No C 160/8 Official Journal of the European Communities 1. 7. 85 
on the waste from pig-rearing. This problem has already 
been the subject of numerous pilot projects and studies in 
other regions. The Commission should circulate the results 
widely to all interested parties (Mediterranean basin and 
other regions) and consider collaborating with them on 
further measures, taking into account each specific situation, 
such as that of the Bay of Arta. 
The Committee passes no opinion on Community financing 
for a study on waste from nickel-bearing ore. This measure 
might be regarded as gravely prejudicing the 'polluter pays' principle and therefore setting a precedent for all other firms 
experiencing difficulties in the disposal of waste from 
non-ferrous metals. In the absence of further details on the 
precise nature of the proposed measure, the Committee 
reserves judgement. 
Specific measure No 10 
The Committee considers that the funds earmarked for this 
measure are inadequate. 
Done at Brussels, 27 March 1985. 
The Chairman 
of the Economic and Social Committee 
Gerd MUHR 
Opinion on 'The regions of Europe' - Second periodic report on the social and economic situation 
and development of the regions of the Community 
(85/C 160/03) 
On 10 April 1984, acting under Article 198 of the Treaty establishing the European Communities, the 
Commission asked the Economic and Social Committee for an opinion on the abovementioned 
text. 
The Section for Regional Development was instructed to draw up an opinion on the subject, with Mr 
Fuller as rapporteur. The Section opinion was adopted on 15 February 1985. 
The Economic and Social Committee adopted the opinion unanimously during its 225th plenary 
session (meeting of 27 March 1985). 
I. Introduction 
1. The first periodic report was published by the 
Commission in February 1981, and the Committee produced 
its opinion on 30 June 1982 (*). 
2. In pursuit of the macro-economic objective of 
convergence in economic and living standards between the 
regions of the Community, and bearing in mind the changes 
then being proposed and subsequently implemented in the 
Regulation of the European Regional Development Fund 
(ERDF), the Committee at that time felt that a commendable 
effort had been made in a highly complex and difficult 
assignment. A start had at least been made in attempting to 
discover a means for evaluating the situation in the various 
regions from approximately comparable statistics. 
(>) OJ No C 252, 27. 9. 1982, p. 20. 3. The Committee is now requested to give an opinion on 
the second periodic report, dated 4 April 1984. 
A number of improvements in the formulation of the 
previous report have been included. The Commission 
responded, in several respects, to the criticisms levelled at the 
earlier report. 
II. Purpose of the second periodical report 
1. The Commission in adopting the second periodic 
report on the social and economic situation and development 
of the regions of the Community, covering the situation of 
the regions in the early 1980s and developments since 1973, 
date of the first oil crisis, looks to the future, considers the 
prospects for labour markets in the 1980s, and attempts a 
1. 7. 85 Official Journal of the European Communities No C 160/9 
forecast of the probable impact of the enlargement of the 
Community from 10 to 12 Member States. The basic aim of 
steering towards European convergence and balanced 
expansion has been retarded, if not in some respects reversed, 
by the present crisis situation. The other objective of regional 
policy, which is to compensate for industrial decline and 
contraction, has called for more intensive action particularly 
in the more centrally located and highly industrialized 
regions as a result of the general recession and sectoral 
imbalance. 
The report gives an analysis of regional disparities in 
employment, production and productivity, and describes 
other factors of regional disparity such as population density 
and movements and the significance of peripherality. It also 
examines regional disparities within a Community of 12 
Member States. 
2. This second periodic report tackles several new areas 
not discussed in the first one: 
— the infrastructure endowment of the Community's 
regions, 
— the particular situation of the regions adversely affected 
by the decline in certain industrial sectors, 
— the consequences, for industry and agriculture in the 
Community's regions, of enlarging the Community to 
include Spain and Portugal, 
— projections concerning regional employment 
situations, 
— the regional aspects of the growth of the services 
sector, 
— the specific problems of frontier regions, 
— the regional impact of new information technologies, 
— a 'typology of the regions' to supplement the analysis of 
the relative severity of regional problems by further 
inquiry into the nature of those problems. 
The second report also provides for more detailed analysis of 
peripherality and demography. 
III. Findings of the report 
From the perspective of the aims of regional policy, and 
particularly greater convergence of the economies of the 
Member States, the most important regional disequilibria are 
those in production and productivity performances and 
differences in labour market situations. 
1. On production and productivity 
It is to be noted that over the last 10 years, regional disparities 
in production and productivity have not lessened but remained very substantial. The group of the 10 regions with 
the best performances and the group of the 10 with the 
poorest performances are respectively 50 % above and 50 % 
below the Community average. 
Disparities in gross domestic product (GDP) per head of 
population depend, among other things, on differences in age 
pyramids, participation rates and unemployment rates. But 
the predominant factor is the differences between regions in 
GDP per person employed, which alone explain between half 
and three-quarters of production disparities. 
2. On the labour market 
Regional labour market disequilibria are characterized - in 
absolute terms - by growing disparities in unemployment, 
with rates ranging from 5 to 20 %. Overall, the regions with 
a low level of production also have a very high 
unemployment rate (Southern Italy, Ireland and Northern 
Ireland, for example). In addition, the report highlights 
problems affecting the previous relatively prosperous 
regions, where sectoral decline points to the need for 
action. 
3. On other factors of disparity 
The endowment in economic infrastructure (transport, 
energy, telecommunications, water supply, etc.) is closely 
correlated with the productivity level. A substantial 
infrastructure endowment is a necessary, if not always 
sufficient, condition for a region to attain a high level of 
development and economic performance, and relatively 
small improvements in infrastructure can often have 
considerable local significance. 
The geographical location of a region often constitutes a 
major factor of disparity. Account must therefore be taken of 
the higher costs incurred in peripheral regions, particularly 
for transport and communications. 
The introduction of new information technologies will to a 
large extent determine regional employment trends in 
services. There is a risk that these technologies will develop 
most of all in the major urban areas. Steps must be taken to 
ensure that telecommunications infrastructure and new 
services are also located in the less-developed regions, in 
order to avoid further and additional imbalances. 
4. On enlargement 
The report suggests that two sorts of consequences for the 
regions of the Community may be expected from 
enlargement. In industry, the positive and negative effects on 
job creation should tend to offset each other overall, and are 
not expected to be concentrated regionally to any great 
extent. In agriculture, however, the pressure of competition 
from imports of specific products of Mediterranean regions 
will become keener; while the farm products of northern 
No C 160/10 Official Journal of the European Communities 1. 7. 85 
Europe should find wider markets. There will therefore be 
regional differences in net impact, to the disadvantage of the 
Mediterranean regions. 
Regional disparities will be much more marked in the 
enlarged Community. The economic performances of the 
applicant countries are much lower than the Community 
average, and they have higher unemployment and heavy 
population pressure. A very large proportion of their labour 
force is employed in agriculture. 
5. On the relative severity of regional problems in the 
Community 
In order to measure comprehensively the relative severity of 
regional problems in the Community, the Commission uses 
data for output and unemployment, output reflecting the 
level of economic activity of the regions and unemployment 
the problems of disequilibria on the labour market. 
Regions with particularly serious problems contain about 52 
million people or 19 % of the Community's total population, 
to which some 30 million people must be added in regions 
affected by profound structural changes. Some of those 
regions, especially on the periphery of the Community, have 
benefited and in the past depended on payments coming from 
the European Agricultural Guidance and Guarantee Fund 
(EAGGF). With the recent reorientation of the common 
agricultural policy (CAP), funds flowing to these regions will 
be less, and problems become more acute. 
IV. Comments on statistical components 
The Committee wishes to congratulate the Commission on 
the progress which has been made both qualitatively and 
quantitatively in the formulation of this second report. In 
particular it notes with considerable satisfaction 
improvements which have been included in response to 
criticisms which the Committee made in ks opinion on the 
first periodical report (*). 
1. Definition of Regions 
The first report relied on Level II regions almost entirely for 
statistical comparison, mainly because at that time Level II 
figures were the only statistics available. But the size and 
composition of these geographical areas varied widely as 
between countries (Ireland and Luxembourg had a single 
Level II region; the Federal Republic of Germany had 30 and 
the United Kingdom had 11). 
This incompatibility laid an inaccurate base both for the 
collection of statistics, and any implementation of measures 
resulting from their use. The Committee criticized this 
decision, and called for a more rational delineation. 
(^ OJ No L252, 27. 9. 1982, p. 20. The Committee recommended the substitution of: 
— labour market regions (travel to work) in the more thickly 
populated regions, 
— homogeneous policy regions in the more thinly populated 
(agricultural) areas. 
In the second periodic report, the Commission has responded 
to the Committee's criticism in some of these respects. While 
it would be Utopian to imagine that perfectly homogeneous 
regions can ever be arrived at, some reforms have been 
introduced. The number of regions in the United Kingdom 
has been increased from 11 to 34, and adjustments have been 
made in some other countries. Obviously the Commission is 
compelled to have regard to the units of territory from which 
regular statistics can be supplied, and marry the requirement 
to the aim of selecting regions sufficiently homogeneous to 
make inter-regional comparison meaningful. 'Labour market 
regions' can without difficulty be statistically used in the 
United Kingdom and the Federal Republic, but would 
complicate the collection of data in other Member States. A 
sub-division of Europe into 'industrial' and 'agricultural' 
statistical zones would be equally impractical at this 
juncture, as well as being open to criticism, from a social 
point of view. 
Moreover, an important objective is that on-going 
comparison should be made possible as each report is 
published every two-and-a-half years. If on each occasion the 
authors are asked to change the regional data base, such 
measurement of progress or decline will be virtually 
impossible. 
The Committee therefore appreciates that the territorial 
units, as defined in the second report, are an improvement on 
those the Committee had criticized previously. They would 
nevertheless encourage the Commission to make 'common 
sense' adjustments, if factors are revealed which too 
obviously lead to distortion. A good example of such possible 
distortion is the classification used for Scotland, where one 
regional unit englobes the Highlands and Islands and 
Grampians; the inclusion of the Aberdeen area artificially 
brings up GDP and lowers the rate of unemployment, thus 
giving an inaccurate global picture of the area. 
The Committee also acknowledges with satisfaction the 
statement that the Commission intends to make further 
progress in the direction of Level III regions. 
As regards functional areas, in the United Kingdom and 
Federal Republic of Germany, maps and information 
channels are already prepared for collecting figures from 
'travel to work areas', which have been comprehensively 
demarcated. The Committee hopes that as and when fuller 
and more sophisticated information becomes available in the 
other Member States, the Commission will at least give 
consideration to the adoption of functional rather than 
administrative boundaries. 
1. 7. 85 Official Journal of the European Communities NoC 160/11 
2. Synthetic indicator 
The synthetic indicator is used to range regions in order of 
need, and is based as to 50 % on the GDP for a given area, 
and 50 % on figures for unemployment. The two sets of 
figures meshed together constitute the synthetic indicator. 
3. Gross deomestic product 
The Committee recognizes the limits of GDP as an indicator 
because methods of collection vary, both as between 
Member States and within Member States. Additional 
incompatibilities are caused by the following: 
(a) errors of interpretation in GDP per head occur - where 
there is significant commuting in small areas; 
(b) accounting procedures in some countries attribute 
product to the area where the head office is situated, 
rather than to the locality where the product is made; 
(c) the impossibility of estimating GDP stemming from 
'informal economy' is likely to distort the figure more 
particularly in certain countries and areas. 
Nevertheless, possibly as a result of such criticism, and with 
attribution to experts whom the Commission have consulted 
in the interval since publication of the first report, changes 
have been made. In the second report the calculation is based 
on a rolling average of three years rather than one year. 
Moreover, instead of using figures solely in ECU, they now 
use them half in ECU for the working population, the other 
half in purchasing power for the total population. The 
Committee considers this an improvement, serving to damp 
down possible errors, but the 50:50 weighting needs 
justification. 
The Committee wishes to emphasize strongly that it is of 
paramount importance that the quality of collection of GDP 
information within each Member State should be improved, 
and that the least efficient should rapidly reach the level of the 
most efficient. Methods of collection should be harmonized 
as between Member States. Statistics need to be adequate, 
and the returns sent in promptly. 
With these provisos the Committee accepts that GDP is the 
best indicator at present available. 
4. Unemployment 
This is a more difficult indicator than appears at first glance. 
There are wide discrepancies in the definition of 
unemployment and the methods of collecting statistics in the 
different Member States: in one country no figures can be 
supplied; in another they are very late in arriving. Sampling is 
used in several instances. Activity rates, more especially for females, show wide disparities often linked to socio-cultural 
differences. The statistics are to some extent vitiated by 
part-time work, (which is increasing) particularly in 
agriculture, and by 'moonlighting'. 
Some, admittedly not all, of these difficulties could be 
avoided if, instead of using figures for unemployment, 
variously defined, employment statistics could be used. 
These are more readily available either through employers or 
tax authorities, and the ratio of men and women in 
employment to the potentially economically active 
population gives a more accuarte indication of the 
seriousness of unemployment in a region than a tally of those 
registering for or receiving assistance. Temporary and 
part-time workers could be dealt with pro rata. It would be 
easier to incorporate accurately the self-employed, which 
cause difficulties under the present system. Moonlighting 
would still be a problem. It could be considered more 
consistent to marry a positive GDP indicator with a positive 
employment indicator qualifying the latter with a total 
economically active coefficient, in the same way as the GDP 
indicator has now been qualified by including purchasing 
power of the total population. 
The present indicator throws light neither on the level of 
unfilled vacancies, nor on the number of discouraged 
workers and other forms of under-employment like 
involuntary part- and short-time working. Unemployment 
rates are therefore only a proxy for imbalances on the labour 
market and for capital and training needs. 
Nevertheless the Committee welcomes the speed with which 
the Commission has been able to obtain and use the figures 
based on the new method of arriving at comparable regional 
unemployment figures, agreed in November 1982 between 
Eurostat and the national statistical services of the Member 
States. 
V. Plurality of indicators 
In its opinion on the first periodical report, the Committee 
thought that using only two indicators to make up the 
synthetic index was insufficient. It recommended the 
adjuntion of other qualitative indicators. 
Discussion with experts has highlighted possible additional 
indicators as follows: 
— agglomeration rates (density of population, which should 
be neither too high nor too low). This indicator appears 
to have certain advantages, 
— sectoral structure for which the Commission has made 
figures available (proportion of active population in 
primary, secondary or tertiary sector). This indicator is 
very interesting in regard to trends of development, since 
agricultural areas seem to be steadily declining and the 
predominance of services is said to be an indication of 
dynamism and growth, 
NoC 160/12 Official Journal of the European Communities 1. 7. 85 
— an indicator representing degree of progress in 
information technology infrastructure, 
— an indicator to show types of levels and density of 
vocational training, according to age group, 
— given the importance of peripherality, it would be 
desirable to find a means of improving and developing the 
relevant indicator. 
•It is accepted that the prime purpose of these reports is to 
measure accurately and promptly a situation - to take a 
'snapshot'. To do this, indicators must be based on statistics 
which are able to be abtained from all member countries, in a 
form which as far as possible feeds in comparable 
information from each country. To increase the volume of 
information, the Commission should be required to collect 
and process, for the synthetic index might jeopardize the 
immediate value of the periodical reports. 
But if these reports are going to be used to assist the equitable 
distribution of assistance to those regions in most need, it is 
necessary not only to take the patient's temperature, but to 
diagnose at least some of the symptoms of his illness. It is 
therefore appreciated that the Commission now presents 
analyses of infrastructure provision and provides figures for 
'sectoral analysis', - and it is hoped that, in future, further 
auxiliary studies may be carried out, which, without 
interfering with the main synthetic index calculation, will 
serve to throw further light on the problems of the regions. 
For qualitative indicators, appropriate graphs could be used 
instead of statistics. 
VI. Enlargement 
The Committee would have welcomed a fuller treatment of 
the specific problems likely to be encountered in the two new 
applicant countries, similar to that provided for the Ten. 
More particularly, it is important to find out as soon as 
possible what the needs of the regions in Spain and Portugal 
will be, and what is their state of readiness to supply the 
necessary statistics for the synthetic index broken down by 
region. The Committee suggests that it might be possible for 
the Community to insist that Spain and Portugal should 
undertake to instal the necessary machinery to collect the 
basic information on which Eurostat has to operate, and that 
a proportion of the Community funds dedicated to studies 
and research might be set aside to encourage this. 
Done at Brussels, 27 March 1985. VI. Presentation 
The second periodical report is difficult to read, because 
specific information on the multifarious problems of a region 
have to be 'hunted for' under different subject headings. The 
Committee expressed the wish last time, and wishes to renew 
its request, that either in the main body of future reports, or, 
if preferred, in an Appendix, there should be included a series 
of single sheets setting out and drawing together the corpus of 
information applying to each region, possibly mainly by 
graphs and diagrams, rather than printed text. 
VIII. Conclusion 
The Committee notes with satisfaction the method and 
quality of the report, and encourages the Commission to 
pursue their objectives in the third and subsequent periodical 
reports. The series constitutes a body of statistical data 
unique in Europe, and possibly in the world, a precious 
instrument for analyzing the degree of advance to economic 
convergence, one of the main objectives of the 
Community. 
Unfortunately, the problems militating against such advance 
to convergence are becoming more acute in terms of 
peripherality, sectoral decline, and widely divergent 
standards of general infrastructure. A stronger will and more 
material means are required to tackle these problems at the 
centre. There is a regional planning element in most other 
policy decisions affecting competition, industrial investment, 
new technology, vocational training and agriculture, and it is 
hoped that those in control of such decisions will not hesitate 
to refer to the information contained in the periodical reports 
in implementing them. Simultaneously, future periodical 
reports could well embrace analyses of the effects of ERDF 
assistance in the localities. Further efforts are needed to 
improve the spread and quality of information available, and 
this may entail financial assistance, not only as mentioned 
above to Spain and Portugal, but also in other peripheral 
regions, where at present 'the statistical famine' of which the 
Commission complains, is impairing the overall accuracy of 
inter-regional comparison. 
Finally the Committee believes that in future periodical 
reports the Commission should not feel inhibited from 
continuing the process already begun of using the purely 
statistical analyses to draw attention to and highlight specific 
problems in the different regions, with examples by way of 
illustration. 
The Chairman 
of the Economic and Social Committee 
Gerd MUHR