
tives will be reviewed and an overall impact –evalua -
tion will be carried out to enable policy makers to
consider strategic options for a revision of the Guide -
lines. This evaluation process will start soon (at Mem -
ber State and EU level) and should provide the
necessary information for the political decisionsneeded in 2002. Two separate strands need to bedistinguished in the exercise:
•policy evaluation, focusing on those areas where
the Employment Guidelines can be expected tohave influenced policy choices at national levelas well as the effect of those choices;
•macro-evaluation, assessing the progress made
towards achieving the key objectives of the EES –combating unemployment, increasing
employment rates, improving the adaptability ofthe labour force and the responsiveness of labourmarkets, reducing gender gaps and developinglifelong learning.
92II.5  Employment, human resource development and cohesion
1 ‘All actors at the regional and local levels must be mobilised to implement the European Employment Strategy …Member States will
encourage local and regional authorities to develop strategies for employment in order to exploit fully the possibilities offered by jobcreation at local level. ’
II.6  Environment policy
Social and economic objectives, including a
strengthening of cohesion, are not in conflict with en -
vironmental aims but are complementary. There is no
inherent contradiction between the pursuit, on theone hand, of higher economic growth in the weakestregions and Member States and, on the other, im -
provements in the environment. Indeed, environmen -
tal quality is a key element of quality of life in any
region. Environmental improvements can, accord -
ingly, increase the attractiveness of a region for out-side investors and its economic potential –for the
growth of tourism, for example. In addition, weakermembers of society, notably those in inner city areas,or lagging regions, in particular, stand to benefit dis-proportionately from improvements. Growth in thelagging regions, moreover, will enhance their willing-ness and ability to pay for a cleaner environment.
However, there is an interaction between the two poli -
cies, and this interaction has to be managed to en -
sure there are gains on both fronts.
1‘Improved
environmental quality ... will have to come mostly from
changes in economic activity and socio-economic
policies ‘2and it is important to assess these changes,
in terms not just of environmental benefits but their ef -
fects on cohesion.
The starting point for analysing the interaction is that
environmental policy, by necessitating additional in -
vestment to reach higher standards or by imposing
new taxes on environmentally damaging activities,seems to increase costs. In reality, however, it makesthe costs of environmental damage more visible. Anycosts, moreover, need to be weighed against the bene -
fits noted above, even if these tend to be more difficult
to quantify. The costs should not be overstated; esti -
mates tend to show that they are very small relative to
overall costs of production, especially when implemen -
tation is
viamarket-based instruments. For example,one of the most ambitious parts of environmental policy
in the EU is to achieve the Kyoto targets for reducingemissions of greenhouse gases. Yet the estimated costof this is around EUR 7.5 billion a year –only 0.09% of
EU GDP
3–which has to be set against the benefits of
avoiding the damaging effects of accelerated climatechange.
However, while, in overall terms, cost increases tend
to be relatively small, they can often be concentratedin particular regions or sectors or on particular socialgroups. The fact that the long-term benefits of envi-ronmental protection outweigh the costs may not betrue for everyone in society. Environmental measurescan, therefore, have significant distributional implica-tions.
4
There are, therefore, three main questions to ask inanalysing the cohesion impact of environmentalpolicies:
•do the costs of implementation fall disproportion -
ately on less prosperous Member States, regions
or social groups?
•do the benefits, eg in terms of increased quality of
life, accrue disproportionately to these?
•are there gains to employment?
In some cases, such as in respect of the pursuit of the
Kyoto targets, it is difficult to identify or quantify signif -
icant differential effects. However, in two key areas of
environmental policy, waste and water, differential ef -
fects can be identified.
93
European waste policy
The Fifth Environmental Action Programme ‘Towards
sustainability ’, reiterates the priorities for waste man -
agement in the following order of preference:5
1 Where possible, the generation of waste should
be prevented
2 If this is not possible, it should be reused3 Otherwise, it should be recycled4 If not, waste should be sent for energy recovery5 Only if none of the above are possible, should
landfill be used as the last resort
According to a study for the Commission,
6there are a
number of elements which are relevant for cohesion.
First, the production of waste is less in the cohesion
countries than in the EU as a whole, ranging from 90%of the average (Ireland) to only 65% (Greece). Ac-cordingly, the potential implementation cost of wastepolicy is proportionately lower in cohesion countriesalthough, as GDP per head in these countries contin-ues to converge to the EU average, they may producemore waste.
Secondly, however, the Cohesion Countries lag be-
hind in the treatment of waste.
This is true both for the most virtuous form of treat -
ment, recycling (Portugal, in particular, recycles only
4% of total waste as opposed to an EU average of 9%)and for the worst form of disposal, landfill (93% ofGreek waste ends here, as opposed to an EU aver -
age of 66%). Only in Spain is the disposal profile simi -
lar to that in the EU as a whole, and even here, this
applies much less to the lagging regions
The cost of meeting the waste management targets
is, therefore, likely to fall just as (or even more) heavilyon these countries (except Spain) as it does on the EUas whole, despite their lower waste production. All ofthem, except Spain, have, accordingly, been givenan extension until 2006 to meet the first set of targets.In addition, the Cohesion Fund is making a major con -
tribution to costs –over EUR 200 million annually, cov -
ering up to 75% of costs (see ‘Cohesion Fund
investments in environment and waste treatment ’),which means the costs falling on these countries will
be much less than elsewhere.
Moreover, in terms of benefits, they are likely to see a
relatively large reduction in landfill waste disposaland up to 46,000 new jobs created in managing suchprogrammes (4,000 in Ireland, 9,000 in Portugal,10,000 in Greece and 23,000 in Spain).
Waste in the CECsThe situation in the Central European candidate
countries is similar to that in the cohesion countries.The production of municipal waste is low (typically70% of the EU average), but growing fast (it is fore -
cast to increase by 50% over the period 1995 to
2010). Moreover, the proportion disposed of in landfillsites is high (typically 80% or more). The problem isparticularly serious in Poland, where almost 99% ofwaste is disposed of in landfill sites, which cover a to-tal of 3020 hectares and include the dumping of 1000tonnes a year of (incinerated) dangerous medicalwaste. This highlights a typical problem in many can-didate countries that landfill sites often do not meetEU safety standards.
An additional problem in some countries is the waste
liability inherited from past activities, both military andindustrial. For example the production of shale oil inEstonia over the past 60 years has left spoil heapsover 100 metres high, which not only blight the land -
scape but contaminate the groundwater. The dam -
age being caused by shale oil production represents
a major challenge for policy given the implications ofany reduction for regional development and energysupply.
Similar policy conclusions apply as for the cohesion
countries. Despite producing less waste, candidatecountries will need to spend as much, if not more, perhead than the EU average in order to implement the
acquis , in a context where incomes are much lower.
The Cohesion Fund and ISPA (the pre-accessionstructural instrument) are likely to make a significantcontribution to this. In terms of employment, the esti -
mates for current Member States suggest that imple -
menting the
acquis could create up to 50,000 jobs in
the CECs.
94II.6  Environment policy
European water policies
Improvements in water quality are likely to require a
large part of the EUR 260 billion estimated to beneeded over a 20-year period for the EU15 to complywith the 10 directives on environment. There is, there -
fore, the potential for a significant effect on cohesion.
One feature of water management conditions this ef -
fect; the role of public authorities in this means,
among other things, that historically polluters have of -
ten not paid for the damage they cause. As the ‘pol-
luter-pays principle ’is applied more systematically,
there is likely to be a marked redistribution of costsbetween both social groups and regions.
According to a study for the Commission,
7there are,
in particular, four elements of EU water legislationwhich could have effects on cohesion:
•the Water Framework Directive
•the Drinking Water Directive
•the Urban Waste Water Treatment Directive
•the Nitrate Directive
These are considered in turn below.The Water Framework DirectiveAdopted in 2000 and incorporating many previous di -
rectives, the Water Framework Directive improves the
coordination of standards and shifts planning fromadministrative entities (such as municipalities) to ‘nat-
ural’entities (such as those responsible for river bas -
ins). A key point for cohesion, however, is the
requirement, in line with the polluter-pays principle,for increasing the extent to which the costs of waterservices are recovered from users.
At present, cost recovery is low, especially in the co -
hesion countries and especially as regards agricul -
tural producers. Eliminating the cross-subsidy which
now exists might have a negative effect on cohesion.Although the present pattern of cross-subsidy be -
tween households, industry and agriculture is compli -
cated and varies from region to region, some general
conclusions can be drawn.Full-cost recovery from households would reduce
their income by an estimated 1.7% in the cohesioncountries as opposed to only 0.2% on average inother Member States. But this is a maximum estimatesince the Directive only mandates an increase in costrecovery, not full cost recovery. The Cohesion Fundwill cover a large part of the cost of investment in im -
proving water supply main drainage. The shift in
costs from taxpayers to householders will mean thatcertain user groups will pay more than they do atpresent in taxes, including those on low incomes,those with large families and those who are living insmaller or remote communities.
The recovery of the cost of supply from industry is gen -
erally higher than for households already and, in most
Member States, costs are recovered in full. The cohe -
sion countries, however, are exceptions and none of
them impose the full cost of supply on industry con -
nected to the network. A move to full cost recovery,
therefore, is likely to increase the costs of water use byindustry in these countries, especially in sectors whichare heavy users, though not enough to affect their com-petitiveness significantly.
The recovery of supply costs is at present lowest for
agricultural users, and very few countries impose thefull cost on these, especially in respect of public irri-gation schemes. As a result, the impact on rural areasis likely to be substantial, particularly where crops re-quiring a lot of water are grown. The use of the Cohe-sion Fund can reduce some of these adverse effects,but in deploying this, it is important to maintain incen -
tives to increase the efficiency of water use.
The Drinking Water DirectiveThe main effect of the revision of the Drinking Water
Directive is to reduce the permissible levels of lead. Itis generally impossible to meet the new standard ifwater is delivered through lead pipes. These, how -
ever, are not common in the three least prosperous
Member States, so the implementation costs arelower there than elsewhere.
Within Member States, on the other hand, lead pollu -
tion seems to be relatively high in less favoured re -
gions. If improvements are paid for at national level,
there is, therefore, a positive effect on regional cohe -
sion. Moreover, there is also a positive effect on social
cohesion, since health problems from lead dispro -
portionately affect poorer people, partly because
95II.6  Environment policy
they are more sensitive (old people and children are
most at risk) or simply because they live in poor qual -
ity, older housing close to sources of lead pollution
and seldom drink bottled or filtered water.
Meeting the requirements of the Drinking Water Di -
rective is a major challenge for most of the candidate
countries. In many –Estonia, Latvia, Lithuania, Roma -
nia, and Slovakia, in particular –over 20% of the pop -
ulation is not connected to drinking water supply
systems. Significant investment is also required to im -
prove the quality of drinking water –nearly 25% of
people in Hungary, for example, are supplied withdrinking water that does not meet Community stan -
dards. It is estimated that expenditure of between
EUR 13 and 17 billion in the candidate countries isneeded to meet these standards.
The Urban Waste Water Treatment DirectiveThis is by far the most expensive of the directives to
implement, accounting for some EUR 150 billion ofthe estimated EUR 260 billion of total expenditure forthe EU15 implied by the ten key environment direc-tives. This directive also requires the highest level ofinvestment in the candidate countries –of EUR 27-33
billion, according to national studies. The main effecton cohesion results from the substantial investmentrequired in construction and maintenance of thewaste water treatment system.
There are substantial differences in the estimated
cost of implementation between Member States, re -
flecting their initial positions –some being much more
advanced in the treatment of sewage –and the state
of their natural environment. The first factor tends topush up the costs in the cohesion countries becausethe requirements are higher, while the second tendsto reduce costs because of the relatively highassimilative capacity of the environment.
Since, however, around a quarter of the necessary in -
vestment in these countries is being financed by the
Cohesion Fund (and the Structural Funds are makinga similar contribution in Eastern Germany), the costburden on cohesion countries will be limited. Thelarge-scale investment required is likely to boost em -
ployment, particularly in construction, where the di -
rect effect
8is to add 2% to output, implying increased
employment of up to 200,000. For most of the cohe -
sion countries, however, there is likely to be substan -
tial‘leakage ’of such benefits abroad because of thesmall scale of their waste water and eco-industries,
so much of the benefit is likely to accrue to firms in themore prosperous Member States.
In sum, the effect of expenditure on cohesion is likely
to be positive, but it would be larger if eco-industrieswere to expand in the cohesion countries.
The Nitrate DirectiveThis directive was adopted in 1991, but is only now
being implemented, illustrating the often long delayinvolved in water legislation. It lays down standardsfor the use of nitrogen in farming and, therefore, hasclear implications for the agricultural sector and forrural communities.
The key point is that there are various forms of nitro -
gen put into the soil, through chemical fertilisers, ani -
mal manure and natural deposition, which comes out
in crops and livestock, but it also leaks into water bod -
ies or is emitted into the atmosphere. Problems arise
when the loading of nitrogen exceeds the ‘absorptive
capacity. ’
The Nitrate Directive affects cohesion in at least two
major ways. First, the imposition of application stan-dards, notably for nitrogen from animal manure, af-fects livestock producers, particularly high-intensityones. In Ireland and Greece, where nitrogen is closeto the EU average, the increased cost implied by thedirective is likely to be modest. In Spain and Portugal,where farming is less intensive, the effects could evenbe positive, with anecdotal evidence of such activi -
ties as pig farming being transferred there from the
most intensive-producing countries, like theNetherlands.
At the same time, there is evidence that the codes of
good agricultural practice which are part of the direc -
tive can lead to substantial cost savings through
better nitrogen management. Although the efficiencyof nitrogen use could be improved throughout the EU,the largest potential gains appear to be in the Medi -
terranean, where there are wide variations in nitrogen
use between farms even of similar types.
Overall policy effects
In sum, environmental legislation is on balance morelikely to have positive than negative effects on
96II.6  Environment policy
regional cohesion. The same, however, may not be
the case for social cohesion, which might, therefore,justify accompanying measures being taken:
•at the national level, the cohesion countries are
likely to share significantly in the benefits of envi -
ronmental improvements (including the quality of
life which might attract business investment) and,though the costs of implementing legislationmight in a number of cases be higher than else -
where, these will be met to a large extent by the
Cohesion Fund;
•at the regional level, some less prosperous areas
benefit most from environmental improvements,for example those in inner cities from wastewatertreatment, and often have the cost of these paidby central government or the Cohesion Fund;
•at sectoral level, there will be cost increases for
some sectors, though in most cases limited in re-lation to production costs. In a few cases, thesewill fall disproportionately on the less prosperousregions, rural areas being a notable example.These will bear the cost of the Nitrate directive, re-flecting the true cost of the activities carried outthere. The main effects, however, will be on agri-cultural areas in the more prosperous MemberStates and rural areas in Spain and Portugal areactually likely to benefit. A move towards full re-covery of costs of water supply is likely to fallheavily on agricultural users and on householdsin remote communities, although again becausethey will start to pay the true cost of their activities;
•at the social level, costs in a number of cases
may, initially at least, fall disproportionately onpoorer people and those living in remote areas,the shift from taxpayers to households in respectof the Water Framework Directive being a notableinstance.Environmental protection measures, however, tend to
benefit employment. The gains are significant, even ifthey are modest in relation to the overall need for jobsin the EU. For example:
•implementing EU waste legislation is likely to
boost employment in the cohesion countries byup to 35,000 in the next five years and by 50,000in applicant countries when they fully implementthe
acquis ;
•the Urban and Waste Water Treatment Directive
may create up to 200,000 jobs in constructionand some in manufacturing, though to the extentthat more prosperous regions tend to have biggereco-industries, they are likely to gain most.
The above conclusions are somewhat tentative be -
cause of the limited data available at present. The in -
tention is to rectify this in time for the next Cohesion
Report.
97II.6  Environment policy
1 European Commission (2000) “Bringing our needs and responsibilities together –integrating environmental issues with economic
policy ”.
2 European Environmental Agency (1998) ‘Europe ’s environment: the second assessment ’.
3 Ecofys, National Technical University of Athens, AEA Technologies (2001 forthcoming), ‘Economic evaluation of sector objectives
for climate change ’.
4 European Commission (2000) op. cit.5 This hierarchy was already established in Directive 75/442/EEC on waste management, as amended by directive 91/156/EEC.6 Club Espa ñol de los residuos (2000), ‘The Impact of Community Environmental-Waste Policies on Economic and Social Cohesion ’.
7 WRc (2000) ‘The Impact of Community Environment-Water Policies on Economic and Social Cohesion ’.
8 The final effect is likely to be less than this because of displacement effects.
98II.6  Environment policy
II.7  Research and Development policy
The European Union is increasingly becoming a
knowledge-based economy and society. The devel -
opment of knowledge has a direct effect on competi -
tiveness and employment, as well as on the way
society functions in general.
Although the importance of knowledge was explicitly
recognised at the European Summit in Lisbon in Feb -
ruary 2000, research in Europe displays contrasting
features. There are unquestionable strengths, butalso evident weaknesses, as reflected in a trade defi-cit in high tech-products of over EUR 20 billion. This,in turn, reflects a number of underlying factors –a
lower level of expenditure on R&D in the EU (1.8% ofGDP) than in the US (2.8%) and Japan (2.9%), a lessdynamic environment for innovation and a relativelyfragmented research system (divided between 15Member States).
Accordingly, the European Commission has con -
cluded that a genuine ‘European Research Area ’
needs to be created to improve the situation.
1
The regional dimension of
the European Research Area
According to the Commission, to establish a Euro -
pean Research Area, Member States need to con -
sider policies on finance, human resources, the
relationship between the public and private sectors,the creation of a common reference framework andvalues, and regional aspects. On the last issue, theCommission pointed to the importance of studyingand putting in place the conditions for a ‘real
territorialisation ’of research policies or adapting
these ‘to the geographical socio-economic context. ’
2
It has, therefore, invited policy-makers at all levels to
consider both the challenge posed to regions by theEuropean Research Area and how they can contrib -
ute to its achievement.
Action at the regional level
Regional and local authorities already support re -
search, technological development and innovation. It
is estimated that the finance they provide amountsannually to almost 1 ½times the total appropriation of
the EU Framework Programme (EUR 4.5 billion com-pared with EUR 3 billion), over 90% of which is allo-cated on a regional basis.
3
The authorities concerned are best placed to form thelinks with companies necessary for innovation and,therefore, the generation of economic wealth and em-ployment. Creating networks of knowledge, clustersof companies, linking the scientific system to theneeds of industry and services are all easier to organ -
ise at local and regional level.
Regional authorities are also well-placed to review
best practice and to identify other regions with whichthey can fruitfully cooperate, which may be relativelydistant ones, such as those which form the network ofthe ‘four regional engines for growth ’, Baden
Württemberg, the Rhone-Alps, Lombardia and
Catalu ña, or neighbouring areas, such as Brussels,
Flanders, Kent, Wallonia and Nord-Pas-de-Calais.Such cooperation can help strengthen regionalcapacity for research and innovation by facilitatingspecialisation and complementary action and en -
couraging the rapid dissemination of knowledge.
By pursuing their own interests, therefore, regional
authorities can increase the momentum towards theestablishment of a European Research Area as wellas ensuring its effectiveness and consistency.
99
The establishment of a European Research Area,
however, is not confined to the most central and com -
petitive regions. The instruments available –the
Framework Programme, the Structural Funds and ac -
tion at national and regional level –should be used to -
gether in a more coherent way, each according to its
objectives, in order to enable all regions to participatefully in the area.
Networking and encouraging
regional specialisation
The Commission Communication on Guidelines for
EU Research Activities (2002-2006), adopted in Oc -
tober 2000, indicates how regions are intended to be
involved in the European Research Area and sets outa number of Community objectives in five major ar -
eas: research activities, innovation and SMEs, infra -
structure, human resources and the relationship
between science, society and citizens.
4It indicates
three horizontal aspects which need to be taken intoaccount in this regard: the overall coherence of Euro-pean cooperation over science and technology, theinternational dimension of projects and the regionalaspect. It also emphasises the importance of carryingout measures which encourage the full use of re-gional potential, through networking and exploitinggeographical features or areas of economicspecialisation.
Member States indicated their perception of the re -
gional dimension of European Research Policy in the
resolution of the Research Council in November:
‘The Council of the European Union:... emphasises
the importance of promoting the scientific and tech -
nological performance of all the regions of the Mem -
ber States and participating countries, including the
cross-border dimension, both within the European
Research Area, in future framework programmes and
in other relevant community initiatives. ’
In this regard, the following aspects, which are con -
sidered in turn below, are of some importance:
•the learning effects of being part of European
RTD consortia and networks;
•the mobility of researchers as a mechanism for
the tacit exchange of knowledge;•the policy learning effect of RTD activities.
Shared-cost RTD projects in the
Fourth Framework Programme
The most important mechanism for EU funding of RTD
is the ‘shared-cost actions ’in the Framework
Programmes, which are project-based contracts be -
tween the Commission and the participants. Since
the latter generally consist of organisations from anumber of Member States, this enables knowledgeand ideas to be shared and new know-how and tech -
nology to be developed jointly. The participation of
representatives from cohesion countries and Objec -
tive 1 regions, therefore, is a way of improving the
knowledge flow into these areas.
A detailed analysis of the regional impact of RTD pol -
icy has not been possible because data on the geo -
graphical distribution of expenditure from the Fourth
Framework Programme (FP4) are not published.Some national data exist, but not for all countries andregions, and they are not based on official Europeanstatistics but on national surveys. The following analy-sis concentrates on numbers participating and otheravailable indicators.
Relating participation figures to indicators of national
RTD capability, such as the number of RTD personnelin a country, indicates that the cohesion countries areperforming well, with Greece, Ireland and Portugal inleading positions. Closer examination, however,shows participation being heavily concentrated in thecapital city areas. On the other hand, this concentra -
tion seems to be diminishing, with other regions in
these countries accounting for a growing share ofparticipation.
Participation and the number of projects from Objec -
tive 1 regions and cohesion countries increased over
the second half of the 1990s. The number of projectswith at least one partner from an Objective 1 regionrose from 27% in 1994 to 41% in 1998. The total num -
ber of participations (ie the number of occurrences of
participation in projects) from Objective 1 regions inFP4 has gone up from 1,705 in 1995 to 4,067 in 1998,although in relation to the overall number ofparticipations, it declined slightly from 16% in 1995 tojust over 15% in 1998. Examination of the evidenceshows that there is a positive relationship between theextent to which organisations from a particular region
100II.7  Research and Development policy
participated in the Framework Programme and RTD
capability indicators, such as R&D expenditure andnumber of R&D personnel.
Encouragement of SMEs to participate in the Frame -
work Programme was successful in increasing their
share of total participation in FP4. However, a lack ofofficial statistics on the type of participants at NUTS2Iregional level means that it is not possible to verifywhether this had a positive impact on Objective 1 re -
gions. Nevertheless, the user survey, carried out as
part of the Five-Year Assessment of European RTDprogrammes (1995-1999), suggests that in Irelandand Spain, representation of SMEs was higher thanthe EU average.
Since 1994, the Central European Countries (CECs),
Russia and the Newly Independent States have beencovered by the INCO-COPERNICUS programme.(INCO ’s contribution to the CECs countries in FP4
amounted to a total of ECU 78.3 million.) The need tostrengthen links with the established RTD sector inthe candidate countries is important for safeguardingand strengthening their scientific and technologicalpotential and INCO has provided a sound foundation,support and guidance for them, though industry par-ticipation was low.
Participation in FP4 was important in increasing co-
operation between EU Member States. In the 8 years,1987 to 1995, there were 150,000 instances of coop-eration between large companies, SMEs, universitiesand public or private research centres as a result ofEU RTD activities. After 1995, under FP4, the numberof instances of cooperation increased significantly, to113,990 in 1996 and 78,300 in 1998, the variation re -
flecting the implementation cycle.
Such collaboration in RTD is one of the most direct
ways in which knowledge, both tacit and codified, istransferred between organisations in different Euro -
pean countries. Accordingly, any increase in instances
of cooperation involving organisations in the cohesioncountries helps to reduce disparities across the EU inaccess to know-how. Over the course of the FourthFramework Programme, cooperation links have variedfrom one year to the next without showing any distincttrend. Overall, links between the four cohesion coun -
tries and the other 11 Member States accounted on av -
erage for 22.2% of the total created annually, which is a
good indication of the stimulative effect of the Frame -
work Programme on disadvantaged regions (Table 8).At the same time, it appears that organisations from
cohesion countries participating in projects tend, ingeneral, to gain more from this than those from else -
where. The user survey of participants in FP4 indi -
cates that participants from Greece, Spain and
Portugal were more positive than average, or aboutthe same as the average, as regards the impact ontheir scientific and technological standing, competi -
tive position, productivity and employment. On the
other hand, participants from Ireland were, in gen -
eral, less satisfied than average with the impact on
them, including in relation to their scientific and tech-nological standing.
Mobility underpinning RTD capability
The European Commission Programme, ‘Improving
the human potential and the socio-economic knowl-edge base, ’is aimed at increasing the mobility of re -
searchers throughout the EU. According to several
studies, the cohesion countries are well representedin programmes, such as the Training and Mobility ofResearchers (TMR) under FP4, and have a relativelylarge proportion of their researchers receiving fellow -
ships to work in ‘centres of excellence ’in other Mem -
ber States. The UK is by far the most popular host
country, followed by France, and the opportunity foryoung researchers to gain experience in research or -
ganisations best suited to developing their careers is
an important aspect of policy.
In any assessment of the effect of mobility and cohe -
sion, two considerations need to be taken into
account:
•the possibility of increasing the mobility of re -
searchers in the EU should not reinforce the ‘brain
drain ’from less developed to core RTD regions.
Given a general shortage of skills in many parts of
101II.7  Research and Development policy
Table 8  Links created by FP4 between
the cohesion countries and other EUMember States, 1995-1998
% total
1995 1996 1997 1998
Greece 4.5 6.6 5.5 6.2
Spain 6.1 12.1 11.5 10.2
Ireland 2.2 3.3 2.8 3.2
Portugal 2.5 3.9 4.0 4.0
Europe and the increased competition for highly
qualified researchers, this problem is likely to be -
come more acute. The Return Grants scheme
which helps researchers from less favoured re -
gions return home is a response to this problem,
although only some 6% of TMR fellows from lessfavoured regions are eligible for the scheme andmake use of it. The effect on the movement of re -
searchers between EU regions of programmes
like TMR has, however, yet to be studied;
•studies of RTD expenditure from the Structural
Funds indicate that there is not necessarily a linkbetween an increase in RTD resources and per -
sonnel in Objective 1 regions and the innovative
capacity of businesses situated there. The gapbetween public RTD activities and the needs offirms is particularly wide in these regions. Im -
proving the international career prospects of
young researchers is unlikely in itself to increasethe‘absorptive capacity ’of a region in the
short-term.
As noted above, there is a positive association be-
tween the rate of participation in EU RTD projects andthe RTD capacity of a region, as measured, for exam-ple, by the number of R&D personnel in the popula-tion. This suggests that a long-term strategy ofinvesting in people will increase the capacity to col-laborate in international research and technologyprojects. Efforts should, therefore, be made in cohe -
sion countries and lagging regions to develop goodcareer possibilities for researchers as a means of
combating the brain drain.
Recent shifts in RTD policy
The Fifth Framework Programme (FP5), representsthe continuation of a shift in focus from a policy ori -
ented exclusively towards technology to one that in -
cludes innovation as a key concept. In essence,
previous Framework Programmes prioritised areas ofscience and technology where Europe needed tostrengthen its capability, whereas FP5 started from astatement of the most pressing societal problemswhich science and technology could help solve. Nev -
ertheless, the Five-Year Assessment Panel that eval -
uated the first phase of FP5 concluded that more
attention could be paid to social and economicaspects.In principle, the way that the goals of FP5 are formu -
lated allows more consideration to be given to the dis -
tribution of knowledge, to building ‘absorption
capacity ’ and not just to knowledge creation.
A horizontal programme for ‘Promotion of Innovation
and Encouragement of SME participation ’has wid -
ened the target group to include not only high-tech
performers, but also companies for which initial entryinto the Framework Programme is difficult. The aim isto reduce obstacles to innovation for companies inless favoured regions and in more traditional sectors.At the same time, the provision of information to po -
tential applicants, through Innovation Relay Centres,
National Contact Points, more transparent Info Packsand so on, has been improved to reach a larger audi -
ence. While excellence in science and technology is
still the main criterion for participation in FP5, thereare parts of the programme which enable partici -
pants to achieve such a level over time.
The candidate countries in Central Europe have
been granted full access to FP5, which should enablethem to continue their links with the science and tech-nology community in the EU and which should helpovercome the technology gap that exists betweenthem and the leading European countries.
Policy learning effects
from EU RTD Initiatives
The EU has played a major role in disseminating
good practice in RTD policy by helping to create a‘European Research, Technology, Development and
Innovation Community, ‘where decision-makers, re -
searchers, and other interested parties can commu -
nicate and work together, in both formal and informal
ways, in official advisory committees, specific RTDprogrammes and policy exchange initiatives. By as -
sisting in this, and through its influence on policy for -
mulation and implementation, EU policy has
indirectly contributed to closing the RTD and innova -
tion gap between Member States and regions, and,
by changing the culture, it has, in some respects, im -
proved the policy planning process.
Moreover, initiatives such as, in particular, the Re -
gional Technology Plans (RTP), the Regional Innova -
tion Strategies (RIS), the Regional Innovation and
Technology Transfer Strategies and Infrastructures(RITTS) and Trans-Regional Innovation Projects,
102II.7  Research and Development policy
jointly set up by DG Regional Policy and DG Enter -
prise, have helped put innovation high on the policy
agenda in over 100 regions. These projects havestimulated the establishment of ongoing andlong-lasting processes in these regions and have,therefore, prepared the ground for further decentrali -
sation of RTD policies to the regional level. Fine-tun -
ing of the planning of RTD policy and the deployment
of the Structural Funds for this purpose has been inte -
gral to the success.
Conclusion: progress in increasing
the contribution of EU RTD policyto social and economic cohesion
EU RTD policy has increased its support for those in -
volved in research and technology in the cohesion
countries, less favoured regions and candidate coun -
tries. The absence of statistics on funding prevents
quantification of the extent to which funding has beendirected towards the latter. The increased number ofprojects with participation from Objective 1 regions,however, and the relatively favourable position of re-search fellows from cohesion countries in the Euro-pean Human Mobility schemes point towards apositive contribution towards reducing regional dis-parities. Moreover, various measures have helpedimprove the effectiveness of policies relating to inno-vation in a number of disadvantaged regions.
The candidate countries have gained from the experi -
ence under the INCO programme of developing and
managing RTD consortia and establishing partner -
ships with EU organisations as well as from being in -
troduced to the art of writing EU RTD proposals. They
are likely to gain further from full membership of FP5,although most countries lack the overall capability toparticipate extensively. Up until now, it has beenmainly scientific institutes which have taken part inRTD projects and higher levels of business sectorparticipation remains to be achieved. Positive effectson competitiveness and economic cohesion will,therefore, take longer to emerge than in the presentObjective 1 regions.Overall, EU RTD policy has adopted an approach ori -
ented more towards innovation than technological
excellence as such, better addressing the deficien -
cies of less favoured regions as a result. The regional
dimension of RTD policy has come to be featured ex -
plicitly in the Initiative ‘Towards a European Research
Area ’. An improvement in the interaction between the
deployment of the Structural Funds and RTD policy isimportant to accelerating the ‘catching up ’of lagging
regions.
The Structural Funds can provide the necessary sup -
port for firms and research institutes in the latter to
participate on equal terms in future RTDprogrammes. Moreover, the conditions for a genuine‘territorialisation ’of research policies (ie adapting
these better to the geographical, social and eco -
nomic context) need to be studied and put in place.
This could open up new opportunities for policies atall levels to be better integrated into regional or inter -
regional development programmes and for the syner -
gies between them to be strengthened.
103II.7  Research and Development policy
1 ‘Towards a European Research Area ’, COM(2000)6, 18 January 2000.
2 Such a study was launched in December 2000: ‘Involving the regions in the European Research Area: refining the territorial
conditions to optimise the creation and the transfer of knowledge in Europe ’ Price Waterhouse Coopers.
3 ‘Role of the local and regional authorities in the field of research, technological development and innovation ’, October 2000,
Bannock Consulting Ltd.
4 ‘Making the European Research Area a reality: guidelines for European Union Research activities (2002-2006) ’, COM(2000)612, 4
October 2000.
104II.7  Research and Development policy
II.8  Transport policy
Transport Policy in the context
of regional development
The Common Transport Policy has made a positive
contribution to the success of the Union in the pastdecade. The provision of high quality transport ser -
vices and infrastructure is an essential pre-requisite
for ensuring that all regions share in the prosperitythat the Single Market is creating. The opening up ofmarkets has reduced prices and made distancesshrink to the benefit of peripheral areas. It has also,however, led to a greater volume of traffic, which isnow recognised as having negative consequencesfor congestion, dependency on oil and theenvironment.
Traffic growth has been greater in the cohesion coun-
tries than in the rest of the Union, due mainly to roadpassenger transport increasing at twice the rate else -
where as car use catches up. The Community has
invested substantially in infrastructure, where ‘trans -
port funds ’(the Trans-European Network-TEN –
transport budget line) have been used in conjunctionwith the Structural Funds, to give a major boost to theprovision of infrastructure in the regions. The revisionof the Common Transport Policy now underway seeksto improve the quality of transport as much as the ser -
vices provided.
The Common Transport Policy
through the 1990s
There were many achievements between 1992 and
2000. The supply of transport services, notably byroad and air, increased significantly as prices fell inreal terms. In road transport, outmoded restrictionswere removed completely in 1998. The opening up ofair transport markets increased the number of flightsand lowered their cost. The main areas in which prog -
ress was made were:
•the interconnection of national networks, particu -
larly through the development of the trans-Euro -
pean transport network, which has substantially
improved links within the cohesion countries andbetween these and the Union. The completion ofthe high-speed rail network will improve links be-tween many regions. In addition, the new ISPAfund has been set up to finance infrastructureprojects in the candidate countries;
•the removal of bureaucratic controls and the
technical harmonisation of transport equipment,which has reduced costs through economies ofscale and removed technical barriers to interna-tional operations;
•‘interoperability ’of rail networks, developed first
for high-speed trains in 1996, which is about to beextended generally.
However, there have also been negative aspects. In
particular, congestion in urban areas and along maininternational routes has increased dramatically overthe past decade as road traffic has grown.
Sustainable transportDuring the 1990s, the issue of sustainability has
gained importance. Under Article 6 of the Treaty, en -
vironmental considerations have to be integrated into
the definition and implementation of Community poli -
cies and activities to ensure development is sustain -
able. The concept of sustainability includes not only
environmental concerns but also economic and so -
cial considerations. While environmental issues are
105
important they have to be balanced against competi -
tiveness and social welfare.
Above all, transport should be safe. Road safety lev -
els remain unacceptable, with 42,000 killed on the
EU’s roads every year. It is of particular concern that
the situation in the cohesion countries is worse thanelsewhere. While they have 17% of EU population,they account for 26% of fatal road accidents, sug -
gesting that road improvements have not been
matched by gains in safety. Maritime safety is also ca -
pable of improvement.
Progress has been made in environmental protec -
tion, notably in air quality. Community directives will
reduce air pollution by 70% by 2010 thanks to techni -
cal improvements in fuels and vehicles, though some
emissions remain a problem. Technical measures atEuropean level are not a complete answer and localmeasures need to be taken to reduce urban emis -
sions. New infrastructure can also help, as in the case
of the Athens metro, which is expected to reduce caruse substantially. Transport accounted for 28% ofCO2 emissions in 1998. The EU Kyoto objective of re-ducing greenhouse gas emissions by 8% by2008-2012 is far from being met and requires, amongother changes, a shift from road to other modes oftransport.
To achieve such a shift was one of the aims of the
1992 White Paper. Despite significant growth in shortsea shipping, however, the potential of environmen -
tally-friendly modes of freight transport, such as in -
land waterways and rail, has yet to be realised.
There is a clear need to update Community policy
and to propose new measures and priorities to im -
prove the overall efficiency of the transport system.
The 1992 White Paper identified an inherent risk of thetransport system becoming unbalanced and unsus -
tainable and this in effect has happened. The revised
policy has to tackle the challenge.
The trans-European transport networkThere were major efforts in the 1990s to upgrade
transport systems in the assisted regions and cohe -
sion countries to levels more similar to those else -
where in the EU. Since the mid-1990s, investment has
increased and projects started in the early 1990s,such as the Madrid-Seville high-speed train or largesections of the Pathe motorway, have been
completed.
In sea transport, the dominance of the northern ports
has been challenged by large growth in containertraffic in the Mediterranean, as a result of the new portof Gioia Tauro and investment in Algeciras andelsewhere.
Public private partnerships have brought stricter con -
trol of the risks taken and of the work carried out.
Spata airport in Greece and the Vasco da Gamabridge in Portugal are good examples. The creationof special project authorities in the public sector hasalso served to improve accountability and efficiency.
106II.8  Transport policy
II.9  Energy policy
Access to reasonably priced
energy essential for cohesion
In addition to liberalisation of markets, the major as -
pect of EU policy is support for improvements in the
distribution network, to increase the availability ofsupply in peripheral regions, in particular. EU financehas, therefore, contributed to the construction ofhigh-tension electricity lines and of gas pipelines aspart of the trans-European Networks, to increase thepossibility of trade in energy between Member Statesand to provide access to natural gas to regions wherethis energy source does not exist. Accordingly, as-sistance has been provided under the REGEN andINTERREG II programmes to help improve infrastruc-ture in Greece, Spain, Portugal and southern Italy inorder to increase the chances of consumers therebenefiting from a single market.
These measures are aimed at reducing regional dis -
parities in access to energy and prices. The estab -
lishment of a single market in energy should further
help in this respect, by stimulating more trade andcompetition, especially in peripheral regions wheremonopoly suppliers tend to be more prevalent, andso pushing down prices.
The reduction in prices brought about could benefit
the cohesion countries disproportionately, since theirenergy use in relation to GDP, though it has fallen inrecent years, remains above that in the rest of the Un -
ion. This is specifically the case for Greece and Portu -
gal, where consumption relative to GDP is some 40%
above the EU average, reflecting the composition ofeconomic activity, though to a major extent inefficien -
cies in the use of energy. Nevertheless, the economic
development of these countries in particular, involv -
ing, as it is likely to, increased industrialisation, will al -
most certainly necessitate increased energyconsumption and, therefore, stands to be assisted by
lower prices. At the same time, it is important for envi -
ronmental reasons, in particular, that any reductions
in price which occur do not lessen efforts to improveenergy efficiency.
The scale of the effect of moving to a single energy
market on the energy price differences, which atpresent exist across the Union is, however, hard topredict, especially since taxes of one kind or another(excise duties, value-added tax) represent a signifi-cant, but highly variable, component of the price offuel in all countries.
The net reduction in energy prices from the establish-
ment of a single market should benefit most consum-ers, including many poor households. There is nocertainty, however, that prices will come down for ev-eryone. In particular, those living in more remote com -
munities, especially islands, where the cost of
providing supply is relatively high, will not necessarilybenefit from lower prices and might even see pricesincrease as these come to reflect more closely thetrue costs of provision. Increased competition, in it -
self, is unlikely to help much in this respect. Accord -
ingly, the case for the incorporation of universal
service provision guarantees in legislation, to ensurethat everyone has access to affordable fuel, is a com -
pelling one. Without such provision, there is a danger
that a single market could lead to a widening of dis -
parities in society and damage social cohesion.
Increasing security of supply
The EU ’s dependence on imports of energy is set to
increase in future years as North Sea reserves beginto run down. Dependence on imports varies greatlybetween Member States, as do the measures
107
adopted (mainly regulatory ones) to minimise the
risks involved in this. Such dependence does nothave any direct implications for cohesion as such, solong as supplies are maintained and prices are rela -
tively stable. However, the differential vulnerability to
external shocks, such as an increase in world oilprices or the suspension of supply, is a potentially im -
portant source of disadvantage and, therefore, a pos -
sible factor in the decisions of businesses of where to
locate, especially during periods of global instability.
In general, each Member State is responsible for
safeguarding its own supplies (a common feature isthat all member countries of the International EnergyAgency continue to respect the norm of maintainingemergency stocks at a level equivalent to 90 days ofnet imports of petroleum). This may mean, to someextent, trading off lower prices for increased securityand, therefore, overriding the market or imposing afiscal and regulatory framework, which explicitly in -
corporates security considerations as well as those
relating to the long-term availability of supply, withinwhich the market can operate. Accordingly, the mainlong-term guarantee of security is to have access tomultiple sources of supply, which can be achieved bydiversifying both the sources of energy used and theirorigin.
For coal, supply is already extremely diversified.
Apart from domestic mining (which is heavily subsi-dised), there are many exporting countries, in CentralEurope, North and South America, South Africa andso on. For petroleum, although there is an efficient,well-established world market, there is a high degreeof dependence on countries in the Middle East, andthis is likely to increase further in future years. For nat -
ural gas, there are two major sources apart from the
North Sea – Russia and North Africa.
Indeed, securing access to supplies is particularly
strategic in respect of natural gas, which is likely tobecome an increasingly important source of energyin future years, not only in the generation of electricity–almost all investment in generating plants world -
wide in recent years has been in gas-fired stations –
but also as a possible replacement fuel for petrol invehicles.
Accordingly, Structural Funds support for investment
in natural gas networks in the cohesion countries is vi -
tal not just for increasing their diversity of supply, but
also in preparing them for the future.Environmental considerations
The pursuit of a path of economic development whichis environmentally sustainable in the long-term is acentral objective of policy and one which conditionsthe structural measures taken in the EU to assist re -
gional convergence. This gives rise to a potential
conflict between the pursuit of cost competitiveness –
ie ensuring that production costs are not out of linewith those elsewhere in the Union –and following a
path best suited to achieving sustainable economicdevelopment. Accordingly, it suggests that there aremutual gains to be made, particularly in thelong-term, from the adoption of a common policy ontackling the ecological damage caused by energyuse, including in respect of fiscal measures.
At the same time, the EU continues to assist Member
States in the pursuit of environmental objectives,through the ALTENER programme to encourage thedevelopment of renewable energy sources, SAVE, topromote more efficient use of energy, and PCCE, tosupport the co-generation of electricity. Moreover,the European programme for diversification and en-ergy saving, which is aimed at stimulating interna-tional cooperation, is part of the 5
thFramework
Programme for science and technology.
108II.9  Energy policy
II.10  Enterprise policy
Building on the Commission ’s existing policies for
SMEs, innovation and industrial competitiveness, en -
terprise policy has recently undergone a process of
refocusing and reformulation in response to the chal -
lenges posed by the knowledge-based economy and
the need to adapt to global economic developments.
The starting-point for this new policy was set by the
Lisbon Economic Council in March, 2000, which fixedthe goal for the EU ‘
to become the most competitive
and dynamic knowledge-driven economy in the
world, capable of sustainable economic growth with
more and better jobs and greater social cohesion ’
and identified enterprise and entrepreneurship as
key to achieving this.
Enterprise policy in the Union is founded on three
main aims,1each of which gives rise to a set of spe-
cific measures as described below:
•encouraging entrepreneurial activity: the mea -
sures under this head, which are especially impor -
tant for lagging regions, are aimed, in particular, at
improving the access of SMEs to finance, in coop -
eration with the European Investment Bank and
the European Investment Fund. They also focus ondeveloping a range of business support services,creating a regulatory and administrative environ -
ment favourable to enterprise development, offer -
ing entrepreneurial advice and encouraging the
development of skills and motivation, which ac -
cordingly increase the attractiveness of regions to
investors. These elements have been developedunder the Multiannual Programme for Enterpriseand Entrepreneurship (2001-2005);
2
•creating an environment which is supportive to in -
novation and change: measures under this head
seek, in particular, to encourage benchmarkingand the exchange of good practice between
countries, regions and businesses across the Un -
ion. They also help to remove obstacles to innova -
tion and growth, provide support to innovation
projects and promote the development of the ser -
vice sector. They are being implemented through
the recently adopted Communication ‘Innovation
in a knowledge-based economy ’and the First Ac -
tion Plan for Innovation in Europe;3
•to ensure that businesses have access to mar-
kets: measures under this head are being pur-sued through continued efforts to consolidate theInternal Market, ensuring access to global mar-kets, the dissemination of voluntary standardsand the promotion of e-commerce and new distri-bution networks. The reduction in the problemscreated by distance will, of course, be of particu-lar importance to firms in peripheral regions.
The new enterprise policy has no specific spatial di -
mension but, nevertheless, addresses some of the
most relevant obstacles to cohesion and regional de -
velopment. Many of the new enterprises policy priorities
have parallels in the regional policies implementedthrough the Structural Funds. In this respect, it can workin parallel with regional policy to create synergy to ad -
vance economic and social cohesion. In particular, it is
aimed at removing the whole range of barriers to marketentry, which are often particularly prevalent in laggingregions. In the short-term, at least, it is expected thattheir removal will release latent enterprise potential andso help to reduce regional disparities. In addition, theestablishment of an enterprise and innovation ‘score -
board ’will accelerate the diffusion of business best
practice between both Member States and regions.While the precise impact of the new enterprise policy oneconomic and social cohesion (and, in particular, its ef -
fect on the development of the lagging regions) is
109
difficult to quantify, it can potentially play a significant
role in reducing regional disparities.
In addition, the wide range of measures which are
planned can have a positive effect on the ability of firms inlagging regions to compete in the global market place:
•measures such as benchmarking, peer reviews
and joint action with Member States will enablepolicy makers and businesses across the EU toidentify best practices and, in turn, to implementthem. Programmes for encouraging the dissemi -
nation of innovation and best practice are likely to
benefit lagging regions, in particular, and to -
gether with the development of business centres
and technology parks, help them to exploit theopportunities offered in the new economy;
•policies designed specifically for SMEs, which are
important for employment creation and regional de -
velopment, to help them compete on a more equal
footing with larger firms; the establishment of infor-mation and advice centres, such as the EuroInfoCentres (EICs) and the European Business and In-novation Centres, to offer support to enterprisesacross the EU. The EICs, by virtue of their close as-sociation with local businesses, their understand-ing of the local institutional environment and theirlinks throughout the Union, play an important role inbuilding relationships between firms in different re-gions and help them solve practical problems. Inaddition, the Europartenariat programme encour -
ages SMEs in lagging regions to form business
links with companies elsewhere, so enabling themto import technological and business know-how.
Many of the new enterprise policies have parallels in
the regional policies implemented through the Struc -
tural Funds, and a core chapter of the Guidelines for
Structural Funds programmes
4was devoted to estab -
lishing priorities for enterprise support similar to the
new enterprise policy.
SMEs
Enterprise policy is particularly focused on SMEs,which are an important part of the European econ -
omy. SMEs are the predominant type of firm in the EU
and they are particularly important in lagging regions,where the small family business is prevalent, particu -
larly in traditional sectors. The first multiannualprogramme for SMEs was therefore aimed at the de -
velopment of SMEs in assisted regions.
In 1998, SMEs accounted for 99.8% of the 19.4 million
non-primary sector private enterprises in the EU. Theiraverage turnover was around EUR 500,000. In the twoyears, 1996 to 1998, the total number of SMEs in the EUis estimated to have increased by 4% and the numberof people employed by 2% (from 73.2 million to 74.6million), the same as in the economy as a whole.
Access to financeInitiatives have also been undertaken to improve the
availability of finance to SMEs through risk capitalfunds, the SME guarantee facility and small businessloans for ICT projects. Most of these are implementedthrough the European Investment Funds. Since 1998,Spain, for example, has received 15% of the totalamount allocated under the SME guarantee facility,which has gone to 672 firms. Other programmes, likethe Joint European Venture (JEV), have also helpedcreate new businesses in lagging regions, particularlyin areas of new technology, almost 20% of the projectsfinanced under the programme being implemented inSpain, Portugal and Greece.
Policy on tourism
Europe is the main tourist destination in the world. In anumber of regions, particularly assisted ones in thesouth and in mountainous areas, tourism is a majorsource of employment and has a substantial effect oneconomic development. It is also an activity domi -
nated by SMEs, some 6.5% of the total turnover of
firms of this size being generated in this sector.
In the EU as a whole, it accounts for 5.5% of GDP and
6% of jobs. In many parts of the EU, the figures aremuch higher. In Spain, for example, tourism accountsfor 10.5% of GDP and 9.5% of employment.
Tourism is likely to be a major source of job creation
over the coming years, particularly in lagging and pe -
ripheral regions, and measures to support the sector
could have an important effect on the development ofthese. According to the report of a High Level Group onTourism and Employment set up by the Commission,there is an opportunity for creating around 3 million newjobs in tourism in the EU over the next decade, but cer -
tain conditions have to be met to realise this.
110II.10  Enterprise policy
111II.10  Enterprise policy
Regional aspects of Innovation Policy
Two action lines which foster the regional dimension of
RTD and innovation policies have been developed un -
der the Innovation programme: the Regional Innovation
Measures and the network of Innovation Relay Centres.
The Regional Innovation Measures action line has sup -
ported three generations of projects since 1994. RITTS
(Regional Innovation and Technology Transfer Strat -
egies) projects were launched in 70 regions in parallel
with Regional Innovation Strategies (RIS), under the for -
mer Article 10 of the ERDF, in 30 regions. The aim of the
projects is to help regions develop a strategy which en -
courages firms, mainly SMEs, to be more technol -
ogy-oriented and innovative. The approach is a new
one, which moves away from the promotion of individ -
ual, mainly supply-led RTD measures, the concern be -
ing not so much to enlarge the scientific and
technological capacity of regions per se, but to improve
the institutional, RTD and innovation environment inwhich firms operate. The scheme is based on a bot -
tom-up approach, starting from the needs of enter -
prises in regions in terms of innovation support,
technologies and business advice, and is aimed at es-tablishing long-lasting regional structures and pro-cesses. As such, it is designed to strengthencooperation among all relevant parties (including en-couraging public-private partnership), create consen-sus, identify strategic regional priorities and directresources towards these.
The positive effects of the RITTS programme include:
the development for the first time in many regions in
cohesion countries of an innovation policy as a resultof the scheme and the strengthening of the innovationsystem in others;
the creation of an awareness of the importance of in -
novation to economic growth;
the mobilisation of institutions, businesses and indi -
viduals at the regional level;the introduction of a much-needed move towards
strategic thinking for innovation-oriented regional de -
velopment;
helping to develop a broader concept for innovation,
different from mere technology transfer, and to putthis higher on the policy agenda;
a greater focus of public expenditure at regional level
on business needs and an increase in public fundingfor innovation in many regions;
providing the means and incentives to create a dia -
logue in fragmented regions (in a geographical, insti -
tutional and cultural sense);
the creation of ‘innovation communities ’of different
organisations and individuals in regions whose aim isto develop innovation as a driving force for regionalgrowth;
helping regions clarify the scope of infrastructure to
support innovation and develop measures to rational-ise and better define it, as well as to increase its visi-bility.
The Innovation Relay Centre network consists of 67
main nodes (and a large number of sub-nodes) in 30European countries (including the EEA, CECs, Cyprus,Switzerland and Israel), organised on a regional basis.The main aim of the centres is to help local industriesspecify their new technology needs and identify whichof their technologies are suitable for transfer to other re -
gions or sectors.
Both networks focus specifically on the needs of less
advanced regions, which are not only fully integratedinto all the activities but also receive specific support interms of advice, exchange of experience and access togood practice in other parts of Europe, especially in themost advanced areas.
1 Commission of the European Communities (2000) ‘Towards Enterprise Europe ’. Work Programme for Enterprise Policy 2000-2005.
Enterprise DG. SEC (2000) 771.
2 Commission of the European Communities (2000) ‘Challenges for enterprise policy in the knowledge-driven economy ’. Proposal for
a Council decision on a Multiannual Programme for Enterprise and Entrepreneurship (2001-2005). COM (2000) 256. Office forOfficial Publications of the European Communities: Luxembourg.
3 COM (2000) 567 of 20 September 2000.4 The Structural Funds and their coordination with the Cohesion Fund: Guidelines for programmes in the period 2000-2006 –
COM (1999) 344 of 1 July 1999.
112II.10  Enterprise policy
II.11  The Common Fisheries Policy
A geographically concentrated sector
The Common Fisheries Policy (CFP), initiated in 1970,
has four main elements: conservation of stocks,structural measures, organisation of markets and in -
ternational agreements with third countries. Overall,
fishing remains an important sector in the EU econ -
omy, accounting for around 0.20% of GDP in 1997 (as
against 0.25% in 1990) and 0.4% of employment (thesame as in 1990).
Fishing is concentrated in coastal and peripheral
areas, which are often disadvantaged. In 1997, 70%of fishermen and 60% of those employed in the fisher-ies sector as a whole lived in Objective 1 regions. InGreece, Spain and Portugal, the sector accounted forjust over 1% of employment.
Because of this concentration, any CFP measure
which strengthens the competitiveness of the sectortends to contribute to social and economic cohesion.
Areas dependent on fishing
and changes in the scale of dependency
Given the concentration of the industry, the Edin -
burgh European Council (December 1992) officially
recognised the existence of Areas Dependent onFishing (ADFs) and the need to give them special at -
tention.
1In terms of NUTS 3 regions, 34 ADFs (13 of
which were in Greece and 11 in Spain) had, in 1997, arate of dependency on the sector of between 3% and15% (see Table A.30 in Annex). At more detailedNUTS 4 or NUTS 5 regional level, dependency ishigher, with around 30 ADFs (excluding Greece)having a rate of between 20% and 60%.The overall dependency of the Union on fishing, in
terms of catches, declined only slightly between 1990and 1997, the reduction being compensated by an in -
creased dependency on fish farming. On the other
hand, the map of areas dependent on fishing haschanged considerably, with Spain (Galicia and thesouthern Atlantic regions, in particular) showing themost marked reduction. Dependency also declinedin Italy (north-east) and France (Bretagne), while it in -
creased, most especially, in Greece, as well as in
Scotland (Peterhead, Western Isles, Shetlands), Por-tugal (Madeira, Algarve) and Ireland (Galway). Ac-cordingly, the regions in which dependency has risenare those where development is lagging behind.
The social and economic effects of the CFP
Conservation of stocks
In line with the principle of relative stability, fishing
quotas are divided equally among Member Statesand have, therefore, no effect on cohesion. Conser -
vation measures, however, are accompanied by spe -
cial provisions in favour of fishing communities in
ADFs: local fishermen who have traditionally fished incoastal waters of another country can continue to fishwithin the 12-mile limit, usually accessible only tolocal vessels.
Fishing effortBetween 1990 and 1997, employment in fishing de -
clined by 19% in the EU (from 313,000 to 252,000).
The fall was the result of measures taken to conservestock and reduce the extent of over-fishing which fol -
lowed the multiannual guidance programmes
(MAGP) and the action taken under the FIFG –Finan -
cial Instrument for Fisheries Guidance (structural
113
section) –to modernise the fishing fleet. In the
long-term, however, the adjustment of the fishing ef -
fort to available reserves and the restructuring of the
sector are likely to arrest the decline.
ProcessingJobs in the processing sector declined by 10% over
the period (from 107,000 to 96,000). This reflects boththe decline in fishing and the concentration of busi -
nesses worldwide (only 50% of processing involves
fish caught in the EU). It conceals, however, consid -
erable differences between regions. In Greece, em -
ployment in processing increased by 200% and in
Italy overall, by 21%, while it fell by almost 5% in Spainand the southern part of Italy. Support from the FIFGfor the modernisation of businesses and the growth infish farming have, therefore, enabled the number ofjobs in Objective 1 regions to be maintained orincreased.
Fish farmingThe significant growth in fish farming, supported by
the FIFG (and locally by the PESCA Initiative), hasbeen translated into a substantial increase in bothoutput and employment. Between 1990 and 1997,production in the EU (excluding Austria, Finland andSweden) rose by 54% in cash terms (being valued atEUR 2 billion in 1997) and by 23% in volume terms(from 880,000 to 1,080,000 tons), some 85% of thisrise taking place in Objective 1 regions (70% inGreece, southern Italy and Scotland alone). Employ -
ment in fish farming (excluding processing) in -
creased by 20% (from 47,000 to 57,000), the only part
of the fisheries sector in which there has been net jobcreation. Some 70% of job growth in the Union has oc -
curred in Spain, Greece and Portugal. Fish farming
has, therefore, developed largely in disadvantagedObjective 1 ADFs and, accordingly, has had a posi -
tive effect on social and economic cohesion.
Common organisation of markets
The COM, a means of regulation through supporting
prices and direct intervention, is aimed at preventingany form of unfair competition between Member
States. It includes three components which are fa -
vourable to social and economic cohesion:
a) production aids enable producers to become
more competitive as regards processing and dis -
tribution, which are much more concentrated and
organised, and have a positive effect on socialcohesion;
b) the principle of ‘regional adjustment coefficients ’
enables Community withdrawal prices in anygiven region to be varied according to marketconditions or distance from major marketing cen -
tres, which is therefore favourable to regional co -
hesion;
c) as part of the POSEI programme for ultra-
peripheral areas, a scheme has been established(under Council Regulation 1587/98) to compen -
sate for the extra costs of selling certain products,
arising from their remoteness, in A çores, Madeira
and Canarias and the French Departments ofGuyane and R éunion.
International fishing agreements
with third countries
Evaluation undertaken in 1999 of the effects of inter-
national agreements with countries outside the EU in-dicates that they are important for the Union becausethey generate value-added (direct and indirect) ofEUR 944 million and 40,000 jobs (half of which forseamen). Agreements with countries in the south(mainly Africa), which represent 75% of thevalue-added resulting from agreements, mostly ben -
efit Spain (80%) and Portugal (7%), especially the
ADFs in the Canarias, Andalusia, Pays basco,Galicia, Sesimbra and Olh ão, and accordingly have a
positive effect on cohesion.
114II.11  The Common Fisheries Policy
1A n ADF is an area (a region or local area of employment) where the contribution of the fisheries sector to the economy, in terms of
employment or value-added, is so important that problems in the sector or the decline of fishing have serious social and economicconsequences both directly and indirectly. Dependence is analysed in the text in terms of employment, though the sameconclusions would be reached if it were measured in terms of value-added, since this has changed in a similar way over time.
Part III — The EU Budget and the contribution of structural
policies to economic and social cohesion
III.1 The EU Budget and economic and social cohesion .  .  .  .  .  .  .  .  . 117
III.2 The contribution of structural policies to economic and social
cohesion: results and prospects .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 121
115
116Part III — The EU Budget and the contribution of structural policies to economic and social cohesion
III.1  The EU Budget and economic and social cohesion
The objective of strengthening economic and social
cohesion is mentioned explicitly in Article 2 of theTreaty and as the first objective of the Union. Morespecifically, Article 158 states that cohesion is a pre -
condition for harmonious development in the EU: ‘
in
order to promote its overall harmonious development,
the Community shall develop and pursue its actions
leading to the strengthening of its economic and so -
cial cohesion. ’This article, moreover, goes on to
stress that fostering cohesion requires that ‘the Com-
munity shall aim at reducing disparities between the
levels of development of the various regions and the
backwardness of the least favoured regions or is-
lands, including rural areas. ’
The Treaty, by making explicit the aim of reducing
disparities in economic development, implicitly re-quires that EU policies, and cohesion measures inparticular, should influence factor endowment andresource allocation and, in turn, promote economicgrowth. More specifically, cohesion policies areaimed at increasing investment to achieve highergrowth and are not specifically concerned either withexpanding consumption directly or with redistributionof income. This differs fundamentally from nationalcohesion policies which are in part aimed at transfer -
ring income to the poorest areas.
1
The EU Budget is a key instrument for enhancing eco -
nomic and social cohesion. First, even though part of
expenditure is not directed explicitly towards this ob -
jective, most of it is.
Secondly, it is recognised in the Treaty that contribu -
tions to the Budget must take account of the differen -
tial ability to pay and that measures need to be taken
to ameliorate the adverse situation of the less wealthyMember States.Member States which are less well off, therefore, tend
to emerge as net recipients from the Budget
2(Graph
21).Such an aggregate measure may, however, bemisleading since only part of overall EU expenditure(included in the data plotted in graph), is explicitly of acohesion nature. Although the cohesion countries arenet beneficiaries from the Budget, there is not neces -
sarily a negative relationship between budgetary po -
sitions and levels of GNP across Member States,
since expenditure includes that devoted to purposesother than cohesion.
Types of EU expenditure and cohesion
The EU Budget contains no stabilisation function assuch. Nevertheless, according to 1999 data, 23.3%of expenditure was on to allocative objectives, 71.4%on redistributive ones and the remainder onadministration.
117 
 UK
 S FIN P
 A
 NL I IRL
 F EEL
 D DK
 B
-200-1000100200300400500600
-200-1000100200300400500600
40 50 60 70 80 90 100 110 120 130 140 150Operating budget balances (EUR per head)21 GNP and operating budgetary balances, 1999
GNP per head (EUR, EU15=100)
Allocative expenditure is intended to alter the market
allocation of goods and/or services, either to correctmarket failure or to improve the market outcome. Ex -
amples of the former are expenditure on research,
trans-European networks and the environment, whileexpenditure on the CAP is an example of the latter.
Expenditure for correcting market failure is not re -
lated to the prosperity of the countries in which it is
made and, therefore, does not directly impinge on co -
hesion (see Graph 22, which shows the absence of
any correlation between GNP and Internal Marketexpenditure).
Allocative expenditure aimed at improving the free
market outcome poses more difficulties. In the caseof the CAP, for example, it is intended to supportprices at a level which gives a fair income to farmers.The cost of this depends on the gap between marketprices and support prices, while farmers ’income de -
pends only on the level of the latter.
However, an important part of the CAP takes the form
of direct income support to farmers and is, therefore,redistributive in nature. CAP support in total is, ac-cordingly, mildly negatively correlated with income(Graph 23) mainly because of the income supportcomponent (Graph 24).
EU redistributive expenditureRedistributive expenditure is the main instrument of
cohesion policy. This was boosted by the Delors I andII packages, which first institutionalised structuralspending and its programming and then expandedthe amount and established the Cohesion Fund. TheFinancial Perspectives 2000 to 2006 put structural ex -
penditure at the centre of the enlargement strategy,
allocating around 80% of the total funds for the newMember States to this.
As noted above, the key objective of EU redistributive
policy is to reduce regional differences in the level ofdevelopment through fostering investment. The aim,therefore, is to improve the structural endowment ofless prosperous regions or where developmentneeds are greatest. This is pursued through theStructural Funds and many other EU policies whichare directed at improving the level of infrastructure,education and scientific research in the regions inquestion.
118III.1  The EU Budget and economic and social cohesion
 
 UK S FIN
 P
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 I IRL
 F EEL
 D DK B
051015202530354045
70 80 90 100 110 120051015202530354045Internal Market expenditure (EUR per head)22 GNP and Internal Market expenditure, 1999
GNP per head  (PPS, EU15=100 )
 
 UK S FIN
 P A
 NL  I IRL
 F
 E EL
 D DK
 B
050100150200250300350400450500
70 80 90 100 110 120050100150200250300350400450500CAP expenditure (EUR per head)23 GNP and total CAP expenditure, 1999
GNP per head (PPS, EU15=100)
 
 UK S  FIN
 P A
 NL I IRL
 F E EL
 D DK
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050100150200250
70 80 90 100 110 120050100150200250Income support (EUR per head)24 GNP and CAP income support, 1999
GNP per head (PPS, EU15=100)
The emphasis on growth and invest -
ment explains the importance at -
tached to the principle of additionality,
under which Community transfers maynot lead to a reduction in the structuralexpenditure financed by MemberStates themselves. In other words, EUstructural aid must be additional to andsupplement national investment.
The present system of structural ex -
penditure can then be thought of as a
rules-based system in which spendingfor convergence is tied to specific pro -
jects and to explicit financial and other
parameters.
An important aspect of EU structural
expenditure is multilateral monitoringunder which both recipient MemberStates and the EU, through the Commission, agree onthe Community Support Framework (CSF) and its im -
plementation. One rationale for this is to ensure that
convergence aid is used as intended, so providingreassurance to EU taxpayers. The involvement of re-cipient Member States is for reasons of subsidiarity,in that they are acknowledged to be in the best posi-tion to propose projects and to judge the appropriate-ness of expenditure.
Structural expenditure increased over the two pro-
gramming periods, 1988 to 1993 and 1994 to 1999,but is due to decline in the period 2000 to 2006(Graph 25, in which funds going to the accedingMember States are shown separately).
3There is a
clear inverse relationship between structural expen -
diture and the relative prosperity of Member States,
but it is not entirely systematic (Graph 26).
Whilst the largest part of the Structural Funds is allo -
cated on a regional basis, the Guidance section of the
European Agricultural Guidance and GuaranteeFund (EAGGF) and the Cohesion Fund are allocatedto Member States. The limited importance of the latterin relation to the former (the EAGGF-Guidance andCohesion Fund account for about 23% of total struc -
tural expenditure) can mean that Member States with
similar GDP per head have different access to funds,as in the case of Sweden and Italy, for example. In It -
aly, therefore, there are six regions (accounting for
some 33% of the population) eligible for Objective 1funds, while in Sweden, only a small proportion of the
population is similarly covered (under 6%).
As noted above, however, direct income support to
farmers under the CAP is different from other EUredistributive expenditure, in that it is aimed at redis-tributing income between people rather than at fos-tering investment in particular regions. Indeed, themore the CAP moves away from price support to-wards income support, the more it becomes a meansof interpersonal redistribution, with no direct intentionof reducing regional disparities in growth potential.The European Commission has suggested that atleast part of this income support could be co-fi -
nanced by Member States (see European
119III.1  The EU Budget and economic and social cohesion
 
0510152025303540
88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 060510152025303540Structural expenditure: EU15
Structural expenditure: New M.S. % of total expenditure 25 Structural expenditure (commited appropriations), 
1988-2006
Delors 1 Delors 2 Financial Perspective 2000-06
 
 UK S FIN P
 A
 NL I IRL
 F EEL
 D DK B
050100150200250300350
70 80 90 100 110 120050100150200250300350Structural expenditure (EUR per head)26 GNP and structural expenditure, 1999
GNP per head (PPS, EU15=100)
Commission 1998), but this so far has failed to gain
unanimous support.
EU Budget revenue
The EU Budget is financed by the EU ’s own re -
sources, ie custom duties, agricultural and sugar lev -
ies, VAT resources and those related to GNP. In
recent years, GNP resources have increased in im -
portance, while VAT resources and the other sources
have declined (Graph 27). With the new Own Re -
sources Decision, which will come into force on 1 Jan -
uary, 2002, this trend will be further reinforced.
Unlike in the case of national budgets, where pro -
gressive taxation plays an important redistributive
role, in the EU budget, contributions are proportionalto the capacity to pay measured by nominal GNP atcurrent exchange rates. Redistributive objectives, asnoted above, are, therefore, pursued through expen -
diture alone.
The importance of VAT resources to revenue, how-
ever, is liable to produce regressive effects. To cor-rect for this, the 1988 Own Resources Decisioncapped the VAT base of all Member States to 55% ofGNP, while the 1994 Decision limited it for Member
States with GNP per head below 90% of the EU aver -
age (the cohesion countries) to 50% and reduced it
progressively for others to 50% by 1999. The 1994Decision also progressively reduced the maximumcall rate of VAT from 1.4% in 1995 to 1% by 1999. TheMarch 1999 Berlin European Council and the newOwn Resources Decision further reduced the maxi -
mum VAT call rate to 0.75% in 2002 and 2003 and to
0.5% from 2004 on.
The increased importance given to GNP resources in
future years will reduce the regressive nature of thesystem substantially, so effectively nullifying an issuewhich could have become potentially contentiouswith enlargement and the very low levels of GNP perhead in many of the acceding countries.
Cohesion and budgetary balances
The balance between contributions to the EU Budgetand receipts from it is not a policy objective in itself.Nevertheless, with contributions to the Budget beinglargely proportional to GNP, expenditure is crucial todetermining the configuration of balances. Indeed,whatever their limitations, the latter largely mirror thepolicy priorities of the Union. The data are consistentwith cohesion expenditure being inversely related toregional GDP per head and with the cohesion coun-tries being net beneficiaries of the EU Budget. How-ever, a proper analysis of the contribution of the EUbudget to fostering economic and social cohesionneeds to take account of the diverse and heteroge -
neous nature of EU expenditure.
120III.1  The EU Budget and economic and social cohesion
1 Economic literature is nearly unanimous on the positive and direct relationship between income inequality and social policy. For the
most recent findings in Europe see, for example, K. Caminada and K. Goudswaard (2000).
2 This can be measured in a number of ways none of which is superior to others, see Financing the European Union, Report on the
Operation of the Own Resources System , Bulletin of the European Union, Supplement 2/98, especially Annex 3.
3 The data on EU –15 and enlargement-related structural expenditure are from the ‘Interinstitutional Agreement between the European
Parliament, the Council and the Commission of 6 May 1999 on Budgetary Discipline and Improvement of the Budgetary Procedure ’,
Annex I and Annex II. 
0102030405060708090100110120
85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 060102030405060708090100110120
GNP
VAT
Traditionally own resourcesEUR billion27 Composition of EU own resources, 1985-2006
III.2 The contribution of structural policies to economic and
social cohesion: results and prospects
Since their creation, the Structural Funds and the Co -
hesion Fund have represented the main instruments of
social and economic cohesion policy, which is a prior -
ity objective of the Union. These are aimed at strength -
ening the structural factors which determine
competitiveness, and therefore the growth potential ofless advantaged regions.
Over 10 years have passed since the reform of the
Structural Funds in 1988. A first evaluation of the resultswas presented in the First Report on Economic and So-cial Cohesion. This showed the progress made interms of convergence and cohesion and the contribu-tion of structural policies to the attainment of these ob-jectives. The report had also suggested possible waysof improving the effectiveness of structural policies andthese were integrated into the new regulatory frame-work.
The Berlin Council (March 1999) confirmed the will to
continue pursuing this political priority, made evenmore necessary by future enlargement, because of thesubstantial differences in the level of development.Given the scale of the financial transfers involved, it isimportant to assess the effectiveness of the policiespursued in reducing regional disparities and increas -
ing economic convergence.
At the same time, the system for managing the Struc -
tural Funds has become more decentralised, with a
clearer division of responsibilities and, as a result, thecreation of stronger instruments for monitoring, controland evaluation.
This chapter is divided into four sections. The first exam -
ines the scale of the effort made to improve economic
and social cohesion; the second assesses the resultsachieved over the period 1994 to 1999; the third at -tempts to draw lessons from the establishment of the
new method of programming for the period 2000 to2006; the fourth section considers the different financialinstruments created to assist the enlargement process.
The financial effort
to improve cohesion
The macroeconomic aspect
of structural support
Community intervention in support of cohesion involves
a significant financial dimension. The Structural andCohesion Funds together account for over a third of thebudget for Community policies (Graph 28).
This financial effort is significant in macroeconomic
terms, especially in Objective 1 regions (Table 9). Over
121 
0500010000150002000025000300003500040000
1989199019911992199319941995199619971998199920002001200220032004200520060.000.050.100.150.200.250.300.350.400.450.50EUR million (bars)28 Change in the scale of the Structural Funds, 
1988-2006
% EU GDP (line)
the period 1994 to 1999, Community funding in Portu -
gal amounted to 3.3% of GDP, in Greece, 3.5% and in
Ireland, 2.4%, all three countries consisting entirely ofObjective 1 regions. In the other countries with Objec -
tive 1 regions, the figure varied between 0.2% of GDP
(Germany) and 1.5% (Spain). Community support of in -
vestment was even greater, accounting for almost 15%
of total investment in Greece, around 14% in Portugal,10% in Ireland and 6% in Spain. The implication is that,without Community transfers, economic growth, towhich investment is a major contributor, would havebeen less in the cohesion countries. Transfers will,however, decline in scale over the period 2000 to 2006,particularly in Ireland.
Consolidation of financial concentration
in Objective 1 areas
Community structural policies have the effect of
transferring budgetary resources towards regionswhere development is lagging. The scale of interven -
tion in the cohesion countries is therefore consider -
ably larger than in the rest of the Union. Almost 70% of
total allocations for the Structural Funds for the period2000-2006 (around EUR 136 billion) will go to
Objective 1 regions compared to 68% in 1994-1999(including Community Initiatives). This financial con -
centration will enable the average intensity of aid per
inhabitant each year in Objective 1 regions to bemaintained at the same level as in 1999 (Table 10).These regions will also receive funding from the Com-munity Initiatives.
The use of an objective method for distributing over
97% of the Structural Fund allocations between Mem-ber States has made it possible to maintain the con-centration of finance in the less prosperous countriesand regions. Accordingly, the less prosperous coun-tries receive more aid per head (Graphs 29 and 30)and 60% of the Funds go to regions which, together,account for 20% of EU GDP (Graphs 31 and 32).
Increased geographical concentration
One of the priorities of Agenda 2000 was to increasethe geographical concentration of support in the mostdisadvantaged areas of the Union, as well as provid -
ing temporary support for regions where Community
122III.2  The contribution of structural policies to economic and social cohesion: results and prospects
Table 10  Expenditure by Objective in successive periods, excluding phasing-out
(average EUR per head per year at 1999 prices)
1989-93 1994-99 2000-06
Objective 1 123 187 220
– highest (IRL) 253 (IRL) 262 (P) 348
– lowest (D) 62 (B) 95 (S) 104
Objective 2 21 46 41
Objective 3 10 12
Cohesion Fund 41 40Table 9  Economic effects of the Structural and Cohesion Funds
Greece Ireland Spain Portugal EUR4
% GDP
1989-93 2.6 2.5 0.7 3.0 1.4
1994-99 3.0 1.9 1.5 3.3 2.0
2000-06 2.8 0.6 1.3 2.9 1.6
% Gross fixed capital formation
1989-93 11.8 15.0 2.9 12.4 5.5
1994-99 14.6 9.6 6.7 14.2 8.9
2000-06 12.3 2.6 5.5 11.4 6.9
Structural and Cohesion Funds: commitment data up to 1999; forecasts for 2000-2006
Source: European Commission, estimates based on Eurostat data and projections for 2000-2006
aid is set to come to an end. In 2006, Objectives 1 and
2 will cover 41% of EU population, a proportion closeto the Commission ’s proposal in Agenda 2000, which
was for a maximum figure of between 35% and 40%.This is the highest degree of geographical concentra -
tion achieved since the reform of the Structural Funds
in 1988 (Table 11).
The increased geographical concentration is the re-
sult of the strict application of the eligibility criterionfor Objective 1 and the introduction of ceilings on eli-gible population, decided by the Commission, foreach Member State as regards Objective 2.
Objective 1For Objective 1 regions, the strict application of the
75% of average EU GDP threshold, except for north -
ern regions in Sweden and Finland which wereeligible for Objective 6 in the period 1995 to 1999, led
to a coverage rate of 22.2% of EU population (asagainst 24.6% in 1999). There is some continuity withthe earlier period, except for the regions eligible fortransitory support and the UK, for which the coveragerate has been increased by almost half (see TableA.31 for the support provided by country in the twoprogramming periods).
Objective 2For Objective 2 areas, the coverage rate was re-
duced to 18% of EU population (from 25% in 1999 forObjectives 2 and 5b together). Within the populationceilings decided by the Commission,
1Member
States had considerable room for manoeuvre indrawing up the list of eligible regions, while comply -
ing with the obligation to ensure that at least 50% of
the population concerned fulfilled the so-called
123III.2  The contribution of structural policies to economic and social cohesion: results and prospects
 
050100150200250300350400
7000 12000 17000 22000 27000 32000 37000050100150200250300350400SF and CF per head per year (EUR)29 Structural and Cohesion Funds, 1994-99, and 
GDP per head by Member State
GDP per head (EUR), 1995IRL
P
EL
E
DK LI 
050100150200250300350400
10000 15000 20000 25000 30000 35000 40000 45000050100150200250300350400SF and CF per head per year (EUR)30 Structural and Cohesion Funds, 2000-06, and 
GDP per head by Member State
GDP per head (EUR), 2000EL
P
E
IRL
DKI
L
 
020406080100
0 2 04 06 08 0 1 0 0020406080100Cumulative % of EU GDP (EUR), 199531 Allocations of Structural Funds and GDP by 
Member State, 1994-99
Annual average allocations (cumulative %) 
020406080100
0 2 04 06 08 0 1 0 0020406080100Cumulative % of EU GDP (EUR), 200032 Allocations of Structural Funds and GDP by 
Member State, 2000-06
Annual average allocations (cumulative %)
‘Community ’criteria. The areas adopted by the Com -
mission, on the basis of Member State proposals,
cover 47% of the total population eligible for Objec -
tive 2 and consists of the priority areas defined ac -
cording to the Community criteria.2(See Table A.32
for the support provided by country in the two pro -
gramming periods.)
Predominance of industrial and urban areasFollowing the Commission decisions in 1999 and
2000, the distribution between the four types of areawill be very similar to that indicatively agreed by theCouncil: industrial areas eligible for Objective 2 willaccount for 8.5% EU population, rural areas, for 5.2%,urban areas, for 1.9%, areas dependent on fishing,for 0.3% and mixed areas, for 2.1%.
At the EU level, the share of rural areas in Objective 2
will therefore be slightly higher than indicated in theregulations. In addition to the measures implementedunder the rural development policy supported by theEAGGF-Guarantee section, Member States havejudged it useful and necessary to make the more vul -
nerable rural regions eligible for a wider range of sup -
port measures from the ERDF and the ESF.
Although urban areas in decline appear to be un -
der-represented, this is not the case, since they are
also included among industrial areas. The same istrue of the areas dependent on fishing, since in orderto be able to implement policies for restructuring in ar -
eas of sufficient size, a number of Member States
have included some ports in areas eligible for assis -
tance under rural or industrial criteria.
The distribution between different types of area varies
markedly between Member States. Urban areas arerelatively important in Belgium, the Netherlands, Lux -
embourg and the UK, while higher priority is given to
rural areas in Denmark, Sweden, France, Italy andAustria, and industrial areas predominate in Germanyand Spain. In Finland, the distribution is similar to the
EU average pattern.
Territorial continuity and fragmentationFew areas not covered by either Objective 2 or Ob -
jective 5b during the period 1994 to 1999 were pro -
posed by Member States for eligibility under any of
the Objectives, these being estimated to have a pop -
ulation of around 9.4 million, only 16% of that eligible
for Objective 2 for the period 2000 to 2006. This conti -
nuity of eligible areas suggests that Member States
considered the results achieved up until then werenot sufficient to justify ending EU support, even if ac -
companied by transitional assistance.
The general statement needs, however, to be quali -
fied. Four Member States (Germany, Belgium, Fin -
land and the Netherlands) have in fact modified the
choice of areas for support significantly as comparedwith the 1994 to 1999 period, mainly to take advan -
tage of the urban dimension of the new Objective 2.
The intervention of the Structural Funds in urban ar-
eas in difficulty should create the economic condi-tions for a reduction in crime and complementspecific policies for combating and preventing crime.
In addition, a considerable degree of fragmentation
of eligible areas is evident, reflecting Member States ’
attempts to maximise the overall coverage of Objec-tive 2. This could make it more difficult to implement apolicy of restructuring, given that it multiplies prob -
lems of distinguishing between different areas and so
complicates the management of programmes. Sucha fragmentation gives rise to the risk of diluting the ef -
fects of Community intervention.
Limited coherence with the maps
of State regional aids
In the Commission ’s view, both Community and na -
tional intervention should be concentrated in areas
most in difficulty so as to provide the means for theirrestructuring. Accordingly, it had recommended im -
proving the coherence between the map of State re -
gional aids and that of areas eligible for Objective 1
and 2 support.
In 1997, the Commission also adopted a ‘Communi -
cation on the links between regional and competition
policy ’,
3in which it proposed a number of measures
124III.2  The contribution of structural policies to economic and social cohesion: results and prospects
Table 11  Coverage rate of Structural
Funds, 1993-2006
% total population
1993 1999 2006
Objective 1 21.7 24.6 22.2
Objective 2 16.8 16.4 18.2
Objective 5b 5.0 8.8 –
Total 43.5 49.8 41.3
to improve the consistency between the list of areas
eligible for national regional aid and the list of Objec -
tive 1 and 2 regions. Many of the proposals formu -
lated in this Communication have been implemented:
•The Commission aligned the duration of the re -
gional aid maps on that of the Objective 1 and 2maps. Both lists now cover the same period,
namely 2000 to 2006.
•The criteria for eligibility under Objective 1 and
Article 87(3)(a) of the Treaty (aid to promote theeconomic development of lagging regions) wereharmonised, except for the former Objective 6 re-gions in Finland and Sweden. Some of these lowpopulation density areas were granted Objective1 status in spite of the fact that they did have a percapita GDP which was higher than 75% of the EUaverage. In order to ensure full consistency be -
tween the Objective 1 map and the regional aid
map, all low population density areas with a GDPper head exceeding 75% of the EU average havebeen granted Article 87(3)(c) status (aid to facili -
tate the development of certain economic activi -
ties or areas).•The 1997 Guidelines on national regional aid and
the new Structural Funds regulation gave Mem -
ber States greater flexibility in proposing Article
87(3)(c) and Objective 2 regions. In its Communi -
cation on the links between regional and competi -
tion policy, the Commission invited Member
States to use this flexibility to ensure greater con -
sistency between the two lists. In order to facili-
tate this process, the Guidelines provided thatareas eligible under the Structural Funds mayqualify for the Article 87(3)(c) derogation.
In effect, in relation to Objective 2, the new Structural
Funds regulation adopted by the Council did not in-clude this requirement for greater coherence with theareas which benefit from derogations under Article87(3)(c).
A comparison between the Objective 1 and 2 maps
and the regional aid maps for the period 2000 to 2006shows that the geographical coherence between thetwo has improved slightly compared to the situation inthe period 1994 to 1999 in all Member States, exceptfor Belgium (where there was perfect coherence inthe earlier period) and the UK (where, together withFinland, France, the Netherlands, Sweden and Italy,the lack of coherence remains marked) (Tables 12,
125III.2  The contribution of structural policies to economic and social cohesion: results and prospects
Table 12   Coherence between areas eligible for Structural Funds and eligible for
regional State aid
% EU population
Regions eligible for
Structural FundsRegions not eligible for
Structural FundsTotal
1994-99 2000-06 1994-99 2000-06 1994-99 2000-06
Areas eligible for
regional State aid44.0 35.6 2.7 6.7 46.7 42.3
Areas not eligible for
regional State aid6.6 5.8 46.7 51.9 53.3 57.7
Total 50.6 41.4 49.4 58.6 100 100
Period 2000-2006: estimates based on a geographical comparison at NUTS5 level
Sources: Eurostat, DG Comp, calculations DG REGIO
Table 13  Population in regions eligible for Structural Funds but not for regional
State aid
% total population in each country
B DK D EL E F IRL I L NL A P FIN S UK EU15
1994-99 0.0 0.0 5.3 0.0 8.9 9.6 0.0 7.5 6.4 10.4 5.9 0.0 12.6 8.7 9.0 6.6
2000-06 3.4 0.1 2.3 0.0 4.3 8.8 0.0 7.0 0.3 8.2 3.9 0.0 12.0 7.4 9.8 5.8
Period 2000-2006: estimates based on a geographical comparison at NUTS5 level
Sources: Eurostat, DG Comp, calculations DG REGIO
13 and, in Annex, Table A.33). The responsibility for
this rests with the Member States. This could threatenthe restructuring of problem areas eligible for Objec -
tive 2, since they might not enjoy a significantly higher
level of support than those areas not covered by theStructural Funds but entitled to State aids.
Thematic concentration:
the preponderance ofspending on infrastructure
Concentration of expenditure on particular policy ar -
eas is aimed at ensuring that the priorities defined in
the programmes reflect both the factors underlyingeconomic growth and the EU ’s political priorities.
4
There is almost universal consensus among econo -
mists on the types of action which are likely to initiate a
process of endogenous and sustainable growth.Community structural measures, however, are selec -
tive, complementary to those of Member States and
not claimed to be solutions which are generallyapplicable.
For Objective 1 regions, the priority areas from a co-
hesion perspective, there have been some changesin the distribution of the funds between the three ma-jor areas of intervention –infrastructure, human re-
sources and productive investment (Table 14).
The share of spending on infrastructure has been in-
creased for the period 2000-2006, to around 34% ofthe total (as against under 30% between 1994 and1999), half of which is for transport networks, withhigh concentration of investment in the cohesioncountries because of existing needs. If the CohesionFund is also taken into account, infrastructure repre -
sents more than 40% of total investment allocated to
Objective 1 regions.While the share of expenditure allocated to invest -
ment in human resources (around 24%) is due to de -
cline slightly, higher priority is given to active labour
market policies and to strengthening education sys -
tems (especially in Italy and Portugal).
The share of expenditure on productive investment
(around 35%) has been reduced markedly, particu -
larly in the cohesion countries and Italy, because of a
decline in direct aid to industry as stricter rules areapplied.
More specifically, Structural Funds play a major role
in supporting environmental protection, which ac -
counts for over 10% of the total allocated for Objec -
tive 1. They are also directed towards improving
access to peripheral regions and developing trainingand research activities, which are essential to the In -
formation Society and which, because of national
budget constraints, could not be fully carried out with -
out Community support. In Greece, for example, in -
vestment in major transport networks in the 7 years of
the present programming period will be 1 ½times
larger than in the preceding period.
In addition to the financial aspects, a number of quali-
tative changes are also evident in the new program-ming period, such as increased support for theinformation society and for sustainable development,two major components of present regional policy.These issues are analysed in more detail below.
Additional support for national efforts
Over the period 1989 to 1993, overall public structuralexpenditure in Objective 1 regions amounted to 1.3%of EU GDP, or to an average of EUR 92 billion. TheStructural Funds accounted for around 15% of this.Over the period 1994 to 1999, structural expenditurein these regions declined to EUR 82 billion, a reduc -
tion of 12% compared with the previous period, de -
spite an increase in spending from the Structural
Funds of EUR 2 billion a year, or of 15%. The overallreduction is explained, on the one hand, by theprivatisation of public enterprises in Italy and Portu -
gal, in particular, and, on the other, by a reduction of
almost half in German expenditure in the new L änder,
in order to bring it down to a level comparable to thatin other Member States.
126III.2  The contribution of structural policies to economic and social cohesion: results and prospects
Table 14   Structural Funds by broad
area of intervention under Objective 1
% total
1989-1993 1994-1999 2000-2006
Infrastructure 35.2 29.8 34.3
Human
resources29.6 24.5 23.9
Productive
environment33.6 41.0 34.8
Other 1.6 4.7 7.0
Source: European Commission
The scale of public expenditure in support of develop -
ment in Objective 1 regions varies considerably be -
tween Member States, though data need to be
interpreted with caution. As well as Sweden, wherespending (EUR 6,000 per head) is well above that inother Member States, Germany increased expendituresubstantially over the period 1989 to 1993 in the newLänder to EUR 41 billion, or EUR 2,500 per head, 2 ½
times the average level in the Union. In Greece andPortugal, spending was much higher in relation to theireconomic potential than elsewhere, at 5-7% of GDP,while in other Member States (Germany, Spain, Italyand Ireland), the figure was 3% of GDP or less. By con -
trast, in France, expenditure on structural measures in
Objective 1 regions in the 1994 to 1999 periodamounted to only 0.2% of GDP (EUR 2.3 billion), whichstill represented EUR 890 per head in the regions con -
cerned. The same total amount was spent in Ireland,
which meant expenditure per head over the country asa whole of EUR 650.
Member State forecasts for the period 2000 to 2006,
show a rise in average structural expenditure a yearof 9%, to around EUR 90 billion. This increase is nec-essary, if the level of public support for the catch-ing-up process in lagging region is to be maintained,though it appears to vary considerably betweenMember States. In addition to Ireland, where a pro-jected doubling of expenditure is explained by thelow level in the preceding period, an increase of 30%is expected in Greece and a rise above the EU aver-age in Italy. In Germany, the forecast is for a reductionin structural expenditure of 9% in the new L änder, for
the same reason as in the previous period.
These forecasts, however, imply an overall reduction
in structural expenditure relative to GDP over thepresent programming period, except in a few Mem -
ber States (Greece, Ireland and Italy), despite favour -
able economic prospects up to 2006.
The Cohesion Fund: improved balance
between transport and the environment
A total amount of EUR 15 billion (at 1992 prices) were
allocated by the Edinburgh European Council to theCohesion Fund for the period 1993 to 1999 for theMember States where GDP per head was below 90%of the Community average. For the period 2000 to2006, the Berlin European Council allocated EUR 18billion (at 1999 prices) to the Fund and decided thateligibility should be re-examined halfway through the
period in the light of the outturn for GDP.
In terms of the distribution of funds between areas of
investment, it should be noted that a slightly largershare of expenditure went to environment than totransport over the period 1993 to 1999, even if inGreece the transport share was a little higher (Table15). Within environment, there was a significant in -
crease in investment in waste water facilities in order
to meet the obligations imposed by Community Di -
rectives, and within transport, increased importance
was given to investment in railways.
5
The European Investment Bank:
active support for regional development
The main means by which the European Investment
Bank (EIB) assists regional development is throughloans for individual projects. These amounted to overEUR 66 billion over the period 1994 to 1999, or 77% ofthe total of such loans in the Union (Table A.34). Mostof them, 83%, went to the financing of infrastructureprojects, in transport, telecommunications and en -
ergy, which, in most cases, formed part of major net -
works of European interest, which together
accounted for around 86% of all loans forinfrastructure.
Loans for individual projects expanded by over 25%
between 1994 and 1999. The main growth, however,occurred in global loans (loans to financial institutionsfor small and medium-scale projects), whichamounted to EUR 20 billion over the period as whole,accounting for around 30% of total EIB lending, andwhich more than doubled in terms of the annualamount between the two years. These went mainly tofinancing productive activities, in industry in
127III.2  The contribution of structural policies to economic and social cohesion: results and prospects
Table 15  Cohesion Fund: resources
committed by area of intervention,1993-1999
Transport
% totalEnvironment
% totalTotal
EUR mn
Greece 51.2 48.8 2998
Spain 49.7 50.3 9251
Ireland 50.0 50.0 1495
Portugal 48.1 51.9 3005
Total 49.7 50.3 16761
Source: European Commission
particular, though also to helping to fund smaller
scale infrastructure projects.
The complementarity between global loans and
those for individual projects, which stems from the ca -
pacity to adapt to the specific characteristics of differ -
ent projects and managers in different sectors and
regions, has been a strong point in the EIB ’s ability to
support regional development.
The EIB ’s total lending for projects relating to regional
development was significantly higher in the period1994 to 1999 than in the preceding programming pe -
riod, annual loans being almost 50% greater (Table
16). Although this increase was smaller than that re -
corded by the Structural and Cohesion Funds as a
whole, it still demonstrates a growing commitment bythe Bank to projects for strengthening cohesion andregional development. The increase was mostmarked for projects in Objective 2 and 5b areas(lending rising by 71%), especially for those aimed atoffsetting industrial decline and containingunemployment.
The EIB plans to collaborate more closely with the
Commission over the period 2000 to 2006, in order tomake the most of the potential complementarity be-tween its activities and Community structural aid. Itwill, in particular, continue to support the creation anddevelopment of productive activities in the more dis-advantaged regions, not only by helping to financethese directly, but also by supporting the servicesnecessary for their development, as well as improve -
ments in infrastructure, especially those aimed atincreasing accessibility and energy supply. In addi -
tion, growing attention will be focused on the
competitiveness of firms in the context of the ‘Innova -
tion 2000 ’Initiative. Viewing regional development
more widely, the same orientation of policy will alsoapply to the candidate countries.
Assessing the effects of
Community intervention (1994-99)
The aim here is to assess the results of structural poli -
cies over the last programming period. This, how -
ever, is inevitably still a preliminary exercise since
some of measures will not be completed before theend of 2001 and the results of the
ex-post evaluations
will not be available before this date. The analysis fo -
cuses on the extent to which appropriations for Com -
munity intervention have actually been spent, the
results achieved both in total and by Objective, thevalue-added of Community initiatives and the effi-ciency of the procedures.
Budget implementation
Information on the implementation of the budget forthe period 1994 to 1999 gives an indication of theprogress achieved, even though a number ofprogrammes have not yet been completed, sincepayment can be extended up to December 2001 (seeTable A.35). Up to the end of 1999, the results appearto be satisfactory, in the sense that appropriations
128III.2  The contribution of structural policies to economic and social cohesion: results and prospects
Table 16  EIB lending, 1989-1993 and 1994-1999
1989-1993 1994-1999 Change
EUR mn %
Regional development
- total period 47.1 85.4 81.0
- annual average, of which 9.4 14.2 51.0
- Objectives 1 and 6 5.0 6.4 27.0
- Objectives 2 and 5b 3.4 5.8 71.0
Structural and Cohesion Funds
- total period 70.0 166.7 138.0
- annual average, of which 14.0 27.8 100.0
- Objectives 1 and 6 8.8 15.8 80.0
- Objectives 2 and 5b 1.7 3.7 117.0
Lending consists of signed individual loans and current global loans
Source: EIB and European Commission
amounted to 99% of total support available and pay -
ments to 75%. It is the latter, it should be noted, rather
than appropriations as such which provides a betterguide to the actual implementation of programmes onthe ground. Taking the Member States with Objective1 regions together, with almost all appropriationscommitted –as statutorily required –overall commit -
ments are in line with the growth of expenditure as
budgeted in 1994 in the Community Support Frame -
works (CSFs), Single Programming Documents
(SPDs) and related programmes. As regards the pay -
ment of appropriations, some Member States among
the main beneficiaries of the Funds (Spain, Portugal,Ireland, Germany) were well above the EU average atthe end of 1999 (78%), while France, Italy, the Nether -
lands and the UK lagged most significantly behind (at
only 67%).
The monitoring systems established in Member
States have, however, enabled start-up problemsand implementation difficulties to be identified andfollowed and the measures involved to be repro-grammed in agreement with the Member Statesconcerned.
For the other Objectives, implementation is variable.
In the case of Objective 2, a number of programmes,which were only adopted at the end of 1997 or in1998, could not be satisfactorily implemented in 1999and, as a result, overall payments were relatively low(60% of the total funds available). Moreover, some3% of total appropriations for the period (EUR 477.5million) could not be carried out and, therefore, had tobe returned to the Community Budget.
For Objectives 3 and 4, cumulative appropriations
were committed in full. Payments amounted to 80% oftotal funds available for Objective 3, but to only 69%for Objective 4, because of delays in the UK and Italyas well as the innovative nature of a number ofmeasures.
In the case of the agriculture part of Objective 5a, the
rate at which appropriations were actually imple -
mented, as reflected in payments, was below that for
other Objectives, while for the fishing part, it provedpossible to make good the delays experienced in ear -
lier years, so all appropriations were committed and
payments amounted to 73% of total funds available.For Objective 5b, there have been persistent delaysin payments in a number of Member States, due tocomplicated implementation procedures (Italy) andthe unsatisfactory functioning of regional partnership
(Belgium).
For Objective 6, which relates to only two Member
States, the situation is very different. Although totalappropriations have been committed, paymentsamounted to only 65% of the funds available in Fin -
land and 54% in Sweden, but this reflects the fact that
programmes were not adopted until 1995 when theyjoined the Union.
The above levels of payment –and, therefore, as
noted above, the actual implementation of structuralmeasures –are, in general, satisfactory, especially
for Objective 1 and Objective 3 programmes, and arebroadly in line with the rates foreseen in the provisionsfor the various types of assistance.
In the case of the Cohesion Fund, around 92% of ap -
propriations for the period 1993-99 were matched by
payments by the end of 1999. Nevertheless, the im -
plementation of projects in 1999 varied considerably
from Portugal (85%), at one extreme, to Greece(65%), at the other.
Trends in eligible regions
Analysis of trends in eligible regions reveals an en-couraging performance by Objective 1 regions as awhole, but this is less marked for Objectives 2 and 5bregions.
There was some convergence of GDP per head in
Objective 1 regions towards the EU average, thelevel, in PPS terms, in these areas taken together in -
creasing from 63% of the average in 1988 to 70% in
1998, which means that the gap was reduced by asixth (Graph 33). This, however, conceals significantdifferences between regions. Some regions havecaught up considerably, especially the new GermanLänder (where GDP per head increased from 37% of
the EU average in 1991 to 68% in 1995) and Ireland(where it rose from 64% to 102%), as well as Lisbon,Northern Ireland, Burgenland and Flevoland, whereGDP increased from below to above the threshold of75% of EU GDP over the period. Other regions haveexperienced little growth or even a decline in GDP perhead: in Greece, Central Macedonia (from 63% of theEU average to 60%), Ipeiros (unchanged at 43%),Sterea Ellada (from 72% to 64%), Peloponnese (from58% to 57%), in Italy, the Mezzogiorno as a whole
129III.2  The contribution of structural policies to economic and social cohesion: results and prospects
(from 69% to 68%) and in the UK, Merseyside (from
80% to 75%) and Highlands and Islands (from 83% to76%).
On the other hand, unemployment in Objective 1 re -
gions remains high (16.6% in 1999 as against 9.2%
for the EU as a whole), although along with the EU av -
erage rate, it has declined over the past three years
(Graph 34). In a number of regions, unemployment isstill well above the EU average, especially the Objec -
tive 1 regions in Spain (19.3% in 1999, though down
from 27% in 1994), the French DOMs (32%), Italy(22.4%) and the new German L änder (16.7%).
These high levels of unemployment go hand in hand
with low rates of labour force participation, becauseof scarce job opportunities and insufficient rates ofjob creation, even in periods of economic recovery,which means that the gap with the rest of the Union interms of employment rates (the proportion of work -
ing-age population in work) is even wider.
The level of productivity in Objective 1 regions has
changed comparatively little relative to that in the restof the EU, GDP per person employed increasing from64% of the EU average in 1988 to 67% in 1998. Never-theless, there were substantial increases in Irelandand the new German L änder.
In general, the performance of regions is closely
bound up with the general economic context in whichthey are developing. The example of Ireland demon -
strates what can be achieved with a favourable com -
bination of structural intervention and a sound and
stable macroeconomic policy.For regions in receipt of assistance under Objectives
2 and 5b over the period 1994 to 1999, in which em -
ployment was relatively dependent on industry and
agriculture, unemployment remained relatively lowand stable in the latter, while in Objective 2 areas, itdeclined by more than the EU average between 1995and 1999 (by 2.2 percentage points as against 1.3points). Even though the rate is still slightly higherthan EU average, the experience in both these andObjective 5b regions suggests that Community assis -
tance has been beneficial.
Objective 1: Catching-up and modernisationStructural support for Objective 1 regions lies at the
heart of cohesion policy in the Union. Accordingly, it isessential to assess its effects as rigorously as possible.There has been significant convergence of GDP perhead in Objective 1 regions over the past 10 years, butthis in itself does not necessarily signify that the policyhas been effective. Nevertheless, it is possible to dem -
onstrate that Community assistance has had positive
and long-lasting effects in both increasing economicgrowth and strengthening underlying structural factorswhich determine competitiveness and, therefore, fu-ture potential growth.
Macroeconomic impact: significant
effects on growth, less on employment
Structural assistance has had significant effects in
boosting economic growth in the countries and re -
gions for which analysis is possible. Over the period1994 to 1999, the gap in GDP per head has been
closed considerably in a number of countries. In
130III.2  The contribution of structural policies to economic and social cohesion: results and prospects
 
60.062.565.067.570.072.575.0
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 199860.062.565.067.570.072.575.01988-98
1994-98Index, EU15=10033 Objective 1 regions: GDP per head (PPS), 
1988-98 
02468101214161820
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 199902468101214161820
Objective 1 1989-99
Objective 1 1994-99
EU15
EU15, excl. new L änder% labour force34 Objective 1 regions: unemployment rates, 1988-99
Ireland, Portugal and Spain, annual GDP growth over
the these five years was well above the EU average(almost 1 percentage point above in the latter two and6½points above in Ireland). Investment growth was
also higher, laying the basis for growth in the longerterm.
Transfers from the Structural Funds added directly to
demand and economic activity, but more importantly,since they were concentrated on investment in bothphysical and human capital, they were aimed at in -
creasing growth potential in the medium and
long-term.
Recent evaluations of the Community Support Frame -
works (CSFs) in the last two programming periods indi -
cate that the estimated effect on growth was highest in
Greece and Portugal, where the level of GDP rose by9.9% and 8.5%, respectively, over and above whatwould have been expected in the absence of assis -
tance (Table 17). The estimates for Ireland (3.7%
higher) and Spain (3.1%) are lower, but still significant.Increased growth resulted in lower unemployment,particularly in Greece, though also in higher productiv-ity growth in the manufacturing sector.
The estimates of the ‘supply-side ’effects on growth
are of the same order as the direct effects on demandand become predominant in the longer-term as thestrengthening of productive potential boosts output.
Improvements in competitivenessAlthough structural policies are ultimately judged in
terms of their effect in narrowing regional disparitiesin GDP per head and employment, it is their impact onthe underlying factors which determine economic de -
velopment which is a prime consideration. Substan -
tial progress has been achieved in improving basicinfrastructure in weaker regions, but imbalances
persist in RTD, access to know-how, the InformationSociety and continuing training, and the quality of theenvironment. The Structural and Cohesion Fundsmake a significant contribution to correct thesedisparities.
Transport infrastructure – improving accessibilityAn efficient transport system is essential to regional
development. Investment in improving the system,however, needs to take account of the balance be -
tween different modes of transport (road versus rail)
and the potential effect on the environment.
Transport accounts for over half of total investment in
infrastructure. Investment in improving the transportnetwork in the cohesion countries and southern Italyover the period 1994-99 amounted to over EUR 40 bil -
lion, a third of which went to Spain. This was largely
concentrated on roads (around 56%), while just un -
der a quarter of expenditure went on railways (around
23%). In Spain and Ireland, roads accounted for alarger proportion of investment than elsewhere (73%and 68%, respectively) (Graphs 35 and 36, where ex-penditure includes financing from the Structural andCohesion Funds and EIB lending for regional devel-opment, and Table A.36).
This investment served to reduce disparities in trans-
port between these countries and the rest of the EUsignificantly, especially in respect of roads and thestandard of the rail network (high-speed trains, elec -
trification and double-track). As a result, accessibility
was improved through reductions in travel time, byaround 20% on average in Spain (largely through im -
proving the road network) and 70% in respect of rail
freight in Portugal (Table 18), and better links wereestablished between the least prosperous areas and
131III.2  The contribution of structural policies to economic and social cohesion: results and prospects
Table 17  Effect of Community structural intervention on GDP and unemployment,
1989-99
(% of non-intervention estimate)
Greece Ireland Portugal Spain
GDP Unemp. rate GDP Unemp. rate GDP Unemp. rate GDP Unemp. rate
1989 4.1 -3.2 2.2 -1.4 5.8 -3.6 0.8 -0.5
1993 4.1 -2.9 3.2 -1.0 7.4 -4.1 1.5 -0.8
1999 9.9 -6.2 3.7 -0.4 8.5 -4.0 3.1 -1.6
2006 7.3 -3.2 2.8 0.4 7.8 -2.8 3.4 -1.7
2010 2.4 -0.4 2.0 0.5 3.1 -0.1 1.3 -0.4
Source: ESRI, estimates based on the HERMIN model (2000)
other parts of the country and, indeed, of Europe (eg
through motorways in Spain). In addition, access toultra-peripheral areas (French DOMs) was improvedthrough the construction or upgrading of airports.
In many cases, use of the Structural Funds gave rise
to private sector investment and the establishment ofpublic-private partnerships (as, for example, in theconstruction and management of roads in Portugal,the port of Gioia Tauro in Italy and Spata airport andthe Rion-Antirion bridge in Greece). In addition, theconstruction of infrastructure financed partly with EUassistance resulted in net job creation of around900,000 persons a year (in full-time equivalent terms),mainly in Objective 1 regions.
The Cohesion Funds have made a significant contri -
bution to transport improvements through financing
projects included in national and regional economicdevelopment programmes, most of which involved aspecific assessment of the environmental impact. Asa result, they have reinforced beneficial effects of
ERDF intervention and helped to reduce regional dis -
parities further. According to a recent study (carried
out by the London School of Economics in 1997),
6
they have increased employment and private invest-ment significantly in recipient regions, with largespillover effects in neighbouring ones. The estimatedeffect of 9 projects in Spain, with a total investment ofEUR 2.5 billion, was to add around 0.6% to both GDPand employment in the medium-term (equivalent tosome 75,000 jobs).
However, the need for investment in infrastructure re-
mains. Analysis carried out for the European SpatialDevelopment Perspective indicates that while invest -
ment in peripheral regions has improved accessibil -
ity, it has been accompanied by similar investment in
neighbouring regions and more central ones (in railnetworks, for example), which can counteract any rel -
ative gain. The overall effect of such investment,
moreover, depends on what other measures are
132III.2  The contribution of structural policies to economic and social cohesion: results and prospects
 
Spain
38%
Greece
21%Ireland
11%
Portugal
23%Italy
7%36 Breakdown of expenditure on transport 
infrastructure (EUR 1994 million), 1994-99 
Air
5%
Metro
8%
Rail
24%Road
57%Ports
4%Other/Mixed 
modes 2%35 Breakdown of expenditure on transport 
infrastructure (EUR 1994 million), 1994-1999
Table 18  Estimated saving in travel time due to Structural and Cohesion Fund
investment, 1994-99
Greece Spain Ireland Portugal Italy (Obj.1)
Road 20-30% 10-20% 10-15%
(190 mn for three
main routes)20% 34%-87%
(for  5 main roads)
Rail Around 10%
(1hour 35mn
for Athens-
Thessaloniki)- 20-40% et 73%
(for freight
to Spain)14%
(increase
in speed of 10kph)
Other 50%
(Athens metro)10%
(with the UK)-
Source: Oscar and Faber, Thematic evaluation on the impact of Structural and Cohesion Funds transport (2000)
taken to stimulate economic activity in the regions
concerned.
Supporting SMEs: critical
to regional competitiveness
Supporting SMEs is a priority of EU policy since they
are a vital source of competitiveness and job cre -
ation, especially in Objective 1 regions. The Struc -
tural Funds provide support in a variety of ways,
including through services (information, training andguidance, in particular) and help in financial engi -
neering as well as through financial assistance. Over
the period 1994 to 1999, an estimated EUR 14 billion(14.5% of total funds for Objective 1) went to thesekinds of measure (see Tables A.38 and A.39). Over500,000 firms (16% of the total in eligible regions)were assisted through direct aids (over a third of total,finance) and other measures.
7
Evidence, in the form of an EU-wide evaluation,based on surveys and case-studies, suggests thatthe Structural Funds had a significant effect on SMEsover the last programming period. In the absence ofCommunity support, it is estimated that 70% of invest-ment projects would have either not taken place at all,or been smaller in scale or postponed and that assis-tance contributed to creating more than 300,000additional jobs, even after taking account of ‘dead-
weight ’and substitution effects. The evidence also
emphasises the potential of financial engineeringschemes as an intsrument of intervention, eventhough they might take a long time to be establishedin regions where financial services are weak.
EU support of SMEs has demonstrated a specific
added-value in many respects. First, it has added tothe funds available at national level. Secondly, co-fi -
nanced measures have often addressed the struc -
tural problems SMEs face, in particular, by providing
business services (eg in respect of innovation andtechnology) and introducing new practices (eg finan -
cial engineering). Thirdly, in a number of countries, it
has enabled SMEs to become an ‘instrument ’for re -
gional development and procedures for selecting
and implementing projects to be improved.
On the other hand, the evidence indicates that assis -
tance has been concentrated mainly on providing
grants rather than loans and risk capital, which mightimprove the sustainability and cost-effectiveness ofschemes. It also indicates a need to improve thetargeting of assistance, in particular, through the cre -
ation of specialist intermediaries in the private sector,
preferably organised on a decentralised ‘one-stop
shop ’basis. Experience demonstrates that these
tend to make schemes more accessible and providequicker appraisal and better delivery of SME projectsby integrating direct aid and services.
Research, Technological Development
and Innovation (RTDI): a strengtheningof regional capacity
As noted in Chapter 1, the gap in RTDI between the
most developed and the least developed regions ismuch wider than in income per head. The concentra -
tion of these activities in the more dynamic regions is
a key aspect of the ‘virtuous circle ’as regards growth,
competitiveness and employment. By contrast, lessdynamic regions have a scientific and technologicalsystem which is still afflicted by structural problems,by low RTDI expenditure; excessive concentration onGovernment research rather than on stimulating pri-vate sector demand for innovation; inadequate re-sources to maintain the existing infrastructure; strongdependence on external (Community) sources of fi-nance and excessive concentration of research ac-tivities in and around capital cities (Lisbon, Athensand Dublin).
According to an evaluation of 52 Objective 1 and 6 re-
gions for the period 1994 to 1999, structural interven-tion seems to have had beneficial effects, especiallyon infrastructure. In Greece, for example, the effectwas particularly significant in Crete, where universi -
ties and research centres were strengthened, and in
Central Macedonia, through closer cooperation be -
tween local industry (chemicals and textiles) and
Government research centres.
In broader terms, when assessing the effect of the
Structural Funds, it is important to distinguish be -
tween different types of region, defined by their po -
tential for innovation, as measured by the extent of
cooperation between research institutions and busi -
nesses. In these terms, most Objective 1 regions are
below the highest level and around a third can be de -
scribed as ‘technological deserts. ’The performance
of regions, however, is affected by the national fea -
tures of the country in which they are located as well
as by the growth rate and other factors. The positionfrom which they start affects their development path,especially as regards the weakest regions. Regional
133III.2  The contribution of structural policies to economic and social cohesion: results and prospects
differences in performance indicate that the policies
implemented have been successful in some cases(Lisbon and Ireland) and failed in others (Attiki), whileyet other regions seem to have developed independ -
ently of their innovative capacity (in particular, tourist
regions like the Canary islands) (Table 19).
At the same time, the effect in Objective 1 regions
cannot be limited to the expansion of the researchbase, even if it is natural to focus on this because ofthe scale of the technology gap. In a number of Mem -
ber States and regions, increased effort has been de -
voted to strengthening human capital by increasing
the number of qualified researchers and givinggreater importance to the establishment of networksbetween industry and universities, technology trans -
fer and support for the demands of business.
Accordingly, in Ireland, after the mid-term review, in -
creased attention was focused on company research
and development as well as on the training of re -
searchers. Co-financed measures have served to in-
crease the amount of RTD in industry significantly,more than 400 firms being assisted, many of whichhad not undertaken RTD before, and 300 firms partic-ipating in research training. Increased industrialawareness, therefore, has helped to strengthen therelationship between public research and the privatesector.
A further example is the CDTI (Centre for Industrial
Technological Development), which was set up inSpain to support technological development in firmsin Objective 1 regions by providing funds which arereimbursable if projects are successful. The 243 pro -
jects approved have involved investment in RTD of
EUR 240 million and 1,622 full-time researchers.From the 108 projects completed, around 74% of the
funds provided will be reimbursed.
Furthermore, effort still needs to be made to increase
the efficiency with which funds are used and man -
aged. The most innovative measures have frequently
been insufficiently exploited because of the relativecomplexity of the procedures for implementing them,as well as, on occasion, difficulties in finding projectsof sufficient quality to justify financing. This may havecontributed to reducing the efficiency and effect ofthe Structural Funds. In addition, there is still inade -
quate follow-up and evaluation of projects. These
problems apart, the implementation of genuinely in -
novative measures can be useful for addressing the
difficulties noted above; but they need to be based onactive partnership between public and private sec -
tors and entail an appropriate division of responsibil -
ity between the Union, Member States and regions.
8
RIS: a proactive innovation approach
The Commission has also helped to develop the inno-
vative capacity of regions through a number of pilotactions. Since 1994, 32 regions have received fundsunder Article 10 of the ERDF for developing RIS pro-jects (regional innovation strategies).
9These involve
private-public partnership and are intended as a re-sponse to the need of businesses, specifically SMEs,to innovate. Over the past 5 years, over 5000 SMEshave undergone technology audits and/or interviews.Hundreds of RDTI organisations have been con -
sulted in the process of formulating strategies and im -
plementing action plans.
RIS has produced significant results in the form of the
creation of new regional partnerships and joint work -
ing methods, the strengthening of the innovative
134III.2  The contribution of structural policies to economic and social cohesion: results and prospects
Table 19  Objective 1 regions: relationship between technological potential and growth
High ‘institutional density ’
regionsIntermediate regions ‘Technological deserts ’
Converging regions Ireland, Lisbon and Tago valley,
Norte, CreteCentro (P), Murcia,
Castilla-La-Mancha, Cantabria,
Andalucia, FlevolandAlgarve, Alentejo, Canarias,
Extremadura
Intermediate regions Central Macedonia, Hainaut,
Castilla Y Leon, Northern IrelandCorsica, Galicia , Sardegna,
Puglia, Campania, AbruzzoSouthern Aegean, Calabria,
Basilicata
Diverging regions Merseyside, Attiki Eastern Macedonia and
Thrace,Epirus, Thessaly,
Western Greece, AsturiasHighlands and Islands, Western
Macedonia, Sterea Ellas,
Peloponese, Northern Aegean,
Ionian Islands,  Sicilia, Molise
Source: CIRCA, Thematic evaluation on Research, technological development and innovation and Structural Funds in Objectives 1
and 6 regions, 1999
process and the launching of new innovation projects
within firms. For example, in Castilla y Leon, almost800 firms took part in a series of meetings to decidethe type of RIS to be implemented. A total amount ofEUR 447 million was committed for the first four yearsof implementation (1997 to 2000), increasing techno -
logical expenditure in the region from 0.8% of GDP in
1997 to 1% in 2000.
These initiatives has been succeeded by a new gen -
eration of projects, RIS+. The Commission has also
developed a database (RINNO –Regional Innovation
Observatory) to list and describe all public incentivesfor innovation in EU regions so as to encourage thetransfer of innovation.
The information society: focus on
telecommunication infrastructure
The potential of the Information Society for improving
regional competitiveness and social cohesion is re -
cognised by the Structural Funds. The rapid diffusion
of information and telecommunication technologiesopens up new development opportunities for the lessadvantaged regions, in particular, by facilitating amore efficient location of investment, given the differ-ences in costs and access to markets. Regions canalso benefit from these technologies by exploitingtheir own areas of specialisation and attracting new,higher valued-added activities. Moreover, sincethese can be located outside urban areas, they are ameans of helping to achieve more balanced develop -
ment across the EU.
The proportion of the Structural Funds devoted to in -
vestment in telecommunications is relatively small, at
only around 2% of the total spending, 1.5% on infra -
structure and 0.3% on stimulating the demand for ser -
vices and applications.
10The focus has, therefore,
been on improving the basic system and narrowingdisparities between peripheral regions and the rest ofthe Union through the digitalisation of networks andimproving the quality of service.
Technological change and the liberalisation of tele -
communication markets are driving factors towards a
more coherent and integrated approach, aimed atfurthering the development of the Information Soci -
ety, especially as most investment in the sector is
highly profitable. The Structural Funds need, there -
fore, to be focused on stimulating demand, develop -
ing new skills, raising the awareness of all thoseinvolved and implementing new high value-added
applications while giving strategic priority to regionalbalance.
11
RISI: a catalyst for regional development
Through its integrated approach, the RISI12has had a
major effect in boosting the creation of specialisedknow-how and jobs in the regions. In Nord-Pas-de-Calais it has been a catalyst for the development ofnew skills and know-how, new activities and an enter -
prise culture. This is recognised by virtually all those
involved in regional development and is reflectedin the integration of various information technologymeasures (distance-learning and training, businessdevelopment, health care, cultural activities,cyber-centres, public services, websites and trans -
port) into the regional programmes.
Human resources: helping people into work and
strengthening education and training systems
In the main countries with Objective 1 regions, struc-
tural policies have helped to strengthen active labourmarket measures, education and training systemsand the links between training and job placement.The focus has been on integrating training with othertypes of action, giving increased importance to dis-advantaged groups and targeting assistance onthese, adjusting training to the needs of the labourmarket, adopting a ‘customer-oriented ’approach
and improving the quality of training. Examples of ac -
tions include support for qualification and accredita -
tion systems, developing technical teaching in upper
secondary and higher education, improving infra -
structure, providing continuing training to teachers
and trainers and trying to reduce the rate of schooldrop-out.
Overall, the ESF has been a catalyst in modernising
education and labour market policies in differentcountries. ESF co-funded activities, and the need tocomply with the administrative requirements for re -
ceipt of funds, have helped to encourage the devel -
opment of mechanisms for the better planning of
policies, better coordination and improved relationsbetween the institutions involved. As a result, a single,standard reference framework emerged between thefund-giving agencies and the regions, which facili -
tated the dissemination of techniques for implement -
ing social and economic policy. Best practices
identified by evaluators include greater transparency
135III.2  The contribution of structural policies to economic and social cohesion: results and prospects
in policy implementation, a strengthening of the ca -
pacity to manage at local and regional level and
closer links between public policy and labour marketneeds.
In Spain, part of the added-value of the ESF was seen
as providing support for the reform of technical sec -
ondary education (by, for example, developing work
experience modules, introducing guidance and ad -
vice systems and taking responsibility for disadvan -
taged students). The rationale for ESF intervention
and the scope of this remain relevant, given that a mi -
nority of students undertake technical secondary ed -
ucation and the amount of expenditure allocated to it
is still relatively small.
In Portugal, the ESF helped improve the educational
system by widening the range of paths which stu -
dents could follow and by giving priority to quality.
The training of teachers and trainers, both in primaryand secondary education (49.3% of teachers) and atuniversity level (grants for postgraduate courses) ap-pears to be one of the major contributions of theprogramme. Widening the range of educational andtraining paths seems to have strengthened links be-tween secondary education and labour market needsand improved career guidance arrangements inschools. Indeed, the support given to the training of‘medium level ’technicians created an alternative to
traditional general education and provided skillswhich were directly applicable on the labour market.
In Italy, the ESF has enabled the quality of technical
streams to be improved, through the gradual intro -
duction of training for teachers (50% of all vocational
education teachers were covered), work experiencemodules (30% of the total length of courses) and newtraining methods and programmes.
Environment: a key role in developing
water supply infrastructure
In the case of environmental measures, the effects of
structural intervention in the cohesion countries andthe Mezzogiorno need to be distinguished from thosein other parts of the Union.
In the cohesion countries, the proportion of house -
holds connected to drinkable water supply and main
drainage is still much lower than elsewhere in the EU.This not only reduces the quality of life of the peopleconcerned, but also has a damaging effect on thepotential for economic development, and on tourism,
in particular.
Many regions in the Mediterranean suffer from a
shortage of water, especially in the Mezzogiorno,where only 26% of the population is connected todrinkable water supply throughout the year. Maindrainage is also inadequate, while in urban areas, en -
vironmental conditions are usually very poor, and not
enough is done to make people more aware of the is -
sues involved and of the need to manage the environ -
ment effectively.
These problems have adverse effects on the econ -
omy, as well as society, and conflict with the aim of
pursuing a sustainable development path. Neverthe -
less, outside large cities, and except in a few areas of
Spain and Ireland, the low level of industrial develop -
ment means that toxic gas emissions tend to be less
of a problem than generally in northern Europeancountries.
In the north of the EU –in the new German L änder, in
particular –the main problems stem from industrialis-
ation, which has left a legacy of soil contamination,pollution and urban degradation. This had a damag-ing effect on the image of many regions with tradi-tional industries and reduces their capacity to attractinvestment from outside. In rural areas –in the Nether-
lands and Ireland, in particular –however, agriculture
is a major source of pollution.
During the period 1994 to 1999, environmental invest -
ment financed from the Structural Funds amounted to
over EUR 9 billion, around 9% of the total funds forObjective 1. Over the same period, 20% of EIB loanswent to environmental projects, totalling EUR 1 billionin the cohesion countries and almost EUR 3 billionelsewhere in the Union (mainly in the UK on watertreatment projects).
In the cohesion countries, the Structural Funds
played a major role in improving water supply anddistribution systems as well as those for waste watertreatment. In Greece, the number of urban areas con -
nected to main drainage almost doubled between
1993 and 1999, increasing the population covered toover 70%. In Ireland, the proportion covered rosefrom 44% in 1991 to 80% in 1999. In Portugal, thepopulation connected to drinkable water supply rosefrom 61% in 1989 to 95% in 1999 and that connectedto main drainage from 55% in 1990 to 90% in 1999.
136III.2  The contribution of structural policies to economic and social cohesion: results and prospects
The Funds also helped to increase water supply in re -
gions with a serious shortage. In Italy, for example,
supply was expanded by over a third over the pro -
gramming period.
In the case of the Cohesion Fund, ex-post evaluation
of a representative sample of environmental projectsgenerally indicated satisfactory results, though anumber of problems were identified in respect of themanagement of water reserves. In particular, it ap -
peared often to be difficult for small-scale projects to
improve supply and become self-financing. The mostsignificant environmental benefits were identified inrespect of water supply projects, in particular thoseconcerned with better management of reserves (pro -
jects in Sevilla and Lough Mask in Ireland, for exam -
ple). In areas severely affected by drought,
moreover, water loss was considerably reduced in anumber of cases.
Beyond the immediate effects on the quality of life, es -
pecially of those living in the less developed parts of
the Union, the investment has also given rise to widerbenefits:
•significant progress in the extent of compliance
with Community directives: for example, in 1999,Ireland attained the standards imposed by the di-rective on drinking water;
•a reduction in potential constraints on the devel-
opment of agriculture, industry and tourism;
•growing awareness of the need for integrated en -
vironmental policies (Greece).
The areas in which it was possible to verify that im -
provements had been made –and much remains to
be done –consist mainly of municipal waste treat -
ment, the designation and management of protected
natural areas, the implementation of specific meansfor controlling air pollution (Greece) and the degrada -
tion of rivers, from intensification of agricultural activ -
ity (Ireland) and from a low level of water flow in
industrial areas (Portugal).
Objective 2: strategic progress, but a limited
leverage effect from Community support
For Objective 2 regions, quantitative evaluation is
more difficult, though it is possible, for specific mea -
sures, to identify the leverage effect of Communityintervention. It is evident that the authorities in Mem -
ber States responsible for structural policies regard
eligibility for assistance from the Structural Funds asbeing much more important than simply the addi -
tional finance that it provides, since it opens the way
for them to give national support to activities in the re -
gions concerned and to obtain loans from the EIB.
The volume of State regional aids is, therefore, largerthan transfers from the Structural Funds, while thescale of EIB loans is expanding significantly.
The increase in regional partnerships made it possi -
ble to redirect Community funds towards productive
investment and measures aimed directly at employ -
ment creation. Around half of structural assistance
was spent directly or indirectly on support of the pro -
ductive sector, and in particular SMEs (Graph 37).
During the last programming period (1997 to 1999),
employment became more visible as an objectiveboth in the formulation of policies and in the quantifi -
cation of results. However, despite progress made,
evaluation of the employment effects carried out inthe Member States is still not fully comparable be-cause of differences in coverage and methods of cal-culation as well as in the nature of the interventionitself. For example, the number of jobs created ormaintained per million Euros invested varies approxi-mately from 13 to 57 for the period 1994 to 1996 andfrom 17 to 68 for 1997 to 1999 (see Table A.42).
A number of estimations carried out, particularly in
the UK SPDs, indicate that the real effects ofprogrammes on employment are reduced signifi -
cantly if account is taken of ‘deadweight ’effects (ie
137III.2  The contribution of structural policies to economic and social cohesion: results and prospects
 
05101520253035404550
Physical
regeneration &
environmentHuman
resourcesProductive
environmentTechnical
assistance and
other051015202530354045501989-93
1994-96
1997-99% total37 Distribution of Structural Funds by broad 
target area in Objective 2 regions, 1989-93, 1994-96 and 1997-99
the effects which would have taken place even in the
absence of intervention) and ‘substitution ’effects
(when jobs created are at the expense of existingones). This means, for example, that if these effectsamount to 30%, three out of every ten Euros spenthave no net effect on employment.
Less assistance went to infrastructure than in the
past, while programmes to create alternative activi -
ties and to strengthen the productive environment in
areas with serious problems of restructuring gave riseto uneven results, even if in some cases a real recov -
ery in their economic potential seems to have
occurred.
Technology transfer centres, adapted to the needs of
local business, have been set up to disseminateknow-how to SMEs, as in some French areas under -
going restructuring, such as Aquitaine, where these
centres are likely to have long-term effects on theirbehaviour and capacity to adjust to change.
The environment is an increasing cause for concern
in most regions, which has led to a wide range of pro-tection and improvement measures, including clean-ing up industrial wastelands but also, as in the case ofthe most innovative programmes (in Berlin, SouthWales and East Midlands in the UK) changing pro-duction methods, the transfer of know-how, trainingand the adoption of clean technologies.
In addition to strategic advances in programming,
Community intervention has had beneficial effectsthrough the delivery system adopted, which, over thedecade, progressively improved.
13These include the
creation of active and diversified partnership, theadoption of more rigorous means of selecting pro -
jects and the establishment of computerised monitor -
ing systems. The effectiveness of programmes,
however, was often limited, because, in particular, ofthe relative dispersion of the funds over small andfragmented areas.
Objective 3: improved targeting of
the young and the long-term unemployed
The influence of Community action in helping young
people, the long-term unemployed and those at riskof social exclusion to enter the labour market is limitedby the relatively small scale of expenditure comparedwith national spending on employment measures.This means that national priorities have tended todetermine the focus of programmes. In addition, the
broad scope of activities covered by Objective 3 hasmade it difficult to concentrate Community supportsolely on targeted measures.
According to the evaluations carried out,
14ESF mea -
sures had two kinds of effect, according to whether
they were addressed to direct beneficiaries (ie peo -
ple) or systems (changes in public intervention).
In the case of transfers to direct beneficiaries, the ESF
helped to improve the employability of those in re -
ceipt, as measured by placement rates, or the pro -
portion who subsequently found a job. In the case of
other kinds of measure not directly targeted at em -
ployment, the indicators used include the proportion
of participants obtaining a qualification or having aspell of work experience. Over the period 1994 to1999, overall placement rates have increased, re -
flecting above all improved labour market conditions.
Placement rates ranging from 30% to 80% are re -
ported by evaluators, depending on the country, the
target group and the type of measure. Where therewas a causal link between participation in a co-fi-nanced measure and finding a job, 25-50% of place-ments seem to be directly attributable to the ESF.
The effectiveness of co-financed measures appears
to increase when they are concentrated on groupswith the greatest difficulty of finding employment. Par-ticipation in active labour market measures, there-fore, seems significantly to raise the chances of theunemployed in older age groups (in the Netherlandsand the UK), the long-term unemployed (in Ireland)and those with relatively few qualifications (in Italy) toobtain a job, while it appears to have only a marginaleffect in respect of the young. The results also vali -
dated the programme guidelines on ‘pathways to in -
tegration ’, which emphasise the importance of
following a ‘pathway ’approach to helping people find
employment. Measures combining training with ad -
vice, support and work experience, accordingly,
seem to have more effect on employment than thosenot doing so. Support for employment appears tohave a particularly large effect. Increasing the in -
volvement of the most disadvantaged groups in ESF
measures, therefore, could potentially both help toachieve greater social cohesion and improve theoverall effectiveness of the Structural Funds.
In the UK, evaluation showed that the most efficient
measures are employment subsidies and job-search
138III.2  The contribution of structural policies to economic and social cohesion: results and prospects
assistance. Analysis of those completing integrated
programmes suggested that the largest net effectwas on older men, whose chances of finding a jobwas increased by most. Although an integrated ap -
proach is more costly, it is justified by its greater
effectiveness.
In the Netherlands, placement rates were generally
high because of favourable labour market conditions.The net effect of ESF measures, however was gener -
ally relatively small, except for the most disadvan -
taged participants, for whom placement rates were
highest. The net placement rate in respect of trainingprogrammes was 33% for the least qualified and 25%for those over 40, while for others it was virtually zeroon average.
In Italy, the placement rate of those who had com -
pleted a training programme was 51% as against
28% for a control group who had not followed such aprogramme, a difference of 23 percentage points,which, moreover, was increased to 43 percentagepoints once the different characteristics of the twogroups were taken into account. Indeed, participa-tion in a training programme seems to be the most im-portant factor determining a person ’s chances of
finding employment (according to regression analy-sis), ahead of the sex of the person (men being morelikely to find a job than women) and the level ofeducation.
Targeting assistance on the most vulnerable groups
has generally remained relatively limited in respect ofObjective 3: beneficiary groups in ESF programmeswere characterised by a high proportion of young, therelatively highly qualified and those unemployed forless than a year, with disproportionately more menthan women.
Countries can be divided into two groups. The first
consists of those with large areas covered by Objec -
tive 1, where Objective 3 programmes aimed at com -
bating social exclusion accounted for less than 10%
of total ESF funding. The second group includes otherMember States, in which the figure was between 20%and 30%. In the first group, measures tended to betargeted on specific groups, such as people with dis -
abilities and ethnic minorities, in the second, exclu -
sion was more broadly defined and more general
integration policies were funded.Overall, the ESF continued mainly to finance training
measures over the period 1994 to 1999. The pro -
gramming, however, allowed for some diversification,
to include employment support, enterprise training,counselling and job search guidance, and measureswithin the education system to ease the transitionfrom education to employment.
Evaluators stressed the qualitative improvement in
systems and the ESF contribution to innovative poli -
cies. Although small in financial terms, Objective 3
has helped diversify policies for tackling unemploy -
ment. In some Member States, innovation was an ex -
plicit objective of programmes, through developing
partnerships. The Objective 3 evaluation for Finland,for example, found that the ESF helped develop thecapacity for local and regional cooperation, target thegroups who were hardest to reach and strengthen in -
dividualised approaches to the provision of support.
In other countries, the ‘pathway to employment ’ap-
proach sought to generalise the principle of an inte -
grated approach across all employment policies.
Finally, it has been possible, by supporting specificgroups, to include people who are usually excludedfrom the ambit of policy.
Objective 4: concentration
on the training needs of SMEs
During the period 1994 to 1999, Objective 4
programmes, which were aimed at helping workerscope with industrial change, were altered signifi -
cantly, as the underlying principles were re-inter -
preted and co-financed policies were modified.
Absorption problems, which were evident between
1994 and 1996, were overcome in the subsequentperiod, through a softening of the selection criteriaand the application of less stringent requirements forco-financing in terms of the target group or type oftraining.
There are two groups targeted by Objective 4 mea -
sures, SMEs and workers at risk of job loss. Substan -
tial efforts were made over the period to increase
concentration on SMEs, but within these, training wasmainly addressed to managers and highly-qualifiedworkers, rather than those with the highest risk of be -
coming unemployed.
139III.2  The contribution of structural policies to economic and social cohesion: results and prospects
Evaluation of programmes has identified three types
of effect –on firms, on employees and on training
systems.
In the case of firms, the main effect was on changing
attitudes towards continuing training and the kind ofschemes carried out, in terms of the amount of train -
ing given, its quality, nature and relevance to indus -
trial change as well as the number of employees
covered.
In the case of employees, the effects were examined
in terms of job improvement (or reduced risk of redun -
dancy) and employability, as reflected in more and/or
higher qualifications. At this stage, however, few eval -
uations have been completed because of the delay in
the launch of Objective 4 and, consequently, the sig -
nificant number of projects which are still ongoing.
Those available suggest, in some cases, that firmsbenefited more than employees and, in others, thatbenefits were divided between greater competitive -
ness of firms and improved qualifications of some
categories of employees.
The ESF also had an important effect in improving
training systems, through structuring the continuingtraining offered, widening the provision of continuingtraining in SMEs and encouraging the developmentof better systems of labour market analysis
Although Objective 4 as such has not been included
in the 2000 to 2006 period, several of the underlyingprinciples have been incorporated as part of the pri -
ority given to lifelong learning in the new Objective 3,
such as the inclusion of preventative measures intraining programmes, the need to focus on employ -
ees at risk and mobilisation of SMEs.
Objective 5a and 5b: agricultural
structures and rural development
Community policy on rural development emerged in
the mid-1980s from two broad concerns –a desire, on
the one hand, to reduce regional disparities and im -
prove cohesion across the Union by supporting dis -
advantaged areas and, on the other, to limit the
negative effects on rural areas of the reform of theCAP. The policy consisted mainly of an attempt tosupport the economic activities carried out in theweakest areas, which necessitated formulating aprior analysis of the factors underlying developmentand of the processes which need to be set in motion,so as to identify both the weaknesses and potential
strengths of particular regions. Such an analysis isessential to the formulation of a policy which buildsupon local potential.
The factors determining the economic growth of rural
areas are both many and wide-ranging: the endow -
ment of factors of production and the comparative
advantage which these imply, the distance to mainmarkets, the potential for economies of scale and ag -
glomeration, the capacity for organisation and inno -
vation, and the availability of support services and
infrastructure. Both the measures adopted and thenetwork of actors involved in their implementationneed to be flexible enough to respond to local needs,since there is no guarantee that measures carried outaccording to a sectoral or individual logic will becoherent.
Unfortunately, regions sometimes opted for the easi -
est approach, pursuing measures which were insuffi -
ciently targeted or simply continuing with those
already in place, failing to strengthen the means ofcoordinating the activities of the different entities in-volved or tailor measures to local conditions. A num-ber of French regions reduced the application ofcertain measures on a territorial basis, and madethem components of overall programmes.
In Objective 5b areas, unemployment has risen mar-
ginally since 1995, but it is still much lower than theEU average. There is some evidence of net employ -
ment growth in manufacturing industries dominated
by SMEs, especially –but not only –those linked to
the rural economy, as well as in other sectors. Signifi -
cant diversification of economic activity away from
agriculture is underway, which was the main objec -
tive of the policy.
Measures to improve infrastructure (eg sanitation,
electrification, drinking water) and services (livingconditions, above all) have generally been success -
ful, though the recipients of support have typically
been local authorities, for which the matching na -
tional contribution has not posed a difficulty. On the
other hand, involving the private sector and private fi -
nance has proved more difficult, possibly because of
the lack of a framework for potential investors, and, insome regions, a weak structure of local organisation(in terms of, for example, support networks or interac -
tion between groups) or uncertain economic pros -
pects. Rural areas, with sparse population and
140III.2  The contribution of structural policies to economic and social cohesion: results and prospects
access difficulties, can find it more difficult than cities
to achieve a sufficient level of demand or offer the fullrange of services needed to compete at the Euro -
pean level.
Under-performance is, in some cases, explained by
the measures adopted not being tailored to localneeds or by the availability of more favourable finan -
cial support under other public programmes.
15It is
also clear that existing firms benefited more from in -
tervention than newly-created ones.
Environmental considerations are included in re -
gional development strategies to varying degrees,
the scale of measures adopted being linked to therichness of the natural and physical heritage to pro -
tect and the seriousness of any environmental degra -
dation suffered. Policies in this area, however, are
complicated by the involvement of a range of inter -
ested parties concerned with differing policy
priorities.
While there were few projects aimed at protecting
flora and fauna or exploiting the natural heritage fortourism, there was a relatively large number of pro-jects for managing household –and in come cases in-
dustrial –waste. In the case of tourism, financial
initiatives have been dispersed and the evaluationssuggest that in future they should be organisedaround centres and networks of activity.
Similarly, the work involved in the renovation of vil -
lages, an item included in most programmes, could
be carried out in a more rational way, the heritage (interms of buildings, culture and architecture) betterexploited and the projects better integrated with tour -
ist activities.
FIFG: restructuring the fishing sectorThe Financial Instrument for Fisheries Guidance
(FIFG), with a budget of EUR 2.6 billion over the pe -
riod 1994 to 1999, was responsible for funding the fol -
lowing types of activity: reduction in the fishing fleet
and its modernisation (50% of the budget), process -
ing and marketing of products (25%), the develop -
ment of fish farming (10%), the development of
fishing ports (7%), product promotion (3%) and socialand economic measures (subsidies for ceasing ac -
tivity, support for early retirement) (5%). This expendi -
ture was carried out in part under Objective 5a, but for
the most part under Objective 1.With the inclusion of the FIFG in the Structural Funds
in 1994, economic and social cohesion became oneof the major concerns of fisheries policy. Over theprogramming period, the cohesion countries were al -
located 56% of all FIFG funds, 42% going to Spain, by
far the largest recipient.
Substantial reductions in the fishing fleet were
achieved, especially in Portugal and Spain (Table20), Community support for these activities exceed -
ing that for construction and modernisation by 60%
and for construction alone by 2-2 ½times (taking ac -
count of capacity as well as the number of ships).
The‘mixed ’enterprises established with third coun -
tries enabled fishing capacity to be exported and
jobs to be maintained or created in areas dependenton fishing (ADFs). By the end of 1998, 152 projectshad been undertaken and these were directly re -
sponsible for 2,400 jobs being maintained or created
and indirectly for another 3,000, mainly in Spain andPortugal (which accounted for 55% and 22% of theprojects, respectively).
The processing of products was the driving force be-
hind this and is the second most important area ofFIFG intervention (accounting for a planned EUR 610million). The modernisation of the industry has beensupported by substantial FIFG investment in techno-logically innovative firms, improvement of sanitaryconditions and the development of certain products.Moreover, there has been strong interest in measuresof this kind from potential recipients of support and bythe end of 1997, 12 of the 31 projects had been repro -
grammed in this direction. FIFG support has helped
to limit the employment losses associated with re -
structuring (see also section II.11 in the present re -
port). By the end of 1997, after only 3 years of FIFG
support, the projects financed had created 1,200jobs in 6 Member States (Denmark, Germany, Spain,Ireland, Finland and the UK), 350 of these in Ireland,
141III.2  The contribution of structural policies to economic and social cohesion: results and prospects
Table 20  Effects of FIFG measures,
1994-99
FIFG
payments
(EUR mn)National
payments
(EUR mn)No. of
ships
(projects)Change in
power
of fleet
(kW)
Adjustment(withdrawal)481 267 4090 - 700,000
Construction 191 50 1820 + 270,000
Modernisation 103 32 6830 -
220 in Northern Ireland and 50 in Scotland, and pre -
vented another 360 from being lost (250 of these in
Spain). By end-1998, 2,870 projects had beenlaunched, 760 of them in Spain.
Although only 10% of the FIFG budget was allocated
to fish farming over the Union as a whole, the figurewas markedly higher in some countries (30% in Ire -
land, 24% in Greece). Initially, it proved difficult to in -
terest many of the potential participants in such
programmes, because of low fish prices and the strictenvironmental standards applied in project selection.Nevertheless, FIFG support has helped to develop aproductive structure and to assist a recovery in em -
ployment in the sector, especially in the Objective 1
regions (see elsewhere in this report). By the end of1998, 2,580 projects has been established, 550 ofthem in Spain and 150 in Greece.
The Structural Funds other than the FIFG –the ERDF
and the ESF, in particular –financed port develop -
ment projects and fishery research, as well as voca -
tional training in Objective 1 regions.
Objective 6: improving accessibility
and job creation
The accession of Finland and Sweden to the EU in
1995 significantly enlarged the land area and intro-duced a new type of sparsely populated region –the
new Objective 6 –with extremely low population den-
sity, peripheral location, a general tendency for popu -
lation to decline, small markets and long distances
between towns and villages.
Evaluations show that the strategic choices made in
the Objective 6 programmes strongly reflected Com -
munity priorities and that favourable results were
achieved in terms of employment creation in particu -
lar, where the targets set were met in the regions con -
cerned in both countries. These were to increase the
number of jobs in private services and manufacturingby 17,500 in Finland and by 9,500 in Sweden.
Community Initiatives: institutional
rather than economic value-added
The rationale for Community Initiatives, in general, is
to tackle the problems or issues facing the EU as awhole, which can best be addressed through coordi -
nated action between Member States. They are com -
plementary to other programmes co-financed by theStructural Funds and negotiated on a regional or na -
tional basis. Between 1994 and 1999, there were 13
such Initiatives, with a Community contribution ofnearly EUR 14 billion, representing around 9% of theentire Structural Funds allocation.
Community Initiatives cover a diverse range of
themes, but have certain features in common. Fouraspects, in particular, contribute to their added-valueas compared with other Structural Funds measures:
•they encourage transnational, cross-border and
interregional cooperation;
•they increase involvement of people on the
ground (because of their ‘bottom-up ’approach);
•they stimulate innovation and the incorporation of
the lessons learnt into regional, national and Eu -
ropean policies;
•they help to diversify economic activity in areas
affected by declining industries.
Transnational, cross-border and
interregional cooperation
Transnational cooperation has been a feature of
most Community Initiatives (Adapt, Employment,INTERREG II, Leader, Peace, Pesca, Regis II, SMEs),the aim being to promote the concept of national, re -
gional, local and sectoral partners working together
with their counterparts in other Member States. Underthe Employment and Adapt Initiatives, for example,all projects involved participants from more than oneMember State, while INTERREG entailed cooperationbetween regions in different countries.
While the benefits are difficult to quantify, those who
have participated in transnational exchanges tend toacquire a greater appreciation of the European Unionand of other societies and cultures. In institutionalterms, added-value is evident in the sustainable Eu -
ropean networks which have been established and
which will continue the exchange of experience andtransfer of best practice in the future, a form of coop -
eration which would be unlikely to develop to the
same extent without Community support.
Leader, Pesca, Regis and SMEs emphasised the ex -
change of good practice and the establishment of
142III.2  The contribution of structural policies to economic and social cohesion: results and prospects
networks between Member States. Leader promoted
networks and more formal transnational cooperationthrough its European Observatory. The SMEs Initia -
tive had a fund of EUR 25 million to finance three
types of transnational activity: tourism and the in -
ternet, international buyers ’exhibitions and the ex -
change of experience and good practice under the
Reacte project.
Cross-border cooperation is concerned with the de -
velopment of local and regional economies which
share common borders. INTERREG II has promotedeconomic and social cooperation between regionsparticularly disadvantaged because of their borderlocation and has also helped the applicant countriesto prepare for accession through cooperationprogrammes with EU regions, many of them involvingthe transfer of know-how. Cross-border cooperationwas also a major feature of the special Peaceprogramme, agreed in 1994 to support the peaceprocess in Northern Ireland, through assisting pro -
jects operating across the border with the South, as
well as those aimed at encouraging reconciliation be-tween the two communities in the province.
The mid term evaluations of INTERREG II indicate
different levels of cooperation:
•At its most basic, cross-border cooperation in-
volves the enhancement of physical links,whether in the form of roads, rail, sea ports or air-ports. Such projects have predominated inINTERREG II programmes in the southern Mem -
ber States (Spain and Portugal, in particular), but
a lack of real involvement by local and regionalauthorities was noted in the evaluations.
•More intensive cooperation is evident in the de -
velopment of networks and partnerships between
organisations and institutions situated relativelyclose to each other, but which, since they areseparated by a border, focus on other parts oftheir region or country instead. Mid-term evalua -
tions of INTERREG II programmes between
France, Belgium, the Netherlands and Germanyshow cooperation becoming more intensive be -
tween INTERREG I (1992 to 1995) and
INTERREG II (1995 to 2001).
•The Scandinavian countries have a long history of
cooperation and INTERREG II has built on this byforging even stronger links in certain areas ofregional policy, while also extending
programmes to include the applicant countries.The mid-term evaluation of INTERREG IIA be -
tween Denmark and Sweden ( Öresund) identi -
fied the development of new networks, the
promotion of new initiatives and improved part -
nership as major benefits from the programme. It
concluded that it had created a ‘neutral platform ’
for the development of cooperation between Co -
penhagen and Malm ö. According to the evalua -
tion of the INTERREG IIC Baltic Sea programme,
cooperation with the accession countries hasbeen hampered by the different funding mecha -
nisms and procedures involved in INTERREG,
PHARE and TACIS, and these issues need to beaddressed in the 2000 to 2006 period.
On the basis of these evaluations, a Commission Re -
port on INTERREG (January 2000) concluded that
border regions, particularly in southern Europe oftenlack experience of cooperation. Centralised adminis -
trative bodies inadequate acquaintance with each
other and a lack of mutual trust make the creation oflasting cross border institutions difficult, as in thecase of efforts at cooperation generally. As a result,the involvement of local and regional entities and ofthe social partners remains limited, and in somecases projects have not been genuinelycross-border.
So far as human resource development is concerned,
the EU-wide evaluations of Employment and Adaptfound problems in the establishment of transnationalpartnership between projects, especially in the earlyphases. Problems identified included responding todifferent selection criteria and time scales in differentMember States and the difficulty of finding partnerswith projects which had a sufficiently common sub -
ject matter to make working together meaningful.
These findings, which are equally relevant forINTERREG and other Community Initiatives, under -
line the need for greater efforts to develop the basis
for transnational and cross-border cooperation in thefuture.
Area-based or ‘bottom-up’ approachSeveral of the Community Initiatives focus explicitly
on local areas, in recognition of the fact that nationalor regional responses are sometimes too generalisedto tackle the particular needs of a locality and thatthose who live and work there are often best placed to
143III.2  The contribution of structural policies to economic and social cohesion: results and prospects
develop appropriate measures. INTERREG II, Leader
and Urban all followed this area-based approach,which led to capacity building, greater local auton -
omy and enhanced targeting of action, as well as a
greater ability to concentrate on areas of particularneed. The latter is a particularly valuable aspect of theUrban Initiative, which puts emphasis on involvingresidents in decisions on the design and develop -
ment of programmes.
Both Urban and Leader also emphasise the need for
integrated responses to area-based problems. Ur -
ban covers a wide range of projects combining re -
newal of obsolete infrastructure with measures
designed to stimulate the economy and employment.Leader, whose acronym refers to ‘links between ac -
tions for the development of the rural economy, ’ex-
plicitly attempts to ensure that measures and
projects, whether in the same sector or different sec -
tors, are properly coordinated and integrated. At its
most effective, this means adopting a comprehensiveview of intervention, involving all the relevant aspects(economic, social, cultural and environmental) andendeavouring to implement as many multi-sectoralmeasures as possible.
Sometimes termed a ‘bottom-up approach, ’this is
one of the most important aspects of the added valueof the Community Initiatives and has been incorpo-rated into mainstream programmes for the 2000 to2006 period, in the increased emphasis on local de-velopment in the Structural Funds regulations. It hasalso been strengthened as a key feature of the fournew Community Initiatives.
Innovation and mainstreamingThe support of innovative approaches, often devel -
oped on a transnational basis, was at the heart of sev -
eral of the Community Initiatives (Adapt,
Employment, Leader, SMEs), which encouraged thedesign of new approaches and the testing of their im -
plementation. The EU-wide evaluation of Employ -
ment (2000) identified three different forms of
innovation, process-oriented, goal-oriented and con -
text-oriented, and found that all three were an aspect
of most projects, with a particular emphasis on pro -
cess-oriented innovation, while the development of
new ‘pathways to integration ’was a theme running
through many projects. The Adapt evaluation (2000)concluded that most projects were innovative ‘to
some degree, ’but few were ‘highly innovative. ’Bothevaluations recommended that future Initiatives
should predefine areas and forms of innovation at theoutset.
Linked to innovation is the concept of
‘mainstreaming, ’or the notion that the lessons learnt
from the Community Initiatives should feed into re -
gional, national or European policies as appropriate.
This was a particular priority for the human resourceInitiatives, Employment and Adapt, as well as Leaderand some of the sectoral Community Initiatives. Theevaluation of Employment identified two forms ofmainstreaming:
•dissemination, where the project itself communi -
cates the results through documentation, semi -
nars, meetings and websites, usually to other
projects;
•transfer, where the project engages with pol -
icy-makers at different levels to provide a means
of feeding the results into regional, national andEuropean policies.
The evaluation of Adapt found more evidence of hori-
zontal than vertical mainstreaming, which is poten-tially more important but also more difficult to achieve.The strategies for bringing this about were generallyweak in Member States, reflecting the complexity ofthe process of transferring experience gainedthrough bottom-up action to national policy and un-derlining the need to develop appropriate mecha -
nisms in the Initiatives and mainstream programmes
in the 2000 to 2006 period.
DiversificationA group of Community Initiatives was aimed at sup -
porting diversification in areas with an over-reliance
on particular industries in decline, specifically, thedefence industry, fishing, coal mining, the steel in -
dustry and textiles in the case of Konver, Pesca,
Rechar II, Resider II and Retex, respectively, whileLeader and Regis II had a similar aim. The timeframefor most of these Initiatives was limited in order to in -
duce timely responses to the particular problems
concerned.
More generally, many of the Community Initiatives
have led to those living in areas where projects havebeen implemented developing a clearer understand -
ing of the concept of ‘Europe ’, as they see tangible
144III.2  The contribution of structural policies to economic and social cohesion: results and prospects
benefits from the projects supported and possibly
come into contact with people in other parts of the EU.Through the Initiatives, they have, therefore, gained agreater awareness of the Structural Funds and of themeaning of economic and social cohesion. This con -
trasts with many mainstream measures supported by
the Structural Funds, for which, according to the eval -
uations carried out, people usually do not know that
the EU is a major source of finance.
While the Community Initiatives appear to have had
significant positive effects in the 1994 to 1999 period,evaluations have highlighted a number of deficien -
cies. Chief among them is the large number of Initia -
tives with overlapping aims and separate systems of
administration. From the standpoint of local, regionaland national authorities, as well as the Commission, aclearer and more streamlined approach would en -
hance effectiveness.
Added-value of Community regional policyThe value added of Community involvement in re-
gional development is not only related to the expendi-ture incurred as such. Benefits also stem from themethod of implementation developed in the 1988 re-form of the Structural Funds, which was revised ineach subsequent programming period. Some as-pects of the method were discussed in the first Cohe-sion Report and so the focus here is on key elementsof the 1994 to 1999 period.
Programming: a more strategic approach
but with over-complex procedures
Programming and management based on partner -
ship are cornerstones of the 1988 reform of the Struc -
tural Funds. The extent to which administrative
authorities have adapted to this has varied markedlybetween Objectives, countries and regions.
In Objective 1 regions, the programme-based ap -
proach adopted made it possible to learn from expe -
rience, which benefited those responsible for
implementing measures on the ground.
Given the broad range of measures involved and ad -
ministrative weaknesses –often a major factor behind
lagging economic development –in many cases, the
process proved to be difficult and failed to producethe expected results.In Objective 2 and 5b areas, the methods were assim -
ilated more quickly, although some authorities ex -
pressed concern about the burden imposed in
relation to the resources allocated. In the case of Ob -
jective 3 and 4 measures, according to some Mem -
ber States, these were more difficult to plan because
the need for them depended on labour market condi -
tions which were determined exogenously.
Finally, Objective 5a measures remained outside the
programming process, because transfers continuedto be based on reimbursing Member States for part ofthe expenditure incurred under existing support sys -
tems (apart from measures for the processing and
marketing of agricultural, forestry and fisheryproducts).
The multi-annual planning process encouraged par -
ticipants to adopt a ‘strategic ’approach, resulting in
better selection and greater coherence of co-fi -
nanced projects. This change, however, has not yet
produced all the results expected because there wasoften a failure to quantify programme objectives suffi-ciently and, therefore, some difficulty in evaluatingthem with any precision.
During the mid-term review of Objective 1 and 6
programmes, the Commission called for greater sup-port of measures for increasing employment andthere is concrete evidence of the willingness to ad-dress this issue: in Spain, Greece and, most espe-cially, Italy, territorial employment pacts, for example,were integrated into general programmes.
16
Nevertheless, it should also be noted that approvalprocedures for Community Support Frameworks, forprogrammes and their modification have oftenproved excessively onerous in administrative terms,particularly for smaller programmes, which is hard tojustify from an efficiency perspective.
The simplification that has already been put into prac -
tice and the application of the new regulations should
allow greater flexibility in implementing procedures.
Partnership: an important aspect
but still limited in practice
Partnership is the key to the implementation of struc -
tural policies, the aim being to ensure that all those in -
volved in the preparation, implementation and
evaluation of Community measures cooperate
145III.2  The contribution of structural policies to economic and social cohesion: results and prospects
effectively. The application of the principle requires a
clear definition of the respective tasks of each partnerand the deployment of appropriate methods and in -
struments. The partnership approach has to balance
the limits of coordination, the adoption of a global vi -
sion and the potential economies of scale realisable
at a central level against the best understanding of lo -
cal needs and the synergy and complementarity that
can be achieved at a decentralised level.
The principle has been developed over the years in
different ways:
•a range of vertical partnerships involving local
and regional participants has been established toimplement regional programmes;
•the social partners have been involved in human
resource programmes and measures;
•cross-border cooperation programmes have en-
abled new structures of partnership to be estab-lished to the benefit of peripheral regions in theUnion;
•innovative policies for local and rural develop-
ment, the territorial employment pacts, in particu-lar, have given rise to ‘micro-partnerships ’,
according a major role to those involved at the lo-cal level;
•other forms, such as informal, horizontal and
transnational partnerships for exchanging expe -
rience between cities, regions and rural areas, of -
ten in different countries, have recently begun to
be created.
These different forms of partnership have become a
permanent means of exchanging information andexperience.
The implementation of the Structural Funds, more -
over, has pushed regions to define objectives and to
use their financial resources effectively. According toa recent evaluation,
17the introduction of the partner -
ship approach has encouraged the priorities of all the
participants as a whole to be considered and recon -
ciled, so resulting in more coherent policies, as well
as the identification of a set of objectives which isshared by all those involved.The monitoring committees have proved to be effec -
tive means of agreeing on how to tackle problems
and how best to modify programmes in this regard,even in Member States where decentralisation isleast developed, because a pragmatic approach hasenabled regional actors to be involved in the monitor -
ing process.
The decentralisation of responsibility for implementa -
tion, however, has highlighted the technical and man -
agerial limitations of regional and local authorities. In
some Member States, there were serious delays inundertaking programmes managed at the regionallevel as compared with those managed centrally, ne -
cessitating significant budget reallocations. In this re -
gard, Member States have not made sufficient use of
the technical assistance, which should have accom -
panied decentralisation and enabled some of the
problems encountered to be resolved.
In spite of Commission efforts, the participation of the
social partners in the planning and monitoring ofprogrammes was often unsatisfactory. They were notwell represented on monitoring committees (exceptin respect of Objectives 3 and 4) and were not keptfully informed of developments.
Finally, experience indicates that there has been
some confusion of roles and responsibilities in the or-ganisation of tasks in cases where programmes werejointly managed, which suggests that responsibilityneeds to be defined in a more efficient and transpar -
ent way.
Management and financial flows: complex
and often poorly transparent systems
Financial management systems were tried out during
the first programming period and were then reformedwith the aim of increasing flexibility.
Because of the cooperation between the Member
States and the Commission and the vigilence of theCourt of Auditors, there were relatively few cases ofirregularity and fraud.
Nevertheless, the financial system governing the dis -
bursement of Community funds in the Member States
is often complex and varies between the differentsources of funding. As a result, there were oftenlengthy delays in making payments in respect ofmany programmes, creating uncertainty among
146III.2  The contribution of structural policies to economic and social cohesion: results and prospects
recipients and so reducing their economic impact. In -
deed, even though delays may not actually have
occured, the possibility was enough to make it diffi -
cult for those concerned to plan ahead.
The mid-term evaluations emphasised that the finan -
cial system in place made it difficult to apply the co-fi -
nancing principle in a transparent way and that most
Member States regarded Community support as re -
imbursement of expenditure already incurred.
The improvement of financial arrangements is one of
the keys to improving the effectiveness of Communityaction.
Monitoring and evaluation: significant
advances need to be consolidated
Two main factors stimulated the development of mon -
itoring and evaluation from 1988 on. On the one hand,
the new regulations encouraged Member States todo more in this respect, while, on the other, becauseof budgetary constraints, they became increasinglyconcerned to ensure the efficient implementation ofprogrammes.
Since 1994, a series of measures has been intro-
duced by the Commission to improve monitoring andevaluation procedures. In the first place, data on so-cial and economic disparities between regions havebeen improved to make it easier to analyse progressin reducing them. Secondly, specialised evaluationunits were established in the Commission to coordi -
nate evaluation activities. Thirdly, the MEANS
programme (Methods for evaluating action of a struc -
tural nature) was launched with the aim of creating a
‘culture of evaluation ’across the Union and facilitat -
ing exchange of experience between Member
States.
For their part, Member States –in the south of the Un -
ion as well as the north –have progressively devel -
oped more effective monitoring systems, which, in
the best cases, were based on quantified objectives,well-defined indicators and better information. Na -
tional authorities, therefore, have increasingly estab -
lished a more effective structure of evaluation with
coherent guidelines, while regional authorities havein many cases set up their own evaluation systems inresponse.While the benefits of an effective monitoring and eval -
uation system are widely recognised –for improving
policy-making and transparency as well as for theirown sake –the systems in place are not used in prac -
tice as fully and effectively as they might be. They are
often not comprehensive and, in many cases, theyare limited to financial indicators, which means thatthe evaluations carried out cannot be fully integratedinto the decision-making process.
Leverage effects: an unbalanced
mix of loans and subsidies
Support from the Structural Funds has been crucial to
economic development in Member States withrelatively limited budgets. It increased the level ofinvestment possible and so gave an added impetusto growth, which in turn enabled private capital tobe mobilised. Over the 1994 to 1999 period, thisleverage effect was reinforced through a strengthen -
ing of the link between structural transfers and loans.
In Greece, for example, around 29% of the financefor the overall investment undertaken came fromprivate capital, though the figure was lower inmany other parts of the Union. To maximise the in-vestment achieved in the future will require loans andtransfers to be combined in a way which is both judi-cious and manages public financial resourceseffectively.
Outlook for the new programming
period, 2000-2006
The new programming period opens up new chal -
lenges. It should be possible to achieve renewed
progress towards convergence and higher rates ofgrowth in the less prosperous parts of the Union be -
cause of a more favourable outlook for the EU econ -
omy as a whole and a more efficient combination of
Member State and Community structural policies.This will not happen to the fullest extent possible un -
less investment is allocated to priority areas where
the impact is greatest. Moreover, the effectiveness ofintervention is heavily dependent on respecting theimplementation and management conditions whichhave been jointly established with the MemberStates.
The two main conclusions to be drawn from model
simulations of economic developments over the new
147III.2  The contribution of structural policies to economic and social cohesion: results and prospects
programming period are, first, that structural policies
can create the conditions for higher economic growthwithout increased inflation and, second, that throughthis, they can increase employment and, therefore,reduce structural unemployment (see Box).
Coherence of national and
Community priorities
Strategic guidelines19for the 2000 to 2006 period
have been adopted to achieve an optimal and moretargeted use of Community resources. Priorities andstrategic objectives have been established by the
Member States after consultation with theCommission.
Ex-ante evaluations initiated by Member States
helped, in most cases, improve the coherence andquality of plans, notably by relating priorities and ob -
jectives more closely to the analysis of social and
economic problems. The Commission, moreover, en -
couraged Member States to concentrate more re -
sources on priorities and high-impact measures,
making Community intervention more visible andefficient.
148III.2  The contribution of structural policies to economic and social cohesion: results and prospects
Convergence, cohesion and growth: impact of CSFs in 2000-2006
As for the preceding period, the macroeconomic ef -
fects of the Community Support Frameworks have been
assessed using several different econometric models(Table A.43). The simulations
18were carried out for total
(public) expenditure (Structural Funds plus nationalco-financing), which are assumed to cease after 2006 inorder to identify the supply-side effects on the recipienteconomies .
Using the Hermin model, the estimated effect is to in -
crease real GDP in 2006 by around 6% in Greece and
Portugal and by 2.4% in Spain as compared with the sit -
uation without intervention. The effect is relatively mod -
est in Ireland (1.8%), where the Structural Funds only
account for under 10% of total public expenditure.
The CSF will increase investment by much more, espe -
cially in Portugal (by 23%) and Greece (14%), which will
add to effective demand via multiplier effects and, overtime, also tend to increase productivity, through im -
proved infrastructure and human capital as well as the
use of more modern, and therefore efficient, plant andequipment. The effect on employment is likely to be sig-nificant, but will tend to decline after 2006, because ofhigher productivity.
Inflation is likely to be increased to varying extents. In
Greece, average prices are estimated to be pushed upby most (4%), though the inflation rate will then decline.In Ireland, the investment foreseen in the National De-velopment Plan could raise inflation at the beginning ofthe period because of very tight labour market condi -
tions and pressure on the construction industry. The
CSF, however, adds very little to the pressure on pricesand any effects are unlikely to extend beyond 2006.In general, the QUEST II model suggests that the effects
will be more modest in Spain, Ireland, Portugal andGreece, especially on GDP, than estimated by othermodels, largely because of the inclusion of ‘agents ’ex-
pectations ’, or the effect of anticipatory behaviour,
which tends to lead to interest rates and the exchangerate adjusting to offset some of the expansion ininvestment.
The principal effect is higher growth, which is estimated
to continue beyond the programming period as a resultof investment strengthening the supply-side, or the pro -
ductive potential of the economy. The added growth in
GDP averages between 1-1.5% a year for Greece andPortugal, 0.8% for Spain and 0.5% for Ireland. The rela -
tively small multiplier in Ireland and Portugal reflects the
openness of the two economies, which means that alarge part of the increased demand goes to imports, aswell as the assumed ‘crowding-out ’effects on the pri -
vate sector of higher public investment.
Significant effects are also estimated for other large
Member States which are major recipients of structuralassistance. The first analysis of the macroeconomic ef-fects in the new German L änder, using the Hermin
model, suggests an increase in GDP of 4% during theprogramming period, and 1.5% after, and added in-vestment of around 6%. In addition, productivity is likelyto be boosted in manufacturing.
In the Mezzogiorno, the second largest recipient of
Structural Funds assistance, models developed by theItalian authorities suggest growth above the EU aver -
age by 2004, while other models estimate that this is
likely only by the end of the programming period, andthen only if there were radical changes in economic be -
haviour and the efficiency of public investment.
Under Objective 1, the Community guidelines imply a
significant adaptation of regional development strat -
egies over the programming period.
Transport: towards a better balanceTransport is a major priority in the new programming
period (accounting for around 19% of the StructuralFunds allocation –Table A.36 in Annex). The balance
between different modes of transport has beenshifted towards rail from road. For example, under theCSF in Portugal, the number of passengers travellingby rail is planned to increase by 600,000 in 7 years(from 3.8 to 4.4 million a year), as well as the metro linkbetween Lisbon and the airport being completed.The plan envisages a doubling of investment in rail interms of Euros per head (from EUR 193.6 in 1996 toEUR 373 in 2006), while spending on road improve -
ments will remain unchanged.
Under the CSF in Greece, at least 650 km of double-
track railway lines are planned to be electrified in or-der to complete the trans-European Network by 2006and new metro lines will be constructed inThessaloniki and Athens, signalling a shift towardsmore environmentally friendly forms of transport. Indue course, 26% of journeys in Athens will be madeby metro.
In Objective 1 regions in Spain, new high-speed train
routes are planned, doubling the length of track from623 km to 1140 km in 2006.
In Germany, very few infrastructure projects were fi -
nanced in the previous period, other than those
aimed at supporting productive activity, such asroads linking industrial sites or ports. Over the 2000 to2006 period, in contrast, investment of EUR 1.5 billionis planned for German Objective 1 regions, around athird on rail projects.
Upgrading road and motorway networks, neverthe -
less, remains a priority in the cohesion countries,
given their present state and the need to make up de -
ficiencies in respect of the trans-European networks.
The need to ensure sustainable development was al -
ready a priority during the previous programming pe -
riod, all infrastructure and transport projects being
subject to environmental assessment. The orientationof the CSF for the present period makes clear that thiswill be continued, as reflected in the choice ofstrategic objectives, such as limiting cross-city traffic,
the extension of public transport and the constructionof high-speed rail links.
Reduction in direct support for firmsA marked reduction is planned in the share of trans -
fers going to direct support of firms, particularly in the
cohesion countries and Italy, as a result of stricterregulation of state aids and the recognition of the sig -
nificance of deadweight losses from these. Ireland is
the most extreme case, with the Structural Funds pro -
viding no direct aid to industry (except for research
and innovation programmes). In Italy, the national aidscheme to support industry (Law 488) has been re -
vised to tailor assistance better to the specific sec -
toral and territorial features of firms in the
Mezzogiorno.
Increased efforts to promote
innovation and human capital
Total funds allocated to research, technological de-
velopment and innovation (RTDI) are planned to re-main unchanged, at around 3.5% of total StructuralFunds expenditure, except in Italy and Ireland, wherethe shares have risen to 8% and 10%, respectively.This, however, conceals a relative decline in invest-ment in infrastructure and research projects and ashift towards a more open approach to innovationand collaboration between research institutes andindustry.
In the Member States where the RTDI shortfall is
greatest, a shift in the orientation of policy is most evi -
dent, in the form of:
•improved links between RTD and the needs of
firms, through measures to transfer innovationand technology; this could lead, for example, toan increase in private RTD in Spain (to 45% of thetotal in 2006 as against 35% in 2000);
•an increase of employment in the RTD sectors, of
40% in Greece, and to 0.5% of the total in Portugaland Objective 1 regions in Spain;
•increased involvement in international networks
(a 50% increase in scientific publications withPortuguese involvement, for example).
149III.2  The contribution of structural policies to economic and social cohesion: results and prospects
The Information Society: a strategic
reorientation towards demand
Investment in telecommunications will be substan -
tially reduced in the new programming period, due to
privatisation and competition between providers.Most effort is aimed at services and applications insupport of SMEs (e-commerce) and the public sector(health and education), which represents a signifi -
cant change in regional policy. Accordingly, the
Structural Funds are making a major contribution tothe development of an e-Europe. Support of telecom -
munication infrastructure is generally limited to the
most isolated areas, where the return does not justifyprivate investment. Member States have set relativelyambitious targets under their CSFs, including:
•providing Internet access for schools (the propor -
tion of schools in Greece connected to the
Internet increasing from 5% in 2000 to 100% in2006) and the population at large (the proportionconnected in Spain being planned to rise from5% in 1998 to 25% in 2006);
•a wider spread of electronic commerce in SMEs
(to 15% of SMEs in Greece in 2006 from 1% in2000).
Human resources: link to the
European Employment Strategy
Investment in human resources plays a strategic role
in Community policies for economic and social cohe -
sion, accounting for 30% of the Structural Funds in the
new programming period, the same as in the previ -
ous one. The objectives are twofold: to help realise
the human resource potential of the Union and socontribute to economic development in MemberStates and regions and to allow everyone equal ac -
cess to the labour market. The European Employment
Strategy has encouraged policies on employment,the labour market and the fight against social exclu -
sion to be integrated and the new programmes have
a similar aim together with that of promoting policyconvergence across the EU.
Over the next 6 years, the ESF will provide around
EUR 60 billion to support the European EmploymentStrategy (EES), in addition to Member States ’own fi -
nancing of labour market policies, a contribution of
some 9% to total expenditure in this area. Other Struc -
tural Funds will also play an important role insupporting the EES, but the ESF is the main financial
means at the EU level of pursuing the strategy.
The programmes for 2000 to 2006 reveal a strong link
between the ESF and the EES, most obviously in thegreater focus on the preventive action, in the form ofsupport for those most at risk of becoming long-termunemployed. In addition, future ESF programmes willhave a firmer commitment to gender equality, socialinclusion and wider access to information and com -
munication technologies to combat what might be
termed ‘the digital divide ’. In most Member States, the
ESF has been extended beyond a narrow focus ontraining to wider support of measures designed to im -
prove the effectiveness and responsiveness of labour
market policy. For some countries, the ESF ‘policy
frame of reference ’
20has also provided a useful basis
for securing a coherent approach to the various poli -
cies under the three Objectives of the Structural
Funds and to the various groups involved.
A preliminary review of the ESF support for Objectives
1 and 321under the 4 pillars of the EES indicates that
between 2000 and 2006:
•around 60% of funds will go towards improving
the employability of the work force, to co-financ-ing active labour market policies and measures topromote social inclusion and support lifelonglearning. Objective 1 regions, in particular, willuse ESF support to modernise their public em-ployment services to improve the functioning oflabour markets;
•some 12% of funds will go to support the develop -
ment of entrepreneurial skills, helping business
start-ups and establishing networks of entrepre -
neurs to help maximise the benefits of support;
•around 20% of funds will go to supporting adapt -
ability in the workplace, much of it to promoting
continuing training of the work force. There willalso be a sharper focus on the specific needs ofSMEs than previously;
•around 6% of funds will go to supporting equal
opportunities for women, the fourth pillar of theEES, much of it to helping the development of ef -
fective child-care measures. ESF support for
equal opportunities, however, will far exceed thisfigure.
150III.2  The contribution of structural policies to economic and social cohesion: results and prospects
Greater integration of environmental aspects
The environment is increasingly recognised as a key
aspect of cohesion policy. In line with the AmsterdamTreaty, the Commission guidelines emphasise the im -
portance of incorporating the concept of sustainable
development in the new structural programmes. Thenew regulation explicitly includes a requirement tocarry out an environmental evaluation, which in -
cludes an environmental impact assessment, compli -
ance with Community legislation on the environment
and the involvement of environmental authorities inthe preparation and implementation of programmes.
Member States and regions are becoming increas -
ingly proactive in both the conception and implemen -
tation of environmental aspects in regional
development programmes, including carrying out
ex-ante evaluations of the situation in eligible regions
and of the impact of proposed measures and estab -
lishing appropriate criteria for follow-up.
More generally, the Structural Funds seem increas-
ingly to provide a favourable means of implementingEU environmental policy. For example, respect of theHABITAT directives, concerning the protection of nat-ural sites, was set as an essential condition for ac-cepting plans and programmes.
Taking account of equal opportunitiesSecuring equality of opportunity between men and
women has been given new emphasis by its inclusionas one of the Community tasks set out in the Treaty ofAmsterdam. The regulations for the Structural Fundsfor 2000 to 2006 reflect this by stipulating that thereshould be a greater consideration of equal opportuni -
ties in all policies and at all stages.
In the 1994 to 1999 period, equal opportunities were
mostly addressed through pilot projects orring-fenced allocations for positive action and, ingeneral, they were viewed as an issue for the ESFalone.
The 1999 regulation explicitly requires
ex-ante evalu -
ation of this dimension in all plans and Single Pro -
gramming Documents (SPDs). While the appraisals
carried out by Member States were variable in quality,the fact that they were carried out at all represents animportant first step. The evaluations undertaken inFinland, Germany and Wales are examples of goodpractice, while Italy has developed an innovative ap -
proach to examining direct and indirect benefits on
men and women.
Contribution of EAGGF Guarantee to
rural development policy
Twenty-seven different measures were co-financed
by the EAGGF Guarantee as part of its contribution torural development policy. On the basis of theprogrammes approved up to now by the Commis -
sion, the allocation from this fund go, in the main, to
measures which are directly linked to the agriculturalsector (see Table A.44). Less than 7% of allocationsgo on measures for economic diversification outsideagriculture.
Improving efficiency and
the evolution of instruments
The new regulations impose a programming system
organised by Objective as before, but in a simplifiedand more flexible form, with stricter controls onadditionality, more inclusive and responsible partner-ship and greater focus upon results.
Simplified and decentralised programmingIn the new programming period, negotiations have al-
ready taken place and, in most cases, agreementreached on the CSF, SPDs and OperationalProgrammes (OPs) for Objectives 1, 2 and 3, theguidelines have been adopted and the CommunityInitiatives (INTERREG III, Urban II, Equal, Leader II)and the new generation of innovative measures havebeen launched.
22
In line with the new rules, the number of programmeshas been greatly reduced, to around 400, from 1134in the previous period (including 524 Community Ini -
tiatives). In the few cases –mainly in Spain –where
programmes were separated by Fund, the authoritiesestablished an integrated multi-fund OP or SPD, al -
lowing positive synergy between the measures
envisaged.
Once the operational programmes have been ap -
proved by the Commission, Member States will pre -
pare complementary information, containing details
of the measures, while leaving scope for more flexiblemanagement without infringing the regulations laid
151III.2  The contribution of structural policies to economic and social cohesion: results and prospects
down, notably in terms of quantifiable objectives and
indicators for monitoring.
Additionality: a means of increasing effectivenessSince 1989, the application of the additionality princi -
ple commits Member States to maintaining at least
the same level of public expenditure on structuralmeasures –excluding the EU contribution (Table
A.45). The principle was defined in 1993 and the 1999reform simplified the procedures for verification.There are, however, exceptions, such as economiccircumstances or exceptionally high expenditure inthe past, which allow Member State to reduceexpenditure.
Additionality is assessed in respect of expenditure
under each Objective. For the 2000 to 2006 period,the procedure has been simplified in two ways:
•for Objectives 2 and 3, additionality is jointly veri -
fied on the basis of active labour market expendi-
ture across each Member States as a whole;
•verification is carried out only three times, before
adoption of programmes (
ex-ante ), at the
mid-point, and towards the end of the program-ming period.
Towards inclusive and responsible partnershipPartnership has progressively been widened in suc -
cessive programming periods, from the inclusion of
regional and local authorities in 1989 to 1993, and ofthe social partners in 1994 to 1999, to the planned in -
clusion of representatives from various groups (such
as non-governmental organisation, or the equal op -
portunities movement) in 2000 to 2006.
This widening reflects the efficiency gains achieved
in the last two programming periods (Table 21).The preparation of the new CSF highlighted the in -
creased awareness of the roles of the various partici -
pants in the programming phase. In Italy, the
authorities set up a broad consultative framework,bringing together local representatives (regional,provincial, communal), central Government Ministers(for employment, agriculture, environment and equalopportunities) and representatives from employers ’
organisations, trade unions and non-governmentalorganisations. This led to the production of interim re -
ports, which formed the basis of the development
plan for the Mezzogiorno. Such a broad structure ofpartnership and the need to consult with all memberscan, however, give rise to delays in the decision-mak -
ing process.
In the 2000 to 2006 period, responsibility for manage -
ment has been determined according to the princi -
ples of decentralisation and subsidiarity. The
counterpart to this is the need to improve transpar -
ency, especially for financial management, control of
specific measures and project selection procedures.It is important to establish new procedures for sharinginformation to ensure that each participant can oper-ate effectively and exercise their responsibility. Inparticular:
•responsibilities need to be defined and divided
between those involved in the programming,those managing the measures and those payingfor them;
•information networks need to be set up to collect
and transmit data for monitoring;
•the responsibility of all those involved needs to be
increased to improve transparency of financialflows;
152III.2  The contribution of structural policies to economic and social cohesion: results and prospects
Table 21  Programming of Structural Funds: the experience
Process Phase 1 (1989-93) Phase 2 (1994-99) Phase 3 (2000-06)
Preparation of plans Exclusive Reactive Interactive
Strategic guidance Passive Embryonic More active
Management Split by Fund and
organisationIntegration/
fragmentationResponsabilities/
transparency
Partnership Exclusive Semi-exclusive Inclusive
Monitoring and evaluation Non-systematic Systematic Integral
•scope for initiative needs to be widened to im -
prove operational efficiency and simplify
procedures.
Partnership and decentralisation (the corollary of the
former) are the basic principles underlying a new ap -
proach to structural policy, which is more in line with
the need for a new form of governance , in place of tra -
ditional management, to conceive and implement the
programmes in question.
Management focusing on resultsThe new regulations emphasise the importance of
monitoring and evaluation to increase the effective -
ness of structural policies.
The aim of the Commission and the Member States
is to ensure effective monitoring by defining quan -
titative objectives and appropriate indicators in re -
spect of approved programmes. The indicators are
intended to measure the impact of the programme,both directly (the infrastructure constructed, theamount of training provided and so on) and indi-rectly (the gains in efficiency, for example) as wellas the wider economic and social effects (such ason employment).
23Electronic information systems
for the collection and processing of the relevantdata are increasingly being established in MemberStates.
The new regulations provide for financial manage -
ment procedures which are simpler, but more rig -
orous, with Member States taking primary
responsibility for controlling expenditure, a taskthey will need to perform more strictly than before.In particular, a provision has been introduced forsuspending a project automatically if the funds al -
located are not absorbed within two years.
Regular and reliable evaluation of intervention can
be regarded as evidence of transparency and effi -
ciency. Substantial progress has been made in this
regard, especially in Member States where therewas not much of an evaluation culture. On the onehand, the managing authorities have an essentialresponsibility for organising intermediate evalua -
tions and the (proactive) use of the results. On the
other, the Commission is responsible for
ex-post
evaluations, identifying the results achieved anddrawing lessons for the future.The introduction of the ‘performance reserve ’adds
a new dimension to evaluation by giving an incen -
tive to achieve the objectives set beforehand for
each measure. Even though the Commission ’s
more demanding proposal was not accepted (to al -
locate 10% of funds to the reserve), Member States
will, nevertheless, have to assign 4% of total Com -
munity funds (around EUR 5 billion) to programmes
according to certain criteria, linked to the effi -
ciency of financial management and their effec -
tiveness. In implementing this provision, however,
account will need to be taken of administrative andinstitutional features of Member States.
The Commission has played an important role in
establishing these new arrangements, through dis -
cussions and by defining the methodological
guidelines. Though demanding and difficult to im -
plement, a system of management by results has
become necessary to improve the transparencyand effectiveness of policy.
Preparing for enlargement:
pre-accession support
Up until 1999, Community intervention in candidate
countries was financed by the PHARE programme, inthe case of the ten countries in Central Europe, andby the funds allocated to southern and eastern Medi -
terranean countries, in the case of Cyprus and Malta.
Since the beginning of 2000, the funds for the formergroup have been increased through the creation oftwo new instruments, the Instrument for StructuralPolicies for Pre-Accession (ISPA), in preparation forthe Cohesion Fund, and the Special AccessionProgramme for Agriculture and Rural Development(SAPARD).
In 2000-2006, PHARE is providing some EUR 11 bil -
lion of co-financing support for institution-building,
through ‘twinning ’and technical assistance, as well
as for investment to help applicant countries in theirefforts:
•to strengthen their public administration and insti -
tutions so that they can function effectively inside
the Union;
153III.2  The contribution of structural policies to economic and social cohesion: results and prospects
•to promote convergence with the European Com -
munity ’s extensive legislation and reduce the
need for transition periods;
•to further economic and social cohesion.
The‘PHARE 2000 Review-Strengthening prepara -
tions for Membership ’, approved by the Commis -
sion in October, 2000,24assessed whether
PHARE ’s guidelines, as introduced in 1997, and
updated in 1999, still meet candidate countries ’
needs and whether any further refinements are re -
quired.
It takes into account the new context arising from
the adoption of Agenda 2000 at the Berlin Euro -
pean Council, including the increase in the PHARE
budget, and the progress achieved in the acces -
sion negotiations with the ten countries which are
eligible for PHARE assistance from 2000.
The review concluded that PHARE ’s current guide-
lines continue to address the main needs of the ap-plicant countries. Accession-led programming ofPHARE should continue, based on Accession Part-nerships, National programmes for the adoption ofthe
acquis , regular reports and the negotiations
process. PHARE ’s primary objective must remain
institution building and promoting convergencewith the Community ’s
acquis communautaire ,d i -
rectly helping the countries to comply with the po -
litical, economic and acquis communautaire
criteria set by the Copenhagen Council in 1993.
But the review identified two challenges for PHARE
in the period 2000-2006:
1) Delivering on the past reforms .There should be a
period of relative stability to consolidate the pastreforms and to ensure their full benefit is ob -
tained. In addition, some of the 1997 reforms
must be refined to respond to the constructivecriticisms of the Court of Auditors and EuropeanParliament. Moreover, efforts to increase the ab -
sorption capacity in the applicant countries must
be further emphasised.
2) Moving to the Structural Funds. The aim is to de -
vote about half the investment element of PHARE
within national programmes to this objective,which is to:a) prepare for the implementation of Structural
Funds in candidate countries by putting inplace the necessary administrative and bud -
getary structures;
b) allow these countries to benefit from a first
generation of integrated regional develop -
ment programmes of an Objective 1 type, so
contributing to their economic and social co -
hesion.
The PHARE-INTERREG programmeSince 1995, following a European Parliament initia -
tive, PHARE, jointly with INTERREG, has also
154III.2  The contribution of structural policies to economic and social cohesion: results and prospects
PHARE’s history – 1989 to 2000
The PHARE programme is one of the three pre-ac -
cession instruments financed by the European
Communities to assist the applicant countries ofCentral Europe in their preparation for joining theEuropean Union.
The PHARE programme has been providing sup -
port to the countries of Central Europe since 1989,
helping them through a period of massive economicrestructuring and political change. Following the1993 Copenhagen Council ’s invitation to Central
European countries to apply for membership,PHARE support was reoriented and support for in -
frastructure investment was expanded markedly.
However, PHARE ’s‘pre-accession ’focus was put in
place only in 1997 in response to the LuxembourgEuropean Council ’s launching of the present en -
largement process. PHARE funds now focus en -
tirely on the pre-accession priorities highlighted in
each country ’s Accession Partnership. Civil ser -
vants from Member States are now seconded
through ‘twinning ’to assist their counterparts in pre-
paring for accession. In addition, PHARE ’s manage-
ment was integrated into the structure ofgovernment in applicant countries through the cre-ation of the National Fund and a small number of im-plementing agencies.
These basic orientations were adjusted in 1999 to
reflect the launch of SAPARD for agriculture and ru-ral development and of ISPA for transport and envi -
ronment infrastructure. The principal adjustment
was to redirect PHARE ’s funds to adressing the
problem of economic and social cohesion.
financed cooperation programmes between border
regions of the EU and the candidate countries, andbetween the candidate countries themselves, afterthe revision of the PHARE-CBC regulation in 1998.
On the basis of the new PHARE CBC Regulation and
the new INTERREG guidelines, a Single Program -
ming Document, covering regions on both sides of
the border and including joint cooperation prioritiesfor the 2000-2006 period has been prepared for eacheligible border.
Further improvements towards better aligning
PHARE-CBC and INTERREG were included in theabove mentioned Communication, notably to allowPHARE-CBC to support projects similar in size tothose under INTERREG (through a new ‘mea-
sure-by-measure ’approach to finance projects be -
tween EUR 50,000 and EUR 2 million from 2001).
SAPARDSAPARD, with an annual budget of EUR 520 million,
finances structural measures for agriculture, the pro-cessing and marketing of products and rural devel-opment (Table A.46).
By decentralising management, this programme will
give the future Members States an opportunity to gainvaluable experience in applying procedures for man-aging rural development programmes. On a broaderfront, the investment made at present will build skillswhich will be readily transferable to other StructuralFund activities and to other areas of Community pol -
icy. It should, however, be emphasised that SAPARD
can only make a limited contribution to meeting thechallenges in rural areas.
ISPAISPA, with a budget of EUR 1,040 million a year, is
aimed at enabling the candidate countries to meetCommunity environmental standards and at the con -
struction of trans-European transport networks. Prior -
ity has been given, in the case of the environment, to
drinking water supply, waste water treatment, wastemanagement and reducing air pollution, in the caseof transport, to projects which are environmen -
tally-friendly and of wider Community interest, which
accord with the priorities established by the Ministers ’
Conferences in Helsinki and Crete.
Budgetary impact on cohesionThe area of intervention of these three pre-accession
instruments is similar to that of the Structural and Co-hesion Funds. In particular, the funds allocated underPHARE to ‘institution-building ’go to a special
programme for preparing countries for managing theStructural Funds, while ISPA and SAPARD performthe same task in respect of the Cohesion Fund andthe structural part of the EAGGF. The projects fi-nanced are similar to those eligible for support fromthe Structural and Cohesion Funds in Member States.
155III.2  The contribution of structural policies to economic and social cohesion: results and prospects
Table 22  Annual breakdown of pre-accession funding, 2000-2006
EUR mn at 1999 prices
PHARE SAPARD ISPA Total
Minimum Maximum Minimum Maximum
Bulgaria 100.0 52.1 83.2 124.8 235.3 276.9
Czech Rep. 79.0 22.1 57.2 83.2 158.3 184.3
Estonia 24.0 12.1 20.8 36.4 56.9 72.5
Hungary 96.0 38.1 72.8 104.0 206.9 238.1
Latvia 30.0 21.8 36.4 57.2 88.2 109.0
Lithuania 42.0 29.8 41.6 62.4 113.4 134.2
Poland 398.0 168.7 312.0 384.8 878.7 951.5
Romania 242.0 150.6 208.0 270.4 600.6 663.0
Slovakia 49.0 18.3 36.4 57.2 103.7 124.5
Slovenia 25.0 6.3 10.4 20.8 41.7 52.1
Total 1085.0 520.0 1040.0 2645.0
PHARE total annual budget is EUR 1,577 million
Source: European Commission
The amounts committed represent a significant pro -
portion of the current investment by public authorities
in the countries concerned (Table 22).
Cyprus and MaltaCyprus and Malta have been associated with the Un -
ion since 1972-73 and have been in receipt of Com -
munity assistance under four successive financial
agreements. These were replaced in December 1999by a single pre-accession instrument with a budget ofEUR 95 million for the period 2000 to 2004.
In the current phase of pre-accession, more aid has
been made available than on previous such occa -
sions, with the aim of accelerating the adoption of the
acquis communautaire . Despite being small, the
funds committed are a means of helping countriesprepare for the implementation of cohesion policies,required to reduce the significant regional disparitieswhich exist.
156III.2  The contribution of structural policies to economic and social cohesion: results and prospects
1 Commission Decision of 1st July 1999.2 Eligibility criteria defined by Article 4 of the General Regulation 1260/99.3 Commission Communication to the Member States on regional policy and competition policy: strengthening their concentration and
their coherence, OJEC C90 26.03.98.
4 European Commission, ‘Structural and Cohesion Funds, Guidelines for programmes in the period 2000-2006 ’, COM (1999) 344 final
5 European Commission, Report on the Cohesion Fund (1999).6 London School of Economics, The socio-economic impact of projects financed by the Cohesion Fund, 1999.7 Over a third of SMEs in the Union (around 18 million) are located in areas eligible for Structural Funds assistance, of which 3 million
are in Objective 1 regions.
8 COM (1998)275, ‘Renforcer la coh ésion et la comp étitivitépar la recherche, le d éveloppement technologique et l ’innovation ’,
Communication of the Commission 12.06.1998.
9 RITTS (Regional strategies for innovation and technology transfer) have been financed under the Innovation Programme of the 4th
Framework Programme.
10 COM (97) 7, ‘Economic and social cohesion and the information society ’, Commission Communication.
11 European Commission, ‘From telecommunications to the information society: evaluation criteria for the 2000-2006 programmes ’,
Technical Document n °2, 1999.
12 RISI (Regional information Society Initiatives) were financed under Article 10 of the ERDF and Article 6 of the ESF.13 European Policies Research Centre (EPRC), ‘Objective 2: Experiences, lessons and policy implications ’, July 1999.
14 European Commission, ‘Conclusions of ESF final evaluations, 1999 ’.
15 ENESAD, ‘Synthesis of intermediate evaluations of Objective 5b in France ’, April 1998.
16 European Commission, ‘Mid-term review of Objective 1 and 6 programmes – Better management through evaluation ’, 1997.
17 Tavistock Institute, ‘Thematic evaluation of the partnership principle ’, 1999.
18 For Quest II: R öger, W. (1996) ‘Macroeconomic evaluation of the effects of CSF with Quest II ’(paper presented at the European
Conference on evaluation methods for Structural Funds intervention, Berlin 2-3 Dec. 1996). For Hermin: Bradley, J. (2000) ‘The
impact of CSF on objective 1 countries –1989-2006 ’(study for the Regional Policy DG of the European Commission). The detailed
results are presented in the Annex.
19 European Commission, ‘The Structural Funds and their coordination with the Cohesion Funds –Guidelines for the 2000-2006
programmes ’, COM (1999) 344 Final.
20 A document which sets out the context for support for employment and human resources development in each Member State.21 At the time of drafting full details on Objective 2 programmes were not available.22 The Commission has announced priorities for the four Initiatives and has decided the allocation of the overall amount (EUR 10.44
billion or 5.3% of the total Structural Funds) between Member States.
23 European Commission, ‘Indicators for monitoring and evaluation ’, Working Document n °3, 1999.
24 C(2000)3103.
157Regional features in Turkey
Regional features in Turkey
Since the Helsinki summit, Turkey has become the 13th
candidate country for accession to the EU.
Regional disparitiesAccording to OECD data, GDP per head in terms of PPS
is only 33.4% of the EU average. Indeed, the differencein relation to the EU seems to have persisted for manyyears at around this level, going back at least to the be -
ginning of the 1950s, higher GDP growth than in the EU
being offset by high population growth. Regional dis -
parities are associated with significant differences in
geographical features and climatic conditions, thoughthey also have their roots in the substantial migrationflows which occurred during the troubled times at theend of the 19th century and first half of the 20th.
The data available on GDP per head by province, of
which there are 80 and which have been aggregatedinto 19 regions of approximately NUTS 2 size, illustratethe scale of disparities in 1997:
between east and west: two-thirds of the population
were concentrated in the west of the country in halfthe land area, accounting for 82% of national GDP,and with GDP per head 23% above the national aver-age (41% of the EU average). In the east, GDP perhead was 53% of the national average, much thesame as 10 years earlier;
between coastal and inland regions: GDP per head in
the four coastal regions as a whole accounting for55% of the population is 26% above the national aver -
age;
in two regions (Istanbul and Izmit), GDP per head was
substantially above the national average (53% and70% higher, respectively), or around half the EU aver -
age;
in 7 regions (Aegean Sea, the southern coastal areas,
Ankara), GDP per head was up to 50% above the na -
tional average, or between a third and a half of the EU
average;
in 7 regions (around Anatolia, the Black Sea coastal
areas), the level was between half and 100% of thenational average, between 20% and 33% of the EUaverage;
in the remaining three regions, in eastern Anatolia, the
level was between 20% and 50% of the national aver -age, or only 7% to 16% of the EU average, lower than
in any other regions in the candidate countries.
Social disparities
Employment
In 1998, the official unemployment rate was estimated
at 6.3% of the labour force, but this does not reflect thetrue situation given the absence of an unemploymentbenefit system and substantial under-employment. Ofthe 20.5 million in civilian employment, 5.5 million wereunpaid family workers, mostly women. While the activityrate of men was much the same as the EU average(79%), for women, it was considerably lower (29% asagainst 59%), particularly in urban areas (15%). Data onoccupations suggest that women face considerable dif -
ficulties, or even discrimination, in finding a job in manu -
facturing or services.
Education
The rate of illiteracy is still significant (18% as against
3% in Greece), even among young people in the workforce and especially among women (24%). Participa-tion in compulsory schooling is below 90% of the agegroup concerned, largely due to children working, 1 mil-lion of those between 6 and 14 being in work, a third ofthem under 12.
Structural policies
Regional policy
In contrast to the other candidate countries, Turkey in -
troduced a regional policy during the 1970s with an aid
scheme for business. The provinces assisted ac -
counted for a third of the population and had an average
level of GDP per head of 56% of the national average.
The policy, however, has not produced significant re -
sults. Because of security problems during the 1990s,
financial aid did not attract many firms to eastern re -
gions. Moreover, problems of lagging development
were compounded by difficulties in the coal(Zonguldak) and the iron and steel (Karab ük)
industries.
Data on public investment, which is still substantial be -
cause of a large nationalised industry sector, indicate
that support of disadvantaged areas was small. In 1997,total spending on investment amounted to around EUR
158Regional features in Turkey
194 per head, of which some 40% went on regional
measures.
Social policy
The macroeconomic adjustment underway will havelasting effects only if it is accompanied by a broadrange of social reforms. Much needs to be done in re -
spect of employment legislation, equal opportunities,
social protection, health care, education and humansrights.
Social expenditures accounts for only 7% of GDP as
compared with 25% in the European OECD countries,leaving a large part of the population without adequateprotection.
Employment
There is no general unemployment compensation sys -
tem in Turkey. Under employment regulations and col -
lective agreements, dismissals give entitlement to a
fixed payment proportional to the time spent in a job.However, 50% of employment is not declared and col -
lective agreements cover only 35% of those in officiallydeclared jobs. There is no provision in employment leg-
islation against sex discrimination and, according to the1998 UNDP report on human development, discrimina-tion is institutionalised and a structural feature of the la-bour market.Health
The current health care system is costly and not particu -
larly effective. In 1998, the deficit on expenditure
amounted to 2.7% of GDP and accounted for a third ofthe total budget deficit. Access to health care is un -
equal, with rural areas being especially disadvantaged,
expenditure on public health centres, mainly located inrural areas, declining from 7% to 3% of the total healthbudget between 1992 and 1996.
Education
Despite a relatively large number of children of schoolage, spending on primary and secondary educationamounts to only 2.1% of GDP, against an OECD aver -
age of 3.4%. Expenditure per pupil in primary schools is
only just over 20% of the OECD average, while in sec -
ondary schools it is only around 12%. For the poorest
families, children are a significant source of income andthere is no Government policy to encourage parents tosend them to school.
ConclusionsIn the context of preparing for accession, it is essential
that Turkey develops regional and social policies capa-ble of responding to needs and enabling it to participatein EU programmes for strengthening economic and so-cial cohesion.
66Statistical annex
 
024681012
1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000024681012% labour forceA.1 Disparities in unemployment,  EU15 1970-99; 
EU27 1998-99
Unemployment rate
Standard deviation of 
unemployment rate (by region)
Standard deviation of unemployment 
rate (by Member State)EU27
EU27
EU27 
01020304050607080
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999010203040% population 15-64A.2Regional disparities in employment rates, 
EU12, 1988-99
Employment rate 
Coefficient of variation 
Excluding A, FIN, S and new German Länder
NUTS2 level, except for Ireland (national level) and UK (4 countries)Coefficient of variation (%)
 
0.00.51.01.52.02.53.0
PI
IRLELELUKFABNLFINDDKEU150.00.51.01.52.02.53.0Earnings of those with high education
Earnings of those with medium educationRatio to earnings of those with low educationA.3 Earnings by level of educational attainment, 
1995 
0510152025303540
B DK D EL E F IRL I L NL A P FIN S UK EU0510152025303540Population with income below poverty line
Social protection transfers as % GDP
Unemployment rate%A.4Poverty and social protection transfers, 1995
 
0102030405060708090100
02 04 06 08 01 0 00102030405060708090100% EU GDP (EUR)A.5 Distribution of GDP by region,  EU15, 1998
% EU population20% of population in regions with lowest GDP account for 11% of EU GDP
20% of population in regions with highest GDP account for 30% of EU GDP
Ratio of GDP between highest and lowest 20% = 2.62 
0102030405060708090100
02 04 06 08 01 0 00102030405060708090100% US GDP (US$)A.6Distribution of GDP by State, US, 1998
% US population20% of population in regions with lowest GDP account for 16% of US GDP
20% of population in regions with highest GDP account for 24% of US GDP
Ratio of GDP between highest and lowest 20% = 1.51
67Statistical annex
 
EU15
UKSFIN
PA
L, NLIIRL
F
EEL
DDK
B
0102030405060708090100
01 02 03 04 05 06 07 08 00102030405060708090100% EU land areaA.7 Distribution of population in rural areas in 
EU15, 1997
% EU population
 
-0.50.00.51.01.5
-0.50.00.51.01.5
B DK D EL E F IRL I L NL A P FIN S UK EU15Rural population
Total populationAnnual average % changeA.8Annual change in rural and total population 
in EU15, 1993-97
 
-40 -30 -20 -10 0 10 20 30
-40 -30 -20 -10 0 10 20 30Population 65+ (%)
Population 15-64 (%)
Population <15 (%)
Service employment (%)
Industrial employment (%)
Agricultural employment (%)
Unemployment rate (%)
GDP per head (PPS)
Population density
% difference from EU15 averageA.9 Features of regions with population decline 
in EU15, 1993-98
Employment and 
unemployment, 1999Population, 1998
GDP, 1997
68Statistical annex
 
05101520253035
PEAIRLELLNLDBDKFI
FINUKSSKHUCZSIPLLVEELTROCYBG 
ApplicantsEU1505101520253035% GDPA.10 Gross fixed capital formation, 1999
BG 1998
 
051015202530354045
LDKSDANLFINFBUKIRLIEELPCYSICZHUPLSKEELTLVROBG
ApplicantsEU15051015202530354045Capital formation GDPEUR (000)A.11 GDP and gross fixed capital formation per head, 1999
BG 1998
69Statistical annex
 
0102030405060708090
EL P IRL E B NL F UK I S FIN D DK A L EU3 EU010203040506070809019891999EUR (000)A.12 Net capital stock per head in EU15, 1989 and 
1999
EU3 = EL, E, P 
020406080100120140160
P EL IRL E B UK I NL F S FIN D A DK L EU3 EU0204060801001201401601989 1999EUR (000)A.13Gross capital stock per head in EU15, 1989 and 1999
EU3 = EL, E, P
 
050100150200250300350400
BD KDE LE FI R LI LN LA PF I NSU K E U050100150200250300350400
1988 all regions
1988 Objective 1 regions
1998 all regions
1998 Objective 1 regionsIndex EU all regions=100A.14 Composite index of railway lines in EU15, 
1988 and 1998 
0102030405060708090100
BD KDE LE FI R LI LN LA PF I NSU K E U01020304050607080901001988 all regions
1988 Objective 1 regions
1998 all regions
1998 Objective 1 regions% totalA.15Electrified railway lines in EU15, 1988 and 1998
 
0102030405060708090100
BD KDE LE FI R LI LN LA PF I NSU K E U01020304050607080901001988 all regions
1988 Objective 1 regions
1998 all regions
1998 Objective 1 regions% totalA.16 Double-track railway lines in EU15, 1988 and 
1998 
050100150200250300
BG CZ EE HU LT LV PL RO SI SK E EL IRL P EU4 EU15050100150200250300
Roads MotorwaysIndex EU25=100A.17Index of roads in candidate countries and EU15, 1996
EU4 = E, EL, IRL, P
70Statistical annex
 
050100150200250300350
P EL E I IRL F UK D A NL DK B S FIN L050100150200250300350Index EU15=100A.18 Final energy consumption per head in EU15, 
1998 
0100200300400500600
DK B D UK* E F I* L* EL NL* P A IRL* S FIN0100200300400500600Index EU15=100A.19Total freshwater reserves in EU15
* estimated
 
051015202530354045
B/LDKDELEFIRLINLAPFINSUKBGCZEEHULTPLSISK
EU15051015202530354045Abstraction Consumption% total renewable reservesA.20 Total water abstraction and consumption
71Statistical annex
 
0102030405060708090100
P B E EL IRL A DK UK L D S NL0102030405060708090100% sewage treatedA.21 Population connected to waste water 
treatment plants, 1995/96
P 1994 
0100200300400500600700
SE LEF I NP L IU KB DI R L N LFD KAE U0100200300400500600700Kg per headA.22Municipal waste, 1996/97
 
012345678
BD KDE LE FI R LIN LA PF I NSU K E U U SJ012345678% GDPA.23Value of ICT markets, 1998  
051015202530
Utilities Finance Business 
servicesTransport/
travelOther 
servicesRetail/
wholesaleManufacturing051015202530Average % reduction in operating costs expected
Average % reduction in cost of sales expected%A.24Expected cost savings from e-commerce 
adoption, 1999
 
113108 108
80
565245
35237
050100150200250
SIBGROPLCECCZLVEEHU050100150200250% increaseA.25 Growth of mobile phone penetration, 1998-99  
02468101214161820
1991 1992 1993 1994 1995 1996 1997 1998 1999 200002468101214161820    B      D  EL
    E      F     IRL 
    I      L      NL 
    A      P     FIN 
 EU12  EU15 %A.26Nominal long-term interest rates (10-year 
government bond yields) in the EU, 1991-2000
Interest rate 2000 = September
72Statistical annex
 
05101520253035404550
B/L DK D  EL E  F  IRL I  NL A  P  FIN S  UK 05101520253035404550Intra-EU trade 1991
Intra-EU trade 1999% GDPA.27 Intra-EU trade of Member States, 1991 and 
1999 
051015202530
B/L DK D  EL E  F  IRL I  NL A  P  FIN S  UK 051015202530Extra-EU trade 1991
Extra-EU trade 1999% GDPA.28Extra-EU trade of Member States, 1991 and 1999
 
0102030405060708090
B/L DK D  EL E  F  IRL I  NL A  P  FIN S  UK 010203040506070809019911999% total tradeA.29 Intra-EU trade as % of total trade of Member 
States, 1991 and 1999 
0.00.10.20.30.40.50.60.7
B/L D DK E EL F I IRL NL P UK0.00.10.20.30.40.50.60.71988 1998IndexA.30Intra-industry trade of EU12 Member States, 1988 and 1998
Grubel-Lloyd-index computed with CN 8 digit data of harmonised statistics from COMEXT for intra-EU trade
 
051015202530354045
B/L DK D EL E F IRL I NL A P FIN S UK EU0510152025303540451995 1999% extra-EU exportsA.31 Exports to CECs as share of extra-EU exports 
of Member States, 1995 and 1999 
0510152025303540
B/L DK D EL E F IRL I NL A P FIN S UK EU05101520253035401995 1999% extra-EU importsA.32Imports from CECs as share of extra-EU imports of Member States, 1995 and 1999
73Statistical annex
 
024681012141618
B/L DK D E F IRL I NL A P FIN S UK024681012141618% GDPA.33 Total FDI in Member States, average 1998 
and 1999
EL: no data; Provisional and partial data; F: 1998 
0102030405060708090100
B/L DK D E F IRL I NL A P FIN S UK0102030405060708090100% total FDI A.34FDI from other EU Member States, average 1998 and 1999
EL: no data
 
05001000150020002500
1991 1992 1993 1994 1995 1996 1997 1998 199905001000150020002500Intra-EU EU target EU bidderNumberA.35 Number of cross-border mergers and 
acquisitions, 1991-99 
0.00.51.01.52.02.53.03.54.04.5
1991 1992 1993 1994 1995 1996 1997 199800.511.522.533.544.5% GDPA.36Foreign direct investment in CECs, 1991-98
 
0102030405060708090100
1992 1993 1994 1995 1996 1997 1998 19990102030405060708090100Restitutions Market support
Direct aid Rural development%A.37Agricultural expenditure by measure, 
1992-99 
02000400060008000100001200014000160001800020000
0 5000 10000 15000 20000 25000 3000002000400060008000100001200014000160001800020000Support (EUR) per annual work unitA.38Relationship between value-added and total CAP support (price and direct) for EU regions, 1996
Gross value-added (EUR)
74Statistical annex
 
0102030405060708090100
01 02 03 04 05 06 07 08 09 01 0 00102030405060708090100% total CAP supportA.39 Distribution of CAP support by level of 
regional development, 1996
%  EU population, regions ordered by GDP per head (PPS) 
-200020040060080010001200
-200020040060080010001200
Sunflower
SoybeansRapeseedWheatCornRye
BarleyOats
Sugar (white)MilkEggsBeefPorkPoultryEU15 at EU prices
CECs at national prices
CECs at EU pricesEURA.40Market price support per hectare or livestock 
unit,  average 1997-99
1Guyane (F)Guadeloupe
(F)Martinique
(F)Réunion
(F)Canarias (E)
Açores (P)
Madeira
(P)
Change in index  (Eu15 = 100)
< - 6
- 6 -  - 1
- 1 -  4
4 -  9
> 9
no dataSource: EurostatIRL: NUTS0
0 100 500 kmSIG16SIG16
© MEGRIN for the administrative boundariesA.1  Change in GDP per head (PPS), 1987-1997
2Guyane (F)Guadeloupe
(F)Martinique
(F)Réunion
(F)Canarias (E)
Açores (P)
Madeira
(P)
Kypros
Index, EUR27 = 100
< 15
15 - 30
30 - 50
50 - 75
75 - 100
100 - 125
≥125Source: Eurostat
0 100 500 kmSIG16SIG16
© MEGRIN for the administrative boundariesA.2  GDP per head by region (Euro), 1998
3% part-time employed< 69.869.8 - 74.874.8 - 79.879.8 - 84.8≥84.8
no dataaverage = 77.3Standard deviation = 9.9D (Sachsen): NUTS1SK: 1998 Source: Eurostat (LFS) IRL: NUTS0% total female employment< 15.315.3 - 23.323.3 - 31.331.3 - 39.3≥39.3
no dataaverage = 27.3Standard deviation = 16.1D (Sachsen): NUTS1SK: 1998IRL: NUTS0% total employment< 9.19.1 - 13.313.3 - 17.517.5 - 21.7≥21.7
no dataaverage = 15.4Standard deviation = 8.4
D (Sachsen): NUTS1SK: 1998IRL: NUTS0
250
01250 km© MEGRIN for the administrative boundaries
A.3  Part-time employment, 1999
Women as % of total part-time employed Female part-time employmentTotal part-time employment
4Guyane (F)Guadeloupe
(F)Martinique
(F)Réunion
(F)Canarias (E)
Açores (P)
Madeira
(P)
Kypros
Central regions
Peripheral regions
Other regionsAccording to the peripherality index
to GDP in Euro by lorry (NUTS2)
Source: IRPUD - DGREGIO
0 100 500 kmSIG16SIG16
© MEGRIN for the administrative boundariesA.4  Central and peripheral regions
50 100 500 kmGuyane (F)Guadeloupe
(F)Martinique
(F)Réunion
(F)Canarias (E)
Açores (P)
Madeira
(P)
Kypros
SIG16SIG16#
#
##
# ########
# ##
#### ##
#
## ### ##### # #
### ##
#### # # #### #### #
###
Rail bottlenecksA.5 Trans-European Transport Network Outline Plan (2010 horizon)
60 100 500 kmGuyane (F)Guadeloupe
(F)Martinique
(F)Réunion
(F)Canarias (E)
Açores (P)
Madeira
(P)
Kypros
SIG16SIG16#
### ### ##
##### ## ## ##
#####
####
# ### #
#
#
#
Road bottlenecksA.6 Trans-European Transport Network Outline Plan (2010 horizon)
7Guyane (F)Guadeloupe
(F)Martinique
(F)Réunion
(F)Canarias (E)
Açores (P)
Madeira
(P)
Kypros
Index, average EUR27 = 100
< 60
60 - 80
80 - 120
120 - 160
160 - 250
250 - 400
≥400
no dataAverage of indices of regional
emission estimates per km² forSO , NO  and NH .
23 2
Source: EMEP/MSC-W - DG REGIO
0 100 500 kmSIG16SIG16
© MEGRIN for the administrative boundariesA.7  Emissions of acidifying gases, 1998
8WAIDMTME
MN
ND
ORNH
WIVT
NY
MI
SD
WYMA
CARI
CT
NVIA PA
NE
UTNJ
OH
ILIN
COWVDE
MD
MOVADC
KSKY
AZNC
NMTN
OK
TXARSC
GA
AL
MS
LAFL
AK
HIIndex, US = 100 standard deviation = 16Source: USDoC BEA< 8585 - 9292 - 100100 - 108108 - 120≥120
A8  United States : Gross State Product (GPS) per head, 1998
SIG16SIG16
90 100 500 kmGuyane (F)Guadeloupe
(F)Martinique
(F)Réunion
(F)Canarias (E)
Açores (P)
Madeira
(P)
Kypros
SIG16SIG16
Euclidian distance between centres of urban areas
less than 100 km
100 km to 150 kmA.9  Spacing between European urban areas
@GIP R.E.C.L.U.S. Equipe P.A.R.I.S., C. Rozenblat, 1995Source: GEOPOLIS, F.Moriconi-Ebrard, 1993
10Guyane (F)Guadeloupe
(F)Martinique
(F)Réunion
(F)Canarias (E)
Açores (P)
Madeira
(P)
Kypros
SIG16SIG16
Categories
Non-border regions
Internal EU15 borders
Borders between accession candidates
Borders between EU members and accession candidates
Borders with external countriesEU15: Interreg 3A regions
Candidates: level 3 regionsPL: old level 3 regions
0 100 500 km
© MEGRIN for the administrative boundariesA.10  Border regions
11Guyane (F)Guadeloupe
(F)Martinique
(F)Réunion
(F)Canarias (E)
Açores (P)
Madeira
(P)
Kypros
< -3
-3 - 0
0 - 3
3 - 6
> 6
no dataSachsen, Wales, Scotland: NUTS1
Source: EurostatIRL: NUTS0
0 100 500 kmSIG16SIG16
© MEGRIN for the administrative boundariesA.11  Crude rate of total population change, average 1995-1997
12Guyane (F)Guadeloupe
(F)Martinique
(F)Réunion
(F)Canarias (E)
Açores (P)
Madeira
(P)
Kypros
< -2.5
-2.5 - 0.0
0.0 - 2.5
2.5 - 5.0
> 5.0
no dataSachsen, Wales, Scotland: NUTS1
Source: EurostatIRL: NUTS0
0 100 500 kmSIG16SIG16
© MEGRIN for the administrative boundariesA.12  Crude rate of net migration, average 1995-1997
13Guyane (F)Guadeloupe
(F)Martinique
(F)Réunion
(F)Canarias (E)
Açores (P)
Madeira
(P)
Kypros
% of total GDP
< 0.15
0.15 - 0.40
0.40 - 0.70
0.70 - 1.10
1.10 - 2.00
≥2.00
no dataaverage = 1.17
Standard deviation = 0.92
F, NL: 1996
B, D, IRL, LT: 1995EL, A: 1993UK: estimatesSource: EurostatBE, UK: NUTS1
IRL, NL, SE: NUTS0
0 100 500 kmSIG16SIG16
© MEGRIN for the administrative boundariesA.13  Business enterprise expenditure on RDT, 1997
7DEOH$*’3DQGSRSXODWLRQJURZWKLQFRKHVLRQFRXQWULHV
Period EL E IRL P EU3 (1) EU12 (2) EU15 (2)
Annual average % change in GDP 88-98 1,9 2,6 6,4 3,0 2,5 1,9 2,0
88-93 1,2 2,0 4,4 2,6 2,0 1,7 1,793-98 2,6 3,1 8,5 3,4 3,1 2,3 2,4
HVWLPDWHV        
Annual average % change in populatio
n88-98 0,5 0,1 0,5 0,0 0,2 0,4 0,4
88-93 0,7 0,1 0,2 -0,2 0,2 0,6 0,593-98 0,3 0,1 0,7 0,2 0,2 0,3 0,3
HVWLPDWHV        
GDP per head (PPS), EU15=100 1988 58,3 72,5 63,8 59,2 67,8 106,6 100,0
1989 59,1 73,1 66,3 59,4 68,4 106,4 100,01990 57,4 74,1 71,1 58,5 68,6 106,4 100,01991 60,1 78,7 74,7 63,8 73,0 105,2 100,01992 61,9 77,0 78,4 64,8 72,3 105,3 100,01993 64,2 78,1 82,5 67,7 74,0 105,0 100,01994 65,2 78,1 90,7 69,5 74,4 104,9 100,01995 66,1 78,4 93,3 70,9 75,0 104,8 100,01996 66,9 79,5 94,1 71,1 75,9 104,6 100,01997 66,0 80,0 103,8 74,3 76,6 104,5 100,01998 66,0 81,1 108,2 75,3 77,5 104,3 100,01999 66,8 82,5 114,0 76,1 78,7 104,1 100,0
HVWLPDWHV        
(/(3
*URZWKUDWHVDQGH[FOXGLQJQHZ*HUPDQ/lQGHU
6RXUFH(XURVWDWQDWLRQDODFFRXQWVDQGFDOFXODWLRQV’*5(*,2
Member State 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
B 24,5 24,7 25,1 25,1 26,0 27,1 25,9 25,3 25,7 25,7 25,7
D : : : 38,6 35,8 32,4 31,3 26,7 26,7 26,5 26,8D excl. new Länder 21,0 21,0 21,8        
EL 6,1 6,5 6,3 6,1 6,6 7,6 7,8 10,4 10,2 10,1 10,2E 13,9 14,9 14,9 16,0 15,9 15,2 15,9 17,1 17,7 18,4 19,1F 28,6 28,6 28,9 29,9 28,9 29,9 30,8 28,2 28,2 27,0 26,5I R L ::::::: 13,9 14,0 16,8 17,3
I 25,7 25,8 24,8 24,7 24,9 24,7 25,5 28,6 28,7 27,8 27,6NL 11,5 10,6 10,6 11,8 11,3 11,5 10,8 13,4 14,3 15,4 15,8A 27,5 27,0 27,5 28,6 28,7 30,3 28,1 30,8 30,2 29,2 27,8P 17,2 17,7 13,5 15,0 13,6 14,3 13,8 13,5 13,3 14,0 14,2FIN 18,1 17,7 17,9 17,7 15,4 17,0 17,1 18,3 21,2 22,0 24,6S 10,7 10,9 10,8 12,0 10,9 12,8 11,0 13,1 14,0 16,2 17,1UK 21,2 20,7 20,2 19,2 19,6 20,6 18,3 31,4 31,7 33,4 33,9EU15 (by region) : : : 29,4 28,6 27,7 27,5 28,5 28,4 28,3 28,3H[FOQHZ/lQGHU 26,7 26,4 26,5        
EU15 (by Member State) : : : 13,1 13,2 12,5 12,7 12,5 11,9 11,5 11,2H[FOQHZ/lQGHU 15,9 15,3 15,4        
EU15 (within Member States) : : : 24,5 23,8 23,4 23,0 24,5 24,7 24,8 25,0
H[FOQHZ/lQGHU 20,7 20,7 20,6        
8SWR*’3(6$ILJXUHVIRU1876UHJLRQVYIURPRQ*’3(6$ILJXUHVIRU1876UHJLRQVY
6RXUFH(XURVWDW5(*,2DQGFDOFXODWLRQV’*5(*,27DEOH$’LVSDULWLHVLQ*’3SHUKHDGLQ336E\UHJLRQZLWKLQ0HPEHU6WDWHV
VWDQGDUGGHYLDWLRQRILQGH[(8 
GDP per head Unemployment
PPS (EUR15=100)Regional disparity 
(standard deviation)% labour force
1988 1998 1988 ** 1998 1989 1999 1994 ** 1999 1989-99
B 103,2 111,3 24,5 25,7 7,2 8,8 2,7 3,3 4,3 0,3
DK 105,3 118,9 : : 7,6 5,6 : : : 0,3D : 107,7 : 26,8 : 8,9 : 4,0 4,3 :D excl. new Länder 114,8 116,3 21,0 22,3 5,7 6,9 2,0 1,7 1,8 0,6EL 58,1 66,0 6,1 10,2 6,7 11,7 1,7 2,4 2,0 0,8E 74,0 81,1 13,9 19,1 17,4 16,1 5,4 5,4 5,7 1,3F 108,4 98,6 28,6 26,5 9,3 11,4 1,8 2,0 2,5 0,4IRL 65,9 108,1 : 17,3 14,9 5,9 : : 0,7 3,3I 100,2 101,1 25,7 27,6 10,0 11,7 6,6 6,2 7,9 0,2L 139,1 175,8 : : 1,7 2,4 : : : 2,6NL 97,7 113,2 11,5 15,8 8,5 3,3 1,0 0,7 0,8 1,6A 102,2 111,7 27,5 27,8 3,1 * 4,0 1,2 * 0,9 1,1 0,5P 58,9 75,3 17,2 14,2 4,8 4,7 2,5 1,8 1,4 0,7FIN 101,6 101,6 18,1 24,6 3,8 11,5 2,0 2,5 3,2 -1,1S 109,7 102,4 10,7 17,1 1,7 7,6 0,7 * 1,1 1,6 -0,9UK 98,7 102,2 21,2 33,9 7,4 6,1 3,6 2,4 2,6 0,2
EU15 100,0 100,0 26,7 28,3 8,4 9,4 5,2 6,0 5,5 0,5
/c40/c56/c20/c24/c3/c16/c3/c70/c82/c72/c73/c73/c76/c70/c76/c72/c81/c87/c86/c3/c82/c73/c3/c89/c68/c85/c76/c68/c87/c76/c82/c81/c3/c13/c13/c13 /c21/c25/c15/c26 /c21/c27/c15/c22 /c25/c21/c15/c20 /c24/c23/c15/c19 /c24/c27/c15/c25
/c13/c3/c49/c68/c87/c76/c82/c81/c68/c79/c3/c71/c68/c87/c68
/c13/c13/c3/c41/c76/c74/c88/c85/c72/c86/c3/c88/c83/c3/c87/c82/c3/c20/c28/c28/c23/c3/c68/c85/c72/c3/c69/c68/c86/c72/c71/c3/c82/c81/c3/c87/c75/c72/c3/c82/c79/c71/c3/c49/c56/c55/c54/c3/c21/c3/c69/c85/c72/c68/c78/c71/c82/c90/c81/c17/c3/c51/c68/c85/c87/c3/c82/c73/c3/c87/c75/c72/c3/c70/c75/c68/c81/c74/c72/c86/c3/c76/c81/c3/c71/c76/c86/c83/c68/c85/c76/c87/c76/c72/c86/c3/c90/c76/c87/c75/c76/c81/c3/c70/c82/c88/c81/c87/c85/c76/c72/c86/c3/c76/c86/c3/c71/c88/c72/c3/c87/c82/c3/c70/c75/c68/c81 /c74/c72/c86/c3/c76/c81/c3/c87/c75/c72/c3/c49/c56/c55/c54/c3/c69/c85/c72/c68/c78/c71/c82/c90/c81/c17
/c3/c3/c3/c3/c55/c75/c76/c86/c3/c72/c73/c73/c72/c70/c87/c3/c76/c86/c3/c83/c68/c85/c87/c76/c70/c88/c79/c68/c85/c79/c92/c3/c76/c80/c83/c82/c85/c87/c68/c81/c87/c3/c73/c82/c85/c3/c87/c75/c72/c3/c56/c46/c3/c68/c81/c71/c3/c37/c72/c79/c74/c76/c88/c80/c15/c3/c69/c88/c87/c3/c68/c79/c86/c82/c3/c68/c73/c73/c72/c70/c87/c86/c3/c87/c75/c72/c3/c73/c76/c74/c88/c85/c72/c86/c3/c73/c82/c85/c3/c41/c76/c81/c79/c68/c81/c71/c3/c68/c81/c71/c3/c54/c90/c72/c71/c72/c81/c17/c13/c13/c13/c3/c38/c82/c72/c73/c73/c76/c70/c76/c72/c81/c87/c3/c82/c73/c3/c89/c68/c85/c76/c68/c87/c76/c82/c81/c3/c32/c3/c86/c87/c68/c81/c71/c68/c85/c71/c3/c71/c72/c89/c76/c68/c87/c76/c82/c81/c3/c68/c86/c3/c83/c72/c85/c70/c72/c81/c87/c68/c74/c72/c3/c82/c73/c3/c83/c72/c85/c70/c72/c81/c87/c68/c74/c72/c54/c82/c88/c85/c70/c72/c3/c29/c3/c40/c88/c85/c82/c86/c87/c68/c87/c3/c68/c81/c71/c3/c70/c68/c79/c70/c88/c79/c68/c87/c76/c82/c81/c86/c3/c39/c42/c3/c53/c40/c42/c44/c50/c55/c68/c69/c79/c72/c3/c36/c17/c22/c3/c3/c53/c72/c74/c76/c82/c81/c68/c79/c3/c71/c76/c86/c83/c68/c85/c76/c87/c76/c72/c86/c3/c76/c81/c3/c42/c39/c51/c3/c83/c72/c85/c3/c75/c72/c68/c71/c3/c68/c81/c71/c3/c88/c81/c72/c80/c83/c79/c82/c92/c80/c72/c81/c87/c3/c69/c92/c3/c48/c72/c80/c69/c72/c85/c3/c54/c87/c68/c87/c72
Regional disparity  (standard deviation)Employment 
(average 
annual % 
change)Member State
1989 **
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L 27,1 36557 7320
DK 24,1 29424 6130S 22,4 23746 3790D 22,8 23513 4940A 21,5 23443 5640NL 22,2 22511 4840FIN 21,0 22285 4130F 20,8 22094 3950B 20,9 21890 4570
UK 20,0 20958 3730
IRL 18,5 20552 4600I 18,5 18392 3410E 17,8 13203 3010EL 17,9 10268 2280P 16,0 9581 2600
CY 36,6 12183 2154
SI 29,1 8796 1903CZ 27,5 4869 1341HU 25,3 4133 977PL 24,4 3627 919SK 23,6 3365 1231EE 21,6 3196 930LT 20,1 2586 630LV 19,4 2334 468RO 17,7 1639 318BG 11,5 1327 153Applicants 24,5 3639 893
EU15 19,7 20234 3990
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B DK D EL E F IRL I L NL P UK EU12 EU12
Economic status % total
Employed 36 40 88 66 80 66 44 92 86 81 75 51 74 5Unemployed 406 47 191 144 232 477 439 339 - 434 137 373 320 23Retired 153 307 92 244 129 121 67 57 149 25 243 154 116 8Inactive 464 255 439 126 136 319 372 210 354 343 295 294 285 21
Type of household
Single <65 82 152 109 69 75 126 154 47 90 234 153 75 93 7Single>=65 196 465 136 270 66 155 99 109 215 50 312 203 150 11Couple <65 with no no children 67 39 53 76 63 50 47 21 40 27 84 26 42 3Couple >=65 with no no children 192 225 64 265 190 86 54 31 193 27 252 137 108 8Single parent 136 - 188 105 86 161 234 95 63 189 126 288 180 13Couple with 1 dependent child 35 28 37 24 43 46 38 70 116 21 32 45 46 3Couple with 2 dependent children 84 - 136 38 97 49 50 77 57 81 88 60 82 6Couple with 3 or more dep. children 84 78 121 40 218 162 180 225 177 185 194 146 150 11Couple with dep. and non dep. children 102 99 110 90 107 126 69 140 69 124 62 30 111 8Other 49 80 126 119 74 107 65 89 125 180 79 68 98 7
Education level *
High 36 31 81 10 17 20 4 13 32 33 4 21 36 3Middle 88 90 104 25 55 63 68 46 94 117 21 82 73 5Low 174 254 110 185 136 201 163 138 141 144 120 192 163 12
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/c55/c68/c69/c79/c72 /c3 /c36/c17/c25 /c3/c3 /c44/c81/c71/c76/c70/c68/c87/c82/c85/c86 /c3 /c73/c82/c85 /c3 /c85/c72/c74/c76/c82/c81/c86 /c3 /c74/c85/c82/c88/c83/c72/c71 /c3 /c68/c70/c70/c82/c85/c71/c76/c81/c74 /c3 /c87/c82 /c3 /c83/c72/c85/c76/c83/c75/c72/c85/c68/c79/c76/c87/c92/c15 /c3 /c40/c56/c53/c21/c26/c15 /c3 /c20/c28/c28/c27/c18/c20/c28/c28/c28
/c44/c81/c71/c76/c70/c68/c87/c82/c85 /c56/c81/c76/c87/c86/c38/c72/c81/c87/c85/c68/c79/c3
/c85/c72/c74/c76/c82/c81/c86/c51/c72/c85/c76/c83/c75/c72/c85/c68/c79/c3
/c85/c72/c74/c76/c82/c81/c86/c50/c87/c75/c72/c85/c3/c85/c72/c74/c76/c82/c81/c86 /c55/c82/c87/c68/c79/c3
Total population /c19/c19/c19/c86 159619 198583 122295 480497
/c8 /c3 /c87/c82/c87/c68/c79 33,2 41,3 25,5 100,0
Land area /c54/c84/c88/c68/c85/c72/c3/c78/c80/c86 593315 2750344 896537 4240196
/c8 /c3 /c87/c82/c87/c68/c79 14,0 64,9 21,1 100,0
Population density /c44/c81/c75/c68/c69/c76/c87/c68/c81/c87/c86/c3/c83/c72/c85/c3/c86/c84/c88/c68/c85/c72/c3/c78/c80 269 72 136 113
Population growth, 1991-98 /c36/c81/c81/c88/c68/c79/c3/c8/c3/c70/c75/c68/c81/c74/c72 0,4 0,0 0,3 0,2
Population by age group /c8/c3/c87/c82/c87/c68/c79
/c31/c20/c24/c3 18,1 18,2 15,9 17,6
/c20/c24/c3/c16/c3/c25/c23 66,7 67,7 67,1 67,2
/c25/c24/c14 15,2 14,1 17,0 15,2
Unemployment rate(1) (% labour force
/c55/c82/c87/c68/c79 7,1 11,6 9,7 9,6
/c58/c82/c80/c72/c81 7,4 13,4 11,7 10,9
/c60/c82/c88/c81/c74 11,5 25,5 18,1 19,0
Long-term unemployment % unemployed 45,3 46,0 45,2 45,6
GDP per head(2) /c51/c51/c54 22422 11735 20442 17506
/c44/c81/c71/c72/c91/c15 /c3 /c68/c89/c72/c85/c68/c74/c72/c32/c20/c19/c19 128,1 67,0 116,8 100,0
GDP per head(2) /c40/c56/c53 23465 8419 20623 16523
/c44/c81/c71/c72/c91/c15 /c3 /c68/c89/c72/c85/c68/c74/c72/c32/c20/c19/c19 142,0 51,0 124,8 100,0
GDP (EUR) /c8/c3/c87/c82/c87/c68/c79 47,2 21,1 31,8 100,0
GDP per person employed(4) /c40/c56/c53 52052 21255 48990 39359
/c44/c81/c71/c72/c91/c15 /c3 /c68/c89/c72/c85/c68/c74/c72/c32/c20/c19/c19 132,2 54,0 124,5 100,0
Employment rate /c8 /c3 /c83/c82/c83/c88/c79/c68/c87/c76/c82/c81 /c3 /c20/c24/c16/c25/c23
/c55/c82/c87/c68/c79/c11/c21/c12 67,1 58,7 61,8 62,3
/c58/c82/c80/c72/c81/c11/c24/c12 59,0 49,2 52,6 53,4
/c48/c72/c81/c11/c24/c12 75,2 68,1 71,1 71,3
Employment by sector(2) /c8/c3/c87/c82/c87/c68/c79/c3/c72/c80/c83/c79/c82/c92/c80/c72/c81/c87
/c36/c74/c85/c76/c70/c88/c79/c87/c88/c85/c72 2,2 16,3 4,4 8,4
/c44/c81/c71/c88/c86/c87/c85/c92 29,1 30,4 30,2 29,9
/c54/c72/c85/c89/c76/c70/c72/c86 68,7 53,4 65,4 61,8
Education level 25-59 age group(6) /c8 /c3 /c87/c82/c87/c68/c79
/c47/c82/c90 25,6 38,1 35,1 33,0
/c48/c72/c71/c76/c88/c80 50,0 46,0 46,8 47,6
/c43/c76/c74/c75 24,3 15,9 18,2 19,4
R&D expenditure by firms(7) /c8 /c3 /c42/c39/c51 1,9 1,0 1,5 1,6
R&D expenditure by firms /c8 /c3 /c87/c82/c87/c68/c79 /c3 /c53/c9/c39 /c3 /c72/c91/c83/c72/c81/c71/c76/c87/c88/c85/c72 69,8 54,3 62,4 65,8
Length of motorways and dual 
carriageways(2),(3) /c38/c82/c80/c83/c82/c86/c76/c87/c72 /c3 /c76/c81/c71/c72/c91 /c3
/c11/c83/c82/c83/c88/c79/c68/c87/c76/c82/c81/c14/c79/c68/c81/c71/c3/c68/c85/c72/c68/c12 214,8 48,5 140,5 100,0
Length of railway line /c38/c82/c80/c83/c82/c86/c76/c87/c72 /c3 /c76/c81/c71/c72/c91 /c3
/c11/c83/c82/c83/c88/c79/c68/c87/c76/c82/c81/c14/c79/c68/c81/c71/c3/c68/c85/c72/c68/c12 133,4 91,8 118,1 100,0
Electrified railway line/c8/c3/c87/c82/c87/c68/c79 49,5 38,2 48,7 44,1
Double track railway line /c8/c3/c87/c82/c87/c68/c79 54,0 22,0 41,0 35,8
Emissions of sulphur dioxide (SO 2) /c44/c81/c71/c72/c91/c15/c3/c40/c56/c53/c21/c26/c32/c20/c19/c19 121 104 74 100
Emissions of nitrogen dioxides (NO2) 239 62 125 100
Emissions of ammonia (NH3) 172 68 150 100
Emissions of SO 2, NO2 and NH 3 (average) 177 78 116 100
Pressure from urbanisation, transport and 
intensive agriculture(8) /c44/c81/c71/c72/c91/c15/c3/c40/c56/c53/c21/c26/c32/c20/c19/c19 292 39 143 100
/c39/c68/c87/c68/c3/c73/c82/c85/c3/c87/c75/c72/c3/c72/c80/c83/c79/c82/c92/c80/c72/c81/c87/c15/c3/c88/c81/c72/c80/c83/c79/c82/c92/c80/c72/c81/c87/c3/c68/c81/c71/c3/c72/c71/c88/c70/c68/c87/c76/c82/c81/c3/c79/c72/c89/c72/c79/c86/c3/c68/c85/c72/c3/c73/c82/c85/c3/c20/c28/c28/c28/c17/c3/c36/c79/c79/c3/c82/c87/c75/c72/c85/c3/c71/c68/c87/c68/c3/c68/c85/c72/c3/c73/c82/c85/c3/c20/c28/c28/c27/c3/c11/c72/c68/c85/c79/c76/c72/c85/c3/c92/c72/c68/c85/c86/c3/c73/c82/c85/c3/c86/c82/c80/c72/c3/c70/c82 /c88/c81/c87/c85/c76/c72/c86/c12
/c36/c79/c79/c3/c71/c68/c87/c68/c3/c72/c91/c70/c79/c88/c71/c72/c3/c87/c75/c72/c3/c41/c85/c72/c81/c70/c75/c3/c39/c50/c48/c86/c30/c3/c83/c72/c85/c76/c83/c75/c72/c85/c68/c79/c3/c85/c72/c74/c76/c82/c81/c86/c3/c76/c81/c70/c79/c88/c71/c72/c3/c38/c93/c72/c70/c75/c3/c53/c72/c83/c88/c69/c79/c76/c70/c11/c20/c12/c3/c39/c68/c87/c68/c3/c73/c82/c85/c3/c90/c82/c80/c72/c81/c3/c68/c81/c71/c3/c92/c82/c88/c81/c74/c3/c83/c72/c82/c83/c79/c72/c3/c72/c91/c70/c79/c88/c71/c72/c3/c38/c92/c83/c85/c88/c86/c3/c68/c81/c71/c3/c48/c68/c79/c87/c68/c30/c3/c71/c68/c87/c68/c3/c82/c81/c3/c79/c82/c81/c74/c16/c87/c72/c85/c80/c3/c88/c81/c72/c80/c83/c79/c82/c92/c80/c72/c81/c87/c3/c72/c91/c70/c79/c88/c71/c72/c3/c38/c92/c83/c85/c88/c86/c15/c3/c48/c68/c79/c87/c68/c3/c68/c81/c71/c3/c47/c76/c87/c75/c88/c68/c81/c76 /c68
/c11/c21/c12/c3/c40/c91/c70/c79/c17/c3/c48/c55/c11/c22/c12/c3/c40/c91/c70/c79/c17/c3/c38/c60/c11/c23/c12/c3/c40/c91/c70/c79/c17/c3/c54/c44/c11/c24/c12/c3/c40/c91/c70/c79/c17/c3/c37/c42/c15/c3/c38/c60/c3/c68/c81/c71/c3/c48/c55/c11/c25/c12/c3/c40/c91/c70/c79/c17/c3/c37/c42/c15/c3/c38/c60/c15/c3/c47/c55/c15/c3/c48/c55/c15/c3/c54/c46/c11/c26/c12/c3/c40/c91/c70/c79/c17/c3/c38/c82/c85/c86/c72/c3/c11/c41/c12/c15/c3/c47/c15/c3/c54/c15/c3/c37/c42/c15/c3/c38/c60/c15/c3/c40/c40/c15/c3/c48/c55/c15/c3/c51/c47/c3/c72/c87/c3/c53/c50/c11/c27/c12/c12/c3/c40/c91/c70/c79/c17/c3/c37/c68/c79/c87/c76/c70/c3/c54/c87/c68/c87/c72/c86/c15/c3/c54/c79/c82/c89/c72/c81/c76/c68/c15/c3/c38/c92/c83/c85/c88/c86/c3/c68/c81/c71/c3/c48/c68/c79/c87/c68/c54/c82/c88/c85/c70/c72/c29/c3/c40/c88/c85/c82/c86/c87/c68/c87/c15/c3/c81/c68/c87/c76/c82/c81/c68/c79/c3/c86/c87/c68/c87/c76/c86/c87/c76/c70/c68/c79/c3/c76/c81/c86/c87/c76/c87/c88/c87/c72/c86/c30/c3/c73/c82/c85/c3/c87/c75/c72/c3/c72/c81/c89/c76/c85/c82/c80/c72/c81/c87/c68/c79/c3/c76/c81/c71/c76/c70/c68/c87/c82/c85/c86/c29/c3/c40/c48/c40/c51/c18/c48/c54/c38/c16/c58/c15/c3/c44/c49/c39/c56/c53/c50/c55/c3/c16/c3/c40/c54/c39/c51/c3/c86/c87/c88/c71/c92/c3/c83/c85/c82/c74/c85/c68/c80/c80/c72/c30 /c3/c70/c68/c79/c70/c88/c79/c68/c87/c76/c82/c81/c86/c3/c39/c42/c53/c40/c42/c44/c50
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GDP per head Surface area Population GDP
Index, US=100
East Coast 116,0 5,0 19,3 22,3
South of the Great Lakes 108,2 4,0 6,2 6,7South (Texas) 102,8 7,3 7,3 7,5West Coast 105,5 11,8 16,1 16,9
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6RXUFH86’R&%($DQGFDOFXODWLRQV’*5(*,2% US total
/c55/c68/c69/c79/c72/c3/c36/c17/c27/c3/c3/c44/c81/c71/c76/c70/c68/c87/c82/c85/c86/c3/c69/c92/c3/c71/c72/c74/c85/c72/c72/c3/c82/c73/c3/c88/c85/c69/c68/c81/c76/c86/c68/c87/c76/c82/c81/c3/c68/c81/c71/c3/c48/c72/c80/c69/c72/c85/c3/c54/c87/c68/c87/c72/c15/c3/c20/c28/c28/c28
/c56/c85/c69/c68/c81/c3/c68/c85/c72/c68/c86/c44/c81/c87/c72/c85/c80/c72/c71/c76/c68/c87/c72/c3
/c68/c85/c72/c68/c86/c53/c88/c85/c68/c79/c3/c68/c85/c72/c68/c86 /c55/c82/c87/c68/c79 /c56/c85/c69/c68/c81/c3/c68/c85/c72/c68/c86/c44/c81/c87/c72/c85/c80/c72/c71/c76/c68/c87/c72 /c3
/c68/c85/c72/c68/c86/c53/c88/c85/c68/c79/c3/c68/c85/c72/c68/c86 /c55/c82/c87/c68/c79
/c56/c81/c72/c80/c83/c79/c82/c92/c80/c72/c81/c87/c3/c85/c68/c87/c72/c3/c11/c8/c3/c79/c68/c69/c82/c88/c85/c3/c73/c82/c85/c70/c72/c12 /c56/c81/c72/c80/c83/c79/c82/c92/c80/c72/c81/c87/c3/c85/c68/c87/c72/c3/c82/c73/c3/c90/c82/c80/c72/c81/c3/c11/c8/c3/c73/c72/c80/c68/c79/c72/c3/c79/c68/c69/c82/c88/c85/c3/c73/c82/c85/c70/c72/c12
B 11,0 6,0 6,6 8,6 B 12,2 7,8 9,9 10,3
DK 5,5 4,5 5,3 5,1 DK 5,5 5,3 6,7 5,9D 9,7 7,0 10,0 8,9 D 9,3 7,9 11,7 9,3EL 13,5 9,9 7,3 11,7 EL 20,3 16,9 12,0 18,2E 15,6 16,2 15,5 15,7 E 22,0 24,9 24,1 23,1F 13,3 11,6 10,9 12,1 F 14,2 13,9 13,9 14,0IRL 5,5 : 5,8 5,7 IRL 4,6 : 6,2 5,5I 12,9 10,1 12,0 11,7 I 16,9 15,1 18,0 16,4L 3,4 2,0 1,8 2,4 L 4,2 2,8 3,3 3,3NL 3,6 3,7 4,2 3,6 NL 4,4 5,6 6,3 4,9A 5,9 3,8 4,1 4,7 A 5,5 4,7 4,2 4,8P 6,1 3,1 4,4 4,6 P 6,1 4,2 6,3 5,4FIN 8,9 13,1 12,9 11,7 FIN 8,6 13,8 14,4 12,5S 6,2 6,3 8,3 7,6 S 5,3 5,5 7,7 6,9UK 6,9 4,7 5,5 6,1 UK 5,8 4,3 4,7 5,2
/c40/c56/c20/c21 /c20/c19/c15/c22 /c26/c15/c28 /c20/c19/c15/c20 /c28/c15/c25 /c40/c56/c20/c21 /c20/c20/c15/c23 /c20/c19/c15/c19 /c20/c22/c15/c21 /c20/c20/c15/c23
/c40/c56/c20/c24 /c20/c19/c15/c20 /c26/c15/c27 /c28/c15/c28 /c28/c15/c23 /c40/c56/c20/c24 /c20/c20/c15/c21 /c28/c15/c28 /c20/c21/c15/c23 /c20/c20/c15/c20
/c47/c82/c81/c74/c16/c87/c72/c85/c80/c3/c88/c81/c72/c80/c83/c79/c82/c92/c80/c72/c81/c87/c3/c11/c8/c3/c87/c82/c87/c68/c79/c3/c88/c81/c72/c80/c83/c79/c82/c92/c72/c71/c12 /c51/c68/c85/c87/c76/c70/c76/c83/c68/c87/c76/c82/c81/c3/c85/c68/c87/c72/c3/c11/c8/c3/c83/c82/c83/c88/c79/c68/c87/c76/c82/c81/c3/c20/c24/c16/c25/c23/c12
B 63,5 53,6 61,9 60,5 B 64,1 65,1 64,7 64,6
DK 19,6 18,1 22,3 20,3 DK 81,9 80,1 79,9 80,6D 52,2 49,0 49,8 50,8 D 70,2 71,2 73,5 71,2EL 56,1 51,4 53,3 55,3 EL 61,5 63,7 67,7 62,9E 51,2 47,4 36,1 46,3 E 63,0 61,4 61,1 62,1F 42,0 40,0 33,2 38,7 F 68,3 68,3 69,5 68,8I R L :::: I R L 68,2 : 65,3 66,4
I 67,1 57,1 48,5 60,6 I 59,3 59,7 60,0 59,6L 28,9 41,5 18,2 32,3 L 64,8 61,5 64,3 63,1NL 38,2 36,9 36,5 37,7 NL 74,0 73,2 71,5 73,6A 39,9 29,2 20,5 31,2 A 73,0 70,5 70,9 71,6P 41,8 39,5 40,2 40,9 P 70,7 71,8 69,6 70,9FIN 21,8 23,5 21,9 22,3 FIN 79,6 77,2 74,7 76,4S 22,5 34,4 29,8 29,1 S 77,8 79,2 77,6 76,4UK 30,9 24,1 32,2 29,6 UK 74,0 77,9 75,0 75,2
/c40/c56/c20/c21 /c23/c28/c15/c20 /c23/c25/c15/c21 /c22/c28/c15/c23 /c23/c25/c15/c22 /c40/c56/c20/c21 /c25/c27/c15/c19 /c25/c27/c15/c24 /c25/c27/c15/c24 /c25/c27/c15/c22
/c40/c56/c20/c24 /c23/c27/c15/c26 /c23/c24/c15/c26 /c22/c26/c15/c26 /c23/c24/c15/c22 /c40/c56/c20/c24 /c25/c27/c15/c22 /c25/c27/c15/c26 /c25/c28/c15/c23 /c25/c27/c15/c25
/c60/c82/c88/c87/c75/c3/c88/c81/c72/c80/c83/c79/c82/c92/c80/c72/c81/c87/c3/c85/c68/c87/c72/c3/c11/c8/c3/c79/c68/c69/c82/c88/c85/c3/c73/c82/c85/c70/c72/c3/c20/c24/c16/c21/c23/c12
B 27,2 17,1 23,6 22,6 B 76,6 66,4 70,8 71,8
DK 10,8 8,2 10,5 10,0 DK 81,1 67,7 61,5 69,8D 10,3 7,3 8,4 8,9 D 68,8 58,8 57,3 63,3EL 34,5 28,4 24,8 31,7 EL 72,9 53,8 28,4 60,9E 31,1 29,6 26,5 29,5 E 69,9 60,3 48,0 62,0F 26,8 27,1 25,9 26,5 F 78,5 68,9 59,5 69,4IRL 8,2 : 8,5 8,4 IRL 75,4 : 55,6 63,4I 38,2 28,2 31,5 32,9 I 69,7 56,4 56,1 62,2L 8,6 6,4 3,5 6,8 L 78,5 77,1 70,0 76,0NL 6,8 8,4 7,5 7,4 NL 79,0 67,5 65,3 74,5A 8,3 5,1 4,8 5,9 A 74,5 61,8 56,1 64,2P 11,4 5,9 11,1 9,1 P 64,2 44,1 50,0 53,6FIN 20,7 30,0 32,7 28,6 FIN 78,7 71,9 58,5 66,0S 16,2 12,6 16,9 16,3 S 83,8 75,8 68,0 72,3UK 13,6 10,4 11,3 12,5 UK 74,3 70,2 67,6 72,3/c40/c56/c20/c21 /c20/c28/c15/c24 /c20/c25/c15/c20 /c20/c27/c15/c27 /c20/c27/c15/c23 /c40/c56/c20/c21 /c26/c21/c15/c26 /c25/c20/c15/c28 /c24/c25/c15/c28 /c25/c25/c15/c21/c40/c56/c20/c24 /c20/c28/c15/c23 /c20/c25/c15/c19 /c20/c27/c15/c26 /c20/c27/c15/c22 /c40/c56/c20/c24 /c26/c21/c15/c28 /c25/c21/c15/c21 /c24/c26/c15/c26 /c25/c25/c15/c22
/c54/c82/c88/c85/c70/c72/c29/c3/c40/c88/c85/c82/c86/c87/c68/c87/c15/c3/c47/c68/c69/c82/c88/c85/c3/c41/c82/c85/c70/c72/c3/c54/c88/c85/c89/c72/c92/c40/c80/c83/c79/c82/c92/c80/c72/c81/c87/c3/c76/c81/c3/c86/c72/c85/c89/c76/c70/c72/c86/c3/c11/c8/c3/c87/c82/c87/c68/c79/c12
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Unemployment rate (% labour force)
<75 17,1 15,2 15,6 16,2
75-100 10,3 7,7 9,5 9,4
>=100 8,0 5,3 5,7 6,9
EU15 10,1 7,8 9,9 9,4
Unemployment rate of women (% female labour force)
<75 20,8 21,0 21,0 20,9
75-100 11,1 9,2 11,4 10,7
>=100 8,7 6,7 7,5 8,0
EU15 11,2 9,9 12,4 11,1
Youth unemployment rate (% labour force 15-24)
<75 33,4 28,7 24,2 29,3
75-100 19,5 16,0 20,5 18,9
>=100 14,6 10,6 10,5 12,8
EU15 19,4 16,0 18,7 18,3
Long-term unemployment (% total unemployed)
<75 60,7 54,6 44,3 54,4
75-100 40,8 42,0 34,1 38,8
>=100 46,5 40,5 33,0 43,7
EU15 48,7 45,7 37,7 45,3
Participation  rate (% population 15-64)
<75 62,7 62,3 65,8 63,5
75-100 68,9 70,2 70,2 69,7
>=100 69,7 70,1 71,0 70,0
EU15 68,3 68,7 69,4 68,6
Part-time employment (% total employed)
<75 10,2 9,8 9,6 9,9
75-100 20,2 20,9 18,6 19,8
>=100 18,2 17,7 16,9 17,9
EU15 17,6 17,6 16,2 17,3
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EU15=100
GDP per head (PPS), 
EU15=100
GDP per head (PPS), 
EU15=100
GDP per head (PPS), 
EU15=100
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Agriculture Industry Services Total
B 0,5 -8,9 -2,7 1,7 0,5
DK -4,3 -3,1 -1,3 1,7 1,1D 1,8 -3,4 -2,4 0,4 -0,5EL 7,7 -4,7 0,1 2,3 1,6E -8,3 0,4 3,8 3,4 3,5F 0,8 -4,4 -0,5 1,2 0,8IRL -18,1 1,0 4,6 6,4 5,9I -0,6 -16,4 -0,9 1,1 0,1L : ::::NL -16,4 -2,6 1,9 3,1 2,8A 3,4 4,9 -3,2 0,4 -0,5P -13,6 -8,0 -3,7 -6,5 -5,6FIN -8,6 1,6 4,2 3,6 3,7S -5,2 2,3 -5,9 -0,9 -1,8UK -8,2 0,0 -0,8 1,8 1,1EU15 -3,1 -6,4 -0,8 1,3 0,6
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Employment
Unemployed
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Agriculture Industry Services Total
B 21,1 -12,0 3,0 12,6 7,4
DK -8,0 -5,8 0,7 1,1 0,4D 5,4 -2,9 -0,4 2,5 1,0EL 12,4 -6,6 1,3 0,2 -3,7E -6,5 -3,8 3,4 4,0 2,0F 2,1 -2,8 0,7 1,3 0,7IRL -9,9 -6,2 7,4 7,0 5,0I 1,3 -7,4 1,5 1,3 0,2L : ::::NL -5,4 -5,0 1,4 3,6 2,1A 2,3 -7,0 -1,7 1,3 -0,8P -2,3 -4,7 9,8 8,2 5,1FIN -5,7 -2,9 4,2 4,6 3,5S -0,5 -7,7 0,0 0,7 0,1UK -7,2 -8,0 1,2 0,6 0,2EU15 -0,6 -4,8 1,2 2,1 1,0
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Employment
Unemployed
/c55/c68/c69/c79/c72 /c3 /c36/c17/c20/c21 /c3/c3 /c54/c82/c70/c76/c82/c16/c72/c70/c82/c81/c82/c80/c76/c70 /c3 /c76/c81/c71/c76/c70/c68/c87/c82/c85/c86 /c3 /c73/c82/c85 /c3 /c69/c82/c85/c71/c72/c85 /c3 /c85/c72/c74/c76/c82/c81/c86
/c55/c82/c87/c68/c79/c37/c82/c85/c71/c72/c85/c86/c3/c90/c76/c87/c75/c76/c81/c3
/c40/c56/c20/c24/c37/c82/c85/c71/c72/c85/c86/c3/c90/c76/c87/c75/c3
/c70/c68/c81/c71/c76/c71/c68/c87/c72/c3
/c70/c82/c88/c81/c87/c85/c76/c72/c86/c20/c36/c79/c79/c3/c69/c82/c85/c71/c72/c85/c86/c3/c90/c76/c87/c75/c3
/c70/c68/c81/c71/c76/c71/c68/c87/c72/c3
/c70/c82/c88/c81/c87/c85/c76/c72/c86/c36/c79/c79/c3/c69/c82/c85/c71/c72/c85/c86/c3/c90/c76/c87/c75/c3
/c40/c56/c37/c82/c85/c71/c72/c85/c86/c3/c90/c76/c87/c75/c3
/c82/c87/c75/c72/c85/c3/c70/c68/c81/c71/c76/c71/c68/c87/c72/c3
/c70/c82/c88/c81/c87/c85/c76/c72/c86/c37/c82/c85/c71/c72/c85/c86/c3/c90/c76/c87/c75/c3
/c82/c87/c75/c72/c85/c3/c70/c82/c88/c81/c87/c85/c76/c72/c86/c21/c55/c82/c87/c68/c79
Population
/c19/c19/c19/c86 374537 281197 93340 66804 10596 15940 /c20/c21/c21/c23/c19 /c20/c26/c21/c20/c22 32177 11816 61206 44733 105940 480477
/c8 /c3 /c87/c82/c87/c68/c79 /c3 /c74/c85/c82/c88/c83 100,0 75,1 24,9 17,8 2,8 4,3 /c22/c15/c22 /c20/c25/c15/c21 30,4 11,2 57,8 42,2 100,0 :
/c68/c81/c81/c88/c68/c79 /c3 /c68/c89/c72/c85/c68/c74/c72 /c3 /c8 /c3 /c70/c75/c68/c81/c74/c72 0,3 0,2 0,3 0,4 0,2 0,3 /c19/c15/c21 /c29 : : : : -0,1 0,2
Surface area
/c86/c84/c88/c68/c85/c72 /c3 /c78/c80/c86 3191120 1944843 1246277 873667 91203 281408 /c20/c20/c25/c24/c21/c21 /c20/c28/c25/c25/c22/c24 364751 155976 717362 368713 1086075 4277195
/c8 /c3 /c87/c82/c87/c68/c79 /c3 /c74/c85/c82/c88/c83 100,0 60,9 39,1 27,4 2,9 8,8 /c22/c15/c26 /c20/c27/c15/c20 33,6 14,4 66,1 33,9 100,0 :
/c51/c82/c83/c88/c79/c68/c87/c76/c82/c81 /c3 /c71/c72/c81/c86/c76/c87/c92 /c3 /c11/c81/c82/c86 /c3 /c83/c72/c85 /c3 /c86/c84/c88/c68/c85/c72 /c3 /c78/c80/c12 117 145 75 76 116 57 /c20/c19/c24 /c27/c27 88 76 85 121 98 112
Unemployment rate (1999, %) 9,4 9,4 9,3 8,5 9,4 13,0 /c28/c15/c19 /c29 : : : : 10,3 9,6
GDP per head (PPS, 1998, EUR26 = 100) 116 117 111 115 115 95 /c20/c20/c24 /c24/c22 42 37 44 43 44 100
Land use (excl. FIN, S, CY, MT)
/c8 /c3 /c68/c85/c87/c76/c73/c76/c70/c76/c68/c79 /c3 /c86/c88/c85/c73/c68/c70/c72 /c3 /c11/c69/c88/c76/c79/c87/c16/c88/c83 /c3 /c68/c85/c72/c68/c86/c15 /c3 /c72/c87/c70/c12 /c3 /c76/c81 /c3 /c87/c82/c87/c68/c79 /c3
/c86/c88/c85/c73/c68/c70/c72/c3/c68/c85/c72/c68 4,1 4,3 3,6 3,6 3,9 3,1 /c22/c15/c28 /c22/c15/c20 4,3 3,8 3,9 4,5 4,1 4,1
/c8 /c3 /c68/c74/c85/c76/c70/c88/c79/c87/c88/c85/c68/c79 /c3 /c68/c85/c72/c68 /c3 /c76/c81 /c3 /c87/c82/c87/c68/c79 /c3 56,5 58,7 51,5 52,3 52,3 46,3 /c24/c21/c15/c22 /c24/c20/c15/c20 59,2 54,5 56,1 59,5 57,3 56,8
Length of motorways
/c38/c82/c80/c83/c82/c86/c76/c87/c72/c3/c76/c81/c71/c76/c70/c68/c87/c82/c85/c3/c11/c83/c82/c83/c88/c79/c68/c87/c76/c82/c81/c3/c68/c81/c71/c3/c79/c68/c81/c71/c3/c68/c85/c72/c68/c12/c3
/c11/c44/c81/c71/c72/c91/c3/c40/c56/c21/c26/c32/c20/c19/c19/c12 121,9 124,7 115,1 128,1 94,9 75,8 /c28/c26/c15/c27 /c21/c26/c15/c26 17,6 20,2 20,7 26,0 22,7 100,0
/c20/c3/c40/c91/c70/c79/c17/c3/c85/c72/c74/c76/c82/c81/c86/c3/c69/c82/c85/c71/c72/c85/c76/c81/c74/c3/c87/c75/c72/c3/c40/c56
/c21/c3/c40/c91/c70/c79/c17/c3/c85/c72/c74/c76/c82/c81/c86/c3/c69/c82/c85/c71/c72/c85/c76/c74/c3/c87/c75/c72/c3/c40/c56/c3/c68/c81/c71/c3/c87/c75/c72/c3/c70/c68/c81/c71/c76/c71/c68/c87/c72/c3/c70/c82/c88/c81/c87/c85/c76/c72/c86
/c37/c82/c85/c71/c72/c85/c3/c85/c72/c74/c76/c82/c81/c86/c29
/c41/c82/c85/c3/c87/c75/c72/c3/c40/c56/c29/c3/c85/c72/c74/c76/c82/c81/c86/c3/c11/c49/c56/c55/c54/c3/c22/c12/c3/c72/c79/c76/c74/c76/c69/c79/c72/c3/c73/c82/c85/c3/c44/c49/c55/c40/c53/c53/c40/c42/c3/c22/c36 /c41/c82/c85/c3/c87/c75/c72/c3/c70/c68/c81/c71/c76/c71/c68/c87/c72/c3/c70/c82/c88/c81/c87/c85/c76/c72/c86/c29/c3/c69/c82/c85/c71/c72/c85/c3/c85/c72/c74/c76/c82/c81/c86/c3/c68/c87/c3/c3/c49/c56/c55/c54/c3/c22/c3/c79/c72/c89/c72/c79/c3/c3/c11/c51/c82/c79/c68/c81/c71/c29/c3/c82/c79/c71/c3/c79/c72/c89/c72/c79/c3/c22/c3/c85/c72/c74/c76/c82/c81/c86/c15/c3/c79/c72/c89/c72/c79/c3/c22/c3/c81/c82/c87/c3/c75/c68/c89/c76/c81/c74/c3/c69/c72/c72/c81/c3/c71/c72/c73/c76/c81/c72/c71/c3/c92/c72/c87 /c12
/c48/c82/c87/c82/c85/c90/c68/c92/c86/c29/c3/c76/c81/c70/c79/c88/c71/c76/c81/c74/c3/c80/c68/c76/c81/c3/c71/c88/c68/c79/c3/c70/c68/c85/c85/c76/c68/c74/c72/c90/c68/c92/c86 /c54/c82/c88/c85/c70/c72/c29/c3/c40/c88/c85/c82/c86/c87/c68/c87/c15/c3/c44/c49/c54/c15/c3/c38/c82/c85/c76/c81/c72/c3/c47/c68/c81/c71/c3/c38/c82/c89/c72/c85/c15/c3/c39/c42/c3/c53/c40/c42/c44/c50/c3/c70/c68/c79/c70/c88/c79/c68/c87/c76/c82/c81/c86EUR27
TotalNon-border 
regionsBorder regions (Interreg 3A) Border regions (level 3)
Non-border 
regionsTotal/c37/c82/c85/c71/c72/c85/c86/c3/c90/c76/c87/c75/c3/c82/c87/c75/c72/c85/c3
/c70/c82/c88/c81/c87/c85/c76/c72/c86/c3/c21IndicatorsUE15 Pays candidats
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% total 
moutain 
areas
Objective 1 61,5
3KDVLQJRXWRI2EMRUVSHFLDOSURJUDPPH Objective 2 24,73KDVLQJRXWRI2EM Non-eligible 4,9Total mountain areas 100,0
Mountain areas as % total EU15 land are
a 38,8
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1000s % total
GDP/head (PPS) 1998, index, EU15=10 0
<50 1970 3,650-75 18679 34,675-100 13198 24,4100-125 15355 28,4>=125 4835 8,9WRWDO  
Unemplo
yment (%), 1999
<4.7 9278 17,24.7-9.4 
(EU15 avera ge) 14097 26,1
9.4-14.1 15306 28,314.1-18.8 8259 15,3>=18.8 7098 13,1WRWDO  
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Square kms% total MS 
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DK 66 1,3 0,0 0,0 95,1 95,1D 188 0,2 64,9 0,0 35,1 100,0EL 1265 12,3 100,0 0,0 0,0 100,0E 2257 5,8 66,0 0,0 12,5 78,5F 1653 2,8 81,3 15,1 1,6 98,0IRL 3 0,1 80,8 19,2 0,0 100,0I 7008 12,3 99,5 0,0 0,5 99,9L 0 0 , 0::::NL 23 0,1 0,0 0,0 0,0 0,0A 0 0 , 0::::P 489 5,0 100,0 0,0 0,0 100,0FIN 105 2,1 16,0 0,0 58,8 74,8S 113 1,3 0,0 0,3 95,7 96,0UK 307 0,5 23,4 33,2 0,1 56,8
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% total island population
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Population Population 
densityPopulation 
changeGDP per 
head (PPS)
1998 1998 1991-98 1998 Total Female Youth
1000s km² inh./km²% change 
p.a.EU15=100 % % % EU15=100
BORNHOLMS AMT 44,7 588 76,0 -0,3 88,7 8,6 10,7 16,7 9,9
IONIA NISIA 202,8 2307 87,9 0,9 55,7 5,5 8,1 20,7 2,0VOREIO AIGAIO 183,5 3836 47,8 -0,6 60,8 11,3 15,6 30,1 1,2NOTIO AIGAIO 270,8 5286 51,2 0,9 76,9 7,3 11,6 15,7 2,1KRITI 563,0 8336 67,5 0,6 66,8 7,3 11,5 19,9 2,0ISLAS BALEARES 736,9 5014 147,0 1,1 99,5 7,2 10,5 14,9 7,1CANARIAS 1589,9 7242 219,5 0,9 77,1 14,4 20,5 29,8 :CORSE 259,8 8680 29,9 0,5 77,0 14,3 18,8 24,8 19,3GUADELOUPE 437,7 1705 256,7 1,2 52,4 : : : :MARTINIQUE 401,4 1128 355,9 1,3 59,8 : : : :RÉUNION 689,5 2520 273,6 1,7 50,0 : : : :SICILIA 5103,2 25707 198,5 0,4 65,2 24,8 36,2 60,2 9,9SARDEGNA 1658,0 24090 68,8 0,1 76,3 21,9 31,7 56,7 7,0AÇORES 244,4 2330 104,9 0,4 52,0 3,7 6,5 7,6 :MADEIRA 259,9 779 333,7 0,4 57,5 3,4 4,4 7,0 :ÅLAND 25,5 1527 16,7 0,5 122,2 2,1 2,4 : 7,0GOTLANDS LÄN 57,7 3140 18,4 0,1 91,9 7,3 6,7 15,2 5,5ISLE OF WIGHT 127,0 395 321,6 0,1 76,7 7,8 6,6 17,4 86,9ISLE OF ANGLESEY 65,4 715 91,5 : 67,9 9,5 9,1 17,8 57,6COMHAIRLE NAN EILAN (WESTERN ISLES) 27,9 3134 8,9 -0,7 77,1 8,9 5,9 12,2 1,9ORKNEY ISLANDS 19,6 992 19,8 0,0 82,0 3,6 3,7 6,4 1,0SHETLAND ISLANDS 22,9 1438 15,9 0,3 114,0 3,3 3,0 6,7 0,7
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/c44/c86/c79/c68/c81/c71/c86/c3/c70/c82/c85/c85/c72/c86/c83/c82/c81/c71/c76/c81/c74/c3/c87/c82/c3/c68/c3/c49/c56/c55/c54/c22/c15/c3/c49/c56/c55/c54/c21/c3/c82/c85/c3/c49/c56/c55/c54/c20/c3/c85/c72/c74/c76/c82/c81
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(by lorry 
weighted by 
GDP)Unemployment rate (1999)
Land area
Region
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TransportBusiness, 
financial 
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services (2)Total
EU15   47717
B 40927 65739 50507 107187 37967 57980DK 41285 59975 50759 118310 43226 57329D 23103 51150 35329 113750 38956 51278EL 11724 25613 28053 88782 23715 27662E 19093 36257 35022 76999 26924 35725F 36423 58110 46012 105037 40143 55549IRL 31143 69437 36617 101614 37195 51825I 26632 45736 47235 102357 33559 48375L 34215 79076 73425 157682 74700 94136NL 36123 58102 39484 61516 32596 45207A 7560 57613 41551 106994 42834 47711P 6359 19419 21220 47250 21096 20918FIN 29303 61829 49644 110720 34818 52831S 35578 61467 46181 114004 34352 52636U K : :::: 43993
B G : :::: 3426
CY 5279 29204 28962 77707 35853 28237C Z : :::: 10176
EE 4892 6015 9040 16620 5616 7271HU : 10879 10939 32554 : 11340LT 2769 6923 7193 15380 4513 5789LV 1281 6423 6724 9811 4064 5213M T : :::: 22861
PL 1739 11310 12308 17652 9308 9201RO 1909 5321 7081 9023 3195 4185S I : :::::SK 4513 7103 12324 28179 4375 8374
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Net 
Capital 
StockGross 
Capital 
StockPopulation 
(000)NCS per 
headNCS per 
employedGCS per 
headNet 
Capital 
StockGross 
Capital 
StockPopulation 
(000)NCS per 
headNCS per 
employedGCS per 
head
B 303306 536137 9928 30552 84583 54005 452389 771029 10214 44292 113455 75489
DK 316797 549552 5130 61756 120441 107130 417763 742244 5314 78622 154270 139688D 4017994 6341880 78390 51257 146615 80902 6000812 9368420 82037 73148 166277 114197EL 165950 324108 10058 16499 45207 32224 259856 457886 10522 24697 65958 43518E 1000548 1678093 38757 25816 82050 43298 1438887 2253212 39394 36525 104472 57196F 2226545 3862083 56270 39569 102388 68635 2972445 5173348 58973 50403 130631 87724IRL 86874 144589 3515 24715 79301 41134 124679 201753 3735 33382 78276 54018I 2532457 4115837 56649 44704 121699 72655 3111910 4873882 57613 54014 150935 84597L 19006 33579 375 50697 123819 89567 36431 62189 429 84880 206874 144894NL 575791 1012171 14805 38891 95483 68366 783393 1360567 15760 49707 103016 86329A 409796 621443 7628 53722 115699 81468 652446 974717 8083 80720 177406 120591P 152803 227353 9955 15349 33447 22838 264081 402395 9979 26462 54674 40322FIN 410202 687623 4954 82796 168792 138791 342045 580807 5160 66292 146630 112567S 534153 909778 8459 63147 117523 107553 552566 911030 8854 62406 136301 102891UK 2351218 3879999 57258 41064 88539 67763 2999960 4776047 59280 50607 110670 80568EU 15103440 24924224 362130 41707 97287 68827 20409663 32909524 375346 54376 131468 87678
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Rotterdam, NL 226 276 228 303 307 1,1
Antwerpen, B 78 82 102 112 120 7,1Marseille, F 74 103 90 94 93 -0,9Hamburg, D 47 63 61 77 76 -0,3Le Havre, F 58 77 54 60 66 11,3London, UK 64 48 58 56 56 1,2Amsterdam, NL 21 34 47 57 56 -1,4Tees & Hartelp., UK 23 38 40 51 52 0,4Trieste, I 27 38 34 46 47 1,7Genoa, I 53 51 44 46 46 0,0Forth ports, UK 25 29 25 43 44 3,0Wilhemshaven, D 22 32 16 36 44 20,5Algeciras, E 8 22 25 37 42 12,9Dunkerque, F 25 41 37 37 39 7,3Bremen B'haven, D 23 25 28 34 35 1,5Southampton, UK 28 25 29 33 34 3,6Zeebrugge, B 8 12 30 32 33 2,7Gothenburg, S 20 22 26 30 31 1,2Liverpool, UK 31 13 23 31 30 -1,6Milford Haven, UK 41 39 33 35 29 -16,6Bilbao, E 11 21 25 22 26 18,0Tarragona, E 4 19,8 24 31 26 -17,1Dublin, IRL 7 7 8 17 19 10,1Thessaloniki, EL 8 9 14 13 14 2,4Kobenhavn, DK 6 7 9 11 12 10,4Lisbon, P 9 14 14 12 11 -2,5Helsinki, FIN 4 5 8 11 11 -4,8Sum of above ports 951 1153 1192 1367 1399 2,3Singapore 328 312 -4,6
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Rotterdam, NL 3667 4787 5495 6011 9,4
Hambourg, D 1969 2890 3337 3547 6,3Antwerpen, B 1549 2329 2969 3266 10Felixstowe, UK 1436 1924 2237 2500 11,8Gioia Tauro, I 0 16 1449 2126 46,7Bremen B'haven, D 1198 1524 1538 1826 18,7Algeciras, E 553 1155 1703 1812 6,4Le Havre, F 858 970 1185 1319 11,3Genoa, I 310 615 1180 1266 7,3Barcelona, E 448 689 972 1095 12,7Valencia, E 387 672 832 1005 20,8Zeebrugge, B 342 528 648 776 19,8La Spezia, I 450 965 616 732 18,8Southampton, UK 345 681 806 891 10,5Piraeus, EL 426 600 684 933 36,4Marseille, F 482 498 622 660 6,2Gothenburg, S 352 458 531 520 -2,1Liverpool, UK 239 406 461 487 5,6Helsinki, FIN 246 296 330 343 3,8Copenhagen, DK 165 178 160 171 6,8Sum of top 10 ports 11987 16899 22065 24768 12,3Singapore 5224 11846 14100 15100 7,1Hong Kong 5101 12550 14385 14900 3,6
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Maersk DK 346123
Evergreen Taïwan 280237
P&O Nedlloyd UK/NL 250858Mediterranean Shipping CH/I 220745Hanjin Shipping Co. Korea 213081Sea-Land USA 211358Cosco China 202094
APL Singapore
/USA201075
NYK Japan 163930
MOL Japan 133681
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Road 416 628 932 1146 1152 1205 1255 3,8
Rail 283 287 255 221 220 238 241 -0,7Inland water-ways 103 107 108 114 112 118 121 1,4Pipelines 66 91 75 83 85 85 87 1,9Sea (intra EU) 472 780 922 1071 1073 1124 1167 3,0Total 1340 1893 2293 2635 2641 2770 2870 2,8
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countriesOther MS
GDP per head, PPS, EU=100, 1998 111 119 108 66 81 99 108 101 176 113 112 75 102 102 102 100 79 104
Gross RTD expenditure (% GDP) (1) 1,84 1,93 2,29 0,51 0,90 2,19 1,40 1,02 : 2,04 1,49 0,63 2,89 3,77 1,82 1,86 0,85 1,98
/c40/c56/c20/c24/c32/c20/c19/c19 /c28/c28 /c20/c19/c23 /c20/c21/c22 /c21/c26 /c23/c27 /c20/c20/c27 /c26/c24 /c24/c24 : /c20/c20/c19 /c27/c19 /c22/c23 /c20/c24/c24 /c21/c19/c22 /c28/c27 /c20/c19/c19 /c23/c25 /c20/c19/c25
Business RTD expenditure (% GDP) (1) 1,31 1,21 1,55 0,13 0,47 1,36 1,03 0,55 : 1,11 0,84 0,14 1,94 2,87 1,2 1,18 0,43 1,27
/c40/c56/c20/c24/c32/c20/c19/c19 /c20/c20/c20 /c20/c19/c22 /c20/c22/c20 /c20/c20 /c23/c19 /c20/c20/c24 /c27/c26 /c23/c26 : /c28/c23 /c26/c20 /c20/c21 /c20/c25/c23 /c21/c23/c22 /c20/c19/c21 /c20/c19/c19 /c22/c26 /c20/c19/c27
Business as % gross expenditure 71,4 62,6 67,8 25,6 52,1 62,0 73,7 53,7 : 54,1 55,9 22,5 67,2 76,2 65,8 63,7 50,5 64,3
Total RTD personnel as % total (2) 1,22 1,99 1,48 0,75 1,02 1,46 1,17 0,81 : 1,45 1,16 0,61 2,43 2,35 1,28 1,27 0,91 1,34
/c40/c56/c20/c24/c32/c20/c19/c19 /c28/c25 /c20/c24/c26 /c20/c20/c26 /c24/c28 /c27/c19 /c20/c20/c24 /c28/c21 /c25/c23 : /c20/c20/c23 /c28/c20 /c23/c27 /c20/c28/c20 /c20/c27/c24 /c20/c19/c20 /c20/c19/c19 /c26/c21 /c20/c19/c24
Private RTD personnel as % total (2) 0,63 1,00 0,84 0,11 0,26 0,71 0,50 0,30 : 0,61 0,47 0,08 1,29 1,21 0,60 0,59 0,22 0,66
/c40/c56/c20/c24/c32/c20/c19/c19 /c20/c19/c26 /c20/c25/c28 /c20/c23/c21 /c20/c28 /c23/c23 /c20/c21/c19 /c27/c24 /c24/c20 : /c20/c19/c22 /c27/c19 /c20/c23 /c21/c20/c28 /c21/c19/c24 /c20/c19/c21 /c20/c19/c19 /c22/c26 /c20/c20/c21
European patent applications per million 
people, average 1997-98-99 123 139 227 6 18 116 52 60 145 166 125 3 222 269 95 119 16 140
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Wholesale and retail trade 33 30
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Transport, storage and communications 26 18
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/c57/c82/c85/c72/c76/c82/c3/c36/c76/c74/c68/c76/c82/c3/c11/c40/c47/c12 3,7 -8,0 24,2 West Midlands (UK) 48,6 29,0 1,9
/c38/c72/c81/c87/c85/c82/c3/c11/c51/c12 3,7 11,0 31,9 /c38/c72/c81/c87/c85/c72/c3/c11/c41/c12 49,2 26,0 6,5
Attiki (EL) 3,8 -23,0 1,0 Nord-Pas-de-Calais (F) 50,8 29,0 2,9
/c39/c92/c87/c76/c78/c76/c3/c48/c68/c78/c72/c71/c82/c81/c76/c68/c3/c11/c40/c47/c12 4 22,0 23,4 Danmark (DK) 57,2 18,0 3,7
/c44/c83/c72/c76/c85/c82/c86/c3/c11/c40/c47/c12 4,1 -12,0 30,3 Yorkshire and Humberside (UK) 62,6 29,0 1,5
/c48/c68/c71/c72/c76/c85/c68/c3/c11/c51/c12 4,1 114,0 12,5 South East (UK) 65,5 45,0 1,7
/c57/c68/c79/c79/c72/c3/c71/c182/c36/c82/c86/c87/c68/c3/c11/c44/c12 4,2 12,0 6,6 Oost-Nederland (NL) 68,6 25,0 4,2
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/c36/c86/c87/c88/c85/c76/c68/c86/c3/c11/c40/c12 4,5 -29,0 11,1 /c51/c76/c70/c68/c85/c71/c76/c72/c3/c11/c41/c12 78,6 24,0 5,3
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/c48/c82/c79/c76/c86/c72/c3/c11/c44/c12 4,6 4,0 15,5 Zuid-Nederland (NL) 86,1 25,0 3,7
/c46/c85/c76/c87/c76/c3/c11/c40/c47/c12 4,7 -10,0 37,8 Sachsen (D) 87,3 28,0 2,9
/c36/c69/c85/c88/c93/c93/c76/c3/c11/c44/c12 4,8 -10,0 8,9 Ile-de-France (F) 89,3 27,0 0,4
/c54/c87/c72/c85/c72/c68/c3/c40/c79/c79/c68/c71/c68/c3/c11/c40/c47/c12 4,8 -11,0 31,8 /c37/c85/c68/c81/c71/c72/c81/c69/c88/c85/c74/c3/c11/c39/c12 95,1 -6,0 5,3
/c39/c92/c87/c76/c78/c76/c3/c40/c79/c79/c68/c71/c68/c3/c11/c40/c47/c12 5 -7,0 41,5 West-Nederland (NL) 100,4 18,0 2,8
Lazio (I) 5,1 -16,0 4,6 Thüringen (D) 103,7 -9,0 3,9
/c49/c82/c85/c87/c72/c3/c11/c51/c12 5,2 37,0 11,6 East Anglia (UK) 107,2 45,0 3,5
/c38/c68/c79/c68/c69/c85/c76/c68/c3/c11/c44/c12 5,3 22,0 13,1 /c48/c72/c70/c78/c79/c72/c81/c69/c88/c85/c74/c16/c57/c82/c85/c83/c82/c80/c80/c72/c85/c81/c3/c11/c39/c12 159,5 16,0 6,5
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EU 15 16,7 17,0 5,0
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/c82/c73/c3/c90/c75/c76/c70/c75/c29/c3
Obj 1, 6 (EUR mn) 12201 2306 1525 7438 2042 25512 1315 4136 30963 9388 40351
% 30% 6% 4% 18% 5% 63% 3% 10% 77% 23% 100%Obj 2, 5b (EUR mn) 10834 519 2466 3679 1376 18873 337 4069 23280 10159 33438% 32% 2% 7% 11% 4% 56% 1% 12% 70% 30% 100%
/c50/c87/c75/c72/c85/c3/c85/c72/c74/c76/c82/c81/c68/c79/c3/c79/c82/c68/c81/c86/c3 /c20/c28/c27/c23 /c27/c20/c26/c22 /c27/c24 /c26/c21/c26 /c20/c24/c25 /c20/c20/c20/c21/c23 /c20/c21/c20/c23 /c20/c21/c22/c22/c27 /c20/c21/c22/c22/c27
/c55/c82/c87/c68/c79 /c22/c27/c28/c24/c25 /c20/c21/c20/c21/c19 /c26/c26/c27/c23 /c20/c25/c26/c26/c20 /c23/c28/c23/c24 /c27/c19/c24/c26/c26 /c20/c27/c22/c20 /c20/c21/c19/c28/c25 /c28/c23/c24/c19/c23 /c22/c27/c24/c26/c19 /c20/c22/c22/c19/c26/c23
/c53/c72/c74/c76/c82/c81/c68/c79/c3/c71/c72/c89/c72/c79/c82/c83/c80/c72/c81/c87/c3
/c68/c86/c3/c8/c3/c87/c82/c87/c68/c79 /c25/c23/c8 /c28/c20/c8 /c24/c21/c8 /c26/c20/c8 /c26/c21/c8 /c25/c28/c8 /c28/c19/c8 /c26/c27/c8 /c26/c19/c8 /c24/c20/c8 /c25/c24/c8
/c13/c3/c55/c75/c72/c3/c86/c75/c68/c85/c72/c3/c82/c73/c3/c85/c72/c74/c76/c82/c81/c68/c79/c3/c71/c72/c89/c72/c79/c82/c83/c80/c72/c81/c87/c3/c76/c81/c3/c74/c79/c82/c69/c68/c79/c3/c79/c82/c68/c81/c86/c3/c90/c68/c86/c3/c70/c68/c79/c70/c88/c79/c68/c87/c72/c71/c3/c68/c70/c70/c82/c85/c71/c76/c81/c74/c3/c87/c82/c3/c87/c75/c72/c3/c83/c82/c83/c88/c79/c68/c87/c76/c82/c81/c3/c76/c81/c3/c85/c72/c74/c76/c82/c81/c86/c3/c72/c79/c76/c74/c76/c69/c79/c72/c3/c73/c82/c85/c3/c54/c87/c85/c88/c70/c87/c88/c85 /c68/c79/c3/c41/c88/c81/c71/c86
/c54/c82/c88/c85/c70/c72/c29/c3/c40/c44/c37/c44/c81/c3/c68/c85/c72/c68/c86/c3/c72/c79/c76/c74/c76/c69/c79/c72/c3/c73/c82/c85/c3/c54/c87/c85/c88/c70/c87/c88/c85/c68/c79/c3/c41/c88/c81/c71/c86/c3/c11/c40/c56/c53/c3/c80/c81/c12
/c39/c76/c86/c87/c85/c76/c69/c88/c87/c76/c82/c81/c3/c69/c92/c3/c82/c69/c77/c72/c70/c87/c76/c89/c72/c3/c68/c81/c71/c3/c86/c72/c70/c87/c82/c85
/c55/c68/c69/c79/c72/c3/c36/c17/c22/c24/c3/c54/c87/c85/c88/c70/c87/c88/c85/c68/c79/c3/c41/c88/c81/c71/c86/c29/c3/c73/c76/c81/c68/c81/c70/c76/c68/c79/c3/c72/c91/c72/c70/c88/c87/c76/c82/c81/c3/c69/c92/c3/c50/c69/c77/c72/c70/c87/c76/c89/c72/c3/c68/c81/c71/c3/c48/c72/c80/c69/c72/c85/c3/c54/c87/c68/c87/c72/c15/c3/c20/c28/c28/c23/c16/c20/c28/c28/c28
/c37 /c39/c46 /c39 /c40/c47 /c40 /c41 /c44/c53/c47 /c44 /c47 /c49/c47 /c36 /c51 /c41/c44/c49 /c54 /c56/c46 /c40/c56/c53/c20/c24
/c50/c69/c77/c17/c20 /c38/c82/c80/c80/c76/c87/c87/c72/c71/c3/c11/c8/c12 100 0 100 99 99 98 99 100 0 99 100 99 0 0 94 99
/c51/c68/c76/c71/c3/c11/c8/c12 72 0 81 73 82 67 87 67 0 67 77 89 0 0 67 78
/c50/c69/c77/c17/c21 /c38/c82/c80/c80/c76/c87/c87/c72/c71/c3/c11/c8/c12 100 101 94 0 94 100 0 101 102 100 100 0 100 100 95 97
/c51/c68/c76/c71/c3/c11/c8/c12 51 63 61 0 68 64 0 51 67 51 70 0 64 69 57 60
/c50/c69/c77/c17/c22 /c38/c82/c80/c80/c76/c87/c87/c72/c71/c3/c11/c8/c12 100 100 99 0 100 99 0 100 98 100 100 0 100 100 100 100
/c51/c68/c76/c71/c3/c11/c8/c12 86 91 81 0 89 79 0 63 94 71 85 0 76 82 84 80
/c50/c69/c77/c17/c23 /c38/c82/c80/c80/c76/c87/c87/c72/c71/c3/c11/c8/c12 99 99 100 0 100 100 0 100 100 100 100 0 100 100 100 100
/c51/c68/c76/c71/c3/c11/c8/c12 60 87 73 0 89 71 0 52 77 77 87 0 74 73 46 69
/c54/c82/c88/c85/c70/c72/c29/c3/c39/c42/c3/c53/c40/c42/c44/c50
/c55/c68/c69/c79/c72/c3/c36/c17/c22/c25/c3/c38/c82/c81/c87/c85/c76/c69/c88/c87/c76/c82/c81/c3/c82/c73/c3/c54/c87/c85/c88/c70/c87/c88/c85/c68/c79/c3/c41/c88/c81/c71/c86/c3/c87/c82/c3/c50/c69/c77/c72/c70/c87/c76/c89/c72/c3/c20/c3/c71/c72/c89/c72/c79/c82/c83/c80/c72/c81/c87/c3/c72/c91/c83/c72/c81/c71/c76/c87/c88/c85/c72/c15/c3/c20/c28/c28/c23/c16/c20/c28/c28/c28/c3/c68/c81/c71/c3/c21/c19/c19/c19/c16/c21/c19/c19/c25
/c40/c56/c53/c3/c80/c81/c15/c3/c20/c28/c28/c28/c3/c83/c85/c76/c70/c72/c86
/c20/c28/c28/c23/c16/c20/c28/c28/c28
/c37 /c39 /c40/c47 /c40 /c41 /c44/c53/c47 /c44 /c49/c47 /c51 /c56/c46 /c36 /c41/c44/c49 /c54 /c40/c56/c53/c20/c22 /c8
/c44/c81/c73/c85/c68/c86/c87/c85/c88/c70/c87/c88/c85/c72 /c20/c20/c22 /c20/c21/c27/c27 /c25/c23/c19/c25 /c20/c20/c24/c27/c19 /c26/c28/c19 /c20/c22/c20/c28 /c24/c28/c22/c21 /c22/c28 /c24/c21/c26/c20 /c20/c19/c25/c19 /c23/c25 /c19 /c22/c28 /c22/c22/c27/c27/c21 /c21/c28/c15/c27Transport 38 : 3999 6648 384 1066 2061 34 3101 505 0 : 20 17857 /c20/c24/c15/c26
ICT 12 : 251 456 0 28 568 0 385 43 5 : 19 1767 /c20/c15/c25
Energy 0 : 865 678 13 53 731 0 0 223 6 : 0 2568 /c21/c15/c22
Environment & water 59 : 622 3306 371 119 2464 5 1253 289 35 : 0 8524 /c26/c15/c24
Health & social 4 : 668 492 21 53 108 0 532 0 0 : 0 1878 /c20/c15/c26
/c43/c88/c80/c68/c81/c3/c85/c72/c86/c82/c88/c85/c70/c72/c86 /c20/c19/c25 /c23/c21/c24/c25 /c22/c21/c27/c26 /c26/c25/c19/c21 /c26/c24/c21 /c21/c26/c22/c19 /c21/c23/c20/c28 /c22/c20 /c23/c26/c24/c22 /c20/c24/c26/c28 /c24/c19 /c20/c27/c21 /c28/c26 /c21/c26/c27/c23/c23 /c21/c23/c15/c24
Education* 10 1881 2166 105 1291 355 0 1890 40 6 70 58 7871 /c25/c15/c28
Training 96 4256 1238 5436 647 1439 2064 31 2863 1539 44 112 40 19805 /c20/c26/c15/c23
Other 169  /c19/c15/c19
/c51/c85/c82/c71/c88/c70/c87/c76/c89/c72/c3/c72/c81/c89/c76/c85/c82/c81/c80/c72/c81/c87 /c23/c27/c25 /c20/c19/c19/c20/c19 /c23/c21/c20/c25 /c28/c22/c22/c25 /c28/c25/c24 /c22/c19/c23/c25 /c27/c24/c27/c20 /c26/c23 /c26/c19/c21/c27 /c21/c20/c20/c21 /c20/c22/c19 /c22/c26/c27 /c21/c20/c20 /c23/c25/c24/c26/c22 /c23/c20/c15/c19
Industry and services 291 5537 1009 4482 226 1286 4224 24 4060 1109 48 252 97 22644 /c20/c28/c15/c28
RDTI 95 714 331 762 79 62 1157 12 504 215 10 0 14 3954 /c22/c15/c24
Agriculture, rural dev, fisheries 57 3759 2184 3504 566 1352 2649 33 2464 450 34 105 73 17230 /c20/c24/c15/c21
Tourism 43 0 693 588 95 347 551 5 : 338 38 21 28 2746 /c21/c15/c23
/c50/c87/c75/c72/c85 /c27/c28 /c22/c24/c26 /c26/c20 /c21/c25/c21/c27 /c20/c28/c24 /c24/c23/c24 /c20/c20/c28 /c21/c19 /c27/c19/c24 /c22/c27/c25 /c25 /c19 /c21/c19 /c24/c21/c23/c20 /c23/c15/c25/c55/c50/c55/c36/c47 /c26/c28/c23 /c20/c24/c28/c20/c20 /c20/c22/c28/c27/c19 /c22/c20/c20/c23/c25 /c21/c26/c19/c21 /c26/c25/c23/c19 /c20/c26/c19/c24/c20 /c20/c25/c23 /c20/c26/c27/c24/c26 /c24/c20/c22/c26 /c21/c22/c21 /c24/c25/c19 /c22/c25/c26 /c20/c20/c22/c24/c23/c19 /c20/c19/c19/c15/c19
/c36/c29/c3/c20/c28/c28/c24/c16/c28/c28 /c21/c19/c19/c19/c16/c21/c19/c19/c25
/c37 /c39 /c40/c47 /c40 /c41 /c44/c53/c47 /c44 /c49/c47 /c51 /c56/c46 /c36 /c41/c44/c49 /c54 /c40/c56/c53/c20/c22 /c8
/c44/c81/c73/c85/c68/c86/c87/c85/c88/c70/c87/c88/c85/c72 /c28/c20 /c23/c22/c23/c19 /c28/c19/c24/c20 /c20/c23/c23/c23/c21 /c20/c20/c24/c28 /c20/c23/c20/c23 /c27/c28/c21/c27 /c22/c22 /c23/c25/c24/c24 /c21/c19/c20 /c20/c20 /c19 /c26/c25 /c23/c23/c23/c19/c20 /c22/c23/c15/c22
Transport 4 3017 6496 7584 529 732 3227 8 2737 128 : : 33 24495 /c20/c27/c15/c28
ICT 37 : 336 240 13 47 728 16 609 1 6 : 43 2076 /c20/c15/c25
Energy 5 15 721 246 98 41 606 0 : 4 : : : 1735 /c20/c15/c22
Environment & water 45 1308 875 5778 466 357 4246 3 532 67 5 : : 13682 /c20/c19/c15/c25
Health & Social 0 623 594 54 237 121 0 777 0 : : : 2406 /c20/c15/c28
/c43/c88/c80/c68/c81/c3/c85/c72/c86/c82/c88/c85/c70/c72/c86 /c20/c26/c20 /c24/c23/c20/c23 /c22/c28/c27/c22 /c27/c25/c23/c25 /c20/c21/c23/c28 /c27/c25/c26 /c23/c27/c21/c28 /c21/c19 /c24/c19/c23/c19 /c21/c26/c21 /c24/c22 /c21/c25/c25 /c20/c24/c19 /c22/c19/c28/c25/c19 /c21/c22/c15/c28
Education* 0 0 2765 2184 190 386 2645 3 2338 13 : 98 48 10670 /c27/c15/c22
Training 171 5414 1218 6462 1059 481 2184 18 2702 260 53 168 102 20292 /c20/c24/c15/c26
Other /c19/c15/c19
/c51/c85/c82/c71/c88/c70/c87/c76/c89/c72/c3/c72/c81/c89/c76/c85/c82/c81/c80/c72/c81/c87 /c22/c22/c27 /c27/c24/c28/c28 /c24/c22/c24/c24 /c28/c24/c26/c19 /c20/c22/c21/c27 /c25/c28/c27 /c28/c24/c20/c24 /c25/c28 /c26/c27/c26/c24 /c22/c27/c26 /c20/c27/c20 /c25/c24/c20 /c23/c23/c22 /c23/c24/c19/c19/c28 /c22/c23/c15/c27
Industry and services 136 5160 791 4302 368 61 3338 38 4879 300 73 413 170 20029 /c20/c24/c15/c24
RDTI 118 164 336 1008 75 305 1820 5 518 11 25 : 82 4467 /c22/c15/c24
Agriculture, rural dev, fisheries 44 3275 3045 3576 734 271 3668 21 2478 60 38 203 133 17546 /c20/c22/c15/c25
Tourism 41 1183 684 151 61 690 6 15 45 35 58 2968 /c21/c15/c22
/c50/c87/c75/c72/c85 /c23/c24 /c26/c25/c26 /c21/c24/c25/c21 /c20/c22/c23/c23 /c20/c28/c21 /c20/c19/c24 /c26/c21/c27 /c20/c19 /c22/c19/c28/c23 /c20/c25 /c24 : /c24/c21 /c27/c28/c21/c19 /c25/c15/c28
/c55/c50/c55/c36/c47 /c25/c23/c24 /c20/c28/c20/c21/c19 /c21/c19/c28/c24/c20 /c22/c23/c19/c19/c21 /c22/c28/c21/c27 /c22/c19/c27/c23 /c21/c22/c28/c28/c22 /c20/c22/c21 /c21/c19/c25/c25/c23 /c27/c26/c24 /c21/c24/c19 /c28/c20/c26 /c26/c21/c20 /c20/c21/c28/c21/c27/c21 /c20/c19/c19/c15/c19
/c13/c3/c44/c81/c70/c79/c88/c71/c76/c81/c74/c3/c76/c81/c73/c85/c68/c86/c87/c85/c88/c70/c87/c88/c85/c72/c3/c73/c82/c85/c3/c72/c71/c88/c70/c68/c87/c76/c82/c81/c3/c70/c82/c16/c73/c76/c81/c68/c81/c70/c72/c71/c3/c69/c92/c3/c87/c75/c72/c3/c40/c53/c39/c41
/c54/c82/c88/c85/c70/c72/c29/c3/c39/c42/c3/c53/c40/c42/c44/c50(including phase-out)
(including phase-out)
/c55/c68/c69/c79/c72/c3/c36/c17/c22/c26/c3/c54/c87/c85/c88/c70/c87/c88/c85/c68/c79/c3/c41/c88/c81/c71/c86/c29/c3/c76/c80/c83/c79/c72/c80/c72/c81/c87/c68/c87/c76/c82/c81/c3/c83/c85/c82/c74/c85/c72/c86/c86/c3/c82/c81/c3/c87/c85/c68/c81/c86/c83/c82/c85/c87/c3/c83/c85/c82/c77/c72/c70/c87/c86/c15/c3/c80/c76/c71/c16/c20/c28/c28/c28
/c55/c68/c85/c74/c72/c87 /c36/c70/c75/c76/c72/c89/c72/c71 /c8 /c55/c68/c85/c74/c72/c87 /c36/c70/c75/c76/c72/c89/c72/c71 /c8 /c55/c68/c85/c74/c72/c87 /c36/c70/c75/c76/c72/c89/c72/c71 /c8 /c55/c68/c85/c74/c72/c87 /c36/c70/c75/c76/c72/c89/c72/c71 /c8 /c55/c68/c85/c74/c72/c87 /c36/c70/c75/c76/c72/c89/c72/c71 /c8
/c53/c82/c68/c71
New (km) 426 392 92% 1150 1225 106% 1661 1329 80% 5 2,5 50% 1676 465 28%
Upgrade (km) 2000 1694 85% : : : 2908 2326 80% 150 75 50% : : :
/c53/c68/c76/c79
New (km) 375 375 100% :::::: 1 5 9 8 0 5 0 % 7 0 9 2 0 8 2 9 %
Upgrade (km) : : : 800 544 68% 2185 1844 84% 1100 550 50% 520 36 7%
/c51/c82/c85/c87
No. improved 7 : 87% 9 : 94% 5 : 75% 1 : 100% 12 : :
/c36/c76/c85/c83/c82/c85/c87
No. improved 3 : 91% 3 : 92% 3 : 49% 2 : 100% 3 : :
/c48/c72/c87/c85/c82
No. systems improved ::::::::::::1: 6 9 %
/c54/c82/c88/c85/c70/c72/c29/c3/c55/c75/c72/c80/c68/c87/c76/c70/c3/c72/c89/c68/c79/c88/c68/c87/c76/c82/c81/c3/c82/c73/c3/c87/c75/c72/c3/c72/c73/c73/c72/c70/c87/c86/c3/c82/c73/c3/c54/c87/c85/c88/c70/c87/c88/c85/c68/c79/c3/c41/c88/c81/c71/c86/c3/c82/c81/c3/c87/c85/c68/c81/c86/c83/c82/c85/c87/c3/c76/c81/c73/c85/c68/c86/c87/c85/c88/c70/c87/c88/c85/c72/c15/c3/c40/c88/c85/c82/c83/c72/c68/c81/c3/c38/c82/c80/c80/c76/c86/c86/c76/c82/c81/c15/c3/c21/c19/c19/c19/c42/c85/c72/c72/c70/c72 /c44/c85/c72/c79/c68/c81/c71 /c51/c82/c85/c87/c88/c74/c68/c79 /c54/c83/c68/c76/c81 /c44/c87/c68/c79/c92
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Financial support (direct) 6820 31,9
Financial engineering 570 2,7Business services 2684 12,6Innovation, technology transfer 2499 11,7Support infrastructure 2126 10Training 3607 16,9Sectoral measures 1196 5,6Other 1850 8,7Total 21352 100
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B- 3 8DK - 15D 545,6 134EL 694,5 -E 789 258F 65,7 322IRL 337,2 -I 891,6 61L- -NL - -A1 3 2 0P 978,6 -FIN 22,5 35S 24,7 28UK 142,6 322
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Water treatment and distribution 6970,5
Industrial and urban environment, protection of natural environment 1057,6Waste collection and treatment 224,9Research, training and other 75,0
Total Objective 1 8328,0
Reclamation, waste treatment and clean technologies 210,8
Clean up of industrial sites and urban areas 162,0Training and other 24,2
Total Objective 2 397,0
Management of natural environment, countryside, biodiversity 400,5
Reclamation/treatment (clean technologies, industrial waste) 216,2Forestry 103,8
Total Objective 5b 720,5
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, 10 3 to 24 16 54
/ 1 3 43 42 4
1/ 5 2 to 25 16 38
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8. 8 23 to 101 48 66
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/c55/c68/c69/c79/c72/c3/c36/c17/c23/c27/c3/c42/c39/c51/c3/c83/c72/c85/c3/c75/c72/c68/c71/c3/c11/c76/c81/c3/c51/c51/c54/c12/c3/c76/c81/c3/c50/c69/c77/c72/c70/c87/c76/c89/c72/c3/c20/c3/c85/c72/c74/c76/c82/c81/c86/c15/c3/c20/c28/c27/c27/c16/c20/c28/c28/c27
Region (1)1988 1989 1990 1991 1992 1993 1993 1994 1995 1996 1997 1998
/c43/c36/c44/c49/c36/c56/c55 /c26/c26 /c26/c25 /c26/c25 /c26/c25 /c26/c27 /c27/c21 84 82 81 80 79 79
/c50/c69/c77/c17/c3/c20/c3/c37/c40/c47/c42/c44/c52/c56/c40/c16/c37/c40/c47/c42/c44/c201 /c27/c23 /c27/c21 /c27/c20 /c27/c19 /c26/c28 /c26/c28
/c37/c40/c53/c47/c44/c49/c16/c50/c54/c55/c15/c3/c54/c55/c36/c39/c55 47 58 72 73 80 77 74 71 70
/c37/c53/c36/c49/c39/c40/c49/c37/c56/c53/c42 39 48 57 59 66 73 74 72 71
/c48/c40/c38/c46/c47/c40/c49/c37/c56/c53/c42/c16/c57/c50/c53/c51/c50/c48/c48/c40/c53/c49 37 45 52 53 60 72 73 72 71
/c54/c36/c38/c43/c54/c40/c49 36 44 53 54 61 74 75 73 71
/c54/c36/c38/c43/c54/c40/c49/c16/c36/c49/c43/c36/c47/c55 36 45 54 55 61 68 70 69 68
/c55/c43/c104/c53/c44/c49/c42/c40/c49 32 43 52 53 60 68 70 70 70
/c50/c69/c77/c17/c3/c20/c3/c39/c40/c56/c55/c54/c38/c43/c47/c36/c49/c39 /c22/c26 /c23/c25 /c24/c24 /c24/c25 /c25/c22 /c26/c21 /c26/c22 /c26/c20 /c26/c19
/c36/c49/c36/c55/c50/c47/c44/c46/c44/c3/c48/c36/c46/c40/c39/c50/c49/c44/c36/c15/c3/c55/c43/c53/c36/c46/c44 52 53 52 53 55 56 57 59 56 56 55 55
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/c44/c50/c49/c44/c36/c3/c49/c44/c54/c44/c36 55 54 52 53 55 58 59 60 56 57 56 56
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/c54/c55/c40/c53/c40/c36/c3/c40/c47/c47/c36/c39/c36 72 72 68 68 64 64 66 65 83 85 84 84
/c51/c40/c47/c50/c51/c50/c49/c49/c44/c54/c50/c54 58 57 55 56 56 56 57 58 53 53 52 53
/c36/c55/c55/c44/c46/c44 61 62 61 62 66 70 72 73 76 75 74 74
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/c50/c69/c77/c17/c3/c20/c3/c40/c47/c47/c36/c39/c36 /c24/c27 /c24/c28 /c24/c26 /c24/c27 /c25/c19 /c25/c22 /c25/c23 /c25/c24 /c25/c25 /c25/c26 /c25/c25 /c25/c25
/c42/c36/c47/c44/c38/c44/c36 57 57 56 58 57 60 62 61 63 64 64 64
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/c38/c36/c54/c55/c44/c47/c47/c36/c3/c60/c3/c47/c40/c207/c49 67 66 65 67 66 72 74 73 75 75 74 74
/c38/c36/c54/c55/c44/c47/c47/c36/c16/c47/c36/c3/c48/c36/c49/c38/c43/c36 60 61 62 63 62 65 67 66 65 67 66 67
/c40/c59/c55/c53/c40/c48/c36/c39/c56/c53/c36 49 48 48 50 50 55 56 56 50 51 50 50
/c38/c50/c48/c56/c49/c44/c39/c36/c39/c3/c57/c36/c47/c40/c49/c38/c44/c36/c49/c36 72 73 75 77 76 75 76 75 75 76 76 77
/c36/c49/c39/c36/c47/c56/c38/c203/c36 55 54 57 59 57 57 58 58 58 58 58 58
/c53/c40/c42/c44/c207/c49/c3/c39/c40/c3/c48/c56/c53/c38/c44/c36 66 67 70 71 69 68 70 69 65 66 67 67
/c38/c40/c56/c55/c36/c3/c60/c3/c48/c40/c47/c44/c47/c47/c36 64 63 63 66 63 67 69 68 65 66 66 67
/c38/c36/c49/c36/c53/c44/c36/c54 73 72 71 72 73 74 76 75 73 74 75 77
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/c38/c50/c53/c54/c40 78 76 76 76 76 82 84 82 78 76 74 77
/c42/c56/c36/c39/c40/c47/c50/c56/c51/c40 37 37 37 37 39 40 41 40 56 54 52 52
/c48/c36/c53/c55/c44/c49/c44/c52/c56/c40 51 50 50 52 52 53 54 54 63 61 59 60
/c42/c56/c60/c36/c49/c40 49 51 53 54 52 50 51 48 59 55 53 53
/c53/c40/c56/c49/c44/c50/c49 43 43 45 47 48 46 47 46 53 51 50 50
/c50/c69/c77/c17/c3/c20/c3/c41/c53/c36/c49/c38/c40 /c23/c28 /c23/c28 /c23/c28 /c24/c19 /c24/c20 /c24/c20 /c24/c21 /c24/c21 /c25/c19 /c24/c26 /c24/c25 /c24/c25
/c44/c53/c40/c47/c36/c49/c39 /c25/c23 /c25/c25 /c26/c20 /c26/c21 /c26/c25 /c27/c20 /c27/c22 /c28/c20 /c28/c22 /c28/c23 /c20/c19/c23 /c20/c19/c27
/c36/c37/c53/c56/c61/c61/c50 87 87 89 89 90 87 87 89 88 88 /c27/c25 /c27/c23
/c48/c50/c47/c44/c54/c40 78 76 76 76 76 74 75 77 78 79 81 79
/c38/c36/c48/c51/c36/c49/c44/c36 68 68 69 68 68 66 68 67 65 65 65 64
/c51/c56/c42/c47/c44/c36 73 71 71 72 71 69 70 72 67 67 66 65
/c37/c36/c54/c44/c47/c44/c38/c36/c55/c36 64 62 63 63 64 64 66 67 71 73 72 72
/c38/c36/c47/c36/c37/c53/c44/c36 57 59 56 59 58 59 60 59 61 61 61 61
/c54/c44/c38/c44/c47/c44/c36 66 64 67 69 69 68 69 67 66 66 66 65
/c54/c36/c53/c39/c40/c42/c49/c36 73 72 73 76 77 76 78 76 76 76 76 76
/c50/c69/c77/c17/c3/c20/c3/c44/c55/c36/c47/c44/c36 /c25/c28 /c25/c27 /c25/c28 /c26/c19 /c26/c19 /c25/c27 /c26/c19 /c25/c27 /c25/c27 /c25/c27 /c25/c27 /c25/c26
/c41/c47/c40/c57/c50/c47/c36/c49/c39 /c26/c22 /c26/c24 /c26/c25 /c26/c23 /c26/c21 /c26/c22 75 78 83 78 82 81
/c50/c69/c77/c17/c3/c20/c3/c49/c40/c39/c40/c53/c47/c36/c49/c39 /c26/c24 /c26/c27 /c27/c22 /c26/c27 /c27/c21 /c27/c20
/c37/c56/c53/c42/c40/c49/c47/c36/c49/c39 /c25/c21 /c25/c20 /c25/c23 /c25/c24 /c25/c24 /c26/c19 72 72 68 70 69 69
/c50/c69/c77/c17/c3/c20/c3/c103/c54/c55/c40/c53/c53/c40/c44/c38/c43 /c26/c21 /c26/c21 /c25/c27 /c26/c19 /c25/c28 /c25/c28
/c49/c50/c53/c55/c40 54 57 52 53 56 58 60 62 63 63 65 66
/c38/c40/c49/c55/c53/c50 45 45 48 49 52 54 55 58 61 61 64 65
/c47/c44/c54/c37/c50/c36/c3/c40/c3/c57/c36/c47/c40/c3/c39/c50/c3/c55/c40/c45/c50 84 86 78 82 81 85 87 89 89 89 94 95
/c36/c47/c40/c49/c55/c40/c45/c50 39 40 54 51 50 53 54 56 59 62 65 67
/c36/c47/c42/c36/c53/c57/c40 56 54 63 65 69 69 71 70 71 72 75 76
/c36/c100/c50/c53/c40/c54 43 45 43 44 46 48 49 50 50 50 51 52
/c48/c36/c39/c40/c44/c53/c36 43 45 41 45 47 49 51 52 55 55 57 58
/c50/c69/c77/c17/c3/c20/c3/c51/c50/c53/c55/c56/c42/c36/c47 /c25/c20 /c25/c22 /c25/c19 /c25/c21 /c25/c22 /c25/c25 /c25/c27 /c26/c19 /c26/c20 /c26/c20 /c26/c23 /c26/c24
/c48/c40/c53/c54/c40/c60/c54/c44/c39/c40 /c27/c19 /c26/c26 /c26/c23 /c26/c19 /c26/c20 /c26/c23 75 74 69 70 72 73
/c43/c44/c42/c43/c47/c36/c49/c39/c54/c3/c9/c3/c44/c54/c47/c36/c49/c39/c54 /c27/c22 /c26/c26 /c27/c19 /c27/c20 /c27/c19 /c26/c28 81 81 76 76 77 77
/c49/c50/c53/c55/c43/c40/c53/c49/c3/c44/c53/c40/c47/c36/c49/c39 76 75 74 75 76 78 80 80 75 75 78 77
/c50/c69/c77/c17/c3/c20/c3/c56/c49/c44/c55/c40/c39/c3/c46/c44/c49/c42/c39/c50/c48 /c26/c25 /c26/c24 /c26/c23 /c26/c24 /c26/c25 /c26/c27 /c27/c19 /c26/c27 /c26/c22 /c26/c22 /c26/c25 /c26/c24
/c40/c56/c20/c24 /c20/c19/c19 /c20/c19/c19 /c20/c19/c19 /c20/c19/c19 /c20/c19/c19 /c20/c19/c19 /c20/c19/c19 /c20/c19/c19 /c20/c19/c19 /c20/c19/c19 /c20/c19/c19 /c20/c19/c19
/c55/c82/c87/c68/c79 /c3 /c50/c69 /c77 /c72/c70/c87/c76/c89/c72 /c3 /c20 /c3 /c11/c27/c28/c16/c28/c28/c12 (2)/c25/c22 /c25/c23 /c25/c23 /c25/c24 /c25/c24 /c25/c26 /c25/c27 /c25/c28 /c25/c27 /c25/c27 /c25/c28 /c26/c19
/c55/c82/c87/c68/c79 /c3 /c50/c69 /c77 /c72/c70/c87/c76/c89/c72 /c3 /c20 /c3 /c11/c20/c28/c28/c23/c16/c28/c28/c12 /c3(3)/c25/c25 /c25/c27 /c25/c28 /c26/c19 /c26/c19 /c26/c19
/c55/c75/c72/c3/c83/c72/c85/c76/c82/c71/c3/c76/c86/c3/c86/c83/c79/c76/c87/c3/c76/c81/c87/c82/c3/c87/c90/c82/c3/c86/c88/c69/c83/c72/c85/c76/c82/c71/c86/c3/c87/c82/c3/c70/c82/c85/c85/c72/c86/c83/c82/c81/c71/c3/c90/c76/c87/c75/c3/c87/c75/c72/c3/c87/c90/c82/c3/c83/c85/c82/c74/c85/c68/c80/c80/c76/c81/c74/c3/c83/c72/c85/c76/c82/c71/c86/c15/c3/c20/c28/c27/c28/c16/c28/c22/c3/c68/c81/c71/c3/c20/c28/c28/c23/c16/c28/c28/c17/c3/c55/c75/c72/c3/c92/c72/c68/c85/c3/c76/c80/c80/c72/c71/c76/c68/c87/c72 /c79/c92/c3/c69/c72/c73/c82/c85/c72/c3/c87/c75/c72/c3/c83/c85/c82/c74/c85/c68/c80/c80/c76/c81/c74
/c83/c72/c85/c76/c82/c71/c3/c76/c86/c3/c86/c75/c82/c90/c81/c3/c68/c86/c3/c87/c75/c72/c3/c69/c68/c86/c76/c86/c3/c73/c82/c85/c3/c68/c86/c86/c72/c86/c86/c76/c81/c74/c3/c70/c75/c68/c81/c74/c72/c86/c3/c82/c89/c72/c85/c3/c87/c75/c72/c3/c83/c72/c85/c76/c82/c71/c17/c3/c41/c82/c85/c3/c20/c28/c27/c28/c16/c28/c22/c15/c3/c87/c75/c72/c3/c73/c76/c74/c88/c85/c72/c86/c3/c76/c81/c3/c76/c87/c68/c79/c76/c70/c86/c3/c68/c85/c72/c3/c85/c72/c74/c76/c82/c81/c86/c3/c90/c75/c76/c70/c75/c3/c71/c76/c71/c3/c81 /c82/c87/c3/c75/c68/c89/c72/c3/c50/c69/c77/c72/c70/c87/c76/c89/c72/c3/c20/c3/c86/c87/c68/c87/c88/c86/c3/c71/c88/c85/c76/c81/c74/c3/c87/c75/c72/c3/c83/c72/c85/c76/c82/c71/c17
/c55/c75/c72/c86/c72/c3/c68/c85/c72/c3/c72/c91/c70/c79/c88/c71/c72/c71/c3/c73/c85/c82/c80/c3/c87/c75/c72/c3/c87/c82/c87/c68/c79/c3/c73/c82/c85/c3/c50/c69/c77/c72/c70/c87/c76/c89/c72/c3/c20/c3/c85/c72/c74/c76/c82/c81/c86/c3/c68/c81/c71/c3/c73/c85/c82/c80/c3/c87/c75/c72/c3/c70/c82/c88/c81/c87/c85/c92/c3/c87/c82/c87/c68/c79/c86/c17/c3/c41/c82/c85/c3/c87/c75/c76/c86/c3/c73/c76/c85/c86/c87/c3/c83/c72/c85/c76/c82/c71/c15/c3/c40/c56/c20/c24/c3/c72/c91/c70/c79/c88/c71/c72/c86/c3/c87/c75/c72 /c3/c81/c72/c90/c3/c42/c72/c85/c80/c68/c81/c3/c47/c108/c81/c71/c72/c85/c17/c3
/c41/c82/c85/c3/c87/c75/c72/c3/c86/c72/c70/c82/c81/c71/c3/c83/c72/c85/c76/c82/c71/c15/c3/c40/c56/c20/c24/c3/c76/c81/c70/c79/c88/c71/c72/c86/c3/c87/c75/c72/c3/c81/c72/c90/c3/c47/c108/c81/c71/c72/c85/c17/c3
/c20/c28/c28/c24/c16/c28/c27/c29/c3/c68/c70/c70/c82/c85/c71/c76/c81/c74/c3/c87/c82/c3/c40/c54/c36/c28/c24
/c11/c20/c12/c3/c50/c81/c79/c92/c3/c85/c72/c74/c76/c82/c81/c86/c3/c90/c75/c82/c79/c79/c92/c3/c72/c79/c76/c74/c76/c69/c79/c72/c3/c73/c82/c85/c3/c50/c69/c77/c72/c70/c87/c76/c89/c72/c3/c20/c3/c11/c20/c28/c27/c28/c16/c28/c22/c3/c68/c81/c71/c18/c82/c85/c3/c20/c28/c28/c23/c16/c28/c28/c12
/c11/c21/c12/c3/c50/c81/c79/c92/c3/c85/c72/c74/c76/c82/c81/c86/c3/c90/c76/c87/c75/c3/c50/c69/c77/c72/c70/c87/c76/c89/c72/c3/c20/c3/c86/c87/c68/c87/c88/c86/c3/c87/c75/c85/c82/c88/c74/c75/c82/c88/c87/c3/c87/c75/c72/c3/c83/c72/c85/c76/c82/c71/c11/c22/c12/c3/c53/c72/c74/c76/c82/c81/c86/c3/c90/c76/c87/c75/c3/c50/c69/c77/c72/c70/c87/c76/c89/c72/c3/c20/c3/c86/c87/c68/c87/c88/c86/c3/c73/c85/c82/c80/c3/c20/c28/c28/c23/c3/c87/c82/c3/c20/c28/c28/c25/c3/c11/c76/c72/c3/c76/c81/c70/c79/c88/c71/c76/c81/c74/c3/c36/c69/c85/c88/c93/c93/c82/c12
/c54/c82/c88/c85/c70/c72/c3/c29/c3/c40/c88/c85/c82/c86/c87/c68/c87/c3
/c55/c68/c69/c79/c72/c3/c36/c17/c23/c28/c3/c56/c81/c72/c80/c83/c79/c82/c92/c80/c72/c81/c87/c3/c85/c68/c87/c72/c86/c3/c76/c81/c3/c50/c69/c77/c72/c70/c87/c76/c89/c72/c3/c20/c3/c85/c72/c74/c76/c82/c81/c86/c15/c3/c20/c28/c27/c27/c16/c20/c28/c28/c28
Region (1)1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 1988-93 1993-99
% point chan ge
/c43/c36/c44/c49/c36/c56/c55 /c20/c24/c15/c23 /c20/c20/c15/c28 /c20/c19/c15/c28 /c20/c19/c15/c26 /c20/c20/c15/c27 /c20/c23/c15/c19 15,5 15,9 15,8 15,4 17,0 16,6 /c16/c20/c15/c23 2,6
/c50/c69/c77/c17/c3/c20/c3/c37/c40/c47/c42/c44/c201/c16/c37/c40/c47/c42/c44/c52/c56/c40 /c20/c23/c15/c19 /c20/c24/c15/c24 /c20/c24/c15/c28 /c20/c24/c15/c27 /c20/c24/c15/c23 /c20/c26/c15/c19 /c20/c25/c15/c25 /c16/c20/c15/c23 /c21/c15/c25
/c37/c40/c53/c47/c44/c49/c16/c50/c54/c55/c15 /c3 /c54/c55/c36/c39/c55 /c28/c15/c26 /c20/c23/c15/c19 /c20/c19/c15/c28 11,1 9,4 11,2 14,7 18,6 17,3 6,4
/c37/c53/c36/c49/c39/c40/c49/c37/c56/c53/c42 /c28/c15/c20 /c20/c22/c15/c28 /c20/c23/c15/c28 15,2 14,3 15,5 17,0 18,1 16,0 1,1
/c48/c40/c38/c46/c47/c40/c49/c37/c56/c53/c42/c16/c57/c50/c53/c51/c50/c48/c48/c40/c53/c49 /c20/c21/c15/c19 /c20/c26/c15/c26 /c20/c26/c15/c25 16,9 15,5 16,8 18,6 20,0 17,5 -0,1
/c54/c36/c38/c43/c54/c40/c49 /c27/c15/c25 /c20/c22/c15/c28 /c20/c23/c15/c27 15,8 14,1 15,3 17,0 18,1 16,2 1,4
/c54/c36/c38/c43/c54/c40/c49/c16/c36/c49/c43/c36/c47/c55 /c28/c15/c28 /c20/c24/c15/c26 /c20/c26/c15/c23 18,2 16,3 18,0 20,4 21,4 19,9 2,5
/c55/c43/c104/c53/c44/c49/c42/c40/c49 /c28/c15/c28 /c20/c24/c15/c23 /c20/c24/c15/c28 16,0 15,1 16,0 17,4 18,4 14,3 -1,6
/c50/c69/c77/c17/c3/c20/c3/c39/c40/c56/c55/c54/c38/c43/c47/c36/c49/c39 /c28/c15/c25 /c20/c23/c15/c28 /c20/c24/c15/c23 /c20/c24/c15/c28 /c20/c23/c15/c23 /c20/c24/c15/c26 /c20/c26/c15/c25 /c20/c28/c15/c19 /c20/c25/c15/c26 /c20/c15/c22
/c36/c49/c36/c55/c50/c47/c44/c46/c44 /c3 /c48/c36/c46/c40/c39/c50/c49/c44/c36/c15 /c3 /c55/c43/c53/c36/c46/c44 9,0 6,7 5,1 4,8 6,9 6,6 7,4 9,2 9,6 8,2 8,9 12,8 -2,4 6,2
/c46/c40/c49/c55/c53/c44/c46/c44 /c3 /c48/c36/c46/c40/c39/c50/c49/c44/c36 6,8 6,6 5,7 5,5 6,4 7,9 8,2 9,1 8,9 9,2 10,4 11,7 1,1 3,8
/c39/c60/c55/c44/c46/c44 /c3 /c48/c36/c46/c40/c39/c50/c49/c44/c36 6,0 5,7 9,0 7,2 7,4 9,8 9,1 13,2 16,3 13,8 11,3 14,6 3,8 4,8
/c55/c43/c40/c54/c54/c36/c47/c44/c36 6,9 6,5 7,0 6,2 7,3 7,2 6,9 7,6 7,6 7,5 10,7 12,8 0,3 5,6
/c44/c51/c40/c44/c53/c50/c54 5,0 4,0 2,8 8,8 7,4 7,6 8,0 7,2 11,2 10,5 13,6 13,9 2,6 6,3
/c44/c50/c49/c44/c36 /c3 /c49/c44/c54/c44/c36 3,4 2,8 3,1 3,5 2,5 3,8 3,4 5,3 5,5 6,2 3,8 5,5 0,4 1,7
/c39/c60/c55/c44/c46/c44 /c3 /c40/c47/c47/c36/c39/c36 7,2 7,2 6,9 7,8 8,6 9,4 10,5 8,2 8,6 7,9 10,9 11,8 2,2 2,4
/c54/c55/c40/c53/c40/c36 /c3 /c40/c47/c47/c36/c39/c36 6,9 5,9 5,8 6,3 10,8 9,5 10,6 9,2 10,3 12,0 12,8 14,2 2,6 4,7
/c51/c40/c47/c50/c51/c50/c49/c49/c44/c54/c50/c54 5,8 4,8 5,2 5,0 7,3 5,8 6,3 6,0 6,4 7,5 8,1 7,6 0,0 1,8
/c36/c55/c55/c44/c46/c44 10,0 8,5 7,9 8,9 9,7 11,1 11,1 11,0 11,9 11,6 12,2 12,5 1,1 1,4
/c57/c50/c53/c40/c44/c50 /c3 /c36/c44/c42/c36/c44/c50 5,4 5,9 4,2 7,9 4,8 4,3 7,0 4,9 7,1 7,1 10,6 11,3 -1,1 7,0
/c49/c50/c55/c44/c50 /c3 /c36/c44/c42/c36/c44/c50 5,2 4,4 4,3 3,2 3,5 4,5 3,5 4,8 4,9 4,3 6,4 7,3 -0,7 2,8
/c46/c53/c44/c55/c44 3,5 2,4 2,2 3,6 3,3 3,5 3,8 4,1 3,4 4,3 7,1 7,3 0,0 3,8
/c50/c69/c77/c17/c3/c20/c3/c40/c47/c47/c36/c39/c36 /c26/c15/c26 /c25/c15/c26 /c25/c15/c22 /c25/c15/c28 /c26/c15/c27 /c27/c15/c25 /c27/c15/c27 /c28/c15/c20 /c28/c15/c26 /c28/c15/c25 /c20/c19/c15/c27 /c20/c20/c15/c26 /c19/c15/c28 /c22/c15/c20
/c42/c36/c47/c44/c38/c44/c36 13,2 12,5 11,9 12,3 16,2 17,6 19,7 17,4 19,2 19,2 17,2 16,8 4,4 -0,8
/c51/c53/c44/c49/c38/c44/c51/c36/c39/c50 /c3 /c39/c40 /c3 /c36/c54/c55/c56/c53/c44/c36/c54 20,2 17,4 17,4 16,1 17,7 20,4 22,5 21,2 22,5 21,2 20,5 18,2 0,2 -2,2
/c38/c36/c49/c55/c36/c37/c53/c44/c36 /c21/c20/c15/c27 /c20/c26/c15/c25 /c20/c25/c15/c28 /c20/c24/c15/c23 /c20/c25/c15/c22 /c20/c28/c15/c28 24,4 21,7 24,8 21,1 18,6 15,7 /c16/c20/c15/c28 -4,2
/c38/c36/c54/c55/c44/c47/c47/c36 /c3 /c60 /c3 /c47/c40/c207/c49 17,8 17,4 15,5 14,5 17,3 20,0 21,7 20,6 20,5 19,9 18,9 15,6 2,2 -4,4
/c38/c36/c54/c55/c44/c47/c47/c36/c16/c47/c36 /c3 /c48/c36/c49/c38/c43/c36 16,6 14,8 13,3 13,6 15,3 19,5 20,7 20,7 20,2 19,1 16,9 15,6 2,9 -3,9
/c40/c59/c55/c53/c40/c48/c36/c39/c56/c53/c36 27,1 26,8 25,4 24,2 26,3 30,3 32,3 30,9 30,5 29,5 28,8 25,5 3,2 -4,8
/c38/c50/c48/c56/c49/c44/c39/c36/c39 /c3 /c57/c36/c47/c40/c49/c38/c44/c36/c49/c36 18,3 15,3 14,1 15,9 18,7 23,9 24,7 22,6 21,7 21,5 17,4 14,3 5,6 -9,6
/c36/c49/c39/c36/c47/c56/c38/c203/c36 29,2 27,2 25,9 24,7 27,0 32,4 34,7 33,8 32,8 31,9 29,9 26,8 3,2 -5,6
/c53/c40/c42/c44/c207/c49 /c3 /c39/c40 /c3 /c48/c56/c53/c38/c44/c36 17,6 16,2 15,8 16,5 19,4 24,5 25,1 22,6 24,5 18,3 17,4 14,4 6,9 -10,1
/c38/c40/c56/c55/c36 /c3 /c60 /c3 /c48/c40/c47/c44/c47/c47/c36 35,4 31,7 29,8 29,7 25,5 22,9 27,9 33,5 27,3 26,4 24,8 25,5 -12,5 2,6
/c38/c36/c49/c36/c53/c44/c36/c54 22,5 22,5 23,1 24,4 24,7 27,9 28,3 24,0 22,0 20,9 19,8 14,4 5,4 -13,5
/c50/c69/c77/c17/c3/c20/c3/c40/c54/c51/c36/c102/c36/c3/c11/c20/c28/c27/c28/c16/c28/c22/c12 /c21/c20/c15/c22 /c20/c28/c15/c27 /c20/c27/c15/c26 /c20/c27/c15/c26 /c21/c20/c15/c20 /c21/c24/c15/c21 /c21/c25/c15/c28 /c21/c24/c15/c23 /c21/c24/c15/c20 /c21/c23/c15/c21 /c21/c21/c15/c21 /c20/c28/c15/c23 /c22/c15/c28 /c16/c24/c15/c27
/c50/c69/c77/c17/c3/c20/c3/c40/c54/c51/c36/c102/c36/c3/c11/c20/c28/c28/c23/c16/c28/c28/c12 /c21/c24/c15/c20 /c21/c25/c15/c28 /c21/c24/c15/c22 /c21/c24/c15/c20 /c21/c23/c15/c20 /c21/c21/c15/c20 /c20/c28/c15/c22 /c16/c24/c15/c27
/c38/c50/c53/c54/c40 10,6 9,4 9,7 11,3 10,8 11,9 12,5 11,0 14,7 15,0 14,0 14,3 1,3 2,4
/c42/c56/c36/c39/c40/c47/c50/c56/c51/c40 : : 31,1 : : : 24,0 26,1 29,3 : 30,1 32,0 : 5,3
/c48/c36/c53/c55/c44/c49/c44/c52/c56/c40 : : 32,1 : : : 26,2 26,0 27,2 : 28,1 32,0 : 1,0
/c42/c56/c60/c36/c49/c40 : : 24,0 : : : 18,2 23,0 22,4 : 23,2 32,0 : 4,2
/c53/c101/c56/c49/c44/c50/c49 : : 36,9 : : : 31,7 34,3 36,8 : 37,9 32,0 : 5,1
/c50/c69/c77/c17/c3/c20/c3/c41/c53/c36/c49/c38/c40/c3/c11/c72/c91/c70/c79/c17/c3/c39/c50/c48/c12 /c20/c19/c15/c25 /c28/c15/c23 /c28/c15/c26 /c20/c20/c15/c22 /c20/c19/c15/c27 /c20/c20/c15/c28 /c20/c21/c15/c24 /c20/c20/c15/c19 /c20/c23/c15/c26 /c20/c24/c15/c19 /c20/c23/c15/c19 /c20/c23/c15/c22 /c20/c15/c22 /c21/c15/c23
/c50/c69/c77 /c3 /c20 /c3 /c41/c53/c36/c49/c38/c40 /c3(2)/c21/c24/c15/c20 /c21/c24/c15/c21 /c21/c25/c15/c25 /c21/c28/c15/c19 /c21/c28/c15/c20 /c21/c28/c15/c25 /c21/c28/c15/c26 : /c23/c15/c25
/c44/c53/c40/c47/c36/c49/c39 /c20/c25/c15/c22 /c20/c23/c15/c28 /c20/c22/c15/c20 /c20/c23/c15/c25 /c20/c24/c15/c22 /c20/c24/c15/c26 /c20/c23/c15/c26 /c20/c21/c15/c21 /c20/c20/c15/c27 /c20/c19/c15/c20 /c26/c15/c28 /c24/c15/c28 /c16/c19/c15/c25 /c16/c28/c15/c27
/c36/c37/c53/c56/c61/c61/c50 9,3 9,5 9,0 8,0 6,9 9,2 9,4 8,9 9,9 /c28/c15/c25 /c28/c15/c20 /c20/c19/c15/c25 -0,1 1,4
/c48/c50/c47/c44/c54/c40 12,4 12,1 10,7 12,8 7,0 13,3 17,2 17,3 17,8 16,6 16,8 16,6 0,9 3,3
/c38/c36/c48/c51/c36/c49/c44/c36 23,0 20,8 17,7 17,8 16,0 19,5 22,7 25,6 25,5 25,6 24,5 23,7 -3,5 4,2
/c51/c56/c42/c47/c44/c36 15,7 13,8 12,9 13,2 12,6 14,1 14,7 15,8 17,9 19,3 19,6 19,8 -1,6 5,7
/c37/c36/c54/c44/c47/c44/c38/c36/c55/c36 21,5 18,9 19,0 17,0 14,7 13,1 16,2 18,9 19,4 19,4 18,4 17,3 -8,4 4,2
/c38/c36/c47/c36/c37/c53/c44/c36 22,6 23,2 20,1 18,6 16,8 21,2 21,8 23,7 25,0 24,5 27,1 28,7 -1,4 7,5
/c54/c44/c38/c44/c47/c44/c36 18,6 20,0 19,3 18,7 17,1 18,1 21,6 23,1 24,0 24,7 24,1 24,8 -0,5 6,7
/c54/c36/c53/c39/c40/c42/c49/c36 18,4 17,6 16,8 15,7 15,2 19,6 20,0 20,6 21,8 20,8 20,3 21,9 1,2 2,3
/c50/c69/c77/c17/c3/c20/c3/c44/c55/c36/c47/c44/c36 /c20/c28/c15/c20 /c20/c27/c15/c23 /c20/c25/c15/c26 /c20/c25/c15/c22 /c20/c23/c15/c27 /c20/c26/c15/c22 /c20/c28/c15/c23 /c21/c20/c15/c20 /c21/c20/c15/c28 /c21/c21/c15/c21 /c21/c21/c15/c19 /c21/c21/c15/c23 /c16/c20/c15/c27 /c24/c15/c19
/c41/c47/c40/c57/c50/c47/c36/c49/c39 /c26/c15/c28 /c27/c15/c26 /c27/c15/c21 /c24/c15/c26 /c25/c15/c21 /c24/c15/c28 6,7 8,5 6,2 5,7 4,6 3,1 /c16/c21/c15/c19 -2,8
/c50/c69/c77/c17/c3/c20/c3/c49/c40/c39/c40/c53/c47/c36/c49/c39 /c24/c15/c28 /c25/c15/c26 /c27/c15/c24 /c25/c15/c21 /c24/c15/c26 /c23/c15/c25 /c22/c15/c20 /c16/c21/c15/c19 /c16/c21/c15/c27
/c37/c56/c53/c42/c40/c49/c47/c36/c49/c39 /c22/c15/c20 /c21/c15/c23 /c21/c15/c27 2,8 2,8 3,7 3,8 4,2 3,3 0,5
/c50/c69/c77/c17/c3/c20/c3/c103/c54/c55/c40/c53/c53/c40/c44/c38/c43 /c21/c15/c27 /c21/c15/c27 /c21/c15/c27 /c22/c15/c26 /c22/c15/c27 /c23/c15/c21 /c22/c15/c22 /c19/c15/c24
/c49/c50/c53/c55/c40 3,6 2,9 2,6 2,7 3,1 4,5 5,8 6,5 7,0 6,9 5,4 4,7 0,9 0,2
/c38/c40/c49/c55/c53/c50 3,7 2,9 2,0 2,3 2,5 3,6 4,4 4,0 4,1 3,4 2,5 2,4 -0,1 -1,2
/c47/c44/c54/c37/c50/c36 /c3 /c40 /c3 /c57/c36/c47/c40 /c3 /c39/c50 /c3 /c55/c40/c45/c50 8,8 6,9 5,8 4,4 4,8 6,5 8,3 9,4 8,9 7,9 6,4 6,1 -2,3 -0,4
/c36/c47/c40/c49/c55/c40/c45/c50 14,6 11,6 9,8 9,1 7,5 8,8 11,4 11,8 12,3 10,4 9,0 6,7 -5,8 -2,1
/c36/c47/c42/c36/c53/c57/c40 5,5 3,1 3,8 3,9 2,8 5,1 6,8 6,6 9,1 8,3 6,8 3,7 -0,4 -1,4
/c36/c100/c50/c53/c40/c54 2,2 2,5 3,0 3,7 3,4 5,3 6,6 8,1 7,2 5,5 4,4 3,7 3,1 -1,6
/c48/c36/c39/c40/c44/c53/c36 4,8 5,5 5,0 3,0 3,0 3,7 4,6 4,8 5,5 5,5 4,1 3,4 -1,1 -0,3
/c50/c69/c77/c17/c3/c20/c3/c51/c50/c53/c55/c56/c42/c36/c47 /c25/c15/c19 /c23/c15/c27 /c23/c15/c20 /c22/c15/c25 /c22/c15/c27 /c24/c15/c22 /c25/c15/c26 /c26/c15/c22 /c26/c15/c23 /c25/c15/c26 /c24/c15/c22 /c23/c15/c26 /c16/c19/c15/c26 /c16/c19/c15/c25
/c48/c40/c53/c54/c40/c60/c54/c44/c39/c40 /c20/c24/c15/c26 /c20/c24/c15/c20 /c20/c23/c15/c23 /c20/c23/c15/c28 /c20/c24/c15/c21 /c20/c24/c15/c19 14,4 13,3 11,6 10,3 11,8 11,7 /c16/c19/c15/c26 -3,3
/c43/c44/c42/c43/c47/c36/c49/c39/c54 /c3 /c9 /c3 /c44/c54/c47/c36/c49/c39/c54 /c20/c21/c15/c27 /c20/c19/c15/c28 /c28/c15/c27 /c27/c15/c22 /c27/c15/c24 /c20/c21/c15/c23 12,1 10,5 8,1 8,4 6,1 6,0 /c16/c19/c15/c23 -6,4
/c49/c50/c53/c55/c43/c40/c53/c49 /c3 /c44/c53/c40/c47/c36/c49/c39 17,1 17,7 17,3 16,0 15,5 15,1 14,5 12,9 11,4 8,6 10,3 9,4 -2,0 -5,7
/c50/c69/c77/c17/c3/c20/c3/c56/c46/c3/c11/c20/c28/c27/c28/c16/c28/c22/c12 /c20/c26/c15/c20 /c20/c26/c15/c26 /c20/c26/c15/c22 /c20/c25/c15/c19 /c20/c24/c15/c24 /c20/c24/c15/c20 /c20/c23/c15/c24 /c20/c21/c15/c28 /c20/c20/c15/c23 /c27/c15/c25 /c20/c19/c15/c22 /c28/c15/c23 /c16/c21/c15/c19 /c16/c24/c15/c26
/c50/c69/c77/c17/c3/c20/c3/c56/c46/c3/c11/c20/c28/c28/c23/c16/c28/c28/c12 /c20/c23/c15/c27 /c20/c23/c15/c21 /c20/c21/c15/c27 /c20/c20/c15/c21 /c28/c15/c21 /c20/c19/c15/c22 /c28/c15/c27 /c16/c24/c15/c19
/c40/c56/c20/c24/c15 /c3 /c72/c91/c70/c79/c17 /c3 /c81/c72/c90 /c3 /c47/c108/c81/c71/c72/c85 /c3(3)/c28/c15/c19 /c27/c15/c22 /c26/c15/c26 /c27/c15/c20 /c20/c15/c24
/c40/c56/c20/c24 /c3(3) /c27/c15/c21 /c28/c15/c21 /c20/c19/c15/c26 /c20/c20/c15/c21 /c20/c19/c15/c26 /c20/c19/c15/c27 /c20/c19/c15/c26 /c20/c19/c15/c20 /c28/c15/c23 /c16/c20/c15/c22
/c55/c82/c87/c68/c79 /c3 /c50/c69/c77/c17 /c3 /c20 /c3 /c11/c20/c28/c27/c28/c16/c28/c28/c12 /c3(4)/c20/c24/c15/c25 /c20/c23/c15/c24 /c20/c22/c15/c24 /c20/c22/c15/c22 /c20/c22/c15/c28 /c20/c25/c15/c22 /c20/c26/c15/c25 /c20/c26/c15/c24 /c20/c26/c15/c26 /c20/c26/c15/c22 /c20/c25/c15/c26 /c20/c24/c15/c27 /c19/c15/c26 /c16/c19/c15/c24
/c55/c82/c87/c68/c79 /c3 /c50/c69/c77/c17 /c3 /c20 /c3 /c11/c20/c28/c28/c23/c16/c28/c28/c12 /c3(5)/c20/c25/c15/c19 /c20/c26/c15/c21 /c20/c25/c15/c27 /c20/c26/c15/c22 /c20/c26/c15/c19 /c20/c25/c15/c28 /c20/c24/c15/c26 /c16/c19/c15/c22
/c54/c72/c72/c3/c49/c82/c87/c72/c3/c87/c82/c3/c55/c68/c69/c79/c72/c3/c36/c17/c23/c26/c17/c3/c41/c76/c74/c88/c85/c72/c86/c3/c76/c81/c3/c76/c87/c68/c79/c76/c70/c86/c3/c68/c85/c72/c3/c73/c82/c85/c3/c85/c72/c74/c76/c82/c81/c86/c3/c90/c75/c76/c70/c75/c3/c71/c76/c71/c3/c81/c82/c87/c3/c75/c68/c89/c72/c3/c50/c69/c77/c72/c70/c87/c76/c89/c72/c3/c20/c3/c86/c87/c68/c87/c88/c86/c3/c76/c81/c3/c87/c75/c72/c3/c73/c76/c85/c86/c87/c3/c83/c85/c82/c74/c85/c68/c80/c80/c76/c81/c74/c3/c83/c72/c85/c76/c82 /c71/c17/c3/c36/c69/c85/c88/c93/c93/c82/c15/c3
/c76/c81/c3/c44/c87/c68/c79/c92/c15/c3/c90/c68/c86/c3/c81/c82/c3/c79/c82/c81/c74/c72/c85/c3/c72/c79/c76/c74/c76/c69/c79/c72/c3/c73/c82/c85/c3/c50/c69/c77/c72/c70/c87/c76/c89/c72/c3/c20/c3/c86/c87/c68/c87/c88/c86/c3/c73/c85/c82/c80/c3/c20/c28/c28/c26/c3/c82/c81/c17/c3/c44/c87/c3/c76/c86/c3/c76/c81/c70/c79/c88/c71/c72/c71/c3/c76/c81/c3/c87/c75/c72/c3/c87/c82/c87/c68/c79/c3/c73/c82/c85/c3/c44/c87/c68/c79/c92/c3/c68/c81/c71/c3/c87/c75/c72/c3/c40/c56/c3/c73/c82/c85/c3/c20/c28/c28/c26 /c3/c68/c81/c71/c3/c20/c28/c28/c27/c3/c73/c82/c85/c3/c70/c82/c81/c87/c76/c81/c88/c76/c87/c92/c17
/c11/c20/c12/c3/c50/c81/c79/c92/c3/c85/c72/c74/c76/c82/c81/c86/c3/c90/c75/c82/c79/c79/c92/c3/c72/c79/c76/c74/c76/c69/c79/c72/c3/c73/c82/c85/c3/c50/c69/c77/c72/c70/c87/c76/c89/c72/c3/c20
/c11/c21/c12/c3/c49/c82/c3/c71/c68/c87/c68/c3/c73/c82/c85/c3/c39/c50/c48/c86/c3/c76/c81/c3/c20/c28/c28/c26/c30/c3/c87/c82/c87/c68/c79/c3/c73/c82/c85/c3/c20/c28/c28/c26/c3/c70/c68/c79/c70/c88/c79/c68/c87/c72/c71/c3/c82/c81/c3/c87/c75/c72/c3/c69/c68/c86/c76/c86/c3/c82/c73/c3/c20/c28/c28/c25/c3/c71/c68/c87/c68/c3/c73/c82/c85/c3/c87/c75/c72/c86/c72/c17/c11/c22/c12/c3/c40/c88/c85/c82/c86/c87/c68/c87/c3/c75/c68/c85/c80/c82/c81/c76/c86/c72/c71/c3/c88/c81/c72/c80/c83/c79/c82/c92/c80/c72/c81/c87/c3/c73/c76/c74/c88/c85/c72/c86/c11/c23/c12/c3/c53/c72/c74/c76/c82/c81/c86/c3/c90/c76/c87/c75/c3/c50/c69/c77/c72/c70/c87/c76/c89/c72/c3/c20/c3/c86/c87/c68/c87/c88/c86/c3/c87/c75/c85/c82/c88/c74/c75/c82/c88/c87/c3/c87/c75/c72/c3/c83/c72/c85/c76/c82/c71/c3/c11/c72/c91/c70/c72/c83/c87/c3/c36/c69/c85/c88/c93/c93/c82/c3/c90/c75/c76/c70/c75/c3/c69/c72/c70/c68/c80/c72/c3/c81/c82/c3/c79/c82/c81/c74/c72/c85/c3/c72/c79/c76/c74/c76/c69/c79/c72/c3/c73/c82/c85/c3/c50/c69/c77/c72/c70/c87/c76/c89/c72/c3/c20/c3/c76/c81/c3/c20/c28 /c28/c26/c3/c69/c88/c87/c3/c90/c75/c76/c70/c75/c3/c76/c86/c3/c76/c81/c70/c79/c88/c71/c72/c71/c3/c76/c81/c3/c87/c75/c72/c3/c20/c28/c28/c26/c68/c81/c71/c3/c20/c28/c28/c27/c3/c73/c76/c74/c88/c85/c72/c86/c17
/c11/c24/c12/c3/c53/c72/c74/c76/c82/c81/c86/c3/c90/c76/c87/c75/c3/c50/c69/c77/c72/c70/c87/c76/c89/c72/c3/c20/c3/c86/c87/c68/c87/c88/c86/c3/c71/c88/c85/c76/c81/c74/c3/c87/c75/c72/c3/c86/c72/c70/c82/c81/c71/c3/c83/c85/c82/c74/c85/c68/c80/c80/c76/c81/c74/c3/c83/c72/c85/c76/c82/c71/c17/c54/c82/c88/c85/c70/c72/c3/c29/c3/c40/c88/c85/c82/c86/c87/c68/c87/c3/c68/c81/c71/c3/c72/c86/c87/c76/c80/c68/c87/c72/c86/c3/c39/c42/c3/c53/c40/c42/c44/c50% Labour force
/c55/c68/c69/c79/c72/c3/c36/c17/c24/c19/c3/c3/c48/c68/c76/c81/c3/c85/c72/c74/c76/c82/c81/c68/c79/c3/c76/c81/c71/c76/c70/c68/c87/c82/c85/c86
1988
1998
average 1996-97-98
Agriculture
Industry
Services
Total, 1989
Total, 1999
Long term 
unemployed, 1999 (% 
total unempl.)
Women, 1999
Youth, 1999
/c40/c56/c20/c24 /c20/c19/c19/c15/c19 /c20/c19/c19/c15/c19 /c20/c19/c19/c15/c19 /c23/c15/c24 /c21/c28/c15/c21 /c25/c25/c15/c19 /c20/c20/c28/c15/c23 /c27/c15/c23 /c28/c15/c23 /c23/c25/c15/c20 /c20/c20/c15/c19 /c20/c26/c15/c27
/c40/c56/c20/c21 /c28/c27/c15/c21 /c28/c28/c15/c25 /c28/c28/c15/c26 /c23/c15/c23 /c21/c28/c15/c23 /c25/c24/c15/c28 /c20/c20/c23/c15/c19 /c27/c15/c27 /c28/c15/c24 /c23/c26/c15/c19 /c20/c20/c15/c22 /c20/c26/c15/c28/c37/c40/c47/c42/c44/c52/c56/c40/c16/c37/c40/c47/c42/c44/c201 /c20/c19/c22/c15/c21 /c20/c20/c20/c15/c22 /c20/c20/c20/c15/c21 /c21/c15/c23 /c21/c24/c15/c27 /c26/c20/c15/c27 /c20/c21/c22/c15/c20 /c26/c15/c21 /c27/c15/c27 /c24/c28/c15/c22 /c20/c19/c15/c23 /c21/c22/c15/c23  REG. BRUXELLES-CAP. / BRUSSELS HFDST. GEW. 162,3 168,8 169,6 0,2 13,4 86,4 134,5 9,2 14,0 62,0 14,2 35,1  VLAAMS GEWEST 104,4 115,1 114,8 2,5 28,0 69,5 140,1 5,5 5,6 51,1 7,0 14,6    ANTWERPEN 123,8 138,5 137,6 2,2 28,1 69,8 176,4 6,4 6,5 53,2 8,1 17,7    LIMBURG (B) 102,6 108,5 108,4 2,1 34,5 63,4 78,2 8,5 7,0 53,7 9,9 16,6    OOST-VLAANDEREN 99,0 104,1 103,9 2,7 30,4 66,9 106,2 5,3 5,9 52,9 7,2 14,2    VLAAMS BRABANT 81,4 96,1 96,2 1,5 20,7 77,8 217,2 4,0 3,9 47,0 4,5 12,0    WEST-VLAANDEREN 103,9 116,2 115,8 3,8 27,5 68,7 102,4 3,9 4,6 44,5 5,8 11,8  RÉGION WALLONNE 83,4 87,9 87,9 2,8 24,7 72,5 88,3 9,9 13,3 65,1 15,7 37,4    BRABANT WALLON 75,5 86,8 87,2 2,0 24,0 74,1 263,4 5,8 8,8 55,0 10,5 25,1    HAINAUT 77,0 79,2 79,3 2,6 27,3 70,2 47,7 11,9 16,6 68,5 19,4 47,8    LIÈGE 94,9 98,6 98,2 2,4 23,9 73,7 96,6 10,1 12,8 63,7 15,2 33,1    LUXEMBOURG (B) 85,3 95,0 95,7 6,8 24,7 68,5 62,0 6,1 7,3 50,1 9,2 21,6    NAMUR 80,4 85,7 85,7 3,0 20,3 76,7 64,6 9,2 12,6 66,6 14,7 40,2/c39/c36/c49/c48/c36/c53/c46 /c20/c19/c24/c15/c22 /c20/c20/c27/c15/c28 /c20/c20/c28/c15/c23 /c22/c15/c22 /c21/c25/c15/c27 /c25/c28/c15/c24 /c20/c22/c28/c15/c22 /c26/c15/c25 /c24/c15/c25 /c20/c27/c15/c25 /c25/c15/c22 /c20/c20/c15/c19/c39/c40/c56/c55/c54/c38/c43/c47/c36/c49/c39 /c20/c20/c23/c15/c27 /c20/c19/c26/c15/c26 /c20/c19/c27/c15/c25 /c21/c15/c28 /c22/c22/c15/c27 /c25/c22/c15/c22 /c21/c21/c26/c15/c22 /c24/c15/c26 /c27/c15/c28 /c24/c19/c15/c25 /c28/c15/c22 /c28/c15/c19  BADEN-WÜRTTEMBERG 125,1 122,5 122,4 2,5 41,4 56,1 416,4 3,3 5,1 53,9 5,2 5,8    STUTTGART 141,0 130,0 129,9 1,9 43,8 54,4 496,7 2,9 4,9 55,5 5,0 5,1    KARLSRUHE 122,6 133,6 133,5 1,5 37,9 60,6 353,6 4,1 5,8 53,6 5,8 6,9    FREIBURG 109,2 105,5 105,6 3,4 40,1 56,5 398,1 3,2 5,2 52,9 5,4 6,7    TÜBINGEN 112,3 109,4 109,4 4,3 42,9 52,8 355,0 2,9 4,5 51,7 4,8 5,1  BAYERN 116,7 122,9 123,4 4,1 35,6 60,3 360,9 3,7 5,0 47,6 5,1 5,4    OBERBAYERN 145,6 161,2 161,7 3,0 30,1 66,9 571,0 3,5 4,0 47,2 3,8 3,9    NIEDERBAYERN 90,3 98,3 99,1 6,8 40,1 53,1 137,6 3,6 4,8 36,0 4,7 5,6    OBERPFALZ 90,1 94,1 94,7 6,5 38,5 55,0 290,6 4,9 5,4 48,4 5,7 5,5    OBERFRANKEN 98,8 104,2 104,5 3,0 38,0 59,0 174,2 4,0 6,5 48,8 6,8 7,2    MITTELFRANKEN 119,9 118,5 119,0 4,9 37,8 57,3 365,4 4,2 6,4 52,6 6,6 6,8    UNTERFRANKEN 98,3 99,5 100,0 2,8 39,4 57,8 262,8 3,8 5,6 48,2 5,9 6,5    SCHWABEN 106,0 102,9 103,3 4,6 37,9 57,5 260,3 3,0 4,7 48,1 4,8 5,4  BERLIN 116,1 102,2 104,8 0,8 23,4 75,8 139,7 7,1 13,7 46,5 12,4 14,4  BRANDENBURG : 70,6 72,3 5,4 32,2 62,3 45,5 : 16,0 39,8 17,7 10,9  BREMEN 144,3 144,3 143,6 1,3 26,4 72,3 61,0 11,0 11,4 61,7 9,8 13,0  HAMBURG 175,2 185,5 185,8 0,5 22,4 77,1 182,0 8,8 7,9 57,7 6,6 10,1  HESSEN 133,2 131,5 132,8 1,7 31,7 66,7 301,0 4,4 6,7 56,2 6,3 8,2    DARMSTADT 154,7 154,2 155,8 1,1 29,3 69,6 399,0 4,0 6,0 57,8 5,5 7,1    GIEßEN 93,9 90,7 91,6 2,3 36,2 61,5 208,6 4,8 7,0 51,5 7,0 9,0    KASSEL 102,2 99,4 100,3 3,0 35,4 61,6 93,0 5,6 8,5 56,2 8,2 10,2  MECKLENBURG-VORPOMMERN : 70,7 71,9 6,8 26,9 66,3 18,5 : 17,5 39,6 19,6 12,7  NIEDERSACHSEN 97,2 99,5 100,0 4,0 32,5 63,6 154,8 7,3 8,2 58,8 8,2 10,1    BRAUNSCHWEIG 103,7 98,8 98,8 2,3 37,5 60,2 238,6 7,8 9,7 68,3 10,0 10,3    HANNOVER 111,2 112,0 112,4 2,1 32,2 65,7 193,9 7,4 8,3 56,8 7,9 10,9    LÜNEBURG 78,1 80,4 81,3 4,7 28,4 66,9 128,6 6,1 7,2 54,7 7,2 10,1    WESER-EMS 92,1 101,8 102,6 6,2 32,2 61,6 79,2 7,6 7,7 54,9 7,9 9,3  NORDRHEIN-WESTFALEN 108,8 109,9 111,1 1,8 34,3 64,0 215,7 7,6 8,2 61,2 8,0 9,7    DÜSSELDORF 118,1 118,3 119,2 1,5 32,4 66,1 262,4 8,2 8,7 63,6 8,2 11,0    KÖLN 113,2 116,7 118,4 1,5 30,3 68,2 263,5 7,4 7,6 60,4 7,3 8,6    MÜNSTER 93,5 97,9 99,2 2,9 35,0 62,1 154,6 7,9 8,1 59,4 7,9 8,8    DETMOLD 104,1 103,3 104,8 2,1 40,5 57,4 173,1 6,0 7,3 53,7 7,7 8,6    ARNSBERG 103,4 102,2 103,0 1,7 37,3 60,9 162,6 7,9 8,9 63,0 8,7 10,7  RHEINLAND-PFALZ 100,9 97,5 98,7 2,5 36,3 61,3 250,7 4,9 6,4 52,3 6,3 8,5    KOBLENZ 91,8 91,2 92,4 2,2 36,4 61,4 135,5 4,6 6,2 47,6 5,9 7,7    TRIER 86,2 95,2 96,1 4,2 31,2 64,6 69,6 5,6 5,8 46,8 5,7 7,2    RHEINHESSEN-PFALZ 111,6 103,0 104,1 2,2 37,4 60,4 383,9 4,9 6,7 56,6 6,6 9,5  SAARLAND 102,4 99,4 99,7 0,9 34,8 64,3 122,4 8,4 8,5 64,3 7,5 10,8  SACHSEN : 71,4 73,1 3,0 34,8 62,3 59,8 : 16,2 42,9 18,6 10,9    CHEMNITZ : 63,2 64,6 :::::: 41,4 : :
    DRESDEN : 74,1 75,9 :::::: 44,7 : :
    LEIPZIG : 79,4 81,5 :::::: 42,2 : :
  SACHSEN-ANHALT : 68,3 69,2 4,2 31,9 63,9 31,0 : 19,9 42,5 22,5 13,4    DESSAU : 64,2 65,0 3,7 34,1 62,2 27,5 : 20,9 41,7 24,1 13,6    HALLE : 74,7 75,6 3,9 32,4 63,8 41,5 : 20,6 45,6 23,1 15,1    MAGDEBURG : 65,5 66,5 4,7 30,7 64,6 25,1 : 18,9 40,5 21,2 12,2  SCHLESWIG-HOLSTEIN 96,9 101,8 103,5 3,3 24,9 71,9 101,7 6,6 7,4 52,9 6,7 10,2Region/c40/c70/c82/c81/c82/c80/c92 /c47/c68/c69/c82/c88/c85/c3/c80/c68/c85/c78/c72/c87
GDP per head (PPS), 
EUR15=100Employment by sector (% 
total), 1999
Eur. patent applications per 
million inh, av 1997-98-99Unemployment rate (%)
Total
Women
Men
Under 15
15-64
65+
Low
Medium
High
/c25/c21/c15/c27 /c24/c22/c15/c20 /c26/c21/c15/c25 /c22/c26/c23/c24/c22/c26 /c20/c20/c26/c15/c23 /c20/c26/c15/c23 /c25/c26/c15/c19 /c20/c24/c15/c25 /c22/c25 /c23/c22 /c21/c20 /c40/c56/c20/c24
/c25/c21/c15/c23 /c24/c21/c15/c23 /c26/c21/c15/c24 /c22/c24/c21/c23/c24/c23 /c20/c23/c28/c15/c24 /c20/c26/c15/c23 /c25/c26/c15/c20 /c20/c24/c15/c25 /c22/c26 /c23/c21 /c21/c20 /c40/c56/c20/c21/c24/c28/c15/c23 /c24/c19/c15/c24 /c25/c27/c15/c21 /c20/c19/c21/c19/c23 /c22/c22/c23/c15/c23 /c20/c26/c15/c26 /c25/c24/c15/c27 /c20/c25/c15/c24 /c23/c19 /c22/c21 /c21/c27 /c37/c40/c47/c42/c44/c52/c56/c40/c16/c37/c40/c47/c42/c44/c20154,3 47,7 61,0 954 5913,3 17,6 65,2 17,2 39 25 36   REG. BRUXELLES-CAP. / BRUSSELS HFDST. GEW.62,3 53,9 70,5 5920 438,1 17,3 66,5 16,2 39 33 28   VLAAMS GEWEST60,1 50,6 69,3 1640 571,8 17,4 66,1 16,5 39 32 29     ANTWERPEN58,1 46,8 68,9 786 324,3 17,8 69,0 13,1 46 33 21     LIMBURG (B)63,0 54,5 71,3 1358 455,5 16,7 66,7 16,6 41 33 26     OOST-VLAANDEREN66,2 60,3 72,1 1010 479,4 17,2 66,5 16,4 31 34 35     VLAAMS BRABANT64,2 57,3 70,9 1126 359,3 17,3 65,2 17,4 38 36 27     WEST-VLAANDEREN55,6 45,2 66,1 3330 197,7 18,6 64,7 16,7 42 32 26   RÉGION WALLONNE
60,3 52,0 69,0 346 317,1 19,8 65,7 14,5 28 33 40     BRABANT WALLON51,3 40,1 62,5 1282 338,6 18,1 64,7 17,2 46 32 22     HAINAUT57,2 46,4 68,0 1017 263,4 18,2 64,7 17,1 43 31 26     LIÈGE61,1 51,4 70,4 245 55,1 20,5 63,5 16,1 45 30 25     LUXEMBOURG (B)57,9 48,2 67,5 440 120,1 19,1 64,7 16,2 38 33 29     NAMUR/c26/c25/c15/c28 /c26/c21/c15/c19 /c27/c20/c15/c26 /c24/c22/c19/c23 /c20/c21/c22/c15/c20 /c20/c27/c15/c19 /c25/c26/c15/c20 /c20/c23/c15/c28 /c20/c28 /c24/c23 /c21/c27 /c39/c36/c49/c48/c36/c53/c46/c25/c24/c15/c23 /c24/c26/c15/c24 /c26/c22/c15/c21 /c27/c21/c19/c21/c28 /c21/c21/c28/c15/c27 /c20/c25/c15/c19 /c25/c27/c15/c21 /c20/c24/c15/c27 /c20/c27 /c24/c27 /c21/c23 /c39/c40/c56/c55/c54/c38/c43/c47/c36/c49/c3969,5 61,1 77,7 10411 291,2 16,9 68,0 15,1 21 54 25   BADEN-WÜRTTEMBERG70,7 62,2 78,9 3893 368,8 16,8 68,3 14,9 22 53 25     STUTTGART68,1 60,1 75,7 2663 384,9 16,0 68,4 15,6 19 53 28     KARLSRUHE68,5 59,3 77,9 2111 225,6 17,2 67,3 15,5 21 56 22     FREIBURG70,1 62,3 77,7 1744 195,6 18,1 67,4 14,5 21 55 24     TÜBINGEN71,2 62,9 79,4 12077 171,2 16,5 67,8 15,7 21 57 23   BAYERN72,9 65,2 80,8 3994 227,8 15,6 69,2 15,1 18 53 29     OBERBAYERN71,1 62,1 80,0 1161 112,4 17,3 67,1 15,5 25 60 15     NIEDERBAYERN70,6 61,5 79,6 1067 110,1 17,3 67,2 15,5 24 59 17     OBERPFALZ69,7 62,7 76,7 1114 154,0 16,3 66,7 17,0 21 59 20     OBERFRANKEN69,4 61,3 77,3 1678 231,6 16,1 67,9 16,0 24 54 23     MITTELFRANKEN68,1 59,0 76,7 1328 155,7 17,4 66,9 15,7 22 59 19     UNTERFRANKEN72,2 62,9 81,3 1735 173,6 17,5 66,6 15,8 19 60 21     SCHWABEN60,7 57,1 64,1 3414 3832,8 14,4 71,9 13,7 17 49 34   BERLIN63,0 58,5 67,4 2582 87,6 15,4 70,6 14,0 9 60 31   BRANDENBURG60,4 53,5 67,4 671 1659,8 13,9 68,3 17,7 24 57 19   BREMEN66,5 61,2 71,7 1702 2253,4 13,5 69,8 16,8 21 56 23   HAMBURG66,4 57,8 74,9 6033 285,7 15,6 68,5 15,9 20 56 24   HESSEN67,5 59,1 75,9 3700 497,0 15,1 69,5 15,4 19 54 26     DARMSTADT64,7 55,4 73,7 1061 197,2 16,6 67,6 15,8 20 58 22     GIEßEN64,3 55,5 73,1 1272 153,5 16,2 66,3 17,5 20 60 20     KASSEL61,3 56,5 66,0 1803 77,8 16,0 70,6 13,3 10 62 28   MECKLENBURG-VORPOMMERN64,6 55,5 73,5 7856 165,0 16,6 67,2 16,2 18 62 20   NIEDERSACHSEN62,6 53,9 71,2 1672 206,5 15,5 67,2 17,4 16 64 20     BRAUNSCHWEIG65,0 56,6 73,3 2150 237,6 15,2 67,6 17,2 19 60 22     HANNOVER66,1 56,7 75,3 1638 105,7 17,0 67,2 15,8 16 64 20     LÜNEBURG64,7 54,9 74,2 2396 160,1 18,3 66,9 14,8 20 63 18     WESER-EMS62,4 52,5 72,1 17975 527,5 16,3 67,5 16,2 23 58 20   NORDRHEIN-WESTFALEN61,9 51,6 72,3 5277 997,7 15,5 67,7 16,7 24 57 20     DÜSSELDORF63,0 53,3 72,4 4243 576,1 16,1 68,6 15,3 22 55 23     KÖLN61,5 51,8 70,9 2598 376,3 17,6 67,0 15,4 21 61 18     MÜNSTER65,7 56,4 74,7 2039 312,8 17,6 65,9 16,5 21 62 18     DETMOLD61,3 51,3 71,1 3819 477,2 16,2 67,1 16,7 24 59 17     ARNSBERG65,6 56,6 74,4 4021 202,6 16,5 66,9 16,6 21 58 21   RHEINLAND-PFALZ64,4 55,5 73,1 1510 187,1 16,9 65,9 17,2 21 60 20     KOBLENZ64,3 53,4 74,9 510 103,5 16,7 65,9 17,4 20 60 20     TRIER66,8 58,1 75,1 2001 292,0 16,2 67,8 16,0 22 56 22     RHEINHESSEN-PFALZ61,4 52,6 69,9 1078 419,2 15,2 67,5 17,3 20 62 18   SAARLAND64,0 58,8 69,2 4506 244,7 14,1 68,7 17,2 6 63 31   SACHSEN
: : : 1663 272,8 13,8 67,8 18,4 : : :     CHEMNITZ: : : 1742 219,6 14,6 68,9 16,6 : : :     DRESDEN: : : 1102 251,2 13,9 69,6 16,5 : : :     LEIPZIG
59,7 54,4 64,8 2690 131,5 14,7 69,3 16,0 9 64 27   SACHSEN-ANHALT58,8 53,3 64,1 562 131,4 14,4 69,4 16,2 10 63 26     DESSAU57,7 52,0 63,3 890 201,0 14,3 69,3 16,4 9 66 26     HALLE61,6 56,7 66,2 1237 105,4 15,1 69,3 15,6 10 62 29     MAGDEBURG66,8 58,8 74,6 2761 175,1 15,9 68,1 16,0 18 60 23   SCHLESWIG-HOLSTEIN
Popn density (inh./km²), 1998% population aged: (1998)Educational attainment of 
those aged 25-59 (% total), 
1999/c39/c72/c80/c82/c74/c85/c68/c83/c75/c92 /c40/c71/c88/c70/c68/c87/c76/c82/c81
RegionEmployment rate (% popn 
15-64), 1999
Population (000), 1998
1988
1998
average 1996-97-98
Agriculture
Industry
Services
Total, 1989
Total, 1999
Long term 
unemployed, 1999 (% 
total unempl.)
Women, 1999
Youth, 1999Region/c40/c70/c82/c81/c82/c80/c92 /c47/c68/c69/c82/c88/c85/c3/c80/c68/c85/c78/c72/c87
GDP per head (PPS), 
EUR15=100Employment by sector (% 
total), 1999
Eur. patent applications per 
million inh, av 1997-98-99Unemployment rate (%)
  THÜRINGEN : 69,9 70,1 3,8 34,1 62,1 49,0 : 14,3 37,7 16,5 10,3
/c40/c47/c47/c36/c39/c36 /c24/c27/c15/c20 /c25/c25/c15/c19 /c25/c25/c15/c22 /c20/c26/c15/c27 /c21/c22/c15/c19 /c24/c28/c15/c21 /c25/c15/c21 /c25/c15/c26 /c20/c20/c15/c26 /c24/c24/c15/c22 /c20/c26/c15/c28 /c22/c20/c15/c26  VOREIA ELLADA 56,6 62,6 63,0 26,0 23,8 50,2 3,5 6,5 12,4 51,5 19,8 32,3    ANATOLIKI MAKEDONIA, THRAKI 52,2 55,4 55,6 38,4 19,3 42,3 1,2 6,7 12,8 50,9 19,2 31,5    KENTRIKI MAKEDONIA 58,3 67,6 68,0 19,1 25,7 55,1 5,7 6,6 11,7 47,1 18,8 30,2    DYTIKI MAKEDONIA 62,6 59,9 60,2 24,5 35,2 40,3 0,0 5,7 14,6 54,6 24,2 47,0    THESSALIA 53,8 57,4 57,6 32,7 19,0 48,3 1,4 6,5 12,8 61,1 21,7 33,5  KENTRIKI ELLADA 56,0 59,3 59,5 32,5 20,7 46,8 0,9 5,5 11,0 60,5 17,9 34,4    IPEIROS 43,5 41,8 42,1 24,7 24,1 51,2 0,7 4,0 13,9 64,6 22,1 42,6    IONIA NISIA 54,6 55,7 56,3 25,1 16,0 58,9 0,0 2,8 5,5 33,9 8,1 20,7    DYTIKI ELLADA 48,2 52,6 52,9 35,0 16,9 48,1 2,0 7,2 11,8 61,3 18,6 36,9    STEREA ELLADA 71,6 84,2 84,4 27,9 29,7 42,4 1,0 5,9 14,2 64,4 24,9 38,0    PELOPONNISOS 58,0 52,7 52,7 40,2 17,4 42,5 0,5 4,8 7,6 55,3 12,5 27,2  ATTIKI 61,1 73,8 74,0 1,0 25,3 73,7 13,7 8,5 12,5 57,8 17,8 33,2  NISIA AIGAIOU, KRITI 57,6 68,4 68,7 24,6 16,7 58,7 2,8 3,5 7,9 44,0 12,0 19,8    VOREIO AIGAIO 44,5 60,8 60,8 17,9 19,7 62,4 0,0 5,9 11,3 57,5 15,6 30,1    NOTIO AIGAIO 68,4 76,9 77,4 8,3 23,2 68,5 1,2 4,4 7,3 25,3 11,6 15,7    KRITI 57,3 66,8 67,1 33,0 13,2 53,8 4,4 2,4 7,3 47,5 11,5 19,9/c40/c54/c51/c36/c102/c36 /c26/c23/c15/c19 /c27/c20/c15/c20 /c27/c19/c15/c21 /c26/c15/c23 /c22/c19/c15/c25 /c25/c21/c15/c19 /c20/c27/c15/c24 /c20/c26/c15/c23 /c20/c25/c15/c20 /c23/c24/c15/c19 /c21/c22/c15/c23 /c22/c19/c15/c23  NOROESTE 63,3 67,7 67,3 15,6 30,3 54,2 6,8 14,2 17,0 53,3 24,4 36,1    GALICIA 57,9 64,2 64,1 18,6 29,2 52,2 6,8 12,5 16,8 52,2 23,8 33,3    PRINCIPADO DE ASTURIAS 71,9 72,4 71,8 10,3 30,8 59,0 7,4 17,4 18,2 54,3 25,9 45,2    CANTABRIA 73,8 76,3 74,8 8,7 35,6 55,7 5,3 17,6 15,7 57,4 24,9 33,7  NORESTE 87,1 96,4 94,7 5,4 37,2 57,5 29,9 16,0 12,0 47,7 18,8 23,8    PAIS VASCO 88,7 99,1 96,1 2,2 38,5 59,3 30,5 20,0 14,7 49,9 21,7 31,3    COMUNIDAD FORAL DE NAVARRA 91,4 106,2 105,4 8,3 38,7 53,0 44,1 11,5 8,5 44,1 14,6 15,7    LA RIOJA 83,7 93,2 91,6 10,9 42,7 46,5 7,7 9,6 7,1 54,0 13,0 16,1    ARAGÓN 83,1 88,1 88,1 8,3 33,0 58,8 27,4 11,9 9,5 41,9 16,1 16,6  COMUNIDAD DE MADRID 91,0 110,2 107,5 1,0 25,8 73,2 30,3 13,3 13,3 48,5 18,8 25,4  CENTRO (E) 62,1 67,0 67,0 12,0 30,3 57,7 7,0 18,5 17,6 40,6 28,2 33,8    CASTILLA Y LEÓN 68,1 74,2 74,4 11,1 29,2 59,7 8,2 17,4 15,6 47,3 25,9 36,1    CASTILLA-LA MANCHA 61,1 67,0 66,6 11,7 34,6 53,8 7,4 14,8 15,6 38,2 26,1 27,1    EXTREMADURA 49,8 50,2 50,4 15,0 25,6 59,5 3,9 26,8 25,5 33,3 37,3 41,3  ESTE 84,1 91,9 90,9 4,0 35,4 60,6 31,1 14,4 11,8 45,9 17,2 22,5    CATALUÑA 89,2 100,4 99,6 3,5 37,1 59,5 41,9 14,3 10,8 51,4 15,5 20,2    COMUNIDAD VALENCIANA 73,8 77,2 76,2 5,3 34,8 59,9 18,4 15,3 14,3 39,9 21,3 26,9    ISLAS BALEARES 95,5 99,5 97,8 2,2 24,6 73,2 10,6 10,3 7,2 39,0 10,5 14,9  SUR 57,6 59,2 59,1 11,7 25,3 63,0 5,3 25,8 25,1 42,5 35,6 41,3    ANDALUCÍA 55,9 57,9 57,8 11,5 25,1 63,4 5,0 27,2 26,8 42,5 37,5 43,2    REGIÓN DE MURCIA 67,9 67,2 66,8 13,6 28,2 58,2 7,7 16,2 14,4 39,5 23,2 27,4    CEUTA Y MELILLA 65,5 67,0 66,0 0,5 10,4 89,1 : 31,6 25,5 54,0 38,0 52,2  CANARIAS 74,9 77,1 75,4 6,6 19,8 73,7 5,6 22,5 14,4 36,6 20,5 29,8/c41/c53/c36/c49/c38/c40 /c20/c19/c27/c15/c23 /c28/c27/c15/c25 /c28/c28/c15/c25 /c23/c15/c22 /c21/c25/c15/c22 /c25/c28/c15/c23 /c20/c20/c25/c15/c24 /c28/c15/c22 /c20/c20/c15/c23 /c23/c20/c15/c22 /c20/c22/c15/c22 /c21/c21/c15/c23  ÎLE DE FRANCE 165,1 151,7 154,3 0,5 19,7 79,8 252,7 7,7 10,3 41,3 10,9 15,8  BASSIN PARISIEN 97,3 88,7 89,4 5,9 30,4 63,7 80,5 9,6 11,5 42,2 13,9 25,1    CHAMPAGNE-ARDENNE 98,9 92,3 92,1 8,6 28,2 63,1 55,5 10,3 11,8 37,6 14,3 26,9    PICARDIE 89,0 83,7 84,2 4,0 32,1 63,9 86,7 10,9 13,7 44,4 16,4 29,2    HAUTE-NORMANDIE 110,3 90,6 91,9 2,4 32,6 65,0 89,8 10,6 12,2 45,9 14,7 26,7    CENTRE 99,6 90,5 91,5 6,0 31,3 62,8 94,0 8,6 10,0 39,4 12,4 20,1    BASSE-NORMANDIE 87,9 84,6 85,5 9,7 25,9 64,4 54,6 8,6 11,7 42,5 13,6 26,8    BOURGOGNE 96,1 90,1 90,6 6,7 30,1 63,3 86,3 8,9 9,9 41,6 12,5 22,7  NORD - PAS-DE-CALAIS 89,2 79,4 79,7 1,7 29,4 68,9 37,2 12,6 15,8 44,9 17,9 36,3  EST 98,3 90,9 91,8 3,0 35,3 61,7 103,2 7,5 8,4 36,2 10,2 17,7    LORRAINE 91,5 83,3 84,2 3,0 32,2 64,8 70,1 9,1 10,0 41,3 12,3 23,4    ALSACE 110,7 103,5 104,9 1,9 37,1 61,0 149,3 5,3 6,6 26,9 7,5 12,2    FRANCHE-COMTÉ 94,7 87,3 87,6 4,7 38,3 57,0 100,5 8,0 8,3 36,1 10,8 17,7  OUEST 90,2 83,8 84,6 7,6 29,2 63,2 53,1 9,3 9,7 41,0 12,1 21,0    PAYS DE LA LOIRE 94,1 86,8 87,4 6,6 32,3 61,1 51,8 9,3 9,4 40,2 12,1 19,1    BRETAGNE 88,2 82,7 83,6 7,9 27,1 65,0 58,8 8,6 9,3 40,3 11,4 21,9    POITOU-CHARENTES 86,1 80,0 80,8 8,9 26,7 64,4 45,6 10,5 11,3 43,6 13,6 23,8  SUD-OUEST 92,5 87,7 87,9 7,7 23,1 69,2 60,8 10,0 11,5 42,7 14,1 23,9    AQUITAINE 98,8 89,4 89,5 7,7 22,0 70,3 47,3 11,3 11,7 44,5 14,5 24,8    MIDI-PYRÉNÉES 88,7 87,8 87,9 7,2 23,9 68,9 82,7 9,1 11,8 42,1 14,5 23,4    LIMOUSIN 81,2 80,5 81,2 9,9 25,4 64,7 38,0 8,2 8,9 34,9 10,8 21,7  CENTRE-EST 103,4 97,3 98,0 4,4 29,5 66,1 179,1 8,2 10,3 37,9 12,3 20,2    RHÔNE-ALPES 107,8 100,8 101,6 3,6 30,0 66,5 202,3 7,9 10,3 37,9 12,2 19,5    AUVERGNE 86,1 81,9 82,5 8,1 27,5 64,4 79,6 9,2 10,0 37,8 12,8 23,6
Total
Women
Men
Under 15
15-64
65+
Low
Medium
HighPopn density (inh./km²), 1998% population aged: (1998)Educational attainment of 
those aged 25-59 (% total), 
1999/c39/c72/c80/c82/c74/c85/c68/c83/c75/c92 /c40/c71/c88/c70/c68/c87/c76/c82/c81
RegionEmployment rate (% popn 
15-64), 1999
Population (000), 1998
65,1 60,4 69,6 2470 152,7 14,8 69,7 15,5 7 62 31   THÜRINGEN
/c24/c25/c15/c28 /c23/c20/c15/c24 /c26/c22/c15/c21 /c20/c19/c24/c20/c25 /c26/c28/c15/c28 /c20/c24/c15/c27 /c25/c26/c15/c26 /c20/c25/c15/c24 /c23/c28 /c22/c22 /c20/c27 /c40/c47/c47/c36/c39/c3656,5 39,7 74,3 3404 60,3 16,0 68,0 16,0 54 28 17   VOREIA ELLADA60,0 45,7 75,8 562 39,7 16,5 66,6 16,9 61 25 14     ANATOLIKI MAKEDONIA, THRAKI55,5 38,6 73,4 1796 95,5 15,8 69,1 15,1 49 31 19     KENTRIKI MAKEDONIA54,7 36,2 73,7 303 32,1 16,6 66,6 16,7 57 28 15     DYTIKI MAKEDONIA57,0 38,9 75,8 743 52,9 16,0 66,7 17,3 60 24 16     THESSALIA59,7 43,2 76,2 2646 49,1 15,0 66,5 18,5 61 27 12   KENTRIKI ELLADA54,2 39,1 70,3 373 40,5 14,2 67,2 18,6 62 25 14     IPEIROS70,2 55,1 84,5 203 87,9 15,6 64,3 20,1 60 27 13     IONIA NISIA57,7 41,8 73,7 737 65,0 16,6 66,7 16,7 58 29 13     DYTIKI ELLADA57,1 38,0 75,5 663 42,6 14,4 67,7 17,9 67 24 9     STEREA ELLADA64,3 48,4 80,3 670 43,2 14,1 65,4 20,5 58 29 13     PELOPONNISOS54,3 40,5 69,3 3450 905,8 15,6 69,2 15,2 36 41 23   ATTIKI64,5 49,3 79,9 1017 58,3 17,5 65,8 16,7 60 27 13   NISIA AIGAIOU, KRITI53,8 34,5 74,5 184 47,8 16,0 61,3 22,7 58 27 15     VOREIO AIGAIO61,3 43,9 78,7 271 51,2 18,1 67,2 14,7 67 25 8     NOTIO AIGAIO69,4 56,9 81,9 563 67,5 17,6 65,8 16,6 58 28 15     KRITI/c24/c21/c15/c27 /c22/c26/c15/c25 /c25/c27/c15/c23 /c22/c28/c22/c26/c20 /c26/c27/c15/c19 /c20/c24/c15/c25 /c25/c27/c15/c22 /c20/c25/c15/c20 /c25/c21 /c20/c25 /c21/c21 /c40/c54/c51/c36/c102/c3650,6 37,4 64,1 4303 95,0 13,1 68,0 19,0 65 15 20   NOROESTE53,0 40,7 65,7 2717 92,3 13,4 67,8 18,8 67 14 19     GALICIA45,5 32,6 58,5 1060 100,4 11,9 68,3 19,9 63 15 23     PRINCIPADO DE ASTURIAS48,5 30,7 67,1 526 99,4 13,7 68,5 17,8 62 17 22     CANTABRIA56,1 40,7 71,9 4018 57,1 13,0 69,2 17,8 56 17 27   NORESTE54,5 40,9 68,9 2054 282,9 12,6 71,3 16,1 52 18 30     PAIS VASCO59,4 42,7 76,1 529 50,8 13,8 68,9 17,3 56 15 29     COMUNIDAD FORAL DE NAVARRA56,8 38,9 74,2 260 51,5 13,6 67,5 18,9 64 15 21     LA RIOJA57,6 39,8 75,1 1175 24,7 13,2 66,1 20,7 61 16 23     ARAGÓN55,1 41,1 69,8 5028 628,9 15,1 70,3 14,6 50 19 30   COMUNIDAD DE MADRID51,1 32,7 69,7 5284 24,6 15,3 65,3 19,4 67 14 20   CENTRO (E)52,2 35,0 69,7 2496 26,5 13,2 66,0 20,8 60 16 24     CASTILLA Y LEÓN52,7 32,0 73,0 1707 21,5 16,9 64,3 18,7 73 12 15     CASTILLA-LA MANCHA46,2 28,3 64,1 1081 26,0 17,7 64,9 17,3 73 11 16     EXTREMADURA58,6 44,1 73,8 10727 178,0 15,0 68,7 16,2 62 17 21   ESTE60,5 46,7 74,8 6059 189,7 14,3 68,9 16,8 59 19 22     CATALUÑA55,0 39,3 71,7 3931 168,7 15,8 68,7 15,5 66 15 19     COMUNIDAD VALENCIANA62,6 48,7 76,8 737 147,0 17,1 67,7 15,3 67 17 16     ISLAS BALEARES44,4 28,6 60,8 8422 85,4 18,9 67,6 13,5 68 13 19   SUR43,3 27,7 59,4 7188 82,4 18,8 67,7 13,5 69 13 19     ANDALUCÍA52,0 34,5 69,6 1098 97,0 18,8 67,5 13,6 65 15 20     REGIÓN DE MURCIA44,3 26,3 63,2 136 4390,3 22,4 66,1 11,5 59 21 21     CEUTA Y MELILLA52,7 38,8 66,9 1590 219,5 18,1 70,7 11,3 67 15 18   CANARIAS/c25/c19/c15/c26 /c24/c22/c15/c25 /c25/c26/c15/c28 /c24/c27/c22/c28/c27 /c20/c19/c26/c15/c23 /c20/c28/c15/c20 /c25/c24/c15/c23 /c20/c24/c15/c24 /c22/c26 /c23/c20 /c21/c21 /c41/c53/c36/c49/c38/c4064,8 59,9 69,9 10929 909,9 20,1 68,5 11,5 33 35 32   ÎLE DE FRANCE61,2 53,8 68,7 10454 71,8 19,6 64,7 15,8 42 42 17   BASSIN PARISIEN58,3 51,1 65,4 1345 52,5 19,5 65,4 15,1 46 39 15     CHAMPAGNE-ARDENNE59,0 51,1 67,2 1857 95,7 21,2 65,3 13,5 45 40 15     PICARDIE60,2 52,4 67,8 1780 144,5 20,9 65,3 13,8 43 41 16     HAUTE-NORMANDIE64,0 56,8 71,5 2439 62,3 18,7 64,2 17,1 39 44 18     CENTRE61,7 56,1 67,5 1420 80,8 19,3 64,2 16,5 42 41 17     BASSE-NORMANDIE62,7 54,4 71,0 1612 51,0 17,7 63,9 18,4 37 46 17     BOURGOGNE51,0 41,6 60,6 3997 321,9 21,7 64,8 13,5 45 40 16   NORD - PAS-DE-CALAIS61,9 54,1 69,7 5155 107,3 19,4 66,1 14,6 37 45 19   EST58,7 50,0 67,4 2312 98,2 19,3 65,8 14,9 38 44 18     LORRAINE65,7 58,9 72,6 1726 208,5 19,6 67,0 13,5 33 48 19     ALSACE62,6 54,7 70,2 1117 68,9 19,2 65,3 15,5 41 41 18     FRANCHE-COMTÉ62,2 55,4 69,2 7744 91,0 18,4 64,3 17,4 34 47 19   OUEST62,2 54,6 69,9 3210 100,1 19,3 64,7 16,0 36 47 18     PAYS DE LA LOIRE61,9 55,5 68,4 2896 106,4 18,2 64,3 17,5 32 48 21     BRETAGNE63,0 56,8 69,3 1637 63,4 16,9 63,4 19,7 37 46 17     POITOU-CHARENTES60,8 54,5 67,3 6152 59,4 16,5 64,4 19,1 32 46 22   SUD-OUEST60,4 53,5 67,4 2898 70,2 16,8 64,7 18,5 33 46 22     AQUITAINE61,3 55,3 67,4 2542 56,1 16,7 64,5 18,8 31 45 25     MIDI-PYRÉNÉES61,3 56,0 66,7 712 42,0 14,5 62,7 22,8 35 49 16     LIMOUSIN62,1 54,3 70,0 6934 99,5 19,1 65,8 15,1 34 43 23   CENTRE-EST62,7 54,8 70,8 5625 128,7 19,7 66,0 14,3 33 43 24     RHÔNE-ALPES59,5 52,0 66,9 1310 50,3 16,1 64,9 19,0 36 44 20     AUVERGNE
1988
1998
average 1996-97-98
Agriculture
Industry
Services
Total, 1989
Total, 1999
Long term 
unemployed, 1999 (% 
total unempl.)
Women, 1999
Youth, 1999Region/c40/c70/c82/c81/c82/c80/c92 /c47/c68/c69/c82/c88/c85/c3/c80/c68/c85/c78/c72/c87
GDP per head (PPS), 
EUR15=100Employment by sector (% 
total), 1999
Eur. patent applications per 
million inh, av 1997-98-99Unemployment rate (%)
  MÉDITERRANÉE 95,2 85,0 85,9 4,0 19,3 76,7 67,8 12,0 16,5 42,1 19,1 26,2
    LANGUEDOC-ROUSSILLON 83,7 75,7 76,6 6,9 18,7 74,4 49,4 13,1 17,8 45,7 20,9 28,0    PROVENCE-ALPES-CÔTE D'AZUR 101,6 90,2 91,2 2,4 19,8 77,8 80,7 11,5 16,0 40,6 18,3 25,4    CORSE 85,7 77,0 75,7 8,2 14,3 77,0 7,1 9,4 14,3 33,1 18,8 24,8  DÉPARTEMENTS D'OUTRE-MER 43,9 53,3 53,6 4,8 14,5 80,7 1,8 : 32,0 57,7 36,3 51,2    GUADELOUPE 37,0 52,4 52,7 3,6 14,6 81,8 1,9 : : 62,6 : :    MARTINIQUE 51,0 59,8 60,2 6,5 13,0 80,6 0,1 : : 67,4 : :    GUYANE 49,4 53,4 53,9 3,2 18,1 78,7 0,7 : : 44,0 : :    RÉUNION 43,0 50,0 50,2 5,0 14,6 80,4 2,5 : : 52,4 : :/c44/c53/c40/c47/c36/c49/c39 /c25/c24/c15/c28 /c20/c19/c27/c15/c20 /c20/c19/c21/c15/c19 /c27/c15/c24 /c21/c27/c15/c22 /c25/c21/c15/c24 /c24/c20/c15/c24 /c20/c23/c15/c28 /c24/c15/c28 /c24/c25/c15/c19 /c24/c15/c26 /c27/c15/c25    BORDER, MIDLAND AND WESTERN : 79,3 75,3 : : : 25,3 14,7 7,1 : 6,9 10,1    SOUTHERN AND EASTERN : 118,5 111,6 : : : 48,9 14,9 5,5 : 5,4 8,1/c44/c55/c36/c47/c44/c36 /c20/c19/c19/c15/c21 /c20/c19/c20/c15/c20 /c20/c19/c21/c15/c21 /c24/c15/c23 /c22/c21/c15/c23 /c25/c21/c15/c21 /c24/c28/c15/c26 /c20/c19/c15/c19 /c20/c20/c15/c26 /c25/c19/c15/c27 /c20/c25/c15/c20 /c22/c21/c15/c28  NORD OVEST 116,5 114,5 116,0 3,8 35,2 61,0 83,2 6,6 8,0 61,9 12,2 23,5    PIEMONTE 118,0 117,2 119,0 3,8 39,8 56,5 98,5 6,0 7,9 56,7 12,6 22,4    VALLE D'AOSTA 127,8 129,8 133,6 5,4 23,3 71,3 8,1 3,7 5,6 18,8 6,8 12,8    LIGURIA 112,1 106,1 106,7 3,6 23,2 73,2 48,5 8,4 10,8 60,9 15,2 31,2  LOMBARDIA 131,9 134,7 136,2 2,1 41,1 56,8 131,4 3,5 4,9 43,7 7,6 13,8  NORD EST 115,2 120,3 122,1 5,3 39,0 55,7 79,8 4,5 4,7 30,1 7,4 11,3    TRENTINO-ALTO ADIGE 117,8 136,1 137,3 8,6 27,0 64,4 44,5 3,2 3,9 13,0 5,6 7,4    VENETO 114,7 118,9 120,6 4,7 43,0 52,3 82,8 4,4 4,9 30,2 8,4 11,5    FRIULI-VENEZIA GIULIA 114,8 113,5 115,9 4,8 33,5 61,7 96,3 5,7 5,6 32,6 9,0 12,1  EMILIA-ROMAGNA 126,3 129,5 131,0 6,7 36,4 56,9 127,7 4,7 4,8 27,0 7,7 12,7  CENTRO (I) 105,1 106,1 107,4 3,9 35,8 60,4 45,5 7,3 7,2 47,7 11,4 19,8    TOSCANA 108,2 110,4 111,4 3,3 34,4 62,3 47,3 7,3 8,2 42,6 12,1 20,8    UMBRIA 95,8 97,5 99,0 5,0 31,7 63,3 36,7 8,4 7,1 54,0 12,0 19,9    MARCHE 102,6 100,5 102,7 4,5 41,3 54,2 46,3 6,8 6,5 47,5 11,1 18,0  LAZIO 111,0 113,3 114,7 2,9 19,0 78,1 39,1 10,0 13,2 68,3 17,8 46,9  ABRUZZO-MOLISE 84,5 82,5 84,4 7,7 33,3 59,1 46,0 10,0 11,6 65,4 18,0 33,3    ABRUZZO 86,4 83,5 85,6 6,5 34,2 59,3 56,3 9,5 10,6 63,0 17,8 31,6    MOLISE 77,5 78,6 79,6 12,5 29,2 58,3 6,0 12,1 16,6 65,8 24,7 50,4  CAMPANIA 67,4 64,0 64,5 7,5 24,5 68,0 8,7 20,8 23,7 73,0 32,2 60,9  SUD 66,5 64,4 65,0 12,0 24,9 63,1 7,6 17,4 21,9 62,6 33,0 54,0    PUGLIA 72,2 65,1 66,0 11,8 26,6 61,6 7,8 13,8 19,8 61,9 31,6 49,0    BASILICATA 63,4 72,0 72,3 12,8 31,8 55,4 16,4 18,9 17,3 56,2 26,4 52,8    CALABRIA 56,5 60,7 61,0 12,1 18,7 69,2 4,4 23,2 28,7 62,1 41,4 65,2  SICILIA 65,8 65,2 65,7 9,1 19,3 71,6 11,3 20,0 24,8 66,4 36,2 60,2  SARDEGNA 72,8 76,3 76,1 8,1 22,7 69,2 8,1 17,6 21,9 57,9 31,7 56,7/c47/c56/c59/c40/c48/c37/c50/c56/c53/c42/c3/c11/c42/c53/c36/c49/c39/c16/c39/c56/c38/c43/c101/c12 /c20/c22/c28/c15/c20 /c20/c26/c24/c15/c27 /c20/c26/c22/c15/c21 /c20/c15/c28 /c21/c20/c15/c28 /c26/c24/c15/c27 /c20/c23/c24/c15/c19 /c20/c15/c26 /c21/c15/c23 /c22/c21/c15/c21 /c22/c15/c22 /c25/c15/c26/c49/c40/c39/c40/c53/c47/c36/c49/c39 /c28/c26/c15/c26 /c20/c20/c22/c15/c21 /c20/c20/c20/c15/c19 /c22/c15/c19 /c21/c20/c15/c21 /c26/c19/c15/c25 /c20/c25/c24/c15/c27 /c27/c15/c24 /c22/c15/c22 /c23/c20/c15/c24 /c23/c15/c25 /c25/c15/c26  NOORD-NEDERLAND 94,2 104,9 106,1 3,9 24,9 65,9 68,5 10,8 5,3 47,0 7,7 10,8    GRONINGEN 119,1 130,8 135,5 2,4 23,5 67,8 71,1 12,4 6,0 48,7 8,7 13,7    FRIESLAND 79,7 93,3 91,6 3,8 26,2 65,2 55,8 11,0 4,1 46,3 6,3 7,7    DRENTHE 82,4 89,4 90,0 5,9 24,8 64,6 82,1 8,2 5,9 45,6 8,4 11,8  OOST-NEDERLAND 83,9 96,4 94,9 3,6 23,6 67,6 119,7 8,9 3,0 39,1 4,3 5,8    OVERIJSSEL 86,2 96,9 95,3 4,0 28,4 62,4 122,3 9,0 3,1 31,5 4,5 5,3    GELDERLAND 83,9 98,6 96,9 3,5 21,6 69,5 123,1 8,8 3,0 41,4 4,2 6,4    FLEVOLAND 72,7 80,8 80,1 3,1 18,9 73,6 88,6 8,7 3,1 50,3 4,4 4,2  WEST-NEDERLAND 107,0 125,3 122,1 2,3 16,3 76,3 116,2 8,0 3,1 42,1 4,4 6,5    UTRECHT 103,4 142,4 137,1 1,1 15,7 78,5 139,5 7,3 2,3 52,1 3,3 3,5    NOORD-HOLLAND 111,7 131,9 128,6 2,3 15,0 77,8 103,5 8,1 3,3 43,4 4,6 7,4    ZUID-HOLLAND 104,7 117,7 115,0 2,6 16,5 75,7 121,5 8,4 3,2 38,8 4,5 6,7    ZEELAND 107,0 100,6 99,9 4,0 26,5 63,9 84,8 6,7 3,5 41,6 4,0 6,7  ZUID-NEDERLAND 92,1 107,1 104,8 3,7 27,6 63,4 358,9 8,1 3,1 38,1 4,3 6,5    NOORD-BRABANT 93,5 111,9 109,5 3,6 27,5 64,1 445,4 8,1 2,8 36,8 4,0 5,9    LIMBURG (NL) 89,5 97,1 95,4 3,8 27,7 62,0 182,1 8,0 3,7 40,3 5,2 8,1/c103/c54/c55/c40/c53/c53/c40/c44/c38/c43 /c20/c19/c21/c15/c21 /c20/c20/c20/c15/c26 /c20/c20/c20/c15/c25 /c25/c15/c21 /c21/c28/c15/c27 /c25/c23/c15/c19 /c20/c21/c24/c15/c21 /c22/c15/c20 /c23/c15/c19 /c22/c26/c15/c20 /c23/c15/c27 /c24/c15/c22  OSTÖSTERREICH 114,0 123,1 123,6 5,3 26,6 68,1 105,9 : 4,5 59,0 4,8 4,9    BURGENLAND 61,1 68,8 69,5 6,3 34,3 59,5 42,9 3,5 3,3 24,9 4,3 4,3    NIEDERÖSTERREICH 84,4 91,4 89,7 10,1 29,5 60,5 106,9 2,7 3,1 39,1 3,7 3,5    WIEN 152,0 162,8 165,4 0,8 22,8 76,4 115,8 5,3 5,9 71,5 5,9 6,7  SÜDÖSTERREICH 79,3 90,6 90,4 8,3 32,8 58,9 104,4 : 4,3 29,4 5,6 6,5    KÄRNTEN 80,9 91,6 91,2 7,8 30,6 61,6 95,9 3,2 4,7 14,0 6,3 7,3    STEIERMARK 78,6 90,1 90,1 8,5 33,8 57,7 108,3 3,2 4,1 37,5 5,3 6,2  WESTÖSTERREICH 102,7 111,2 110,4 6,1 31,7 62,2 157,2 : 3,4 8,1 4,3 5,1    OBERÖSTERREICH 97,8 104,9 104,1 8,3 34,9 56,9 160,1 2,4 2,7 7,7 3,3 3,9    SALZBURG 115,7 124,8 124,8 4,9 26,5 68,6 101,4 2,0 3,4 4,1 4,2 5,8
Total
Women
Men
Under 15
15-64
65+
Low
Medium
HighPopn density (inh./km²), 1998% population aged: (1998)Educational attainment of 
those aged 25-59 (% total), 
1999/c39/c72/c80/c82/c74/c85/c68/c83/c75/c92 /c40/c71/c88/c70/c68/c87/c76/c82/c81
RegionEmployment rate (% popn 
15-64), 1999
Population (000), 1998
54,0 46,0 62,5 7034 104,3 18,1 63,7 18,3 40 40 20   MÉDITERRANÉE
52,6 44,6 61,1 2283 83,4 17,7 63,4 18,9 41 40 19     LANGUEDOC-ROUSSILLON55,4 47,6 63,8 4491 143,0 18,3 63,7 18,0 38 41 21     PROVENCE-ALPES-CÔTE D'AZUR42,8 32,3 53,4 260 29,9 17,5 64,6 17,8 61 25 13     CORSE
: : : 1693 19,0 ::::::   DÉPARTEMENTS D'OUTRE-MER
: : : 438 256,7 ::::::     GUADELOUPE
: : : 401 355,9 ::::::     MARTINIQUE
::: 1 6 4 2 , 0::::::     GUYANE
: : : 690 273,6 ::::::     RÉUNION
/c25/c22/c15/c28 /c24/c20/c15/c28 /c26/c24/c15/c26 /c22/c26/c19/c24 /c24/c21/c15/c26 /c21/c21/c15/c26 /c25/c25/c15/c19 /c20/c20/c15/c23 /c23/c28 /c21/c27 /c21/c22 /c44/c53/c40/c47/c36/c49/c39
: : : 979 29,4 : : : 46 28 26     BORDER, MIDLAND AND WESTERN: : : 2726 73,7 : : : 52 28 20     SOUTHERN AND EASTERN
/c24/c22/c15/c23 /c22/c27/c15/c25 /c25/c27/c15/c22 /c24/c26/c24/c27/c27 /c20/c28/c20/c15/c20 /c20/c23/c15/c25 /c25/c27/c15/c19 /c20/c26/c15/c23 /c24/c23 /c22/c25 /c20/c19 /c44/c55/c36/c47/c44/c3658,8 46,4 71,1 6047 177,4 11,4 67,7 20,9 53 38 9   NORD OVEST59,6 46,9 72,2 4290 168,9 11,8 68,4 19,9 54 37 9     PIEMONTE63,5 54,3 72,4 120 36,7 12,4 69,3 18,2 56 36 9     VALLE D'AOSTA56,2 44,6 67,9 1637 302,2 10,3 65,7 24,0 50 40 11     LIGURIA61,3 47,8 74,8 9009 377,4 12,9 70,3 16,9 52 37 11   LOMBARDIA61,4 47,7 74,8 6590 165,5 13,1 69,0 17,9 55 36 9   NORD EST64,4 51,6 76,9 927 68,1 15,7 67,8 16,5 50 42 8     TRENTINO-ALTO ADIGE61,2 46,9 75,2 4478 243,9 13,1 69,5 17,4 56 35 9     VENETO59,7 47,6 71,8 1184 151,0 11,0 68,1 20,9 52 39 9     FRIULI-VENEZIA GIULIA65,5 54,7 76,4 3953 178,7 10,9 67,4 21,7 50 39 11   EMILIA-ROMAGNA59,1 46,7 71,7 5813 141,3 11,9 66,7 21,3 54 36 10   CENTRO (I)58,7 46,3 71,3 3528 153,4 11,5 67,1 21,5 55 36 9     TOSCANA58,3 45,1 71,5 832 98,4 12,4 66,0 21,6 46 42 13     UMBRIA60,7 48,7 72,8 1453 149,9 12,9 66,3 20,8 54 35 12     MARCHE51,9 37,1 67,3 5249 304,7 14,2 69,4 16,4 45 42 13   LAZIO51,9 35,0 68,9 1606 105,4 15,1 65,9 19,1 51 39 10   ABRUZZO-MOLISE52,4 35,3 69,7 1277 118,3 15,0 66,1 18,9 51 40 10     ABRUZZO49,9 33,9 66,0 329 74,2 15,4 65,0 19,6 55 34 11     MOLISE40,7 23,5 58,3 5795 426,2 19,9 67,1 12,9 59 32 10   CAMPANIA42,0 23,9 60,6 6765 152,3 17,9 67,1 15,0 59 32 9   SUD43,1 23,6 63,4 4088 211,2 17,9 67,7 14,4 61 30 9     PUGLIA44,4 29,4 59,6 609 61,0 17,1 66,1 16,7 58 35 8     BASILICATA39,1 23,0 55,3 2068 137,1 18,2 66,2 15,6 56 34 10     CALABRIA39,7 21,5 58,7 5103 198,5 18,5 66,1 15,3 60 30 10   SICILIA44,9 29,4 60,7 1658 68,8 15,3 70,1 14,5 62 31 8   SARDEGNA/c25/c20/c15/c27 /c23/c27/c15/c26 /c26/c23/c15/c26 /c23/c21/c26 /c20/c25/c23/c15/c28 /c20/c27/c15/c26 /c25/c26/c15/c19 /c20/c23/c15/c22 /c22/c25 /c23/c24 /c20/c28 /c47/c56/c59/c40/c48/c37/c50/c56/c53/c42/c3/c11/c42/c53/c36/c49/c39/c16/c39/c56/c38/c43/c101/c12/c26/c20/c15/c23 /c25/c20/c15/c24 /c27/c20/c15/c20 /c20/c24/c26/c19/c26 /c23/c25/c22/c15/c25 /c20/c27/c15/c23 /c25/c27/c15/c20 /c20/c22/c15/c24 /c22/c23 /c23/c22 /c21/c22 /c49/c40/c39/c40/c53/c47/c36/c49/c3968,1 58,0 77,8 1645 196,9 18,1 67,4 14,5 36 45 19   NOORD-NEDERLAND66,9 56,4 77,2 559 238,8 16,7 68,8 14,5 34 43 23     GRONINGEN70,4 59,6 80,6 620 184,4 19,0 66,7 14,2 36 47 18     FRIESLAND66,5 57,9 74,7 466 175,7 18,4 66,6 15,0 38 45 17     DRENTHE71,7 61,0 82,1 3268 335,2 19,4 67,5 13,1 35 44 21   OOST-NEDERLAND71,2 59,7 82,2 1067 319,9 19,4 67,2 13,5 37 45 19     OVERIJSSEL71,8 61,6 81,7 1901 381,1 18,8 67,8 13,4 34 43 23     GELDERLAND72,8 61,1 84,5 300 210,6 24,1 66,9 9,0 36 45 19     FLEVOLAND72,0 62,8 81,0 7328 844,2 18,2 68,1 13,7 32 42 26   WEST-NEDERLAND74,7 64,1 85,5 1094 802,1 18,8 68,7 12,4 28 42 30     UTRECHT72,1 64,7 79,4 2495 938,1 17,6 68,9 13,5 31 43 27     NOORD-HOLLAND71,2 61,6 80,7 3369 1175,1 18,5 67,6 13,9 33 41 26     ZUID-HOLLAND69,3 56,8 81,2 370 206,8 18,4 65,3 16,2 39 47 14     ZEELAND71,6 60,9 81,9 3467 488,3 18,0 69,0 13,0 36 43 21   ZUID-NEDERLAND72,4 61,7 82,6 2329 472,1 18,5 69,1 12,4 36 43 21     NOORD-BRABANT70,0 59,2 80,4 1139 525,1 17,2 68,7 14,1 37 43 20     LIMBURG (NL)/c25/c27/c15/c27 /c25/c19/c15/c21 /c26/c26/c15/c23 /c27/c19/c26/c27 /c28/c25/c15/c22 /c20/c26/c15/c21 /c25/c26/c15/c23 /c20/c24/c15/c23 /c21/c22 /c25/c27 /c28 /c103/c54/c55/c40/c53/c53/c40/c44/c38/c4369,2 61,6 76,9 3411 144,8 16,0 67,6 16,4 23 66 11   OSTÖSTERREICH67,9 58,5 76,9 278 70,0 15,7 66,5 17,8 29 66 5     BURGENLAND69,1 60,4 77,6 1535 80,0 17,2 66,5 16,3 24 69 7     NIEDERÖSTERREICH69,6 63,1 76,2 1599 3852,8 15,0 68,7 16,2 21 65 15     WIEN67,0 58,1 76,0 1768 68,2 16,9 66,9 16,2 20 73 7   SÜDÖSTERREICH65,7 56,2 75,5 564 59,2 17,4 66,6 16,0 18 76 6     KÄRNTEN67,6 59,0 76,2 1204 73,5 16,7 67,1 16,3 21 71 7     STEIERMARK69,4 59,9 79,0 2899 84,3 18,7 67,6 13,7 25 67 8   WESTÖSTERREICH69,2 60,4 77,9 1375 114,8 18,5 66,9 14,6 26 67 7     OBERÖSTERREICH71,2 63,7 79,2 514 71,8 18,3 68,4 13,4 21 70 10     SALZBURG
1988
1998
average 1996-97-98
Agriculture
Industry
Services
Total, 1989
Total, 1999
Long term 
unemployed, 1999 (% 
total unempl.)
Women, 1999
Youth, 1999Region/c40/c70/c82/c81/c82/c80/c92 /c47/c68/c69/c82/c88/c85/c3/c80/c68/c85/c78/c72/c87
GDP per head (PPS), 
EUR15=100Employment by sector (% 
total), 1999
Eur. patent applications per 
million inh, av 1997-98-99Unemployment rate (%)
    TIROL 102,0 113,4 111,5 4,8 24,3 70,9 100,7 2,0 4,7 6,9 6,5 7,3
    VORARLBERG 105,3 111,8 112,3 2,0 41,2 56,8 337,5 1,5 3,5 18,3 4,7 4,6/c51/c50/c53/c55/c56/c42/c36/c47 /c24/c27/c15/c28 /c26/c24/c15/c22 /c26/c22/c15/c25 /c20/c21/c15/c25 /c22/c24/c15/c22 /c24/c21/c15/c20 /c21/c15/c26 /c23/c15/c27 /c23/c15/c26 /c22/c28/c15/c28 /c24/c15/c24 /c28/c15/c24  CONTINENTE 59,9 76,4 74,6 12,5 35,6 52,0 2,8 4,8 4,8 39,9 5,5 9,6    NORTE 51,4 66,0 64,7 12,6 46,9 40,5 1,8 2,9 4,7 40,7 5,4 7,9    CENTRO (P) 46,3 65,0 63,4 26,1 31,8 42,1 2,7 2,9 2,4 35,5 2,7 7,2    LISBOA E VALE DO TEJO 76,3 94,9 92,7 4,4 27,9 67,7 4,1 6,9 6,1 40,0 6,6 12,1    ALENTEJO 57,9 66,8 64,6 13,0 27,1 60,0 1,9 11,6 6,7 40,3 10,5 17,1    ALGARVE 61,4 76,1 74,3 10,3 19,9 69,9 3,0 3,1 3,7 41,8 5,3 10,8  AÇORES 40,8 52,0 51,2 18,4 26,0 55,7 : 2,5 3,7 34,9 6,5 7,6  MADEIRA 39,9 57,5 56,4 15,0 31,2 53,8 : 5,5 3,4 44,7 4,4 7,0/c54/c56/c50/c48/c44/c18/c41/c44/c49/c47/c36/c49/c39 /c20/c19/c20/c15/c25 /c20/c19/c20/c15/c25 /c28/c27/c15/c28 /c25/c15/c23 /c21/c26/c15/c26 /c25/c24/c15/c26 /c21/c21/c20/c15/c28 /c22/c15/c27 /c20/c20/c15/c24 /c21/c22/c15/c25 /c20/c20/c15/c25 /c22/c20/c15/c21  MANNER-SUOMI 101,4 101,5 98,8 6,4 27,7 65,6 221,6 3,8 11,5 23,6 11,6 31,1    ITÄ-SUOMI 81,3 75,1 73,5 12,6 25,5 61,6 63,2 6,4 15,7 21,0 15,3 45,1    VÄLI-SUOMI 90,5 83,6 82,4 11,2 28,0 60,4 114,3 4,5 12,3 21,3 12,9 35,8    POHJOIS-SUOMI 91,3 87,3 86,0 9,3 28,1 62,5 222,6 6,6 15,6 19,9 14,9 41,7    UUSIMAA (SUURALUE) 131,5 141,5 135,5 1,1 22,3 76,3 355,3 1,1 7,0 28,7 7,1 16,1    ETELÄ-SUOMI 96,0 93,0 91,8 6,3 32,9 60,5 177,2 3,9 12,3 24,5 12,9 33,5  ÅLAND 139,2 122,2 112,1 9,1 11,6 78,5 91,8 0,9 2,1 14,8 2,4 :/c54/c57/c40/c53/c44/c42/c40 /c20/c19/c28/c15/c26 /c20/c19/c21/c15/c23 /c20/c19/c21/c15/c21 /c22/c15/c19 /c21/c24/c15/c19 /c26/c21/c15/c19 /c21/c25/c28/c15/c22 /c20/c15/c26 /c26/c15/c25 /c21/c28/c15/c20 /c25/c15/c28 /c20/c25/c15/c22    STOCKHOLM 130,7 136,1 133,0 0,2 15,6 84,0 464,9 1,0 5,2 28,1 4,8 10,0    ÖSTRA MELLANSVERIGE 100,8 93,2 94,1 2,8 28,3 69,0 257,0 1,7 7,8 26,0 7,1 17,8    SYDSVERIGE 102,4 91,8 89,6 4,5 25,3 70,3 271,1 1,8 9,0 32,9 9,0 18,8    NORRA MELLANSVERIGE 101,9 95,7 95,4 3,8 27,2 69,1 173,8 2,4 9,5 23,9 7,7 22,3    MELLERSTA NORRLAND 110,3 97,8 97,8 4,7 19,4 76,0 128,0 2,6 10,3 24,3 7,3 23,8    ÖVRE NORRLAND 106,4 98,2 98,4 3,7 19,9 76,5 149,4 3,9 9,9 25,9 6,7 23,1    SMÅLAND MED ÖARNA 105,7 100,5 101,5 3,4 34,4 62,3 90,1 1,2 6,2 27,8 6,2 13,0    VÄSTSVERIGE 108,7 90,5 92,9 3,9 28,8 67,1 206,5 1,7 7,7 35,2 7,4 15,2/c56/c49/c44/c55/c40/c39/c3/c46/c44/c49/c42/c39/c50/c48 /c28/c27/c15/c26 /c20/c19/c21/c15/c21 /c20/c19/c19/c15/c28 /c20/c15/c25 /c21/c25/c15/c19 /c26/c21/c15/c22 /c28/c23/c15/c25 /c26/c15/c23 /c25/c15/c20 /c22/c19/c15/c22 /c24/c15/c20 /c20/c21/c15/c22  NORTH EAST 82,7 79,5 79,1 1,1 28,5 70,2 69,4 12,3 9,9 35,5 7,1 21,7    TEES VALLEY & DURHAM 83,0 77,5 77,3 1,1 31,2 67,5 59,9 11,9 9,9 38,7 7,2 21,6    NORTHUMBERLAND AND TYNE & WEAR 82,4 81,1 80,6 1,2 26,2 72,4 77,1 12,6 9,8 32,8 7,1 21,9  NORTH WEST (INC. MERSEYSIDE) 92,3 89,6 88,9 1,2 28,2 70,5 75,5 9,7 6,8 30,9 5,3 14,9    CUMBRIA 108,6 99,7 99,2 5,4 33,4 61,3 72,9 6,8 5,6 47,4 4,4 11,5    CHESHIRE 105,1 111,6 111,0 1,8 29,4 68,8 167,0 6,9 4,5 35,6 3,6 9,5    GREATER MANCHESTER 94,1 90,2 89,5 0,5 28,6 70,8 56,7 9,5 6,4 29,4 4,9 13,9    LANCASHIRE 89,3 86,7 86,1 1,3 29,5 69,2 61,7 7,5 5,4 17,0 4,2 12,5    MERSEYSIDE 78,0 72,8 71,8 0,2 22,8 76,8 61,1 15,1 11,7 35,3 9,0 26,5  YORKSHIRE & THE HUMBER 89,4 89,7 88,9 1,2 28,5 70,3 62,1 8,8 7,2 28,1 5,8 14,8    EAST RIDING & NORTH LINCOLNSHIRE 93,6 95,7 94,5 2,6 32,1 65,3 52,7 9,8 8,5 43,5 7,4 16,0    NORTH YORKSHIRE 93,0 99,9 99,7 3,0 24,3 72,7 103,5 5,0 3,9 28,6 3,6 7,2    SOUTH YORKSHIRE 79,0 74,8 74,0 0,4 30,3 69,4 40,6 11,7 8,7 27,3 6,6 19,5    WEST YORKSHIRE 92,8 92,8 92,0 0,5 27,5 71,9 64,5 8,0 6,9 20,5 5,5 14,3  EAST MIDLANDS 94,1 95,3 94,7 2,0 31,6 66,3 89,3 6,4 5,1 26,7 4,4 10,8    DERBYSHIRE & NOTTINGHAMSHIRE 91,0 91,1 90,3 1,1 34,3 64,5 85,9 7,9 6,2 30,7 5,2 12,7    LEICESTERSHIRE, RUTLAND & NORTHANTS 102,9 102,8 102,2 1,5 30,9 67,7 113,0 4,4 4,1 21,4 3,8 8,5    LINCOLNSHIRE 82,9 90,3 90,0 6,2 25,2 68,5 41,5 6,6 4,3 21,7 3,9 10,1  WEST  MIDLANDS 90,6 93,0 92,3 1,4 33,0 65,4 77,2 7,6 6,5 28,9 5,5 13,7    HEREFORDSHIRE, WORCESTERSHIRE & WARKS 86,8 98,5 98,4 2,3 30,2 67,4 139,3 4,6 3,6 30,1 3,4 7,5    SHROPSHIRE & STAFFORDSHIRE 85,0 87,1 86,7 2,2 35,8 61,9 57,3 5,6 4,4 26,5 4,1 10,0    WEST MIDLANDS 95,3 93,8 92,6 0,5 32,7 66,6 59,8 10,0 9,3 29,3 7,5 18,9  EASTERN 95,7 103,7 102,3 1,6 26,4 72,0 184,3 3,7 3,9 26,6 3,6 7,6    EAST ANGLIA 98,1 106,6 105,3 2,8 27,3 69,8 226,8 4,1 4,4 26,9 4,0 8,4    BEDFORDSHIRE, HERTFORDSHIRE 102,4 109,7 108,2 0,7 25,3 74,0 158,2 2,9 3,1 22,3 2,8 6,0    ESSEX 85,7 93,9 92,4 1,0 26,1 72,8 152,6 3,9 4,0 29,7 3,8 8,1  LONDON 150,7 152,9 150,1 0,3 16,0 83,6 73,9 7,3 7,8 34,2 7,4 13,3    INNER LONDON : 243,4 239,5 0,3 13,2 86,4 79,2 : 11,7 33,3 11,1 21,4    OUTER LONDON : 96,5 94,6 0,3 17,7 82,0 70,6 : 5,5 35,4 5,2 9,2  SOUTH EAST 98,7 112,7 109,4 1,3 22,9 75,7 150,0 3,1 3,2 28,3 2,8 5,9    BERKSHIRE, BUCKS & OXFORDSHIRE 110,0 130,2 126,6 1,4 24,7 73,8 227,0 2,2 2,2 24,3 2,0 3,8    SURREY, EAST & WEST SUSSEX 96,6 110,0 106,9 1,3 18,2 80,5 127,7 2,5 3,0 32,2 2,7 5,1    HAMPSHIRE & ISLE OF WIGHT 98,0 109,6 106,2 1,5 25,2 73,3 141,7 4,2 3,6 30,1 2,9 7,4    KENT 88,4 97,1 94,1 1,1 25,2 73,7 92,9 4,3 4,6 25,4 3,9 8,8  SOUTH WEST 93,2 93,9 93,4 2,4 25,6 72,0 98,6 5,1 4,2 24,6 3,8 8,3    GLOUCESTERSHIRE, WILTSHIRE & NORTH SOMERSET 104,3 107,9 107,4 1,7 26,2 72,1 154,3 4,7 3,5 18,3 3,2 6,6    DORSET & SOMERSET 90,9 87,0 86,7 2,6 24,9 72,6 59,2 4,0 3,5 29,2 3,1 7,1
    CORNWALL & ISLES OF SCILLY 72,9 70,3 70,0 5,2 25,1 69,3 58,9 7,9 7,0 27,7 7,0 15,1
Total
Women
Men
Under 15
15-64
65+
Low
Medium
HighPopn density (inh./km²), 1998% population aged: (1998)Educational attainment of 
those aged 25-59 (% total), 
1999/c39/c72/c80/c82/c74/c85/c68/c83/c75/c92 /c40/c71/c88/c70/c68/c87/c76/c82/c81
RegionEmployment rate (% popn 
15-64), 1999
Population (000), 1998
69,0 58,2 79,9 664 52,5 18,9 68,0 13,2 26 67 8     TIROL
68,5 55,8 81,0 346 133,1 19,6 68,4 12,0 29 63 7     VORARLBERG/c26/c20/c15/c22 /c25/c21/c15/c28 /c27/c19/c15/c21 /c28/c28/c25/c27 /c20/c19/c27/c15/c24 /c20/c26/c15/c19 /c25/c26/c15/c28 /c20/c24/c15/c20 /c26/c27 /c20/c21 /c20/c19 /c51/c50/c53/c55/c56/c42/c36/c4771,7 63,6 80,2 9464 106,6 16,8 68,0 15,2 78 12 10   CONTINENTE71,3 62,2 80,8 3570 167,8 18,7 68,7 12,7 84 9 7     NORTE82,3 77,1 87,6 1710 72,3 15,9 66,1 18,0 79 11 10     CENTRO (P)68,0 60,2 76,3 3323 278,5 15,6 69,1 15,3 70 16 14     LISBOA E VALE DO TEJO65,4 53,5 77,4 513 19,0 14,5 64,1 21,4 81 11 8     ALENTEJO70,4 60,0 81,0 348 69,8 16,1 65,4 18,5 81 12 8     ALGARVE60,9 41,0 81,0 244 104,9 23,2 64,7 12,1 86 8 6   AÇORES
66,4 57,2 76,9 260 333,7 20,3 67,5 12,2 84 11 5   MADEIRA/c25/c26/c15/c27 /c25/c23/c15/c28 /c26/c19/c15/c27 /c24/c20/c24/c23 /c20/c25/c15/c28 /c20/c27/c15/c26 /c25/c25/c15/c26 /c20/c23/c15/c25 /c21/c25 /c23/c21 /c22/c22 /c54/c56/c50/c48/c44/c18/c41/c44/c49/c47/c36/c49/c3967,8 64,9 70,7 5128 16,9 18,7 66,7 14,6 25 42 33   MANNER-SUOMI59,6 57,5 61,6 694 9,9 18,3 65,3 16,4 27 47 27     ITÄ-SUOMI65,0 60,9 69,0 705 16,5 19,3 64,6 16,1 28 42 30     VÄLI-SUOMI62,8 59,3 66,1 558 4,4 21,3 65,9 12,8 24 45 30     POHJOIS-SUOMI74,7 72,2 77,3 1354 148,6 18,9 69,6 11,5 23 36 41     UUSIMAA (SUURALUE)68,0 64,7 71,3 1817 34,5 17,6 66,2 16,2 26 44 30     ETELÄ-SUOMI73,8 65,0 81,0 26 16,7 18,6 65,2 16,2 31 43 26   ÅLAND/c26/c20/c15/c25 /c25/c28/c15/c22 /c26/c22/c15/c26 /c27/c27/c24/c20 /c21/c20/c15/c24 /c20/c27/c15/c27 /c25/c23/c15/c20 /c20/c26/c15/c21 /c21/c20 /c23/c28 /c22/c19 /c54/c57/c40/c53/c44/c42/c4078,2 78,2 78,2 1773 273,2 18,7 66,8 14,5 17 45 39     STOCKHOLM72,4 69,5 75,1 1489 38,7 18,9 63,7 17,4 21 51 28     ÖSTRA MELLANSVERIGE70,6 66,7 74,5 1270 90,9 18,3 63,6 18,1 23 47 30     SYDSVERIGE69,8 68,3 71,3 847 13,2 18,2 62,1 19,7 24 52 24     NORRA MELLANSVERIGE71,0 69,4 72,4 391 5,5 17,7 62,3 19,9 24 54 23     MELLERSTA NORRLAND65,3 67,5 63,2 520 3,4 18,8 64,2 17,1 17 54 29     ÖVRE NORRLAND74,0 69,9 77,9 804 24,2 19,6 63,7 16,7 26 52 22     SMÅLAND MED ÖARNA73,1 69,0 77,1 1758 59,8 19,1 63,5 17,5 22 49 29     VÄSTSVERIGE/c26/c20/c15/c25 /c25/c23/c15/c26 /c26/c27/c15/c23 /c24/c28/c21/c22/c26 /c21/c23/c22/c15/c19 /c20/c28/c15/c22 /c25/c23/c15/c28 /c20/c24/c15/c26 /c20/c28 /c24/c22 /c21/c27 /c56/c49/c44/c55/c40/c39/c3/c46/c44/c49/c42/c39/c50/c4862,3 56,8 67,8 2590 300,7 19,1 64,8 16,1 24 56 21   NORTH EAST62,4 56,6 68,2 1164 382,2 19,6 64,9 15,4 27 53 21     TEES VALLEY & DURHAM62,2 56,9 67,4 1426 256,1 18,7 64,8 16,6 21 58 21     NORTHUMBERLAND AND TYNE & WEAR68,1 61,6 74,5 6891 486,5 19,7 64,6 15,7 21 54 25   NORTH WEST (INC. MERSEYSIDE)69,9 65,5 74,3 493 72,2 18,0 64,2 17,8 16 62 22     CUMBRIA72,2 65,5 78,8 984 422,2 19,2 65,5 15,3 16 53 32     CHESHIRE68,7 62,1 75,0 2577 2004,4 20,4 64,9 14,7 21 54 25     GREATER MANCHESTER71,7 64,9 78,4 1427 464,8 19,4 64,1 16,5 21 56 23     LANCASHIRE59,7 53,5 66,4 1409 2151,1 19,7 64,2 16,1 27 51 22     MERSEYSIDE69,6 62,9 76,2 5043 324,0 19,3 64,8 15,9 21 55 24   YORKSHIRE & THE HUMBER67,3 59,2 74,7 883 241,4 18,8 64,2 17,0 22 58 20     EAST RIDING & NORTH LINCOLNSHIRE75,7 66,8 85,1 742 89,3 17,9 64,4 17,7 17 55 28     NORTH YORKSHIRE66,6 61,9 71,1 1304 836,3 19,1 65,0 15,9 24 56 20     SOUTH YORKSHIRE70,5 63,6 77,1 2113 1038,9 20,1 65,1 14,8 20 54 26     WEST YORKSHIRE73,6 66,5 80,6 4169 266,8 19,0 65,0 16,0 21 56 24   EAST MIDLANDS71,5 64,4 78,3 2002 418,0 18,9 65,3 15,9 22 55 24     DERBYSHIRE & NOTTINGHAMSHIRE76,6 69,4 83,8 1545 314,1 19,7 65,5 14,8 20 56 24     LEICESTERSHIRE, RUTLAND & NORTHANTS73,2 66,4 80,1 623 105,2 17,9 63,2 19,0 18 58 24     LINCOLNSHIRE71,4 64,5 78,2 5333 410,1 19,7 64,6 15,7 24 54 23   WEST  MIDLANDS77,4 69,7 84,8 1213 205,5 18,5 65,0 16,5 19 53 28     HEREFORDSHIRE, WORCESTERSHIRE & WARKS74,0 67,1 80,8 1492 240,4 18,9 65,5 15,6 20 57 23     SHROPSHIRE & STAFFORDSHIRE67,1 60,5 73,6 2628 2924,4 20,7 63,9 15,4 28 52 21     WEST MIDLANDS76,3 68,1 84,3 5377 281,2 19,0 65,0 16,0 17 57 26   EASTERN75,9 68,1 83,5 2181 173,5 18,5 64,5 17,0 19 55 26     EAST ANGLIA77,1 68,8 85,3 1590 553,2 20,0 65,8 14,2 12 58 30     BEDFORDSHIRE, HERTFORDSHIRE76,1 67,5 84,6 1606 436,9 18,7 64,9 16,4 18 60 22     ESSEX70,3 63,2 77,5 7187 4538,3 19,6 67,5 12,9 18 44 38   LONDON65,4 58,2 72,8 2761 8613,4 19,6 68,9 11,5 20 34 46     INNER LONDON73,5 66,4 80,5 4427 3504,3 19,5 66,6 13,8 17 50 33     OUTER LONDON78,4 70,2 86,4 8004 418,8 18,9 64,9 16,2 13 55 32   SOUTH EAST80,7 72,2 88,3 2099 365,5 19,7 66,9 13,3 13 50 37     BERKSHIRE, BUCKS & OXFORDSHIRE79,0 70,7 87,3 2560 468,7 17,9 63,4 18,7 12 54 35     SURREY, EAST & WEST SUSSEX77,4 70,3 84,6 1771 424,3 18,8 65,2 16,0 14 56 30     HAMPSHIRE & ISLE OF WIGHT75,4 66,7 84,0 1575 421,6 19,2 64,3 16,5 15 61 24     KENT76,9 70,0 83,6 4901 204,5 18,1 63,4 18,5 15 57 28   SOUTH WEST79,7 73,1 86,1 2162 284,4 18,7 65,0 16,3 14 55 31     GLOUCESTERSHIRE, WILTSHIRE & NORTH SOMERSET77,6 69,7 85,7 1181 193,4 17,4 61,9 20,7 15 59 26     DORSET & SOMERSET
68,6 62,3 74,6 490 137,8 17,7 62,3 20,1 19 61 21     CORNWALL & ISLES OF SCILLY
1988
1998
average 1996-97-98
Agriculture
Industry
Services
Total, 1989
Total, 1999
Long term 
unemployed, 1999 (% 
total unempl.)
Women, 1999
Youth, 1999Region/c40/c70/c82/c81/c82/c80/c92 /c47/c68/c69/c82/c88/c85/c3/c80/c68/c85/c78/c72/c87
GDP per head (PPS), 
EUR15=100Employment by sector (% 
total), 1999
Eur. patent applications per 
million inh, av 1997-98-99Unemployment rate (%)
    DEVON 82,4 84,0 83,3 2,4 25,2 72,2 47,5 6,2 5,2 28,4 4,7 10,2
  WALES 84,3 80,1 80,3 2,7 29,5 67,7 50,8 8,6 6,9 24,5 5,5 14,8    WEST WALES & THE VALLEYS : 71,1 71,1 2,0 30,3 67,5 35,1 : 7,7 24,0 6,2 16,2    EAST WALES : 95,7 96,7 3,7 28,3 67,9 78,3 : 5,6 25,4 4,5 12,4  SCOTLAND 91,7 97,6 97,7 2,0 25,3 72,5 65,9 11,1 7,6 31,1 6,0 16,3    NORTH EASTERN SCOTLAND : 128,3 127,8 3,7 28,4 67,7 138,4 : 4,5 19,2 3,6 8,4    EASTERN SCOTLAND : 102,6 102,8 2,0 23,9 74,1 84,7 : 6,7 28,2 5,4 14,7    SOUTH WESTERN SCOTLAND : 90,3 90,4 1,0 26,4 72,6 42,8 : 9,6 33,4 7,3 20,6    HIGHLANDS & ISLANDS : 76,9 76,8 5,2 23,2 71,4 17,1 : 6,0 37,8 5,0 11,0  NORTHERN IRELAND 74,4 76,6 76,8 5,0 26,5 68,5 17,1 17,7 9,4 41,2 7,7 16,8
/c37/c36/c47/c42/c36/c53/c44/c45/c36 /c29 /c21/c21/c15/c22 /c21/c22/c15/c22 /c21/c23/c15/c23 /c22/c21/c15/c25 /c23/c22/c15/c19 /c29 /c29 /c20/c26/c15/c19 /c24/c22/c15/c22 /c20/c25/c15/c27 /c22/c25/c15/c26
  SOFIA STOLITSA : 23,1 24,4 2,7 33,5 63,8 : : 9,9 48,3 9,6 25,2  SEVERNA BALGARIJA : 22,2 23,1 30,8 29,5 39,7 : : 20,7 54,7 20,0 41,1  YUZHNA BALGARIJA : 22,3 23,1 25,4 35,2 39,4 : : 16,5 53,0 16,2 36,4/c46/c60/c51/c53/c50/c54 /c29 /c26/c28/c15/c22 /c26/c28/c15/c19 /c20/c19/c15/c21 /c21/c22/c15/c21 /c25/c25/c15/c25 /c29 /c29 /c22/c15/c20 /c29 /c23/c15/c20 /c22/c15/c19/c38/c40/c54/c46/c36/c3/c53/c40/c51/c56/c37/c47/c44/c46/c36 /c29 /c25/c19/c15/c22 /c25/c22/c15/c19 /c24/c15/c22 /c23/c19/c15/c24 /c24/c23/c15/c20 /c29 /c29 /c27/c15/c24 /c22/c25/c15/c24 /c20/c19/c15/c20 /c20/c25/c15/c25    PRAHA : 114,7 118,8 0,3 22,9 76,6 : : 3,2 30,2 3,8 8,4    STREDOCESKY : 46,9 48,7 5,6 39,9 54,4 : : 6,7 30,4 8,9 12,0    JIHOZAPAD : 57,4 60,1 7,8 40,1 52,1 : : 6,4 31,5 8,0 11,7    SEVEROZAPAD : 52,9 56,2 4,0 42,8 53,3 : : 12,6 43,0 15,0 23,0    SEVEROVYCHOD : 52,7 54,7 6,5 46,5 47,0 : : 7,3 32,3 8,8 13,5    JIHOVYCHOD : 53,4 56,1 8,2 40,1 51,7 : : 8,8 30,1 10,7 17,6    STREDNI MORAVA : 51,5 53,6 5,9 45,6 48,4 : : 9,7 36,7 11,5 18,3    OSTRAVSKY : 56,6 59,8 3,2 47,7 49,0 : : 13,7 46,3 15,4 26,4/c40/c40/c54/c55/c44 /c29 /c22/c26/c15/c21 /c22/c24/c15/c25 /c27/c15/c27 /c22/c20/c15/c27 /c24/c28/c15/c23 /c29 /c29 /c20/c20/c15/c26 /c23/c21/c15/c25 /c20/c19/c15/c21 /c21/c21/c15/c20/c48/c36/c42/c60/c36/c53/c50/c53/c54/c61/c200/c42 /c29 /c23/c28/c15/c19 /c23/c26/c15/c28 /c26/c15/c19 /c22/c23/c15/c23 /c24/c27/c15/c26 /c29 /c29 /c25/c15/c28 /c23/c26/c15/c28 /c25/c15/c21 /c20/c21/c15/c22    KOZEP-MAGYARORSZAG : 72,4 70,9 1,8 28,2 70,0 : : 5,2 52,7 4,8 9,3    KOZEP-DUNANTUL : 48,0 45,7 6,6 42,4 51,1 : : 6,0 39,5 5,5 9,5    NYUGAT-DUNANTUL : 54,1 51,3 6,5 43,7 49,9 : : 4,4 48,0 4,5 7,2    DEL-DUNANTUL : 37,8 37,5 10,5 33,6 55,9 : : 8,2 42,5 7,4 14,6    ESZAK-MAGYARORSZAG : 33,3 32,6 5,5 39,4 55,2 : : 11,4 53,3 10,7 20,2    ESZAK-ALFOLD : 33,1 33,1 9,8 32,3 57,9 : : 10,1 47,6 8,1 17,1    DEL-ALFOLD : 37,4 37,6 15,9 32,0 52,1 : : 5,7 42,8 5,2 11,3/c47/c44/c40/c55/c56/c57/c36 /c29 /c22/c20/c15/c19 /c22/c19/c15/c19 /c21/c20/c15/c23 /c21/c25/c15/c24 /c24/c21/c15/c20 /c29 /c29 /c20/c19/c15/c21 /c22/c27/c15/c24 /c28/c15/c21 /c21/c20/c15/c22/c47/c36/c55/c57/c44/c45/c36 /c29 /c21/c26/c15/c26 /c21/c25/c15/c26 /c20/c26/c15/c21 /c21/c24/c15/c27 /c24/c26/c15/c19 /c29 /c29 /c20/c22/c15/c26 /c24/c22/c15/c21 /c20/c22/c15/c22 /c21/c22/c15/c23/c48/c36/c47/c55/c36 /c29/c29/c29/c29/c29/c29/c29/c29 /c24 /c15 /c22/c29/c29 /c25 /c15 /c24
/c51/c50/c47/c54/c46/c36 /c29 /c22/c25/c15/c20 /c22/c24/c15/c20 /c20/c27/c15/c20 /c22/c20/c15/c23 /c24/c19/c15/c24 /c29 /c29 /c20/c21/c15/c22 /c23/c20/c15/c25 /c20/c22/c15/c21 /c21/c28/c15/c25    DOLNOSLASKIE : 36,0 35,1 9,6 33,6 56,9 : : 13,8 49,3 14,8 31,1    KUJAWSKO-POMORSKIE : 33,2 32,4 20,0 29,0 51,1 : : 15,2 41,3 17,0 37,3    LUBELSKIE : 26,1 25,5 35,6 20,2 44,3 : : 12,6 29,4 12,2 35,5    LUBUSKIE : 32,9 32,0 7,1 39,1 54,1 : : 15,3 42,2 16,8 27,5    LODZKIE : 31,9 31,1 23,0 32,0 45,0 : : 12,7 38,5 12,2 28,5    MALOPOLSKIE : 32,8 32,0 21,2 30,8 48,0 : : 9,7 40,3 10,5 29,1    MAZOWIECKIE : 52,7 51,3 18,8 24,9 56,3 : : 9,2 46,1 9,5 20,9    OPOLSKIE : 31,8 31,0 10,1 38,9 50,7 : : 12,1 25,1 14,5 25,0    PODKARPACKIE : 27,4 26,7 27,1 31,2 41,9 : : 16,1 46,1 16,7 47,9    PODLASKIE : 27,5 26,8 34,0 19,7 46,5 : : 11,4 55,1 11,8 25,9    POMORSKIE : 35,6 34,7 9,2 31,6 59,3 : : 13,0 42,3 15,1 31,2    SLASKIE : 40,3 39,3 3,6 45,4 51,0 : : 9,7 37,0 11,3 23,8    SWIETOKRZYSKIE : 27,8 27,1 35,3 25,7 39,2 : : 15,6 44,0 15,6 41,6    WARMINSKO-MAZURSKIE : 27,7 26,9 14,7 30,8 54,5 : : 21,3 42,7 23,1 48,8    WIELKOPOLSKIE : 38,1 37,1 18,9 34,5 46,6 : : 9,8 40,1 11,3 24,9    ZACHODNIOPOMORSKIE : 35,2 34,3 11,4 31,4 57,2 : : 14,9 40,7 16,0 28,5/c53/c50/c48/c198/c49/c44/c36 /c29 /c21/c27/c15/c21 /c22/c19/c15/c26 /c23/c23/c15/c19 /c21/c26/c15/c20 /c21/c27/c15/c28 /c29 /c29 /c25/c15/c21 /c23/c24/c15/c21 /c24/c15/c24 /c20/c26/c15/c22    NORD-EST : 21,6 24,1 57,7 20,5 21,8 : : 7,1 51,9 5,8 21,2    SUD-EST : 28,4 31,0 43,9 23,8 32,3 : : 7,3 40,8 6,8 19,7    SUD : 25,3 27,8 50,7 27,3 22,0 : : 6,3 42,8 5,3 17,9    SUD-VEST : 26,5 28,4 58,6 20,0 21,4 : : 5,4 34,8 4,4 19,1    VEST : 32,4 34,1 39,5 27,5 33,0 : : 6,6 51,4 6,0 14,9    NORD-VEST : 26,0 28,4 41,6 28,6 29,9 : : 5,6 38,8 5,1 12,9    CENTRU : 31,8 34,6 33,2 38,3 28,5 : : 7,1 54,5 7,0 16,9    BUCURESTI : 40,3 43,5 6,5 37,5 56,0 : : 3,4 39,7 3,8 9,2/c54/c47/c50/c57/c40/c49/c44/c45/c36 /c29 /c25/c27/c15/c27 /c25/c26/c15/c26 /c20/c19/c15/c27 /c22/c26/c15/c26 /c24/c20/c15/c21 /c29 /c29 /c26/c15/c22 /c23/c20/c15/c28 /c26/c15/c24 /c20/c27/c15/c24/c54/c47/c50/c57/c40/c49/c54/c46/c200/c3/c53/c40/c51/c56/c37/c47/c44/c46/c36 /c29 /c23/c27/c15/c25 /c23/c26/c15/c26 /c27/c15/c20 /c22/c28/c15/c23 /c24/c21/c15/c23 /c29 /c29 /c20/c25/c15/c23 /c24/c19/c15/c26 /c20/c25/c15/c23 /c22/c22/c15/c27
Total
Women
Men
Under 15
15-64
65+
Low
Medium
HighPopn density (inh./km²), 1998% population aged: (1998)Educational attainment of 
those aged 25-59 (% total), 
1999/c39/c72/c80/c82/c74/c85/c68/c83/c75/c92 /c40/c71/c88/c70/c68/c87/c76/c82/c81
RegionEmployment rate (% popn 
15-64), 1999
Population (000), 1998
74,2 67,8 80,5 1068 159,4 17,6 62,4 20,0 16 57 27     DEVON
66,1 60,0 72,1 2933 141,2 19,1 63,5 17,4 23 53 25   WALES63,2 58,0 68,3 1868 142,3 19,0 63,1 18,0 25 52 23     WEST WALES & THE VALLEYS71,0 63,3 78,9 1066 139,4 19,6 64,2 16,2 20 53 27     EAST WALES68,5 63,4 73,7 5120 65,5 18,6 66,1 15,3 20 50 30   SCOTLAND79,4 73,3 85,5 504 68,7 : : : 16 50 35     NORTH EASTERN SCOTLAND71,7 65,8 77,6 1895 105,3 : : : 18 51 31     EASTERN SCOTLAND62,7 58,4 67,1 2352 180,5 : : : 24 49 27     SOUTH WESTERN SCOTLAND74,4 69,9 79,0 370 9,3 : : : 16 53 31     HIGHLANDS & ISLANDS64,0 57,3 70,7 1689 119,2 23,1 63,9 13,0 30 48 22   NORTHERN IRELAND
/c24/c23/c15/c20 /c29 /c29 /c27/c21/c24/c26 /c26/c23/c15/c22 /c20/c25/c15/c22 /c25/c26/c15/c28 /c20/c24/c15 /c28/c29/c29/c29 /c37/c36/c47/c42/c36/c53/c44/c45/c36
: : : 1187 955,9 ::::::   SOFIA STOLITSA
: : : 3205 66,0 16,3 67,4 16,3 : : :   SEVERNA BALGARIJA: : : 3865 63,1 ::::::   YUZHNA BALGARIJA
/c25/c28/c15/c23 /c29 /c29 /c26/c23/c25 /c27/c19/c15/c26 /c21/c23/c15/c21 /c25/c23/c15/c26 /c20/c20/c15 /c20/c29/c29/c29 /c46/c60/c51/c53/c50/c54
/c25/c24/c15/c25 /c24/c26/c15/c23 /c26/c23/c15/c19 /c20/c19/c21/c28/c24 /c20/c22/c19/c15/c24 /c20/c26/c15/c23 /c25/c28/c15/c19 /c20/c22/c15/c25 /c20/c22 /c26/c25 /c20/c20 /c38/c40/c54/c46/c36/c3/c53/c40/c51/c56/c37/c47/c44/c46/c3673,1 68,3 78,2 1197 2412,4 14,7 69,1 16,3 6 70 24     PRAHA67,1 57,2 77,1 1107 100,5 17,0 68,7 14,3 13 78 9     STREDOCESKY67,6 58,9 76,3 1179 66,9 17,4 69,0 13,6 12 78 11     JIHOZAPAD61,7 53,0 70,5 1131 130,8 18,1 70,1 11,9 18 74 8     SEVEROZAPAD66,3 58,2 74,6 1491 119,9 17,8 68,6 13,6 13 78 9     SEVEROVYCHOD65,4 57,1 73,7 1661 118,7 17,8 68,3 13,9 12 76 12     JIHOVYCHOD64,4 54,9 74,0 1242 136,5 17,8 68,9 13,3 13 78 9     STREDNI MORAVA59,9 51,7 68,2 1285 231,4 18,5 69,5 12,0 14 77 9     OSTRAVSKY/c25/c21/c15/c19 /c24/c27/c15/c19 /c25/c25/c15/c22 /c20/c23/c24/c19 /c22/c22/c15/c23 /c20/c28/c15/c21 /c25/c25/c15/c26 /c20/c23/c15/c20 /c20/c21 /c24/c27 /c22/c19 /c40/c40/c54/c55/c44/c24/c24/c15/c23 /c23/c27/c15/c27 /c25/c21/c15/c23 /c20/c19/c20/c20/c23 /c20/c19/c27/c15/c26 /c20/c26/c15/c24 /c25/c27/c15/c20 /c20/c23/c15/c23 /c21/c23 /c25/c20 /c20/c24 /c48/c36/c42/c60/c36/c53/c50/c53/c54/c61/c200/c4259,6 53,4 66,6 2862 413,7 15,8 69,0 15,2 17 60 22     KOZEP-MAGYARORSZAG58,5 51,4 65,7 1112 98,8 18,0 69,2 12,7 23 64 14     KOZEP-DUNANTUL63,0 55,3 70,8 990 88,5 16,9 68,4 14,7 23 65 13     NYUGAT-DUNANTUL52,7 46,9 58,9 983 69,1 17,5 68,1 14,4 27 63 10     DEL-DUNANTUL48,1 41,6 54,9 1280 95,3 18,6 67,0 14,4 28 60 12     ESZAK-MAGYARORSZAG48,6 42,8 54,4 1532 86,3 19,7 67,0 13,3 30 58 12     ESZAK-ALFOLD54,7 46,5 63,2 1354 74,2 17,4 67,3 15,3 29 60 11     DEL-ALFOLD/c25/c24/c15/c19 /c25/c20/c15/c23 /c25/c27/c15/c28 /c22/c26/c19/c21 /c24/c25/c15/c26 /c21/c19/c15/c27 /c25/c25/c15/c24 /c20/c21/c15 /c26/c29/c29/c29 /c47/c44/c40/c55/c56/c57/c36
/c24/c28/c15/c24 /c24/c23/c15/c20 /c25/c24/c15/c23 /c21/c23/c23/c28 /c22/c26/c15/c28 /c20/c28/c15/c22 /c25/c25/c15/c24 /c20/c23/c15/c22 /c20/c22 /c25/c27 /c20/c27 /c47/c36/c55/c57/c44/c45/c36/c24/c22/c15/c27 /c29 /c29 /c22/c27/c24 /c20/c20/c24/c27/c15/c23 /c21/c20/c15/c22 /c25/c26/c15/c19 /c20/c20/c15 /c27/c29/c29/c29 /c48/c36/c47/c55/c36
/c24/c26/c15/c24 /c24/c20/c15/c25 /c25/c22/c15/c25 /c22/c27/c25/c25/c25 /c20/c21/c22/c15/c26 /c21/c19/c15/c22 /c25/c26/c15/c27 /c20/c20/c15/c28 /c20/c28 /c26/c19 /c20/c20 /c51/c50/c47/c54/c46/c3656,1 50,6 61,8 2984 149,6 18,8 69,3 11,9 18 70 12     DOLNOSLASKIE56,2 49,9 62,6 2099 116,8 21,0 68,0 11,1 21 70 9     KUJAWSKO-POMORSKIE58,9 54,3 63,5 2241 89,2 21,3 65,4 13,3 22 67 11     LUBELSKIE51,9 43,8 60,5 1021 73,0 21,1 68,5 10,4 17 75 9     LUBUSKIE59,4 53,6 65,5 2668 146,4 18,3 67,7 14,1 24 66 10     LODZKIE59,9 54,8 65,0 3211 212,1 21,4 66,7 11,9 16 69 15     MALOPOLSKIE61,6 56,0 67,3 5066 141,8 19,1 67,3 13,6 18 68 14     MAZOWIECKIE54,7 45,6 64,6 1091 115,9 19,8 69,2 10,9 21 72 7     OPOLSKIE56,8 52,6 60,7 2120 118,5 23,0 65,6 11,4 18 71 12     PODKARPACKIE58,8 52,5 65,3 1224 60,6 21,8 65,1 13,1 26 63 12     PODLASKIE57,3 50,0 64,7 2182 119,3 21,4 68,3 10,3 17 71 12     POMORSKIE54,8 47,6 62,2 4890 397,3 18,9 70,2 10,9 14 75 10     SLASKIE57,6 54,3 60,7 1327 113,7 20,3 66,2 13,5 21 69 11     SWIETOKRZYSKIE51,7 46,5 57,1 1462 60,4 22,4 67,7 9,9 24 67 9     WARMINSKO-MAZURSKIE59,5 52,7 66,5 3348 111,8 21,3 67,6 11,1 18 72 11     WIELKOPOLSKIE53,8 47,9 59,9 1731 75,2 20,3 69,3 10,3 22 69 9     ZACHODNIOPOMORSKIE/c25/c24/c15/c19 /c24/c28/c15/c26 /c26/c19/c15/c23 /c21/c21/c24/c19/c22 /c28/c23/c15/c23 /c20/c28/c15/c21 /c25/c27/c15/c19 /c20/c21/c15/c26 /c21/c28 /c25/c21 /c28 /c53/c50/c48/c198/c49/c44/c3667,9 64,3 71,5 3825 103,8 21,8 66,1 12,1 33 60 7     NORD-EST60,8 54,1 67,6 2949 82,5 19,5 68,6 11,9 30 60 10     SUD-EST67,5 60,9 74,1 3500 101,6 18,7 67,1 14,1 33 60 7     SUD70,6 66,7 74,6 2424 83,0 19,0 67,0 14,0 28 65 7     SUD-VEST63,9 59,4 68,6 2038 63,6 18,4 68,9 12,6 30 61 9     VEST64,0 60,1 68,1 2856 83,6 19,8 68,2 12,1 28 64 9     NORD-VEST61,8 56,1 67,6 2647 77,6 19,4 68,7 11,9 26 67 7     CENTRU62,0 55,2 69,5 2264 1243,3 15,6 71,1 13,2 17 63 19     BUCURESTI/c25/c21/c15/c24 /c24/c27/c15/c20 /c25/c25/c15/c27 /c20/c28/c27/c22 /c28/c26/c15/c28 /c20/c26/c15/c19 /c25/c28/c15/c26 /c20/c22/c15/c21 /c21/c23 /c25/c19 /c20/c25 /c54/c47/c50/c57/c40/c49/c44/c45/c36/c25/c19/c15/c27 /c24/c22/c15/c27 /c25/c27/c15/c19 /c24/c22/c28/c20 /c20/c19/c28/c15/c28 /c21/c20/c15/c19 /c25/c26/c15/c26 /c20/c20/c15 /c21/c29/c29/c29 /c54/c47/c50/c57/c40/c49/c54/c46/c200/c3/c53/c40/c51/c56/c37/c47/c44/c46/c36
1988
1998
average 1996-97-98
Agriculture
Industry
Services
Total, 1989
Total, 1999
Long term 
unemployed, 1999 (% 
total unempl.)
Women, 1999
Youth, 1999Region/c40/c70/c82/c81/c82/c80/c92 /c47/c68/c69/c82/c88/c85/c3/c80/c68/c85/c78/c72/c87
GDP per head (PPS), 
EUR15=100Employment by sector (% 
total), 1999
Eur. patent applications per 
million inh, av 1997-98-99Unemployment rate (%)
    BRATISLAVSKÝ KRAJ : 99,4 97,5 3,4 25,8 70,8 : : 5,9 30,5 6,3 17,0    ZÁPADNÉ SLOVENSKO : 44,3 44,0 9,1 41,9 49,0 : : 15,1 52,4 15,7 32,1    STREDNÉ SLOVENSKO : 42,1 41,3 8,7 42,7 48,7 : : 17,6 47,6 17,6 33,5    VÝCHODNÉ SLOVENSKO : 39,2 38,0 8,9 40,4 50,7 : : 21,9 55,1 21,5 41,5
/c42/c39/c51/c3/c20/c28/c27/c27/c29/c3/c40/c54/c36/c26/c28/c3/c80/c72/c87/c75/c82/c71/c82/c79/c82/c74/c92/c30/c3/c20/c28/c28/c27/c15/c3/c40/c54/c36/c28/c24
/c42/c39/c51/c3/c20/c28/c28/c25/c16/c28/c26/c16/c28/c27/c29/c3/c37/c42/c29/c3/c85/c72/c74/c76/c82/c81/c68/c79/c3/c72/c86/c87/c76/c80/c68/c87/c72/c86/c40/c80/c83/c79/c82/c92/c80/c72/c81/c87/c3/c69/c92/c3/c86/c72/c70/c87/c82/c85/c29/c3/c40/c47/c15/c3/c54/c46/c29/c3/c20/c28/c28/c27/c30/c3/c42/c88/c68/c71/c72/c79/c82/c88/c83/c72/c15/c3/c48/c68/c85/c87/c76/c81/c76/c84/c88/c72/c15/c3/c42/c88/c92/c68/c81/c72/c3/c11/c41/c12/c30/c3/c53/c112/c88/c81/c76/c82/c81/c3/c11/c41/c12/c29/c3/c20/c28/c28/c25/c30/c3/c37/c42/c3/c11/c20/c28/c28/c26/c12/c15/c3/c38/c60/c29/c3/c81/c68/c87/c76/c82/c81/c68/c79/c3/c86/c82/c88/c85/c70/c72/c86/c56/c81/c72/c80/c83/c79/c82/c92/c80/c72/c81/c87/c3/c85/c68/c87/c72/c86/c29/c3/c48/c55/c29/c3/c20/c28/c28/c27/c3/c11/c92/c82/c88/c87/c75/c3/c88/c81/c72/c80/c83/c79/c82/c92/c80/c72/c81/c87/c12/c30/c3/c37/c42/c29/c3/c85/c72/c74/c76/c82/c81/c68/c79/c3/c72/c86/c87/c76/c80/c68/c87/c72/c86/c3/c73/c82/c85/c3/c20/c28/c28/c28/c47/c82/c81/c74/c16/c87/c72/c85/c80/c3/c88/c81/c72/c80/c83/c79/c82/c92/c80/c72/c81/c87/c3/c29/c3/c37/c42/c15/c3/c54/c46/c29/c3/c20/c28/c28/c27/c30/c3/c44/c53/c47/c29/c3/c20/c28/c28/c26/c30/c3/c40/c56/c20/c24/c3/c68/c81/c71/c3/c40/c56/c20/c21/c3/c90/c76/c87/c75/c82/c88/c87/c3/c44/c53/c47/c40/c80/c83/c79/c82/c92/c80/c72/c81/c87/c3/c85/c68/c87/c72/c86/c29/c3/c47/c41/c54/c3/c20/c28/c28/c28/c15/c3/c72/c91/c70/c72/c83/c87/c3/c54/c46/c3/c29/c3/c20/c28/c28/c27/c17/c40/c71/c88/c70/c68/c87/c76/c82/c81/c68/c79/c3/c68/c87/c87/c68/c76/c81/c80/c72/c81/c87/c29/c3/c47/c41/c54/c3/c20/c28/c28/c28/c15/c3/c72/c91/c70/c72/c83/c87/c3/c40/c47/c3/c68/c81/c71/c3/c53/c50/c29/c3/c20/c28/c28/c27/c30/c3/c44/c53/c47/c29/c3/c20/c28/c28/c26
Total
Women
Men
Under 15
15-64
65+
Low
Medium
HighPopn density (inh./km²), 1998% population aged: (1998)Educational attainment of 
those aged 25-59 (% total), 
1999/c39/c72/c80/c82/c74/c85/c68/c83/c75/c92 /c40/c71/c88/c70/c68/c87/c76/c82/c81
RegionEmployment rate (% popn 
15-64), 1999
Population (000), 1998
71,9 67,2 77,1 618 310,9 18,0 70,2 11,8 : : :     BRATISLAVSKÝ KRAJ
61,5 53,7 69,5 1877 123,9 19,8 68,4 11,8 : : :     ZÁPADNÉ SLOVENSKO60,9 54,9 67,0 1354 83,5 21,3 67,3 11,4 : : :     STREDNÉ SLOVENSKO55,0 47,0 63,3 1541 98,2 23,6 66,3 10,2 : : :     VÝCHODNÉ SLOVENSKO