NoC98/50 OfficialJournaloftheEuropeanCommunities21.4.92
OpiniononEconomicandSocialCohesion
(92/C98/18)
On28February1991theEconomicandSocialCommittee actingundertheFourthparagraph
ofArticle20ofitsRulesofProcedure ,decidedtodrawupanOwn-initiative Opinionon
economic andsocialcohesion .
TheOpinionwastofocusonthefollowingaspects:
—theincorporation ofregionalaspectsinEconomicandMonetaryUnion(EMU),
—thepreparation ofthereformofthestructuralfundsafter1992,
—theachievement ofeconomic andsocialcohesionthroughcloserlinksbetween
(a)structuralandregionalpoliciesand(b)otherCommunity policies.
Accordingly ,theOpinioncontains :
—anintroduction settingoutthechallengefacingtheEuropeanCommunity ,
—ananalysisofthelinksbetweenstructuralandregionalpoliciesandtheotherCommunity
policies,
—conclusions andrecommendations onthestrategiestobepursuedinthecontextofeach
Community policy,andonthegeneralstrategytobedevelopedwithaviewtoachieving
economic andsocialcohesion .
TheSectionforRegionalDevelopment andTownandCountryPlanning ,whichwasrespon­
sibleforpreparingtheCommittee 'sworkonthesubject,adopteditsOpinionon22January
1992.TheRapporteur wasMrMasucci .
Atits294thPlenarySession (meetingof27February 1992),theEconomic andSocial
Committee adoptedthefollowingOpinionnem.con.withnineabstentions .
PARTA
1.Introduction
1.1.Regionaldisparities intheECcapitaincomesbelow75%oftheECaverageand
unemployment levelsofupto30%.Germanunification
hasbroughtanother16,5millionpeopleintotheCom­
munity,or5%oftheECpopulation ^).Thevast
majorityofthe76millionlivinginthelaggingareas
arefoundintheMediterranean regions.Apartfrom
theselaggingregions,accountalsohastobetakenof
theareassufferingindustrialdecline.Itismoredifficult
toprovidestatisticsfortheseareasandtheirrelation­
shipwiththeeconomicdevelopment processisalso
different .Areasinindustrialdeclinearesufferingthe
effectsofindustrialrestructuring andeconomicdown­
turns,whichhavewidenedthedisparityinunemploy­
mentratesbetweenthedifferentindustrialregions.
1.1.3.Itwasbecauseoftheseproblemsthatthe1986
SingleActamending theTreatyofRomeinserteda
TitleVoneconomic andsocialcohesion .ArticleBof
thenewTreatyagreedonbytheIntergovernmental
Conference onPoliticalUnioninMaastricht included1.1.1.Thesuccessive accessiontotheECofIreland,
Greece,andSpainandPortugalhasbroughtwithita
completely newtwo-tiersituation,previously only
foundonasimilarscalewithinItaly.Theendof1990
sawtheincorporation oftheEastGermanLander.
Theresultineconomictermshasbeenasplitinthe
Community of12whichisfarmorepronounced than
thataffectinganyothermajoreconomicandpolitical
areaintheindustrialized world.Itseconomically
developedcentreisboundedonitsWestern,Southern
andEasternsidesbyaless-developed ,horseshoe-shaped
periphery .
1.1.2.Around20%oftheECpopulation —over60
millionpeople—liveinlessdeveloped regionswithper(')ThestatisticswhichfollowforGermanydonotcoverthe
EastGermanLander,unlessspecifiedotherwise .

21.4.92 OfficialJournaloftheEuropeanCommunities NoC98/51
economicandsocialcohesionamongthefoundingprin­
ciplesoftheUnion.Cohesion isalsothesubjectofa
specialprotocolappendedtotheTreaty.
1.1.4.TakingtheCommunity meanas100,during
the80spercapitaGrossDomesticProduct (GDP)in
Greece,IrelandandPortugal (thethreecountriesfully
coveredbyobjective 1)fellby1,3pointsfrom57,5to
56,2.ThedropwascausedentirelybyGreece,where
thefigurefellfrom58,2to53.Apartfromthisparticularcase,therewasacertaindegreeofredistribution among
MemberStates.PercapitaGDProseinSpain,Ireland,
ItalyandPortugal ;itfellinallotherMemberStates
excepttheUKandLuxembourg .
1.1.5.However ,ifwelookatthe25weakestregions
andthe25strongestregions—thuscoveringageo­
graphically andstatistically broadandbalancedsam­
ple—weseethatdisparities inGDPgrewsteadily
throughout the80s.Noristhereanysignofthistrend
beingstemmed (seetable1).
Table1:Disparities inGDPperheadbetweenCommunity regions(*),1980-1988
[inPPS(2),EUR12=100H3)
1980 1981 1982 1983 1984 1985 1986 1987 1988
Averageofthe10weakest
regions 47 4646454545 454545
Averageofthe10strongest
regions 145 146147 149 149 150 151 151 151
Averageofthe25weakest
regions 57575656 55 56 5556 56
Averageofthe25strongest
regions 135 136 136 136 137 138 138 137 137
Disparity 26,126,526,82727,227,527,927,527,5
(')Nomenclature ofTerritorial UnitsforStatistics (NUTS)2:FrenchOverseasDepartments ,theAzoresandMadeira
excluded fordatareasons .
(2)Purchasing powerstandard .
(-'}Fourthperiodicreportonthesocialandeconomicsituationanddevelopment oftheregionsoftheCommunity [doc.
COM(90)609final,Table1.21.
1.1.6.Inshort,althoughincomedifferentials nar­
rowedslightlyoverthe80satMemberStatelevel,there
wasaclearincreaseatregionallevel.Wemaydeduce
fromthisthat:
a)thesteadyannualincreaseinthedisparities between
thestrongestandweakestregionsindicatesacertain
indifference toeconomiccircumstances ;SouthoftheCommunity arehighlylabourintensive
anduselowtechnology (e.g.clothingandfootwear )or
antiquated technologies (e.g.thetextilesindustry).The
industriesoftheseregionsarethusrelativelyspecialized ,
andtheirimportsaredifferent (andhaveahigher
technological content)fromtheirexports.Todevelop,
theymusteitherfocusonthisspecialization —inorder
tomakethebestuseofexistingresources—oroptfor
amoreadvancedproduction mixwhichshouldalso
offerimprovedscopetotheservicesector.Thereare
signsthattheyarepreferring thissecond (andmore
difficult)option,whichalsorequiresinvestment from
largenationalandmultinational companies .However ,
thisdoesnotsolvetheproblemoftransferring tech­
nologyandknow-how toindustryingeneral,giventhe
lowlevelofresearchanddevelopment (R&D).Ireland
isthebestknownexampleofthis.b)withintheMemberStatescoveredbyobjective 1,
thegapsbetweenregionshavewidened .
1.1.7.Between1980and1990ECindustrial pro­
ductionrosebyanaverageof1,8%peryear.Ofthe
threemainsectorsintheSouthoftheCommunity ,only
thefoodindustryachievedaverageannualgrowthof
2%,whiletextilesregisteredonly0,2%andthecloth­
ingandfootwearsectorcontracted by2%.
1.1.9.Similarly,decliningregionsaregenerallymar­
kedbyarateofvalueaddedbelowtheCommunity
average.Thedecliningindustrialregionshaveexperi­
encedthetotalorpartialdisappearance ofwholeindus­
tries(suchassteel,shipbuilding ,textiles,mining)and
haveoftenhadtobearthebruntofCommunity-level
restructuring .Thesolutionofre-industrialization prob­1.1.8.Thesectoralstructureofindustryinthelag­
gingregionsplacesafurtherbrakeonthedevelopment
ofproduction ,theprospectsofferedbytheinternal
market,andaccesstomarkets .Themainsectorsinthe

NoC98/52 OfficialJournaloftheEuropeanCommunities 21.4.92
lemsishampered byskillsshortages ,technological
backwardness andinadequate infrastructures .1.1.13.Overthelast15years,agricultural employ­
mentintheEChasfallenby35%,withmodesteffects
onpercapitaincomes .However ,itshouldberemem­
beredthatover15%oftheworkforce inGreece,Portu­
gal,Ireland,SpainandtheItalianMezzogiorno arestill
employed inagriculture —afarcryfromtheUKfigure
of3%.Wemaythereforeexpectstructuralchangesin
farming,withsurpluslabourmovingtoothersectors.
1.1.10.Thenatureoftheirsectoralspecialization
meansthattheweakestregionshavevirtuallynoaccess
topublicprocurement contracts (whichaccountfor
16%ofCommunity GDP)andcannottakeadequate
advantage oftheopening-up ofpublicprocurement in
theSingleMarket.Publicprocurement iscrucialinsuch
sectorsasmachinery forenergyinstallations ,calcu­
lators,officemachinery ,aircraftmanufacture ,railway
equipment ,andtelecommunications equipment .Asall
thesesectorsareconcentrated inthemoredeveloped
regions,publicspendingonthemintheleastadvan­
tagedregionsentailsthetransferofprofitsbackto
themoredeveloped regions.Theabovetendencies
strengthen thecentralCommunity growthareawhich
expertsidentifyasabanana-shaped bandstretching
fromLondonthroughtheNetherlands andFrankfurt
toMilan,andbecoming lessmarkednorthofLondon
andtowardsRomeandParis.Population ,production
andincomeareallconcentrated alongthisaxialbelt,
andtheresultantheavycongestion hasadverseeffects
ontheenvironment .1.1.14.Laboursupplyprospectsforthe90sshowa
slightincreaseintheworkforce (+0,1%peryear)for
theECasawhole,brokendownintoariseoftwo
millionintheSouthandafallof500000elsewhere .
Thefigurewillbeincreasedbyimmigrants fromoutside
theEC.Immigration isexpectedtoremainataround
0,1%peryear,althoughthisfiguredoesnottake
accountofthelikelyincreaseinimmigration from
EasternEurope.Whenaccountisalsotakenofthefact
thatmovement betweenMember Statesandbetween
regionsisnowlow,andthattheSouthernregionsnow
showanetsurplusintermsoflabourmobility ,the
employment problemsoftheseregionsbecomeonlytoo
clear:theonlysolutionissustaineddevelopment .The
Commission statesthataregionwithaGDPperhead
whichis70%oftheECaveragemust,ifitistoconverge
to90%oftheECaverage,'exceedtheCommunity
averagerateofgrowthinGDPperheadby1,25percent­
agepointseveryyearfor20years'.
1.1.11.Themostglaringindicatorofregionaldispar­
itiesisunemployment .In1990,againstanECaverage
ofaround8,5%,unemployment rangedfrom1,5%in
Luxembourg to28,9% (almost19timeshigher)in
Andalusia .In1989,nineteenregionsoftheCommunity
hadunemployment levelsofover15%.Inmostof
theseregionstheunemployment levelcontinuedtorise
betweenApril1990and1991[Eurostat :Rapidreports
(Regions)3/1991].1.1.15.Averagegrosshourlypayin1989ranged
fromaroundECU2inPortugalandGreecetoECU11
inDenmarkand9inGermany .Evenwhenaccountis
takenofdifferingpricelevelsandconsumer habits,
thesedifferences remainconsiderable —fromjustover
4PPSinPortugalto11inLuxembourg andDenmark ;
inotherwords,almostathreefolddifference inthe
livingstandardsofworkersinindustry .
1.1.12.However ,theproblemisparticularly acute
amongcertaingroups :theyoung,thelong-termunem­
ployed,andtheelderly.Between1983and1988,the
numberoflong-termunemployed rosefrom4,5million
to5,5million(+22%)intheCommunity ofTenand
to7,3millionintheCommunity ofTwelve,i.e.from
45%to52%ofthetotalworkless .Inthelastthree
years,thispercentage hasremainedunchanged .Diver­
gencefromtheECaveragegoesfrom42-45% (below
theaverage )intheUK,France,Germanyandthe
Netherlands to57-67% (abovetheaverage)inSpain,
ItalyandIreland.Therearenostatisticalbreakdowns
comparing groupsofregions,butdisparities havealso
grownwithinMemberStates.InItalyunemployment
in1990wasbelow5%intheNorthandover20%in
theSouth.1.1.16.HourlylabourcostsrangefromECU2,5in
PortugaltoECU14inGermany ,accounting respect­
ivelyfor59%and55%ofdirectearnings—avery
similarstructure .Overthelasttwentyyears,theunder­
lyingtrendhasbeenforwagesandinflationtorise
moreinthelessdeveloped economies ,butifthefigures
areconverted intoECUthedifferences becomemuch
smaller.Thishighlights theimportant roleofthe
exchangerateinmitigating theimpactofwagesand
inflationonproduction costsinthesecountries .

21.4.92 OfficialJournaloftheEuropeanCommunities NoC98/53
resistancetakesontheextremeformoforganizedcrime
syndicates whichhavebuiltuphighlylucrativeecon­
omicactivitiesbasedondrugtrafficking andrefining,
racketeering andprotectionist activities,andprocure­
mentofpublicworkscontracts .1.1.17.Althoughlowerwagelevelslimitthestan­
dardoflivingoftheworkersconcerned ,lowlabour
costsdonotnecessarily improvecompetitiveness or
attractnewinvestment .Thisisbecauselowpaynor­
mallygoeshandinhandwithlowerproductivity .These
arethusothermoreimportantconditions forattracting
newinvestment toaltertheproduction mix.
1.2.4.Thefirstandmostimportantproblemishow,
inashorttime,toadjustandupgradetheskillsofthe
locallabourforcetomeetthedemands ofmodern
economicandsocialdevelopment .1.1.18.Althoughsocialspendingvariesconsiderably
betweencountries andfirmsinabsoluteterms,the
percentage variationsareevenmoretelling.Theyrange
from13%ofGDPinPortugalto32%intheNether­
lands,andfrom30%ofhourlylabourcostsinIreland
to47%inFrance .
1.2.5.Educational andvocational trainingfacilities
aresignallyinadequate .TobringthemuptoCom­
munitystandardswouldinsomeregionsentail30%
expansion ,necessitating amajorfinancialcommitment .
Moreover ,aquantitative improvement wouldnot
necessarily achievetherequisitestandardofinfrastruc­
ture,teachingmaterials ,andteachingstaff(thetraining
ofwhomrequiresfurtherinvestment ).1.1.19.Thesedifferences generallyreflectwidediver­
gencesinsocialsecuritycover,andinthequantityand
qualityoftheallowances andservicesprovided .Hence
theareasoftheCommunity wherethelargestswathes
ofpopulation areingreatestneedalsohavethepoorest
socialsecuritycoverandassistance .Thismaybeper­
fectlylogicalineconomicterms;itislessacceptable as
wemovetowardseconomicandpoliticalunion.
1.2.Causes 1.2.6.Theneedfortrainingwillclearlydependon
thetypeofdevelopment beingpursued .Iftheaimisto
achieveamoreadvancedproduction mixinbothindus­
tryandservices,thetaskwillbeevenharder.
1.2.1.Farfromdisappearing ,theeconomic split
betweentheNorthandSouthoftheCommunity and
withinseveralMemberStates(Spain,Italyandmore
recentlyGermanytoo)isactuallywidening ,despite
nationalmeasuresandthesupportfromthestructural
funds.Thereareanumberofinterlinked andextremely
complexreasonsforthis.Themainpointstobeborne
inmindarepinpointed below.1.2.7.Thesecondproblemisthedifficultyofgaining
accesstocapital.Thecostofmoneyisgenerallyhigher
inthemostdisadvantaged regions—evenwhenallow­
anceismadeforinflation—andisdifficulttoreduce,
preciselybecauseoftheneedtocurbinflation .
1.2.2.Firstly,theconceptofa'structurally lagging'
regionisnotsimplyamatterofeconomics ;italsohas
cultural,socialandpoliticalaspects.Itembracescivil
andsocialinfrastructure ,thequalityofconsumerand
businessservices,standards ofbasiceducation and
vocational training,politicalandadministrative struc­
tures,andthecalibreofthepeopleoccupying positions
ofpower.Theleveloftrainingofthesepeople (poli­
ticiansandbusinessleaders)musttherefore alsobe
takenintoaccount,sincetheyoftenlackthetoolsand
initiativetotriggerthedevelopment process .1.2.8.Oftenevenwithinthesamecountry,thecost
ofmoneyishigherinthepoorerregionsthancan
objectively beexplainedbythedifferenceintheaverage
levelofrisk.Thisadditional costistoalargedegreea
reflection ofthebackwardness ofthefinancialmarkets
andcreditsfacilitiesintheseregions.Hencetheneed
topromoteareduction inthecostofmoney,interalia
bymakingfinancinginstruments moreflexibleand
gearingthemmorecloselytodevelopment needs,par­
ticularlythoseofsmallbusinesses .
1.2.3.Outside assistance sometimes meetswith
resistance fromsectorswhichviewdevelopment asa
threattothefeatherbedding andprivileged economic
andsocialpositionswhich—eveninrelativelypoor
regions—theyhavemanagedtosecureforthemselves .
Insomeareas,suchastheItalianMezzogiorno ,this1.2.9.Thesetwobasicproblemsundoubtedly puta
brakeoninternallygenerateddevelopment ,andalso
discourage inwardinvestment (national,Community
orinternational ).

NoC98/54 OfficialJournaloftheEuropeanCommunities 21.4.92
obtainingthefundingwhichsuchareasareentitledto
receivefromthenationalauthorities .
1.2.16.TheyarethereforelessabletotapintoCom­
munitypoliciesandresources ,andtospendthestruc­
turalfundresources allocatedtothem.Effortsareoften
eitherwastedortoofragmented .Thismakesitmore
difficulttopursueaconsistent andcoherentstrategy,
andtoachievethecriticalmassneededtotriggerthe
development process.1.2.10.Largecompanies—thosecapableofsupply­
ingcapitalandtechnology—consideranumberoffac­
torswhendecidingonalocation .Byfarthemost
importantoftheseare:
—marketpotential ,
—themacro-economic context,
—nationalandregionalaid,
—thelabourmarket,
—geographical situation ,
—infrastructure ,
—thequalityoftheenvironment .1.2.17.ThefinalfactoristheeffectofStateaid.The
averagetotalStateaidgiventothemanufacturing sector
plusagriculture ,fisheries,transportandthecoalindus­
trywasECU82300millionperannumbetween1986
and1988.Analysisofthattotalshowsthat:
—thefourlargestMemberStatesaccountforECU
66400million,theunevendistribution ofsuchaid
reflecting differences inthesizeandhealthof
nationalbudgetsandinnationalpolicies,
—thebulkofspendingwasinfurtherance ofhorizon­
talandsectoralobjectives andonlyECU
12000million,waschannelled throughregional
aid.Evenwithinregionalaid,spendingwasuneven,
withGreece,Ireland,SpainandPortugalspending
togetheronlyECU653milliononsuchpermissible
Stateaid.1.2.11.Objective 1regionsareparticularly lacking
ininfrastructure ;transportandtelecommunications ,
andenergysupplyandcosts,posespecialproblems .In
thedecliningindustrialregions,theabovefactorsare
oftenpartiallyobsolescent .
1.2.12.Asregardsthelabourmarket,themost
importantaspectsarenotlabourcostsbutskills,and
theexistenceofamodernindustrialrelationssystem
agreedonbythesocialpartners .
1.3.Thechallenge
1.2.13.Onefactorwhichmakesitmoredifficultfor
inwardinvestment toprovideashort-cuttodevelop­
mentisthattheweakerregionslackthecomplexinter­
dependent networkofadvancedinfrastructure ,infor­
mationchannels ,R&D,education facilities,spiritof
enterpriseandskilledworkforcefoundinthestronger
regions .Becauseofthis,largefirmsalreadylocatedin
theseregionsfailtogeneratetheanticipated multiplier
effectonsmallfirms,services,andtransferoftech­
nologiesandknow-how .1.3.1.Thereviewof14yearsofstructural fund
assistance ,conducted in1988priortothereformof
thefunds,identified variousreasonsforthefailure
toachieve (evenpartially )thegoalsofcohesion .The
followingwereamongthefactorsmentioned :
—thescaleofdisparities wasoutofallproportion to
theresourcesavailable ,
—assistance wastoofragmented (smallisolatedpro­
jectsaccounted for93%ofallmeasures),
—nodevelopment strategy,
—inadequate monitoring .1.2.14.Theexperience gleanedduring15yearsofEC
regionalpolicy—andamuchlongerperiodofspecial
nationalmeasures—hasdemonstrated thekeyrole
playedbythepublicauthorities ,especiallyatregional
andlocallevel.
1.2.15.Theirabilitytoplanassistance ,fittingitinto
anoverallregionaldevelopment strategy,iscrucialto
thesuccessofregionalpolicy.Structuralbackwardness
inparticularoftenalsomeansthatthepublicauthorities
arelesspreparedandlesswell-equipped ,andlackthe
necessaryknow-how andefficiency .Indecliningindus­
trialareas,thisiscompounded bythedifficultyof1.3.2.Theprinciplesunderpinning thereformofthe
structuralfundsshouldrectifytheseshortcomings :
—planningandcombined useofthefunds,
—additionality ,

21.4.92 OfficialJournaloftheEuropeanCommunities NoC98/55
—partnership and,inparticular ,directdialoguewith
theregionalauthorities .important sourceofemployment inPortugal (32,7%
ofindustrialemployment ),Greece(28,7%),Ireland
(11,9%)andGermany (7,27%—thisisthe1988figure
anddoesnottakeaccountofGermanunification ).
1.3.3.However ,resourcesremainfartoolowforthe
objectives .Redtape,accessprocedures andmechanisms
alsostillneedtobesimplified .
1.3.4.TheRegulations didnotlaydownprocedures
forinvolvingthesocialpartners .Thismakesitdifficult
togalvanizetherelevantgroupsandtocreatethesyn­
ergywhichisnecessaryinordertosetthedevelopment
processintrain.1.3.10.ThenewboosttoEuropeanunification pro­
videdbytheMaastricht Summitattributesevenmore
politicalimportance tothegoalofeconomicandsocial
cohesion .Following thereformofthestructuralfunds,
thefirsttwoparagraphs ofArticle130BoftheTreaty,
introduced withtheSingleAct,mustbemadeoperative :
'MemberStatesshallconducttheireconomicpoli­
cies,andshallcoordinate them,insuchawayas,
inaddition,toattaintheobjectives setoutinArticle
130A.Theimplementation ofthecommonpolicies
andoftheinternalmarketshalltakeintoaccount
theobjectives setoutinArticle130AandinArticle
130Candshallcontribute totheirachievement .'
Inotherwords,itisamatterofprioritytoestablish
whetherotherCommunity policies—andespecially
thosewhichabsorbthelion'sshareoftheCommunity
budget—takeaccountoftheneedforcohesion ,or
whethertheywidenthedivergences .Ifthelatterproves
tobethecase,anappropriate responsewillhavetobe
devised .1.3.5.Foramoredetailedassessment ofthefirsttwo
yearsoftheimplementation ofthereformedstructural
funds,thereaderisreferredtotheCommittee Opinion
adoptedon24April1991(*).
1.3.6.Thelastfewyearshaveseenahighrateof
growthandthegradualintegration ofnationalmarkets .
Theyhaveprovidedatypeof'labtest'fortheeffects
whichcompletion oftheinternalmarketwillhaveon
economic andsocialcohesion .Theresultsbearoutthe
pessimistic forecastsoftheCommission andallthe
experts .
1.3.7.TheCecchiniReportexpectsthecompletion
oftheinternalmarkettobeabletocreatebetweentwo
andfivemillionjobsinthelongterm,afteraninitial
dropinemployment ,onconditionthatcertainmacro­
economic measures aretaken.Theincreaseinjobs
whichhasoccurredoverthelastfewyearswould
suggestthatthebenefitsarealreadyappearing .How­
ever,rationalization willleaveitsmarkonthesectors
mostsensitivetotheabolitionofcompetition restric­
tions—aswillunforeseen phenomena suchasperiods
ofstagnation orthesortofrecessionwearegoing
throughtoday.1.3.11.Tothisend,thenextchaptersofthisOpinion
willexaminethefollowingpolicies :
—economicandmonetaryunion,
—thecommonagricultural policy,
—socialpolicy,
—educationpolicy,
—environmental policy,
—industrialpolicy,
—research,
—transport ,
—competition .1.3.8.Evenwithinasingleindustry,theeffectswill
varyinthedifferentpartsoftheCommunity .Themore
efficientcompanies andthoseinprimelocationswill
increasetheirmarketshareattheexpenseoftherest.
1.3.9.Themostsensitivesectorsincludetextiles,
clothingandfootwear ,wherethekeenercompetition
shouldstimulaterestructuring andeconomies ofscale,
withsignificant laboursheddingandanimprovement
inmarketprospects .ThesesectorsformaparticularlyPARTB—ANALYSIS
2.TheimpactofEconomicandMonetaryUnion
2.1.Asthisisapolicypackagewhichwillbeintro­
ducedafterthedecisionsoftheconference onEconomic
andMonetaryUnion,andwhichwillundergoatran­
(')OJNoC159,17.6.1991,p.21. sitionalstagebeforefullimplementation (likelytobegin

NoC98/56 OfficialJournaloftheEuropeanCommunities 21.4.92
tiveregionswhereforstructuralreasonscostsarehigher
andpricesrisefaster.in1977),wemusthererelysolelyonimpactstudies.
However ,theirhypotheses seemextremelyplausible .It
isgenerallyagreedbyexpertsthateconomic union
couldhurtthedisadvantaged regionsandcountries ;the
questioniswhethermonetaryunionwillaggravatethe
risksaccompanying completion oftheinternalmarket.2.6.Anotherveryimportantfactoristhatinamon­
etaryunion—asalreadyoccurswithintheMember
States—ahierarchytendstoemergeonthemoneyand
creditmarkets,partlybecauseeconomies ofscalealso
applytothefinancialmarkets .Twoorthreemain
financialmarketsarelikelytoemerge,andtheywill
distribute resources anddecidetherulesofaccess.2.2.Someimprovement inconditions forthedisad­
vantagedregionscanbeexpected ,albeitnotinthe
samewayforallnorbyanymeansautomatically ,as
explained in2.8.4and2.9oftheCommittee 'sOpinion
ontheReportoneconomic andmonetary unionin
theCommunity ,adoptedon19October1989(J).The
disadvantaged regionsshouldbenefitfromthegreater
efficiencygenerated byelimination ofthecostsofcur­
rencyexchangeoperations ,andofthetechnicalbarriers
whichcomplicate international bankingsettlements .
Similarly ,theseregionswouldbeabletobenefitfrom
afallininterestrates.Thedisappearance ofexchange
risksintheleastdeveloped regionsmayalsoimprove
theinvestment climatebyleadingtogreaterconfidence
insuchregions .2.6.1.Businesses seekingaccesstothesemarketswill
obviouslyhavetodemonstrate anacceptable standard
ofbusinesspractice,conductandethics.Thiswill
favourlargecompanies andthemainmanufacturing
centres,attheexpenseof(a)outlyingareaswherethe
distinction betweenrunningabusinessandsimpleself­
employment islessclear-cut ,and(b)smallandmedium­
sizedenterprises indecliningindustrialareas.Thecredit
positionofthelaggingregions—wheremoneyisalready
lesseasytocomebyandmoreexpensive—maythere­
foreremainunaltered andcouldevenworsen .
2.6.2.Whilecreditfacilitiesintheseareasneedtobe
modernized andrationalized ,thereisadangerthat
localbrokerswillbecomeentirelydependent onthe
mainfinancialmarketsandwillapplythesameselec­
tioncriteria (economies ofscale)totheirclients,again
favouringthelargerbusinesses .2.3.Thedisappearance ofexchange-rate uncer­
taintieswillbeparticularly important forcompanies ,
especiallysmallerfirms.Althoughoneoftheaimsof
EMUistohelpmaketheinternational monetarysystem
morestable,thecompletion oftheinternalmarketwill
initselfincreasetheEC'sworldcompetitiveness .This
couldleadtogreatfluctuations inexchangeratesinter­
nationally .Thelevelofexternaltradeinrelationto
intra-ECtrademeansthattherewouldberepercussions
onbusiness .2.7.Localandregionalauthorities willalsohave
difficultygainingaccesstothefinancialmarketina
situationwheretherewillbasicallybeonesingleinterest
ratesetbytheEuropean SystemofCentralBanks.
2.4.However ,thepossibility ofStateintervention
willundoubtedly bereduced .Itisveryimportant to
realizethatwhencertainvariables (exchangerateand
growthofmonetaryaggregates )becomefixed,others
(growthofGDP,productivity ,growthofinflationand
publicdebt,incomespolicy)takeonparticularsignifi­
cance.Thesevariables ,takentogether,willdetermine
thecompetitiveness oftheregionsintheSingle
Market (2).2.7.1.Thelocalauthorities intheleastdeveloped
regions(withlowertaxreceiptsandpresumably receiv­
ingfewertransfersfromcentralgovernment bythen)
willfinditmoredifficulttoobtainmoneyonthe
marketsandmakeinterestpayments .
2.7.2.Thiswillmakeitharderforthemtoinvestin
infrastructure andinthemeasures whicharevitalto
improvethesocialandeconomicenvironment .
2.5.Asinglecurrencyormonetarypolicywillnom­
inallymeanasinglerateofinflation .Inpractice,there
willbeahigherimplicitrateofinflationinlesscompeti­2.8.Afinalimportant pointisthatinamonetary
unionafixedexchangerateisnotreallythemeanof
allcurrencies ,butinsteadreflectsthesituationofthe
strongestcurrencies .Intheweakerregions,thiswill
meananovervalued currency .
(1)OJNoC329,30.12.1989,p.44.
(2)Forthisandanumberofothercomments onEMUwehave
madeuseofaninterview withProfessor PaoloLeonby
SilvanaParuoloinEuropaforum 11.5,underthetitle'Regioni
arischioconL'UEM',June1991.2.8.1.Thiscouldhavevariouseffectsonthelagging
regions :
—astheseregionsarelesscompetitive ,theyhave
difficultyattractingcapital,

21.4.92 OfficialJournaloftheEuropeanCommunities NoC98/57
—forthesamereason,thereisatendencytoimport
ratherthantoproducelocally,
—thus,evenaidandtransferswillhaveamultiplier
effectinthemostdeveloped regions,andthisis
whereinthefinalanalysistheywillbereinvested .3.2.4.Gradualchangesineatinghabits,andtheCAP
pricingandguarantee mechanisms ,haveplayedapart
inthis.In1989,aidfromtheGuarantee Sectionofthe
EuropeanAgricultural GuidanceandGuarantee Fund
(EAGGF )rangedfromECU3751milliontothe
Netherlands ,with4,7%oftheworkingpopulation
employed inagriculture ,to174milliontoPortugal,
with20,7%:theproportion isthereforeinversetothe
numberofagricultural workers .
2.8.2.Alltheseeffectsarefamiliarinconnection
withaidtodeveloping nations;buttheyhavethepossi­
bilityofdevaluingtheircurrencies ,astheWorldBank
andtheInternationa ]Monetary Fund(IMF)advise
insomecircumstances ,withalltheadvantages and
disadvantages thatthisinvolves .3.3.TheCAPhasdonelittletoclosethegapbetween
farmincomesinNorthernandSouthernEurope,orto
bringuptheincomesofthemoredisadvantaged or
outlyingareasofotherpartsoftheCommunity :
3.Theimpactofagricultural policy —firstly,becausepricingandmarketpolicyhasfavou­
redNorthernEuropeanproduce,withpriceguaran­
teesforunlimitedquantitiesandwithfullprotection
atfrontiersthankstothelevies,
—secondly ,becauseexternalprotection forMediter­
raneanproductshasbeenconsiderably reducedby
theCommunity 'sopentradepolicy,3.1.IntheCommunity ofTen'sagricultural sector
therewasamarkedcontrastbetweenthe'centre',where
GVA/UFL(Grossvalue-added perunitoffarmlabour)
wasveryhigh,andthe'outlying',uplandandother
disadvantaged ruralregionswhereitwaslow.Inthe
Community ofTwelve,regionaldisparities infarm
incomesareevenmorepronounced .Theweightedstan­
darddeviation inregionalGVA/UFLindicators rose
from46in1983to60in1987. —thirdly,becausestructurespolicyhasplayedamar­
ginalroleinthedevelopment oftheSouthern
regions,asaresultofthelowfundingfromthe
EAGGFGuidance Section .Therelationbetween
theGuarantee andGuidance Fundshasbeen—and
remains—unbalanced .3.2.Enlargement alsoextendedtheCommunity 's
Mediterranean regions,andaccentuated theNorth­
Southdivide;notonlydoNorthandSouthproduce
differenttypesofproduct,buttheirproduction struc­
turesandlabourproductivity alsodiffer.
3.4.Thesedistortingeffectsareimplicitlyrecognized
bytheCommission initsrecentCommunication tothe
Councilonthedevelopment andfutureoftheCAP
[doc.COM(91 )100finalof1February1991]:3.2.1.Agricultural supplyintheMemberStateshas
increasedoverthelast15yearsbyalmost2%per
year.However ,fortypicalMediterranean productsthe
increasehasbeenbelow1%,andthelargestrisehave
beenintypicalNorthernEuropeanproducts .
a)asystemwhichtiesagricultural supporttothequan­
titiesproducedencourages greaterproduction and
moreintensiveproduction methods .Thiscreates
surplusesandabusesnaturalresources ;3.2.2.Between1980and1987,fruitandvegetable
production roseby5%inDenmarkandtheNether­
lands,andby3%inBelgiumandFrance.InItaly,
Spain,PortugalandGreecetherisewasunder1,5%.
Between1981and1987,importsofagricultural produce
tothelatterfourcountries fromtherestoftheCom­
munityroseby104,4%,whiletheirexportstotherest
oftheCommunity rosebyonly44,6%.b)supportbasedonpriceguarantees dependsvery
largelyonthevolumeofproduction ,andistherefore
focusedonthelargestandmostintensivefarms.It
doesnottakesufficientaccountoftheincomesof
thevastmajorityoffamily-run smallandmedium
sizedfarms;
3.2.3.ThesefiguresshowthatnotonlyhasNorthern
Europeanagriculture keptitsholdontraditional pro­
ductionareas(cerealsandlivestock),increasing its
exports;ithasalsoboosteditsfruitandvegetable
production andreducedimports .c)between1975and1989farmers'purchasing power
increasedonlymodestly,despitea35%fallinthe
farmworkforce ;

NoC98/58 OfficialJournaloftheEuropeanCommunities 21.4.92
d)nevertheless ,farmspendingcontinuestorisestead­
ily.TheEAGGFGuarantee budgethasrisenfrom
ECU4500millionin1975and11300millionin
1980to31500in1991;
e)therearestillseriousdiscrepancies betweenMember
States'incomesperfarmer.4.2.However ,inareasofkeyimportance forsocial
cohesion (suchassocialsecurity,labourlegislation ,the
framework forcollectivebargaining ,andthirdcountry
immigration ),theCommunity 'spowersareextremely
limitedorconstrained bytheneedforunanimity .
Hence,outofatotalof7426piecesofCommunity
legislation operativeon1December 1989,only147(or
1,97%)concerned freedomofmovement andsocial
policy(*),whileimplementation ofthesocialaction
programme hasvirtuallybeenfrozen.
3.5.ThechangesmadeintheCAPsince1984(the
mainonesbeingtheintroduction ofmilkquotasin
1984andtheadoptionoffarmstabilizers in1988)have
failedtoachievethedesiredresults,particularly as
regardsthecurbingofproduction .4.3.Thisissharplyatoddswiththefrequently
voicedintentions oftheCouncil (moreespecially the
HanoverCouncilof27/28June1988)andtheCom­
mission (inparticular initsworkingpaperof
14September 1988onthesocialdimensionofthesingle
market),markedbytherepeatedrelaunchofsocial
dialogueandtheapprovaloftheCommunity Charter
ofbasicsocialrightsforworkers . 3.5.1.Firstly,theywerenottruereformsbecause
theywerenotaccompanied bymeasurestoavoidthe
formationofsurpluses .Secondly,theCAPstillignores
thestructural differences betweenthevariousregions.
Thishasledtothecreationofnewimbalances .Support
mechanisms favourthemoreadvancedagriculture with
largeintensivefarmsinareaswherethemarketsare
moredeveloped .Ofcourse,thisalsocreatesproblems
forsmallfarmsinsuchareas.4.4.ForthepurposesofthepresentOpinionthe
Committee isthusnotinapositiontoassesstheimpact
ofECsocialpolicyoneconomicandsocialcohesion .
Rather,itfeelsthattwoquestionsshouldbeaddressed :
—WhateffectdoestheabsenceofaCommunity social
policyhaveoncohesionbetweentheregions?
—Ontheotherhand,whatcouldthepotentialimpact
ofsuchapolicybe?3.6.Integration oftheEastGermanLanderinto
theCommunity agricultural systemwillrequiregreat
commitment .Theabolitionofcentralplanningand
adjustment totherulesoftheCAPwillradicallychange
thequantitiesandtypesofproduceandinvolveacom­
pletelynewpricingsystem.Areduction inthefarm
workforce—currently muchhigherthantheCom­
munityaverage—isalsolikely.Atpresent,farmsare
mainlygroupedincooperatives ;thisisalsolikelyto
change.4.5.Inthepresentsituation—withtheexceptions
notedin4.1—socialcohesionwithintheCommunity is
lefttoeconomic regulations andmeasures ,anddealt
withpurelyasaconsequence oftheimplementation of
thesinglemarket.Thisapproach hasbeenfollowed
sincetheadoptionoftheTreatyofRome,andwasonly
partlyredressedbytheSingleAct(theconsequences of
whichweremoreformalthansubstantive ).
4.Theimpactofsocialpolicy4.5.1.Thirty-three yearsaftertheTreatyofRome,
31yearsafterthesetting-up oftheEuropean Social
Fund,16yearsafterthefirstsocialactionprogramme
of1974,andfiveyearsaftertheSingleAct—asnoted
in1.1.1—theperipheral zoneoftheCommunity has
growntoembraceIreland,Portugal ,Spain,Southern
Italy,GreeceandEasternGermany .Thisperiphery is
markedbyweakersocialconditions ,althoughthese
conditions varygreatlyandareconstantly changing .4.1.TheCommunity hasbeenrelatively freeto
tacklecertainsocialissuesbecauseitisempowered to
dosobytheTreaties (e.g.labourmobility,healthand
safetyatwork,SocialFund),orbecausethemember
governments areconvincedoftheneedtoact(e.g.equal
opportunities formenandwomen,socialsecurityof
migrantworkers,training,socialintegration ofthe
handicapped ,fightagainstpoverty).Community Direc­
tivesandactionprogrammes inthesefieldshavehar­
monizednationallaws,filledgaps,andhighlighted the
issues.(l)Source:L'Europadelsociale,CENSIS,Ed.FrancoAngeli,
1991.

21.4.92 OfficialJournaloftheEuropeanCommunities NoC98/59
fortunategroups,andthiscouldleadtodefensivereac­
tionsandtheretentionofbarriers .However ,eventhemostdeveloped countriesinthe
centralareasoftheCommunity haveaccumulated their
shareofsocialdifficulties andalienation overthesame
period,withvarioussocialgroupsfacingspecificprob­
lemswhicharenottackledadequately (unemployment ,
povertyamongtheelderly,povertyingeneral,drug
addiction ).4.8.Alongside theworkofthestructuralfunds,the
Community hasanumberofpositiveactionandinfor­
mationprogrammes tohelpinthefightagainstunem­
ployment (Povertyprogramme ,Helios,ERGO,LEDA,
Misep,Eliseandsoon).
4.5.2.Themostimportant featureoftheapproach
followedhithertoisthatithasprovedincompatible
withthedecision (arguedforin1.1.8above)toopt
forahigh-techindustries/servicesdevelopment mix.In
suchacontext,amodernsocialpolicyandparticularly
itssocialrights,training,socialprotection ,labour-mar­
ketorganization andindustrialrelationscomponents
shouldbeviewednotasaconsequence ofdevelopment
butasaprecondition forit.Advancedeconomicdevel­
opment—atleastinEurope—requiresparticipation by
thesocialpartnersandsocialconsensus .4.8.1.Thelabourmarketalreadyoperatesatvarious
levels(local,regionalandnational).Completion of
theinternalmarketwillalsogiveitaCommunity
dimension .Thecoordination ofemployment policies
couldencourage mobilityandhelpfightunemployment ,
whilealsofacilitating thesocialandeconomic inte­
grationofthemoremarginalgroups.
4.5.3.Inordertoachieveindustrialdevelopment itis
necessarytoespouseandpromoteanindustrialculture
throughout society,includingthebusinessworldand
publicadministration toegetherwith,ofcourse,edu­
cationandtraining.4.8.2.Therearearoundeightmillionimmigrants
fromthirdcountries intheCommunity .Thenew
TreatydoesnotgivetheCommunity anyoverall
responsibility inthisfield,sotherewillcontinuetobe
nocommonpolicyforagroupwhich—particularly in
somecountries—isbeginning toexercicediscernible
pressureontheEuropeanemployment market;thisis
boundtogrowinthenearfuture,inpartowingtothe
openingoffrontierswithEasternEurope.
4.8.3.Immigration flowsfromnon-member Medit­
erraneancountries inparticular areputtingserious
pressureontheCommunity 'sSouthernregions,andthe
officiallabourmarketisunabletoabsorbthemall.
Largepocketsofundeclared labourarethusformed,
andwiththeremovalofinternalfrontiers thesewill
poseaproblemfortheentireCommunity .4.5.4.Abusinesssectorthatderivesitscompeti­
tivenessfromlowlabourcostsandpoorsocialprotec­
tion(madepossiblebytheabsenceofcommonsocial
provisions )canonlyattractcapitalandgeneratedevel­
opmentinsectorswhichareextremelylabour-intensive ,
lessadvanced ,andmostvulnerable tointernational
competition .However ,noteventhiscanbeguaranteed ,
partlybecauseofthelocationalfactorsdiscussedabove
andpartlybecauselowlabourcostsarenormallyoffset
bylowproductivity .
4.8.4.TheCommittee regretsthattheIntergovern­
mentalConference hasnotfinallyrecognized theneed
forCommunity responsibility inthisfield.
4.6.Overthe33yearsofthecommonmarket,differ­
encesbetweenwaysoflifeandculturalpatternshave
narrowed muchmoreswiftlyandmarkedlythanecon­
omicandsocialdisparities .Suchaparadoxical situa­
tion—especially whenitreflectsadeliberate pol­
icy—mustinevitably createsocialconflict,andthus
delaydevelopment .4.9.Forecasting theimpactofarealCommunity
socialpolicyonthedevelopment ofthedisadvantaged
regionsisamoredifficultmatter.Apartfromthegen­
eralimplications ,twoaspects—socialsecurityandcol­
lectivebargaining—areparticularly sensitiveinterms
ofexpenditure andcompetitiveness .
4.7.Finally,theabsenceofsocialcohesionlimitsthe
politicalandcivilrightsoftheCommunity citizenship
whichEuropeanUnionwillbring.Thisisparticularly
trueinthematteroffreedomofmovement andthe
righttochooseone'splaceofresidencewithinthe
Community .Significant differences insocialprotection
standards mightproveamagnetnotonlyfortheless4.9.1.Onthequestionofsocialsecurity,itshould
firstbenotedthatexpenditure isareflectionnotonly
ofbenefitlevels,butalsoofthewayinwhichschemes
arefunded,organized andadministered .Secondly ,
nationalschemesaretheproductofdifferinghistories
andtraditions ,andtheydiffersogreatlythatharmoniz­
ationisunthinkable inthemediumterm.

NoC98/60 OfficialJournaloftheEuropeanCommunities21.4.92
4.9.2.Theaimshouldbeupwardconvergence of
objectivesandpolicieswithregardtobasicneeds,so
thatallworkersandtheirfamiliesenjoythesamelevel
ofcover.Convergence willnaturallymeananincrease
insocialspendinginsomecountries .Thedifferences
betweenthepercentages ofGDPtakenupbysocial
expenditure inthevariousMemberStatescouldprovide
ageneralindicationofthesizeoftheincrease (see
1.1.18above).fore.This'humanresources 'factor,whichcanbe
definedasthesumofknowledge aboutproducts ,pro­
ductiontechnologies ,innovation andresearchcapacity,
andmarketing strategies ,aswellasawholehostof
socialqualitiesderivingfromgeneraleducation ,the
abilitytotakeindependent decisions,flexibility and
interpersonal relations,isofcrucialimportance if
regionalpolicyistotriggerself-sustaining growth.But
eventhoughthereisnodisputingtheabove,educational
andvocational trainingpolicies,structuresandsystems
allovertheCommunity havelaggedinadjustingtothe
newrequirements .
5.1.1.Inthe80stheproportion ofmanualworkers
inindustrydeclinedallovertheCommunity ,evenin
theless-developed countries ,althoughskilledworkers
stillformamuchsmallerproportion ofthetotalwork­
force(e.g.between1983and1988theproportion of
skilledworkersintheNetherlands wentupfrom21%
to24%ofthetotalworkforce whilstinSpainitwent
upfrom8%to10%).Alltheresearchshowsthatthis
trendwillremainstronginthe90s,partlyinrelation
tothefurtherdevelopment oftheadvanced services
Sector.4.9.3.Onthequestionofcollectivebargaining ,one
oftheissuesthatwasunderdiscussion atthe
Intergovernmental Conference onPoliticalUnion,and
forwhichasolutionbegantoemerge,ishowtoestab­
lishalegalbasisforEC-levelbargaining ,soasto:
—ensurebroaderandmorebindinginvolvement of
thesocialpartnersinECsociallegislation ,
—laydownaframework forEC-levelcollectivebar­
gaining,
—establishavalidation mechanism tomakeallframe­
workagreements applicable toallworkers,
—provideCommunity legislation tosupportthe
excerciseoftrade-union rights.5.1.2.Theshortageofskilledworkers (evenifthis
partlystemsfromageneralincreaseintheutilization
rateofproductive capacity )showsthattrainingand
education systemsareresponding sluggishly tothe
needsofindustry .Althoughtheproblemiswidespread ,
itsscale,causesandconsequences varyfromoneMem­
berStatetoanother . 4.9.4.AEuropeancollective-bargaining framework
wouldfirstandforemosthelpsolveEC-levelproblems
createdbygrowingeconomicintegration .Theseprob­
lemsmayaffectallworkers,orjustthoseemployedby
themultinationals .European-level negotiations would
notreplacenationalones,andwouldhavenodirect
impactonMemberStates'industrialrelationssystems.
Asisalreadythepracticeinsocialdialogue,thesubjects
fornegotiation shouldbedecidedindependently bythe
parties .5.1.3.Eveninregionswithstrongeconomies ,skills
shortagesmakelifedifficultforestablished firms—and
moreespeciallysmallandmedium-sized enterprises and
cottageindustrieswhichdonothavetheirowntraining
possibilities andhavedifficulty inrecruiting onthe
increasingly competitive labourmarket .
4.9.5.Sincecollectivebargaining ,trade-union rights
andrighttostrikearealreadyrecognized inallMember
States,labourcostsarenotlikelytobegreatlyaffected.
Inthemediumtermhowever,less-protected employees
shouldenjoybetterprotection andastartshouldbe
madeonthecloseralignment ofindustrial-relations
systems,withamovetowardsmoreadvancedforms
ofparticipation .Thisshouldhaveahighlybeneficial
impactontheprospectsofthemostdisadvantaged
regions.5.1.4.Inthemostdisadvantaged countriestheshort­
ageofskilledworkersisahandicaptotheestablishment
ofnewenterprises .Thisproblemiscompounded bythe
factthatinpracticetheskillsofworkerswithpaper
qualifications frequently failtomatchuptotheneeds
ofthenewindustrial sectors .Thedifficulties ofsmall
andmedium-sized enterprises—particularly inhigh­
techsectors—aremadeworsebecauseoftheimportant
positiontheyoccupyintheirareasofproduction .In
thesecountries highratesofunemployment thus
coincidewithaskillsshortage .
5.Educational andvocational trainingpolicy 5.1.5.Afurtherproblemiscreatedbythefactthat,
predominantly ,itisworkerswithmediumorhigher
qualifications whotendtomovewithintheCom­
munity;thisiscreatinga'braindrain'towardsthe
industrialheartofEurope,wherethereisalreadyahigh
concentration ofskilledworkersfromallregionsofthe
Community .5.1.The70sand80s,especiallythelatter,witnessed
radicalchangesinthecombination ofwealth-producing
factors;inparticular 'humanresources'cametothe

21.4.92 OfficialJournaloftheEuropeanCommunities NoC98/61
—in19896%ofadultsintheCommunity aged
between25and49,i.e.fivemillionpeople,(10%
oftheunemployed inthatagebracket)attended
trainingcourses,
—theproportion nevertheless variesfrommorethan
15%intheNetherlands andDenmark tolessthan
2%inGreeceandPortugal .
5.4.TheCommission 'sremitinthefieldofedu­
cationislimitedtomattersofinfrastructure andto
possibleinitiatives inthefieldofresearchanddevelop­
ment.Itisableindirectlytohelpreducedifferences
betweentheMemberStatesaswellasnarrowthegap
betweentheneedsofsocietyontheonehandandthe
serviceprovidedbytheeducational systemontheother.
Itscontribution ,however,ismarginal .Whatisparticu­
larlyusefulandpromising istheresearch (promoted by
theCommission ),andtheexchangeofinformation ,on
thefuturedevelopment ofhighereducation tomakeit
compatible witheconomic ,social,demographic and
financialchanges;suchworkcanresultinthesetting
ofcommonobjectives andtheestablishment oftrends
whichwillbearfruitsometimeinthefuture.5.2.Thegeneraleducational andvocational training
systemsoftheMemberStatesvarygreatly,bothquanti­
tativelyandqualitatively .Suchdifferences ,whichare
ofdecisiveimportance ,include :
—thelengthofcompulsory education andprimary
schooling (generally shorterinobjective 1
countries ),
—thepreparatory roleoftheintermediate phasesof
educational systems (normallymuchlessselective
inobjective 1countries),
—educational attendance anddrop-outrates,accord­
ingtodifferentagegroups .
5.2.1.Inparticular :
—theproportion ofstudents,traineesandapprentices
inthe15-19yearagebracketvariesfrom40%in
Portugalto85%inGermany ,
—inthe20-24agerangethisproportion variesfrom
26,1%inDenmarkto8,4%inIreland,
—about45%of16year-oldsabandontheirstudiesin
countriescontaining objective 1regions,asagainst
about5%inothercountries and15%intheCom­
munityasawhole(figuresforthe14-year-old age
groupare15%,3%and7%respectively ).
5.2.2.Ruralareas,where50%ofthepopulation
lives,offeradisturbing picture .Educational facilities
therearedwindling andtrainingisinadequate ,being
increasingly gearedtourbanandindustrialneeds.5.5.Inthefieldofvocational training,ontheother
hand,theTreatiesbothlaydownobjectivesandprovide
instruments .Actioncanthusbetakenthroughout the
Community butitisconcentrated mainly [through
structuralfundsandparticularly theEuropean Social
Fund(ESF)londirectmeasurestopromoteemployment
ina)laggingregions,b)areasofindustrialandsectoral
restructuring ,andc)areasofhigh,long-termunemploy­
ment.TheEuropeanCentrefortheDevelopment of
Vocational Training (Cedefop )isavitalinstrument in
thisconnection ,beingnotonlyimportant becauseof
theinvolvement ofthesocialpartnersbutalsobecause
ofitsgreatpotential .
5.5.1.Giventhelevelofresources ,theshareofstruc­
turalfundsearmarked foreducational andtraining
facilitiesin1989-1993 issignificant .Nevertheless ,we
mustnotforgetthat:
—thedemandemanating fromMemberStateshas
farexceeded available ECfinancialresources and
amountsto289%ofthefundsallocatedtoobjec­
tives3and4,
—actiontakeninconnection withobjectives 3and4
isroughlyequivalent to4%ofMemberStatefund­
inginthesamearea.5.3.Publicspendingonvocational trainingissub­
stantial,thoughitdoesnotgiveafullpicture,asit
excludescorporate andpersonalspending .Public
spendingrangesfrom0,1%ofGDPinItaly,andslightly
morethanthatinSpain,toalmost0,6%ofGDPin
Denmark andIreland .Generally speakingthecon­
clusioncanbereachedthatvocational training (includ­
ingcoursesorganized byindividual firms)ismore
prevalent inMemberStateswhereproductivity is
higher—andthegapiswideningallthetime.
5.3.1.Ofequalimportance arethedifferences
betweenthetwomajorapproaches tovocational train­
ingi.e.:
—countrieswhichadoptamorepreventive approach
andconcentrate onraisinggeneralskilllevels,
—countrieswhichfocusfirstandforemostonprovid­
ingtrainingforthemostdisadvantaged social
groups .
5.3.2.Thereareotherconsiderable differences inthe
provisionofvocational training :Thus,giventhepresentmismatch betweenneedsand
availablefunds,andbetweennationalandCommunity
commitments ,itisdifficulttoevaluatetheimpactof
Community action,despitepraiseworthy effortsto
ensurethataidisconcentrated inareaswhereitis
needed.

NoC98/62 OfficialJournaloftheEuropeanCommunities 21.4.92
5.5.2.Inthisconnection ,however ,wefeelthatafew
comments andcriticisms arecalledfor:—thereispoorcoordination betweentheState,
regions,localbodiesandfirms,eachchannelling its
separateresourcesintocertainareasofvocational
training,whilstthereareconsiderable differences
inexperience andknow-how whichareextremely
prejudicial totheweakestsmallandmedium-sized
enterprises andlocalbodies,
—thereisageneraldisparitybetweenthegoalsof
economicdevelopment andthegoalsofvocational
training,withthethreefoldconsequence ofa)insen­
sitivitytochangesindemand,b)inefficient use
ofavailableresources ,andc)bottlenecks inthe
processesofeconomicgrowth,
—thereisopposition to,anddifficulties intheway
of,attemptstomakethesocialpartnersandall
interestedpartiesworktogether,
—actionisnottakenearlyenoughbecauseofdifficult­
iesinmobilizing thedifferentsourcesofpublic,
private,local,nationalandCommunity finance,
—somegovernments makeimproperuseoftraining
coursesinordertodisguiseunemployment ,
—whenprofitsarelow,largecompanies tendtosacri­
ficetrainingresourcesfirst.—thereisasenseofunrealityandpointlessness about
planningaidmeasureswhichinvolveonlyabout
4%oftotalexpenditure ,
—thereisatendencytoconcentrate ESFaidonlarge­
scalefirmswhichareundergoing restructuring ,to
thedetriment ofsmallandmedium-sized
enterprises ,
—therearetoomanyintermediaries (particularly in
thecaseofsmallandmedium-sized enterprises )
betweenthesourceoffinanceproperandtheagent
directlyresponsible foraspecificactionproject;the
costsoftheactivitiesofsuchintermediaries amount
to30%oftheactualESFfunding,
—thecriterionofadditionality ,althoughimportant ,
createsdifficulties forlessaffluentregionsandlocal
authorities ,
—insomecasesthereislittlecoordination between
CSF(Community supportframeworks )andother
Community instruments andprogrammes (Force,
Eurotecnet ,Comett,LEDA,ERGO,Handynet ,
Helios,Petra,Erasmus )which,althoughoperating
withverylimitedfunds,arefrequently ofgreat
strategicimportance fordevelopment .Inthis
respecttheCommittee welcomesthepathtakenby
theCommission withtheMemorandum itissued
lastyearonrationalization andcoordination of
vocational trainingprogrammes .6.Environment policy
6.1.TheCommunity 'senvironment policywaslaun­
chedinOctober1972bytheParisEuropeanCouncil
andwasgivenalegalbasisbythe1987SingleAct.The
ensuing200legalinstruments havecometoprovidean
importantreferenceframework forthedevelopment of
nationallegislation ,whichreflectspublicopinionand
helpstoheightengeneralawarenessoftheproblem .5.6.Problems ,however ,arenotonlyfinancialbut
alsoandaboveallstrategic,regulatory andorganiza­
tional.Overthelastfifteenyearsresponsibilities for
vocational traininghaveshiftedmoreandmoretothe
regions (withsomeexceptions ,forexampletheUnited
Kingdom).Thisdecentralization andthedeclinein
intra-Community andinter-regional migration show
thattherehasbeenaspatialshiftwithregardtoecon­
omicactivityinthatregionalandlocalbodieshave
greaterresponsability fordevelopment whilstrespecting
culturalandsocialidentity .Thereformofthestructural
fundshasreinforced thistendencybyopeningupthe
possibility offinancebeingprovidedatregionallevel.6.1.1.AnECsurvey('Europeans andtheirenviron­
ment')conducted inOctober1988foundthat55%of
ECcitizensconsiderenvironmental protection tobe
anessentialaspectofdevelopment .A1989surveyby
NOWEA (Diisseldorf )revealedthatenvironmental pro­
tectionisconsidered anurgentproblemandthat,sur­
prisingly ,awareness isnotgreaterinthemore
developedcountries (85%inItalyand84%inGreece;
56%inFranceandIreland).5.6.1.Theregions,particularly objective 1and2
regions,findthemselves todayadministering both
emergency socialpoliciesandmedium-term policies .
Thereisajustifiabletendencytogivepreference tothe
latter,particularly inthestrongesteconomies .This
positivedevelopment ,withitsproliferation andvariety
ofinitiatives ,hidesanumberofgeneraldifficulties ,
namely :6.1.2.Community expenditure hasincreased inline
withthisgrowthinawareness .Until1987,ECfinancial
contributions stoodataroundECU60millionperyear.
AroundhalfofthesewereforprojectsoftheEuropean

NoC98/63 21.4.92 OfficialJournaloftheEuropeanCommunities
RegionalDevelopment Fund(ERDF).Expenditure over
theperiod1988to1993willtotalaroundECU
4000million,withanannualaverageofECU
650million .Around90%ofthiswillcomefromthe
structural funds,withtheEuropeanInvestment Bank
(EIB)providinganadditional ECU2000millionper
year.Nevertheless thespecificfinancialinstruments
continuetoplayamarginalrole.
6.2.Inpractice,however,actionhasbeenlittlemore
thanaracetocontainthedamagecausedbyeconomic
growth;problemshavebeentackledaposteriori,at
significant costtothepublicpurseatalllevels.Econ­
omicgrowthhasbroughtwithitagreaterspatialcon­
centration ofeconomicactivities ,urbanization ,aflight
fromtheland,intensivefarming,andanincreasein
roadtrafficandintourism .Thesehaveledtoan
increaseinwaste,airandwaterpollution ,thedisap­
pearanceoffaunaandflora,andshrinkageoftheareas
ofunspoiltcountryside .
6.2.1.Community policiesrarelytakeaccountofthe
longertermcostsofenvironmental damage :
—theCAPisaglaringexampleofthis,withrepayment
mechanisms whichencourage intensivefarmingand
highyields,
—butnationaltransportpolicieswhichgivepriority
tomotorways arealsoacaseinpoint,
—energypolicytoodoesnotgivesufficientsupport
tothedevelopment ofrenewable energysourcesand
therationaluseofenergy.—takingaccountoftheenvironmental implications
ofeconomicandland-useplanning .
However ,theauthorities 'actionisgreatlyaffectedby
thefinancialandbudgetarypossibilities ofthedifferent
countries .Theresultsareinevitably uneven,andthis
distortscompetition .
6.4.Industryisfrequently responsible forenviron­
mentaldamage (causedbyitsproducts,production
processesanditsoftenincompatible technologies );but
industryisalsoresponding todemand,anditoperates
according totherulesofthemarket.Theproblemis
howtotakeaccountofthiswhenframingenvironmen­
talprotection legislation .
6.5.Acompany'schoiceoflocationislikelytobe
influenced interaliabyenvironmental regulations and
therelevantinfrastructure ,insofar—depending onthe
sectorinvolved—astheyaffectcapitalcosts.Itshould
however benotedthat:
—industryisnowpayinggreaterattentiontoenviron­
mentalproblems ,
—themanufacture of'green'productshasbecomea
profitable lineofbusiness .
6.6.TheEC'speripheralMemberStateshavespecial
environmental problemswhichareverydifferentfrom
thosefacingtherestoftheCommunity .Mostofthe
undeveloped areashousinguniquespeciesofinter­
nationalimportance arefoundintheseregions.These
specieshavesurvivedbecauseofthelackofdevelop­
ment,andtheircontinued conservation isintheinter­
estsofthewholeCommunity .Theconservation ofsuch
areasisexpensive ,andthebenefitsintermsofprofit
andemployment aremodest .
6.6.1.Atthesametime,theenvironmental infra­
structureandlegislationoftheseregionsisinsufficient
toprotectthemfrom:
—therapidandunregulated development ofroads,
built-upareas,trafficandtourism,
—intensiveurbangrowthwhichoverthenextten
yearsisexpectedtobeparticularly stronginthe
citiesofSouthernEurope,
—ruraldepopulation ,whichencourages endemicsoil
erosion,
—thesteadydestruction ofwoodlands andforests,
—theland-useproblemscreatedbytherapiddevelop­
mentoftourism (especially inGreece,Spainand
Portugal).
6.7.Theseregionshaveinsufficient resources to
securethedevelopment whichisvitaliftheyaretoItshouldbenotedthatpowerstationsandroadtrans­
portaccountfor60%ofsulphurdioxideemissions ,
80%ofnitrogenoxide,55%ofcarbondioxideand
40%ofhydrocarbons .
6.2.2.Itisthereforenotsurprisingthatdevelopment
inthelessadvantaged countriesandregionsfollowsthe
traditional path,andfocusesoneconomies ofscale
ratherthanreducingenvironmental costs.Hencenew
imbalances arise.
6.3.Community directivesrightlymakegreatplay
oftheprincipleofsubsidiarity ,leavingnational,
regionalandlocalauthorities toimplement Community
principlesandobjectives by
—layingdownthelegalframework ,

NoC98/64 OfficialJournaloftheEuropeanCommunities 21.4.92
6.9.3.Therestructuring ofproduction andthemod­
ernization ofinfrastructure broughtaboutbyfaster
growthprovideanopportunity tointroduce lesspol­
lutingtechnologies .
6.9.4.Byincorporating environmental consider­
ationsintoeconomicpolicy,wecouldgiveanewboost
toeconomicandsocialcohesionandhelpironoutthe
imbalances intheoutlyingregions.
6.9.5.Environmental protection ,thecreationofcon­
ditionsfavourable tothereclamation ofderelictland,
preventive actionandthereduction ofeconomic
environmental costsshouldallleadtoamorebalanced
geographical distribution ofeconomic activities .This
isbecauseeconomic policiestodayareheavilyinflu­
encedbyentrenched economic interestsfocusingon
particular areas.createjobsandwealthwhileatthesametimepreserving
acommonecological heritage .Thereisarealdanger
thatnotonlyimportant biotopeswilldisappear ,but
alsowiderhabitatsofmorelimitedvaluethatareless
wellprotected .
6.7.1.ThereportbytheTaskForceontheenviron­
mentandtheinternalmarket (1992—Theenvironmen­
taldimension )containssomeparticularly tellingdata:
—aneconomicsimulation oftheimpactofthecom­
pletionoftheinternalmarketontheGreekeconomy
showedthattheelimination ofadditional emissions
ofsulphurdioxideandnitrogenoxideswould,in
certainconditions ,reducethegrowthrate,
—itisestimatedthatItalyhavetospendECU13000
milliontoimplement Community provisions (the
figureisalsoofindicativevaluefortheotherSouth­
ernMemberStates),
—Andalusia wouldhavetospendpesetas227000
million .
6.7.2.Itmustalsoberemembered thattheleast
favouredregionsgenerallyhavetoimportenvironmen­
taltechnologies ,know-how andprogrammes ,andthe
benefitsarethustransferred backtothemoredeveloped
countriesandregions .Forexample,technologies for
cuttingsulphurdioxideandnitrogenemissions are
mainlyimportedfromGermany ,Sweden,theUnited
StatesandJapan.
6.8.Indecliningindustrialareas,landreclamation
isvitalforreneweddevelopment ,andlargesumsfrom
thestructural fundsareallocatedaccordingly .How­
ever,financing isextremelydifficultbecause :
—nodirecteconomicoremployment-related benefits
canbeexpected ,
—the'polluterpays'principlecannolongerbe
applied.6.10.Between1,2and1,5millionpeopleintheCom­
munityareemployed inanactivitydirectlylinkedto
environmental protection .Theygeneratevalue-added
ofaroundECU50000million,i.e.around 1%ofEC
employment andGDP.
6.10.1.Theimportance ofthesectorvariesconsider­
ablyfromoneMemberStatetothenext.Germany
accountsfor40%oftheECtotalofsuchactivities ,
whilethecombinedtotalofSpain,Ireland,Greeceand
Portugaldoesnotreach4%.
6.10.2.Thesedifferences reflectthescaleofthepol­
lutionproblem,thenatureofthelegislation andthe
scaleofpublicspending .
6.10.3.Germany ,France,theUnitedKingdomand
theNetherlands currentlyaccountfor80%ofemploy­
mentinthesectorwhichmanufactures anti-pollution
equipment .
7.Researchanddevelopment policy
6.9.Intheory,thelastdecadehasembraced the
principleof'sustainable development 'whichtakes
accountofenvironmental requirements andseeksto
rebutthethesisthatdevelopment andenvironmental
protection areincompatible .Theprincipleunderlies
Article130RoftheTreaty.
6.9.1.Inpractice,thisprinciplehasbeenlittle
appliedeveninCommunity policies.
6.9.2.Yetthecompletion oftheinternalmarketand
theprocessofEuropeanunionprovideahistoricand
uniqueopportunity tosecureatypeofdevelopment
whichrespectstheenvironment .7.1.WiththeSingleAct,researchpolicygaineda
formalplaceintheEECTreaty.TheSingleActcontains
provisionforanR&Dframework programme which
istobevalidforanumberofyearsandistobeadopted
unanimously bytheCouncil;specificprogrammes ,
whichmaybeadoptedbyaqualifiedmajority ;and
supplementary programmes ,underthe'variable
geometry'arrangements .EC-organized researchmay
involvethreetypesofcooperation :
—researchconducted bytheEC'scommonresearch
body,theJointResearchCentre(JRC),takingthe
formofdirectactionsreceiving100%ECfunding,

21.4.92 OfficialJournaloftheEuropeanCommunities NoC98/65
—researchcarriedoutatuniversities ,researchinsti­
tutesorprivatefirmsonthebasisofsharedcost
contractsdrawnupwiththeCommunity (indirect
action),
—concertedaction,wherebyMemberStatesmaymeet
tocompare (andcoordinate )theirgeneralresearch
programmes .apredetermined geographical basis,andtheprinciple
ofexcellencehardlyfavourstheregionswiththepoorest
laboratory facilitiesandresearchers .Theparticipation
ofindividualMemberStatesinthespecificprogrammes
isthuslargelyareflectionofthetechnological skills
builtupatnationallevel,andofthedynamism oflocal
universities andindustries inaparticular sector.Atthe
riskofoversimplifying matters,then,theproblemboils
downtoastarkalternative :whethertofinance'the
best'ortosupportthemostneedy.Thechoiceis
obviously highlypolitical,andhaslong-term impli­
cations.Inthemeantime ,onethingiscertain :atCom­
munitylevel,preference isinpracticebeinggivento
thecriterionofexcellence .7.2.ThevastmajorityofresearchinEuropeisstill
fundedandcarriedoutatnationallevel.Community
researchexpenditure in1990accountedforonly3%of
ECappropriations forpayment,andaround2%of
MemberStates'publicexpenditure onR&D.
7.5.2.TheCommission reportlistingthebreakdown
ofcontractsdrawnupunfortunately doesnotgivea
clearpictureoftheroleofcontracting partiesinobjec­
tive1and2regions.Thisshortcoming shouldberecti­
fiedassoonaspossible .TheCommission shouldpre­
cedeeachreportwithatabledetailingtheactuallevel
ofresourcesallocatedtocontracting partiesinsuch
regions .7.3.Thebudgetofthethirdframework programme
(ECU5700million)issomeECU2000millionlower
thanthesumproposedbytheCommission .Fundsare
dividedamong15specificprogrammes coveringsix
priorityareasandgroupedintothreemainstrategic
sectors :
—enablingtechnologies (54,5%oftotalfunds),
—management ofnaturalresources (36,4%oftotal
funds),
—management ofintellectual resources (9,1%oftotal
funds).7.5.3.However ,weareallawareofthecurrent
tendencyofhigh-techindustriestoclusterinareaswith
goodtransportandtelecommunications infrastructure ,
nearuniversities ,researchandtraininginstitutes ,and
financialcentres(M.
7.6.UnderthetermsofArticle130BoftheTreaty,
economic andsocialcohesion istobeanaimofthe
commonpolicies,includingR&Dandinnovation
policy.ADGXIIpapershowsthat,atoperating level,
Community researchpolicytakesaccountofcohesion
by:7.4.AtCommunity level,thereisaseriousimbalance
betweenthecommitments ofdifferentMemberStates
andbetweenthosewithinindividual countries .Three
quartersofoverallEC-levelspending (i.e.publicand
private)onR&Din1989wasconcentrated inGer­
many,FranceandtheUnitedKingdom .
7.4.1.Thedistribution withinMemberStatesisalso
veryuneven.InItalyin1982,72%ofR&Dexpendi­
tureand70%ofR&Demployment wereconcentrated
intheNorthWest,whiletheSouthenjoyedonly5%
ofR&Dexpenditure andemployment .Ahighgeo­
graphicalconcentration ofresearchwasalsofoundin
Spain;in1983Madridaccounted foroverhalfoftotal
R&Dexpenditure ,followedbyCataloniawithsome
16%.AsimilarpictureemergedinPortugal ,withthe
Lisbonareatakingup72%andcoastalregionsasa
wholeaccounting for93%ofthenationaltotal.Further
analysisrevealsthatthetechnological gapwithinthe
Member StatesiswiderthanthatbetweenMember
States .7.6.1.Forecasting andassessment
—regionalatlasofresearchandtechnological develop­
ment(R&TD)currentlybeingdrawnup,
—studiesontheimpactofECprogrammes onthe
scientificandtechnicalfabricofeachMemberState,
—supportforthestructuralpolicies (referencestudies
fortheStrideprogramme ,andotherstudiesonthe
situationinobjective 1,2,3and4regions),
7.5.Thekeyquestion istowhatextent(ifatall)
Community R&DpolicyhashelpedtoboosttheEC's
economic andsocialcohesion .
7.5.1.Thelessadvantaged regionscontinuetoplay
amarginalroleinCommunity R&Dprogrammes .
Framework-programme resourcesarenotallocatedon(')Mercatounicoeintegrazione europea,bySilvanaParuolo,
Ediesse-CGIL ,1988.

NoC98/66 OfficialJournaloftheEuropeanCommunities21.4.92
—forecasting (FASTprogramme ). ofapplications forstructural fundassistance for
research .
7.6.2.Consideration inthespecificprogrammes of
theneedforcohesion :
—particularly whenselectingprojectsandinthefinal
assessment ofprogrammes ,
—useofECstructural measures (STAR,Valoren,
Envireg,Telematique ,etc.),
—studygrantsfortransnational exchanges ;specific
actionstoboostcohesion ,
—exploration ofnewR&Dworkincollaboration
withotherpartners,
—andthenewcooperative researchactiontosupport
smallfirmsinoutlyinganddisadvantaged regions,
undertheBrite/Euramprogramme andthenew
specificprogramme onindustrialtechnologies and
materials (1990-1994 ).8.Industrialpolicy
8.1.Viewsdifferastowhetherthereisreallysucha
thingasaEuropeanindustrialpolicy,butonecansafely
saythatthereisnocentrewithresponsibilities for
channelling aidinaccordance withanyoverallstrategy .
8.1.1.Itispossible,however,todrawupabyno
meansexhaustive inventoryofthedifferenttypesof
actionswhichmightfallundertheheadingofindustrial
policy:
—long-established Community policiestofightmon­
opolies,
—'selective'Community aidtohelpcrisis-ridden sec­
tors(steel,shipbuilding ,multi-fibre arrangement
sectors),suchaidbeingintendedto'defend'rather
thanpromotetheexpansion ofthesectorsinques­
tion,
—awiderangeofCommunity actionstosupport
enterprisecreation,jobcreation,thepromotion of
scientificandtechnological cooperation between
firmsandresearchinstitutions inthedifferentMem­
berStates,andinnovation ;suchactionsinclude,for
example :
•non-quota ERDFactions,
•thepromotion ofBICs(BusinessandInnovation
Centres)andEBICs(EuropeanBusinessandInno­
vationCentres)plustheirnetworks ,
•theCommunity 'sframework programme for
researchandtechnological development ,
•theSprintprogramme (strategicprogramme for
innovation andtechnology transfer),
•Community actionprogrammes infavourof
smallandmedium-sized enterprises ,
•Community trainingprogrammes ,
•Community programmes formulated withinthe
framework oftheactivities oftheCommission 's
Directorate-General responsible forrelations
withthirdcountriesanddevelopment aid,
•aidfromthestructuralfundsforproductive and
infrastructure investment ,
•thefinancingofstudiessuchasthePanorama of
ECIndustry1990,etc.
8.1.2.Someofthese'policies'areexamined inother
chaptersofthisOpinion,butwewouldmaketwo
generalcomments here:
—theaidandpoliciesreferredtoabovearenotpart
andparcelofanycomprehensive ,coherentstrategy,
—notwithstanding structural aid,including EIBand
NewCommunity Instrument (NCI)operations ,
conversion loansoftheEuropean CoalandSteel
Community (ECSC),thedevelopment ofEuropean7.6.3.Thishasspawnedaseriesofrecommendations
fromDGXIIontheneedforgreatercoordination
betweentheframework programme andthestructural
funds;aspecialfundtoinvolvefirmsinthelessadvan­
tagedregionsmorecloselyintheframework pro­
gramme;anincreaseinR&Dappropriations within
theECbudget;newinitiativesforyoungpeople;devel­
opmentofnetworksofexcellence ;newsocialscience
andmanagement programmes ;simplification ofthered
tapehampering accesstosmallprojects;andstatistics
onthebreakdown ofcontracts .
7.7.OtherpointsemergefromtheFourthPeriodic
ReportontheRegionsoftheCommunity .Thereport
stressesthattoreducethedisparities causedbythe
concentration ofR&Dactivitiesinthecoreregions
oftheCommunity ,relativelyhigherratesofincrease
inR&Dexpenditure andinnovative activitieswould
berequiredinproblemregionsingeneral,andinlagging
regionsinparticular .
7.8.Stressshouldalsobelaidonthelackofcoordi­
nationbetweentheframework programme andstruc­
turalmeasurestosupportresearch,andthelownumber

21.4.92 OfficialJournaloftheEuropeanCommunities NoC98/67
BusinessandInnovation Centres,pilotschemessuch
asEuropartnerships ,andaninventoryofthelocal
development potentialofregions,thereisnosign
thatanyspecialattentionhasbeenpaidtoeconomic
andsocialcohesion .
8.1.3.TherecentCommission Communication on
IndustrialPolicyinanOpenandCompetitive Environ­
ment(Guidelines foraCommunity Approach )rep­
resentsasteptowardsrecognition oftheneedforan
authenticCommunity industrialpolicy,butitgivesno
indication ofhowtomoveclosertowardsrealeconomic
cohesion :
'Theadjustment oflessfavouredregionstothe1992
SingleMarketisbeingassistedbytheCommunity 's
Structural Funds,whichwereenhanced forthis
purpose .Theyareoperatingonthefactorswhich
arecrucialtothecompetitiveness ofbusiness,such
astheprovisionofadvancedinfrastructures andthe
qualityofhumanresources .Economic convergence
betweenMember Statesandgreatercohesion
betweenregionsoccursmorespontaneously among
countriesandregionswhichhavereachedamore
maturelevelofeconomic development .Itis
importanttoensurethatindustries inthoseregions
whicharesignificantly lesshighlydeveloped than
thecentralregionsoftheCommunity haveaccess
tothesortofinfrastructures whichwillenablethem
tocompeteonmoreequaltermsnotjustwithother
regionswithinEuropebutalsoontheglobalmarket.
Dialogueandpartnership betweenindustryandthe
publicauthorities haveavitalroletoplayinthis
process.'sectorsmaybeamended bytheCommission atany
time.
8.2.2.Thenewprovisions drawnupbytheDGfor
theInternalMarketandIndustrialAffairstoimplement
thenewERDFRegulation statethattheCommission
mustreceivepriornotification ofallindustrialinvest­
mentprojectsexceeding ECU10million,irrespective
ofthesensitivityofthesectorinquestion .Thismeans
thattheECU1millionthreshold hasbeenabandoned
andraisedtoECU10millioninthecaseofsensitive
productsandsectors(textiles/clothing,footwear ,car
components ,consumerelectronics ).Allinvestment pro­
jectsincrisis-ridden sectors (steel,shipbuilding and
syntheticfibres)mustbenotifiedtotheCommission in
accordance withCommunity rules.Inthemotorvehicle
sector,whichincludesthemanufacture ofvehicles,their
engines,aswellascomponents promoted byamotor
vehiclemanufacturer ,Commission decision89/C123/
03isapplicable .According tothisdecisiontheCom­
missionmustbegivenpriornotification ofinvestments
wherethecostoftheprojectexceedsECU12million.
8.3.Completion ofthefrontier-free singlemarket
willexposehithertoprotectedsectorsandmarketsto
greatercompetition ,speedingupprofound changes
withregardtoinnovation andmodernization ,restruc­
turing,rationalization ,specialization andconcen­
tration .
8.3.1.Inseekingtoidentifythoseregionswhichwill
bemoststronglyaffectedbytheincreaseincompetition
andtheconsequent restructuring ,weneedtobearin
mindthatsectoralanalysestendtoberelativelyinaccur­
ate.Eveninsectorswheredemandisincreasing slowly,
regionswhichconcentrate onspecificmarketswithin
thesesectorsmaywitnessconsiderable expansion .
8.3.2.Wealsoneedtotakeintoconsideration the
factthatthearrivalofthesinglemarketin1993,
togetherwiththefurtherenlargement oftheCom­
munity,willnotonlyhaveaneffectonindividual
sectorsbutwillalsoleadtogreater'inter-industry '
tradeandgreateruseoftheprincipleofcomparative
advantage .Arecentsurveyofthemostimportant
studiesinthisareacanalsobefoundintheFourth
PeriodicReportontheRegionsoftheCommunity .
Tradebetweenthe'central'countries (Benelux,France,
GermanyandtheUnitedKingdom )tendstobe'intra­
industry'inkind.Tradebetweenthese'central'
countriesandthemore'peripheral 'MemberStates
tends,ontheotherhand,tobemuchmore'inter­
industry',reflectingsubstantial differences inlevelsof
development andavailability ofresources (2).TheCommittee 'sOpinion(^onthesubjectendorsed
thegeneralapproach ,butfeltthatinsufficient account
wastakenoftheregionalandsocialdimensions .
8.2.ThenewCommunity rulesonsensitiveproducts
andonproductsincrisis-ridden sectors—drawnupby
theCommission 'sDirectorate-General ontheInternal
MarketandIndustrial Affairsforthepurposesof
implementing theCommunity supportframeworks
(CSFs)andoperational programmes —showhowasur­
veillanceandmonitoring policy(i.e.anindirectindus­
trialpolicy)canbeappliedinsuchawayastoaccom­
modatetheobjectiveofcohesion .
8.2.1.Thenewruleswillbeappliedingeneraltoall
aidschemescoveredbytheCSFs.Intheadministration
oftheaidprogrammes theapproachnowwillbemore
flexible.Thelistofsensitiveproductsandcrisis-ridden
(2)Inter-industry tradeistradeinproductswithwidelydiffering
technological content,asbetweenadvancedandbackward
countries .Intra-industry trade,ontheotherhand,istrade
inhigh-techproducts,asbetweencountrieswithadvanced
economic structures . (i)OJNoC40,17.2.1992,p.31.

NoC98/68 OfficialJournaloftheEuropeanCommunities 21.4.92
8.3.3.Thefullexploitation ofcurrentcomparative
advantages wouldmeanthatlessdevelopedregionsof
theCommunity specializeevenmoreinlabour-inten­
sive,low-techindustries (traditional consumer indus­
triessuchastextiles,clothing,footwearaswellasother
assembly-oriented industries),whilstcentralregions
specializemoreincapital-intensive industries ,research
anddevelopment .Thedisadvantages ofthis,however,
havebeendemonstrated clearlybytheCommission :
perpetuation ofthedisparities betweenthecentreand
theperiphery ;greatervulnerability ofless-developed
regionstoincreasingcompetition fromdeveloping and
EasternEuropeancountries ,etc.(J).8.4.1.TheCommission 'sactivitiesonbehalfofsmall
andmedium-sized enterprises sparkedoffaninitial
seriesofactionsinthe70s.In1986thesewerebrought
togetherwithinanautonomous ,clearframework sup­
portedbytheCouncil'sinitialresolution onanAction
Programme .Adopting thepremisethatitisthe
responsibility offirmsthemselves todecidethebest
objectives andhowtoattainthem,theCommunity
limitsitsroleto(a)helpingentrepreneurs gainaccess
tothenecessaryinformation ,(b)assistingthemintheir
searchforpartners,and(c)creatingafavourable legal
andeconomic environment forthedevelopment of
smallandmedium-sized enterprises inthesingle
market .
8.3.4.Inthelongrun,theadjustments requiredof
themostindustrialized MemberStatesinthecontext
ofthesinglemarketseemtoimplytwopossiblescen­
arios:1)theEuropeanization offirms(ascenariowhich
presupposes thatthenecessarymeasuresaretakenso
thatthefirmsfromoneMemberStatehavethesame
rightsandobligations inotherMemberStatesason
theirownnationalterritory);2)incentivestoencourage
'nationalchampions '.
8.3.5.Ananalysisofthedynamicadjustments made
inthelessdeveloped countriesoftheCommunity
(nationalinvestment ,foreigninvestment andbusiness
strategies )showsthatinvestment activitybetween1985
and1989wasparticularly stronginSpainandPortugal
butfellinGreece .Manyauthorsconsiderthatthe
adjustment costsnecessitated bytradeliberalization are
higherwhenliberalization leadstointer-industry rather
thanintra-industry specialization .8.4.2.Themeasures launched include :
—theestablishment ofEuroInfoCentres (EIC)for
smallandmedium-sized firmsinallMemberStates;
suchCentreshelpanswersmallandmedium-sized
enterprises requestsforinformation concerning (a)
thesinglemarket,(b)opportunities inotherMem­
berStatesand(c)possibilities ofaccesstoCom­
munityfunds,
—theintroduction bytheCommunity ofcooperation
instruments suchastheCommunity BusinessCoop­
erationCentre,whichisopentoentrepreneurs seek­
ingtocooperate directlywiththeircounterparts
inotherMemberStates;theBusinessCooperation
Network (Bc-Net),whichlinksupmorethan600
businessconsultants inallMemberStatesandmany
non-Member States;andEuropartnerships ,which
aimtocreatepartnerships betweenenterprises ina
givenregionoftheCommunity andotherenter­
prisesfromotherMember Statesandthird
countries ,
—theestablishment oftheComettprogramme ,which
promotescross-frontier vocational traininginthe
fieldoftechnological development ;andtheCom­
mission'sDirectorate-General XXIII,whichiscur­
rentlyevaluating apilotschemedesignedtofam­
iliarizesmallandmedium-sized business entre­
preneurswithstrategicmanagement ;asfarasthe
trainingofyoungpeopleisconcerned ,thePetra
programme assiststheexchangeofapprentices who
wishtocompletetheirvocational trainingwithan
apprenticeship inanotherMemberState,whilstthe
Linguaprogramme facilitateslanguagelearning .8.3.6.Willthestructural fundsoftheCommunity
besufficienttomeetthecostoftheadjustments necessi­
tatedbythecompletion ofthesinglemarket?The
answercanonlybe'no'.Acleardemonstration of
politicalwillisneededmorethaneverbeforeifthe
authorities aretopavethewayforrestructuring and
reconversion anddotheirbesttoensurethatthisis
doneatthelowestpossiblecostandthatalltheexpected
economicbenefitscanbereaped.
8.4.Whatgenuineeconomic activitythereisin
objective 1regionsisconfinedtosmallfirmsandcraft
industries .Everywhere inthepasttheactivitiesofsuch
firmsandindustriesconstituted thefirstessentialstage
ontheroadtoindustrialization andtheyremainthe
backboneofthelocaleconomytoday,capableofsecur­
ingchangeinahealthyeconomy .Apolicyonsmall
firmsandcraftindustries isthereforeofcrucialimport­
ance.8.4.3.NCIoperations ,ECSCconversion loans,the
development ofBICsandtheirnetworks ,pilotschemes
suchasEuropartnerships andaninventoryofthelocal
development potentialofregions,areallspecifically
designedtomeettheneedsofsmallandmedium-sized
enterprises inproblemregions.Thereisstillnocompre­
hensive,wide-ranging assessment oftheextenttowhich
Community actiontohelpsmallandmedium-sized
enterprises actuallyaffectscohesion .Acriticaland
objectiveanalysisofsuchaidschemes (nowoperating
forfiveyears)mighthelptheCommunity improveits(')ECCommission :'Theimpactoftheinternalmarketby
industrialsector:thechallengefortheMemberStates',study
byP.Buigues,F.IlzkovitzandJ.-F.Lebrun.Specialedition
ofEuropeanEconomy !SocialEurope,1990.

21.4.92 OfficialJournaloftheEuropeanCommunities NoC98/69
wholerangeofpoliciesinsupportofsmallandmedium­
sizedenterprises .positiveeconomicimpact.Nevertheless 'effectivecom­
petition'—aconceptwhichimpliesrecognition ofthe
factthatthemarketanditsspontaneous development
mayleadtothedisappearance ofthepositiveeffects
ofcompetition (specialization ,optimumallocation of
resources ,incentivestoencourage productsandprocess
innovation )—maynotbesufficient tomeetthe
demandsof1992,norguaranteethatcompetition policy
willbecompatible withthegoalsofcohesion .8.4.4.Forexample,amini-survey carriedoutinItaly
showedthatlessthan10%ofthesmallandmedium­
sizedenterprises contactedwereawareoftheexistence
ofEuroInfoCentres .TheideaofEuroInfoCentres
hasthereforefailedtotakeoffinItaly.Ofthe29Euro
InfoCentresinexistence ,nolessthan15areattached
toChambers ofCommerce whilstalmostalltheothers
areattachedtotradeassociations .Thesystem,how­
ever,isheavilybureaucratic andincompatible withthe
needforaflexible,rapidinformation service—somuch
sothattheauthorsofthemini-survey wereprompted
toaskwhetheritwouldnothavebeenpreferable to
directlyreinforcetheofficesrepresenting theECinthe
MemberStates.Bydoingso,Brusselswouldatleast
havehadgreaterpowerstomonitorandevaluatethese
activities .9.2.1.Thedangersofan'industrialpolicieswar'and
'greaterconflictsbetweentheweakestMemberStates',
withthelikelihood ofgreaterinter-industry trade,are
identifiedasaseriouscauseforconcernbythePadoa­
Schioppareporton'Efficiency ,stabilityandequity'.
Therearealsostructural ,sectoralandtechnological
problemswhichmaybeaggravated furtherifthesingle
marketissimplysynonymous withliberalization .
9.Competition policyandcohesion9.3.Aquantified generalassessment oftheeffects
ofcompetition policyoncohesion isnotavailable .
However ,thelevelandthedistribution patternofState
aidwithintheCommunity andthepreponderance of
non-regional Stateaid(see1.2.17)aresuchthatthey
conflictwiththeaimofCommunity-wide economic
andsocialcohesion .9.1.TheEuropean Economic Community was
foundedoncommonmarketprinciples .Freecompe­
titionwithinacommonmarketistherefore oneofthe
Community 'sfundamental tenets.TheTreatyofRome
accordingly devotesachaptertotherulesgoverning
themachinery ofcompetition . 9.3.1.Itisofcrucialimportance tomodulatecompe­
titionpolicyinsuchawaythatCommunity and
nationalaids,andtheimplementation oftherelevant
provisions ,arecontrolled moretightlyandrestrictively
intheeconomically strongestregionswhilstbeing
allowedgreaterlatitudeinobjective 1and2regions .
ThefirsttworeportsonStateaidgivesomeideaof
howdifficultitistogettoknowtherealsituationin
individualMemberStates.Yet,accurateknowledge of
therealsituation isessentialifproperactionistobe
taken.9.1.1.Thebasicprovisions arelaiddowninArticles
85and86butother'rulesoncompetition 'arealso
contained inArticle91(whichprohibitsMemberStates
fromdumpingwithinthecommonmarket)andArticles
92-94(whichstateunderwhatconditions aidsgranted
byMemberStatestoundertakings arecompatible with
thecommonmarket).Article85laysdownananti­
trustdoctrinewhilstArticle86prohibitsanyabuseby
oneormoreundertakings ofadominantpositionwithin
thecommonmarketorinasubstantial partofit.
9.3.2.Bywayofexample,wewouldconfineour­
selvesheretoaskingacoupleofquestions :Whatisthe
valueofthefiguresquotedbytheCommission with
regardtopublicaidawardsforsmallandmedium­
sizedenterprises iftheyarenotbasedfirstandforemost
onthedefinitionofsmallandmedium-sized enterprises
usedinnationalawardschemes ?Towhatextentdoes
thesurveytakeintoaccountthedifferenttypesof
aidreceivedbysmallandmedium-sized enterprises
indirectlyviaotherpolicies (researchanddevelopment ,
innovation ,etc.)?Greatertransparency isundoubtedly
desirableifwearetomeetthechallenges of1992.9.1.2.Regulation (EEC)No4064/89onthecontrol
ofconcentrations betweenundertakings ,adoptedafter
15yearsofdiscussions andnegotiations ,laysdownthe
limitswithinwhichconcentrations arepermitted ,thus
providing aninstrument forregulating competition at
EClevel.Ratherthanopposingmergerswithinthe
Community ,theRegulation seemsdesignedtoprovide
aframework forthem,preventing theemergence of
intolerable imbalances ontheroadtothesinglemarket.
Neweconomic sectors—transport ,telecommuni­
cations,audiovisual systems,energy—havenowbeen
broughtundertheCommunity 'srulesoncompetition .
9.4.Stateregionalaidschemescanplayanextremely
valuableroleincountering regionaldisparities within
MemberStates.However ,partlybecauseofthelevel9.2.Competition policyundoubtedly hasavitally
important roletoplayifthesinglemarketistohavea

NoC98/70 OfficialJournaloftheEuropeanCommunities 21.4.92
offinancingavailable (ormadeavailable )and,inthe
lightofdifferentparameters appliedbyMemberStates
(withinECrules),theeffectmaybetoaccentuate the
imbalance betweendisadvantaged regionsthemselves .
WithinFrance,Germany ,ItalyandtheUK,anaverage
ofECU90isspenteachyearoneachinhabitant ofthe
regionsclassified asdisadvantaged whilstforSpain,
Portugal,GreeceandIreland,theaverageisjustECU
16.Stateregionalaidschemesshouldnotbeoperated
soastoundermine thegoalofcohesion .9.5.2.Regionalpolicy,likecompetition policy,has
thetaskofaddressing itselftotheproblemofthe
competitiveness offirmsindisadvantaged regions;in
doingsoitcanrelyoncontrolmechanisms a)toensure
thatregionalorotheraidisnotpouredintoregions
whichhavenoregionaldevelopment priorities (some­
thingwhichwouldnullifyanyeffortstomakepriority
regionsmoreattractive),andb)toensurethatnational
funding (whichisgenerallymoresubstantial thanCom­
munityfunding )canbeeffectivelycombinedwithCom­
munityfunding .Naturally thisdoesnotprevent
regionalaidfrombeinggrantedbyMemberStates
(inaccordance withtheEECTreatyprovisions on
competition )toareasnotregardedaspriorityareasby
theCommunity .
9.4.1.Carealsoneedstobetakentoensurethatthere
isahighlevelofcompatibility betweenallCommunity
policies,andinparticular betweentheCommunity 's
regional,competition ,industrial ,R&Dandinno­
vation,tradeandthirdcountrypolicies .9.5.3.Thedifferences inapproach ,andinthe
methodsusedtodetermine areaseligibleforregional
aid,havegivenrisetoinconsistencies whichhavecome
inforincreasingly heavycriticismfromtheEuropean
Parliament ,theMemberStatesandregionalandlocal
authorities .Theseinconsistencies havebeenobserved ,
inparticular :
a)inareaswhichareeligibleforaidfromstructural
fundsbutnotfromnationalregionalfunds(differ­
encesineligibleareas).Inthiscaseco-financing
posesaproblem ;
b)whenaregionceasestobeeligiblefornational
regionalaidduringthelifetimeofaCommunity
supportframework (differences intimescales ).9.4.2.'Globality',aconceptwhichtheCommittee
hasalwaysstronglyadvocated ,isconcerned notonly
withCommunity andinternational marketsbutalso
thecross-links betweenallCommunity policieswithin
theframework ofacoherent ,realisticviewofthe
overallgeographical andpoliticalcontext .
TheCommission iscurrentlystudyinghowtoeliminate
theseinconsistencies andmakethetwopoliciesmore
complementary .
10.Transport9.5.Wewoulddrawattention inthiscontexttoa
numberofincompatibilities betweentheCommunity 's
regionalandcompetition policies .TheaimoftheCom­
munity'scompetition policy,inthecontextofState
aidforregions,istoremoveorcurbdistortions of
competition causedbythegrantingofaidtocertain
firms.Italsoseekstobringnationalprioritiesand
objectives withinacommonframework .Theaimof
theCommunity 'sregionalpolicy,ontheotherhand,is
tostrengthen theCommunity 'seconomic andsocial
cohesionbyhelpingthemostdisadvantaged areassolve
theirstructural weaknesses .Itistherefore focusedon
whatever furthersthisaim:Community financing ,
nationalaid,theregionalimpactofothercommon
policies .10.1.'Theinternalmarket...willgenerateallthe
economic andsocialeffectsitaimsatifthefreemove­
mentofgoods,services,capitalandpersonsinanarea
withoutinternalfrontiersisbackedupbygenuinely
trans-European networks (physicalinfrastructures ,ser­
vicesandlegalarrangements )'^).Suchnetworksare
likely,giventhetimeanddistancefactorsinvolved,to
furtherthegeographical cohesionoftheCommunity .
10.1.1.Itisawell-known factthattransportand
development arecloselylinkedandplayanimportant
roleinland-useplanning .Thissaid,transportpolicy9.5.1.Thetwopoliciesclearlydifferintermsof
objectivesandmethods .Regionalpolicyisintendedto
playasupportive role(andtakesinitiatives accord­
ingly),whilstcompetition policyhastoexercisecontrol
overnationalpoliciesinthecommoninterest.Both
policiesshouldbecomplementary ratherthancontra­
dictory,becausetheybothaimtoensurethatpublic
development aidisconcentrated onalimitedgeographi­
calarea. (J)OJNoC14,20.1.1992,p.11.

21.4.92 OfficialJournaloftheEuropeanCommunities NoC98/71
todatehasplayedandcontinuestoplayanextremely
negativeroleinsofarasitaccentuates regionaldispar­
itiesbystrengthening themaininterregional links,
therebymarginalizing otherregions .Thisisaphenom­
enonwhichoccursnotonlybetweendeveloped and
lessdeveloped regions,butalsowithinlessdeveloped
regionsthemselves .Certaintransportservicesareaban­
donedbecausetheyareuneconomical ,thuscuttingthe
areasinquestionofffromthelife-bloodoftheeconomy .10.4.1.Themajorexpansion ofthe1980s;the
changesinindustrialproduction ,wheretraditional sec­
torsaredecliningandnewsectorsareemerginginnew
areas;theintegration ofnationaleconomies ,coupled
withthesubsequent increaseinthevolumeoftrade;the
reductioninthepricesofmotorvehicles;theincreasein
thepopulation ,andthetouristboom—allofthese
factorsareexertinganenormouspressurewhichexist­
ingnetworksarenolongerabletohandle.Arecent
Commission studynotedthat'...someyearsago,Euro­
peappearstohaveoverstepped thepointbeyondwhich
anyincreaseintrafficiscounter-productive .Thesum
ofthenegativefactorsseemstocancelouttheextra
wealth,efficiency ,comfortoreasewhichshouldresult
fromtheriseintrafficvolume.'10.2.Thetransportsectoraccountsforabout7%
oftheEuropeanCommunity 'sGDP,about7%ofEC
employment ,andalmost40%ofpublicinvestment .It
alsoaccountsfor28%ofenergyconsumption andhas
adirectimpactontheenvironment ,safetyandpublic
health.Thisgivesanideaoftherelativeimportance of
thetransportsectorineconomicpolicy.
10.2.1.TheTreatyofRomeitselfdevotesagreat
dealofspacetotransport ,andtheERDFhasalways
earmarked mostofitsresourcesfortransportinfra­
structure .Nevertheless ,theERDFhascomeinfor
strongcriticismonthegroundsthatitsaiddistribution
systemishaphazard :10.4.2.Roadandairtransporthavebornethebrunt
oftheincreaseintraffic.Themostcongested areais
thatwhichincludestheSouth-East ofEngland,the
Beneluxcountries ,theCentral-Western partofGerm­
anyandtheNorth-East ofFrance:80%ofintra-Com­
munityroadtrafficbetweenLondonandMilaniscon­
centrated inthisarea.A70%riseincartrafficin
NorthernEuropeanda300-500% riseinSouthern
Europeareforecastforthe1990s.According tothe1988
AnnualReportoftheInternational UnionofRailways
(IUR),totalgoodstrafficacrosstheAlps(North-South
axis)increasedfromabout27milliontonnesin1970to
about56milliontonnesin1985.Therailwaysincreased
thevolumeofgoodscarriedfrom21,6milliontonnes
to25,9milliontonnes—afallintheirshareofthe
marketfrom81%to46%,whilstduringthesame
periodthevolumeofgoodscarriedbyroadshotup
from5to30milliontonnes.—becauseitsresources arenotchannelled intointe­
grateddevelopment programmes ,
—becausethefundsdonotfallwithinthereference
framework ofEuropean networksandregional
planning ,
—becausethehaphazard allocationoffundsnotonly
failstofurtherdevelopment butalsocreatesnew
'marginalized 'areas. 10.4.3.InSouthernEuropecertainareasarecon­
gestedbecauseofbadtownplanning .Thesituationis
madeworsebypoorinfrastructure stemmingfromthe
generallackofdevelopment .Themostcongestedurban
areasinEuropearethoseofAthens,Rome,Madrid
andBarcelona .Theabovementioned studyoftheGroup
Transport 2000Pluscalculated thattheperipheryof
Europehastobear,onaverage,additional costsof5%
becauseoftheinadequacy ofthetransportinfrastruc­
ture.InthecaseofIreland,thisadditional costis9%.
Thisisregardedasaseriousburdenonfirms.10.3.Between 1988and1993theERDFwilldevote
athirdofitsresourcestobasicinfrastructure (princi­
pallyinobjective 1regions),withinthecontextofCSFs
andCommunity initiatives suchasRegen,Intereg,
STAR,Telematique ,andEuroform .TheERDFhas
allocatedapproximately ECU5335millionfortrans­
portalone,ofwhichECU3611,7millionisforroads
andmotorways .In1989alonetheEIBfinancedtrans­
portprojectstothetuneofECU2206million,ofwhich
ECU1384millionwentonprojectsofCommunity
interest .In1990theCouncilapproved anECU
328millionmultiannual programme (1990-1992 )tofin­
ancemajorEuropean projects .ECSCloansarealso
usedtofinancetransportinfrastructure .10.5.Thefiguresalreadygivenshowtheserious
declineoftherailwaysintermsofgoodsandpassenger
transport .Thetrendisparticularly apparentinItaly,
Spain,PortugalandGreecewhererailtransport iscon­
sideredtobeslow,costly,unreliableandinflexibleand
whereintermodal transport isrelativelyunderdevel­
oped.Nationalpoliciesbearthemainresponsibility
forthisstateofaffairs,havinggivenprioritytoroad
transport .TheCommunity ,however ,mustalsobear
someoftheresponsibility .Incompatibility between10.4.Despitetheconsiderable investment —ac­
companied albeitbyagradualdeclineinpublicinvest­
mentatnationallevelduringthe1980s—wearenow
facingageneralcrisisintransport .

NoC98/72 21.4.92 OfficialJournaloftheEuropean Communities
nationalnetworks hasmeantthattherailwayshave
beenunabletotakeadvantage oftheincreaseinintra­
Community traffic.Asaconsequence ,therailways
carryonly18%oftotalgoodstrafficinEurope,amuch
lowerproportion thanintheUnitedStates(95%).In
addition,thecostofcarryinggoodsbyrailinEurope
is35centsperkm,whereasitisonly15centsinthe
USA.Theprioritygivenrecentlytothebuildingof
high-speed linesisjustifiable perse,butunlessitis
accompanied bypoliciesdesignedtore-establish bal­
anceitwillonlyaccentuate existingdisparities .10.8.Theabovecomments revealthatthereisno
suchthingasagenuinecommontransportpolicy,even
thoughthisisoneoftheobjectives oftheTreatyof
Rome.TheCourtofJusticedrovehomethesame
pointinitswell-known judgement of22May1985(1).
MemberStatesandregionalauthorities quiterightly
bearprimeresponsibility forsolvingtheirtransport
problems .Butthisofcoursemeansthatlocalpriorities
willtakeclearprecedence overEuropeanpriorities .The
failureproperlytounderstand theroleoftransportas
aninstrument ofregionalpolicyhasaprofoundeffect
oncohesion .
PARTC—CONCLUSIONS
ANDRECOMMENDATIONS10.6.Coastalshippingcouldhavebeen,andmay
stillbe,avalideconomic alternative tocongestion ,
especially ifitiscomplementary toothermodesof
transport .Between1980and1988thetonnageofthe
Community 'smerchantshippingfleetwascutbyone
halfanditsshareoftheworld'sfleetfellfromabout
30%to15,4%.TheMediterranean portshaveno
properinfrastructure forcoastalshippingandintermo­
daltransport ,andoperateunderconditions whichare
generallybelowaverage .Wearestillalongwayfrom
achievingharmonized ,high-levelCommunity standards
forportsandmaintenance .
10.6.1.TheEurosprogramme (European shipping
registeroperatingalongsidenationalregisters),which
aimstobringtogetherasmanyshipsaspossibleunder
theCommunity flag,withanexclusiveholdonintra­
Community cabotagehasnotyetgotofftheground
becauseofopposition frommostoftheMemberStates.
TheprincipalreasonforthisisthattheEurosshipping
registerlacksthesubstantive contentwhichwouldbe
anincentivetoEuropean shipowners .Inparticular ,
theliberalization ofcabotage isopposedbythefive
Mediterranean countries becauseof:
—fearofcompetition fromthefinancially stronger
fleetsofNortherncountries ,
—lowlabourcostsinSoutherncountries ,
—concernthatliberalization willpenalizeuneconomic
linkswithMediterranean islands .11.Proposalsforincorporating theobjectiveofecon­
omicandsocialcohesioninCommunity policies
11.1.TheanalysisoftheCommunity policiesnot
directlyintendedtotackletheproblemofensuring
cohesionandrestoringbalanceintheeconomicand
socialfields—althoughitisnotexhaustive andexcludes
someimportant Community policies—doesenableus
to:
—notethatinmostcasesacomprehensive ,documen­
ted,reliableassessment oftheimpactofCommunity
policiesontheeconomyandsocietyofthedisadvan­
tagedregionsisnotavailable ,andthataverypartial
assessment canbemade,butonlywithgreatdiffi­
culty,
—stressthattheexception isthecommonagricultural
policy,andthatanotherexceptioncouldbetheas
yetunrealized EconomicandMonetary Union;for
boththeseareas,reliableimpactstudiesandfore­
castsareavailable ,
—identifythemechanisms whichcausethemost
blatantdistortions ,themeasureswhichfavourthe
strongerregionsoraccentuate imbalances ,therisks
emergingonthehorizonfromnewpoliciesand
thosealreadyarisingfromthelackofcommon
policies,
—make,foreachofthepoliciesconsidered ,sugges­
tionsforfurtherattention ,inordertocomplyfully
withArticle130BoftheTreatyofRome.
11.2.TherearetwopointstobemadeaboutEcon­
omicandMonetary Union,inordertominimizethe
risksmentioned aboveandtoexploititsadvantages to
thefulltofacilitatecohesion .
11.2.1.Inthefirstplaceitisnecessarytoavoida
two-speed Europe,asstatedin1.2.9oftheCommittee 's10.7.Thesamefearsareharboured inthecountries
ofSouthernEuropewithregardtotheliberalization of
theroadhaulagesector.Hundreds ofthousands of
smallItalianandSpanishcarriers,eachoftenowninga
singlevehicle,areupagainstlarge-scale ,well-organized
andcomputerized firmsoperating intheheartofEuro­
pe.Giventheexistenceofallthesecarriers,andthe
frequentfailureontheirparttoapplysocialregulations ,
therecanonlybetwoconsequences :
—arestructuring andmergerprocess,whichwillcre­
atefurtherunemployment ,
—anexpansion insub-contracting work. ()Case13/83:Parliament versusCouncil .

21.4.92 OfficialJournaloftheEuropeanCommunities NoC98/73
OpiniononEconomicandMonetary Union,adopted
on27February1991(*).Thecreationofdifferentmon­
etaryareaswouldwidenthegapbetweenthestronger
andweakerregions,makingitevenmoredifficultto
bridge.11.3.Asregardsthecommonagricultural policy,the
startingpointmustbeadaptation ofitsaimstowhat
isnowaradicallychangedsituation,inwhichthe
problemisnolongerself-sufficiency infoodbutrather
thesurplusincertainproductsinthecontextofthe
worldmarketandenvironmental protection .
11.3.1.Thefactthatthehighproportion ofagricul­
turalworkersinsomeregionsderivesfromunderdevel­
opmentandthelackofalternative jobscallsforgreater
consistency betweenregionalpoliciesandanagricul­
turalpolicywhichmustbeincreasingly orientated to
providingsupportforstructuralchanges,aspartofan
overallstrategyforland-useinruralareas.11.2.2.Secondly ,monetaryunionisconceivable only
ifitisaccompanied byacommoneconomicpolicy,so
that,astheCommittee 'sOpinionontheReporton
EMU(2)putit,'apolicygearedtobalancedgrowth,
converging standardsofliving,highemployment and
externalequilibrium 'cancoincidewithgreatermonet­
arystability .Withoutoverlooking thegoalofprice
stability,theEuropean SystemofCentralBankswill
thereforehavetosupport—initsautonomy—theCom­
munity'seconomicpolicy,whichinturnwillhaveto
takeaccountofthenationalmeasures neededtoelimin­
ateunemployment ,structural defectsandregional
imbalances .
11.3.2.Thisapproach makesasingleintervention
mechanism obsolete ;structural measures mustbe
adoptedonacase-by-case basis,takingaccountof
socioeconomic criteria,farmstructuresandtypes,and
theaddedcostsofperipheral location .Supportmust
benotmerelyfinancialassistance ,butmusthavethe
aimofmakingfarmscapableoffacingthemarketand
graduallyadjustingpricestotheinternational market.
Thefinancialresourcesallocatedtoruraldevelopment
shouldbeincreasedinordertocompensate ruralareas
foranylossesresultingfromthereformoftheCAP.11.2.3.ACommunity economicpolicyrequiresthe
fixingofcommonobjectives andthestrengthening of
theCommunity 'sroleincertainbasicprioritypolicy
fields,includingregionalpolicy.Point59oftheReport
onEconomic andMonetary UnionintheEuropean
Community (DelorsReport )of12April1989regards
asnecessary afurtherstrengthening oftheCommunity 's
structural andregionalpolicies,adaptingtheirinstru­
mentstotheneedsofEMU,andanincreaseinstructural
transfersinfavourofMemberStates.Itisparticularly
important todevelopthestructuralpoliciesfrom1993
to1997,inthepreparatory stageforfulloperationof
EMU,whentheMemberStateswillbemostcommitted
toamaximumefforttoachieveeconomicconvergence .11.3.3.ThenewCAPmustgivemoreimportance to
qualitythantoquantity (notonlytocompeteonworld
marketsbutalsointheconsumer'sinterest)andencour­
ageinventiveness andinitiative,whichrequiregreater
effortsintermsoforganization ,researchandcooper­
ation:whattoproduce,howtoproduce,howtosell,
howtoprocess,andhowtocombinefarmingwith
otheractivities .11.2.4.AlsoofinterestistheCommission 'sproposal
foraspecificfinancialmechanism tocomeintooper­
ationwhenoneormoreMemberStatesfacesserious
economic difficulties orwheneconomic convergence
callsforaspecialeffortfromtheCommunity inparallel
withnationaladjustment strategies .Sincefinancial
cloutvariesfromoneMemberStatetoanother(a
factorwhichdetermines nationalcontributions tothe
reductionofregionalimbalances ),theCommittee wel­
comesthecreationofthecohesionfundagreedby
theEuropean CouncilinMaastricht .Measures must
nevertheless betakentoensurethatthefinancial
resourcesavailablefromthecohesionfundactually
benefitthoseregionsqualifying foraidinaccordance
withCommunity criteria .11.3.4.Inthisprocessagriculture shouldnotbeleft
toitsowndevices,butsupportednotonlywithstructur­
alaidbutalsowithsocioeconomic 'shock-absorbers '
(incomesupport,assistanceforearlyretirement ,exten­
sificationofcrops,andaidforsmall-scale producers ).
Inthislight,smallproducers assumeanewposition,
alsoperforming thesociallyusefultaskofsafeguarding
theenvironment andthelandscape .
11.3.5.ThenewCommission proposalonthedevel­
opmentandfutureoftheCAP[doc.COM(91 )258
(')OJNoC102,18.4.1991,p.24. final],howeverlaudableitsobjectives—althoughthat
(2)OJNoC329,30.12.1989,p.44. ofeconomicandsocialcohesion isnotprominent

NoC98/74 OfficialJournaloftheEuropeanCommunities 21.4.92
amongthem—doesnotseemtoconstitute adecisive
stepinthedirectionadvocated inthisOpinion .11.4.4.Following theagreement whichhasbeen
securedbetweenthesocialpartners,aCommunity legal
basisthatfavoursthedevelopment ofcollectivebar­
gaining,andlegislation tosupporttradeunionfreedoms
areessentialtosocialcohesion ,withtheinitiationofa
processofapproximation ofindustrialrelationssystems
towardsmoreadvanced formsofparticipation ;this
shouldhaveapositiveimpactonthedevelopment pros­
pectsofthemoredisadvantaged regions.11.4.Socialpolicyshouldberegardedasanessential
elementofeconomic andsocialcohesion .Anactive
policyistheprerequisite ofadvanced'intra-industrial '
development ,whichrequiressocialparticipation and
consensus ,withtheaimofmobilizing humanresources .
11.4.1.Suchanapproachhasbeenmadeeasierby
theresultsoftheMaastricht summit,withtheextension
ofCommunity competence andofthesubjectscovered
byqualifiedmajorityvoting,andtheadditiontothe
Treatiesofaprotocolonthesocialcharteranda
commitment toimplement it.
11.4.1.1 .Inimplementing this,itisnecessarytotake
intoaccounttheprincipleofsubsidiarity ,asdefinedin
Article3BoftheTreatyestablishing theEuropean
Community .
11.4.1.2 .However ,itisdisappointing thattheCom­
munityhasbeenunabletoagreeonamechanism for
implementing socialpolicywhichisuniformly appli­
cabletoallMemberStates.11.5.Avocational trainingpolicyadaptedtothe
ever-changing needsofthemarketisimpossible unless
backedupbyanefficientgeneraleducationsystem,on
whichwouldbegraftedbothin-servicetrainingand
trainingfordisadvantaged categories .Tothisend,the
Community 'scoordination andcooperation rolein
infrastructure policiesandfinancialaidcouldusefully
bedeveloped .
11.5.1.Theessentialpointisthetransition froma
'passive'laboursupplytoatrainingsystemgearedto
development policies,toprovideastimulustothe
growthofproductive activity.Theveryconceptof
vocational trainingmustincludetheaimsofimproving
theproductivity oflabourinexistingactivitiesandof
redirecting theavailablepotentialtonewactivitieslin­
kedwithlocaldevelopment . 11.4.1.3 .TheCommittee truststhatallpolitical,
institutional andlegalmeanswillbedeployedtopre­
venttheemergence ofaprocessthatfurtherweakens
economic andsocialcohesion .
11.4.2.TheCommission 'srecentrecommendation
onconvergence ofsocialprotection objectivesandpoli­
cies[doc.COM(91 )228final]isinadequate fromthe
standpoint ofcohesion,aboveallbecauseitdoesnot
takeaccountoftheneedforconvergence ontheCom­
munityaverageofthesocialexpenditure oftheMember
Stateswhereitisatitslowestlevel(see1.1.18ofthis
OpinionandtheCommittee Opinionof28November
1991)(1).TheCommittee takestheviewthatfurther
attentionshouldbegiventotheeffectsofEconomic
andMonetary Unionandofeconomic convergence
policiesonsocialexpenditure andsocialsecuritysys­
temsintheMemberStates.11.5.2.Thisshouldbeunderstood notmerelyasa
linkbetweenatrainingactivityandadevelopment
project,butasanactivebondbetweenthetraining
system,theneedsofthemarket,workers'expectations ,
anddevelopment potential .Itmeans:
—overcoming theinstitutional fragmentation of
measures ,
—settingupregionalcentresforcoordination ofall
theinstitutions andinstruments operating indevel­
opmentandtraining,includingthesocialpartners,
—thecreationofanewkindofoperator—a'human
resourcesengineer'—tobringallthefactorsofpro­
ductiontogether,
—thewishoffirmstoincludetheirowntraining
processesinawidersystem.11.4.3.Inthiscontext,theagreement signedon
30October1991betweentheEuropeanTradeUnion
Confederation (ETUC),theUnionofIndustriesofthe
EuropeanCommunity (UNICE)andtheEuropeanCen­
treofPublicEnterprises (CEEP)isofmajorimportance .
ThisisborneoutbythefactthattheIntergouvernmen­
talConference onPoliticalUnionhasadopted—inthe
abovementioned protocol—mostoftheproposedinde­
pendentrecommendations onthesesubjectswhichrep­
resentthesharedopinionofthesocialpartners .11.5.3.Thiscoordinated typeofmeasurerequires
adeeperknowledge ofthesituation ,andtherefore
substantial technicalimprovement ofdatacollection
instruments ,intendedaboveallfor:
(!)OJNoC40,17.2.1992,p.22. —regionalandlocaluse,

21.4.92 OfficialJournaloftheEuropeanCommunities NoC98/75
11.6.3.Thelargestdevelopment isexpectedinthe
fieldsofwastemanagement andwatertreat­
ment—whichalreadyrepresentmorethanhalfthesec­
torintermsofemployment andvalueadded—witha
forecastof6-7%perannumgrowthand30000new
jobs.Theprojections forpotentialannualgrowthof
the'environment market'showPortugalinfirstplace
with13%,followedbySpainwith11,8%andGreece
with10,4%;Germany islowestwith3,4%.
11.6.4.Itisthusimportant toseizetheopportunity
todevelopanationalindustry,bearinginmindthat
80%ofthelabourforcecurrentlyemployed inthe
sectorarerelativelyunskilled,while20%arehighly
skilledmanagerial ortechnicalstaff.
11.7.Inresearchanddevelopment policy—where
theneedtocompeteonaworldscaletendstostrengthen
thealreadystrong—thefollowing twocorrections
shouldbemade:—betterawareness ofthesituationinpublicservices,
smallfirmsandthe'microeconomy ',theemploy­
mentpotentialofwhichisoftenneglected .
11.5.4.Thegreaterresponsibility oftheregionsand
localauthorities forthedevelopment oftheirareas,
however ,meansthattheiractionsneedtobeintegrated
withnationalandCommunity aimsandguidelines ,in
ordertotakeaccountofthescaleandprioritiesof
thesinglemarketI1).Coordination atthedecentralized
levelmustthereforebematchedbysimilarcoordination
atCommunity level,inthefirstplacebetweenthe
measurestakenbytheFunds,bytheTaskForceand
underresearchanddevelopment policy,andmaking
betteruseofexistinginstruments suchastheStanding
Committee onEmployment andthe'Observatory 'on
Employment .
11.6.Ifthereisarealwilltointegrateenvironmental
policyintoeconomicanddevelopment policies,the
problemshouldbesolvedaccordingtomarketrules.It
isnecessarytogivea'value'toenvironmental costsand
incorporate itinthecostsandpricesbornebyinvestors
andconsumers ,throughfiscalmeasures (2).Similarly,
the'polluterpays'principlemustbeextendedtoall
MemberStates.TheCommission 'sproposaltointro­
duceataxonenergyconsumption andC02emissions ,
graduallyimplemented andexcludingrenewableenergy
sources,isonefeasiblestepinthisdirection .
11.6.1.Aswellaspenaltieswhichplaceresponsi­
bilityonpolluters ,thereshouldbepositiveincentives .
Theregionswhichmostneedtodevelop,thosewhich
havetorepairthedamagewroughtbypastindustrial
activitiesorbyover-exploitation oflandorwholeareas,
andthosewhichmustsafeguardrarenaturalhabitats,
needspecialassistance :
—throughexistinginstruments suchasthestructural
funds,orspecificinstruments suchasEnvireg,
—throughanewpermanent financialinstrument for
theenvironment ,suchasLIFE[doc.COM(91 )28
final],basedonsolidaritytopromotecohesion ,
—throughmoregradualimplementation ofCom­
munityrulesinthefinancially weakerMember
States.—prioritiesshouldbechangedsoastofocusnotonly
onthepursuitofexcellence ,butalsoontheneed
forgreaterinvestment intheR&Dpotentialof
thedisadvantaged regions,
—Community policiesshouldbeabletointeractwith
nationalpolicies .
11.7.1.Indeed,notallresearchisconcentrated inthe
moreadvanced areasforsoundeconomic reasons .One
needonlyconsiderrenewable energysources,biotech­
nologyandgeneticsinagriculture ,theneedtoextend
researchtomakebetteruseofexistinghumanandother
resources ,andthecentralimportance ofresearchand
innovation inrevivingindustrial areaswhicharein
decline .
11.7.2.Coordination ofCommunity ,nationaland
regionallevelactionisprobablythebestwaytoensure
thatCommunity R&Dpolicyalsocontributes toecon­
omicandsocialcohesion .
11.6.2.Thefuturegrowthofactivitiesdirectlylinked
withenvironmental problemsiscloselytiedtothedevel­
opmentofCommunity policiesorlawsandtothe
availability offunds.11.7.3.Withoutaresearchpolicy,theknow-how
possessed bybusinesses intheless-developed regions
willremainwithinindividual companies andwillnot
spreadthroughout thesystem.
(')'Regionaldevelopment andvocationaltraining',Interregional
Forumof24-26October1984,Cedefop,Berlin.
(2)Recommendation oftheOrganization forEconomicCooper­
ationandDevelopment (OECD),January1991.11.7.4.Portugalmightbeanexampletofollow,with
its'Science'programme coveringnationalactivitiesand
measuresunderthestructural fundsandCommunity
R&DpoHcy.

NoC98/76 OfficialJournaloftheEuropeanCommunities21.4.92
created,withtheriskofmarginalization andwastage
ofhumanandmaterialresources .Indeed,timely
restructuring withtheparticipation andconsensusof
thesocialpartners—andwithoutlosing'resources'on
theway—willincreasingly cometoformanessential
factorincompetition betweenthemoreindustrialized
regions .11.8.Intheareaofindustrialpolicy,theCommunity
shouldpressaheadwiththeworkwhichwaslaunched
bytherecentCommunication onindustrialpolicyin
anopenandcompetitive environment ^).Theaim
shouldbetodrawtogetherallthedisparatemeasures
whichcomeundertheheadingofindustrialpolicy,and
todevelopthestrategicobjectiveofeconomicandsocial
cohesion ,whileclarifying itscontentthroughafew
clearprinciples .
11.8.5.Clearprinciples onthegeneralthrustof
development andforecastsoftheimpactoneachregion
oftheinternalmarketshouldbeusedtoidentifyCSF
(Community supportframework )priorities,toselect
integrated programmes forfunding,andtodecidethe
overallapproachoftheCommunity actionandpro­
grammesreferredtoin8.1.11.8.1.Firstly,afirmcommitment tointra-industrial
development —rejectingthemisleading useofcompara­
tiveadvantages only—withallitsconsequences for
infrastructure ,education andtraining,researchand
socialpolicy.
11.8.2.Secondly ,aboldselectionofincentivesand
deterrents seekinganewbalanceinbusinesslocation
bydiscouraging furthercongestion intheindustrial
heartoftheCommunity ,andbypursuingmulti-direc­
tional,progressive development alongtheMediterra­
neanbasin(inthecontextofrelationswithnon-member
countries),theAtlanticfringe(fromScotlandtoPortu­
gal,passingthroughIreland),andfromEastGermany
intoEasternEurope .11.9.Competition policycanplayanimportantpart
inre-establishing abalancebetweentheregions,pro­
videdthatitisnotappliedinapurelyformalmanner,
defending marketrules,butacknowledges andincor­
porateseconomicandsocialcohesionobjectives .Now
morethanever,thecompletion ofthesinglemarket
requiresan'active'competition policywhichtakes
accountoftheenormous effortwhichthedisadvan­
tagedregionsmustmake.Suchapolicymustrecognize
theneedforspecialaidstoindustrytobegrantedby
nationalorregionalauthorities withinEECTreaty
provisions .
11.9.1.Itisparticularly necessarytodevelopinstru­
mentstoensurethattheregionalaidgrantedby
nationalandregionalauthorities isbotheffectively
gradedandalsocompatible withCommunity regional­
policycriteria.11.8.3.Thirdly,anapproach tothebackward
regionsaimedatbalanced ,locally-generated develop­
mentandtheinstallation oflargebusinesses fromout­
sidetheregion.Locally-generated development is
important formobilizing localresourcesandcreating
apermanent ,activenetworkofsmallbusinesses ,self­
employment andservices.However ,itisnotsufficient
toensurethesortofintra-industrial development that
canmakefulluseofthepotentialofferedbythesingle
market .MajornationalandEuropean companies
shouldbeencouraged torelocate—takingtheircapital
assets,technology andmanagement capability with
them—notonlybymakingtheenvironment attractive
andattentivetothem,butalsobymeansofdirect
capitalincentivepolicies .11.9.2.TheCommittee welcomes theCommission 's
effortstomodulatecompetition policyinsuchaway
thatCommunity andnationalaids,andtheimplemen­
tationoftherelevantprovisions ,arecontrolled more
tightlyandrestrictively intheeconomically stronger
regions,whilstallowinggreaterlatitudeinobjective 1
and2regions.11.8.4.Fourthly ,awareness thatthecompletion of
thesinglemarketisstiffeningworldcompetition and
triggering apermanent processofindustrialrestructur­
ingmakestheadvancecontrolofsuchprocessesessen­
tialifnewareasofindustrial declinearenottobe
11.9.3.TheCommittee considersthatgreaterprog­
ressshouldbemadeinkeepingarecordofpublicaid
awardswhicharestillnottransparent .Interalia,public
aidfromnon-central sourcesshouldberecorded more
clearlyandcompared .Acriticalreviewofthe'typology'
ofthepublicaidtakenintoconsideration sofarisalso
boundtohelpmakecompetition policymoreeffective . (i)OJNoC40,17.2.1992,p.15.

21.4.92 OfficialJournaloftheEuropeanCommunities NoC98/77
11.10.Geographically concentrated development
andcongestedtransportsystemsaretwoaspectsofa
singleproblem,resultinginashortageofspaceand
actingasabrakeondevelopment .Council'scommitment inJune1990toconsidermaking
abolitioncontingent ontheadoptionofacrisismechan­
ismofferingderogations forMemberStateswhosehaul­
agecompanies sufferadrasticfallindemand .The
CounciladoptedthismeasureinDecember 1990.
11.10.1.Theonlyviablesolutionistodecentralize
economicdevelopment .Fromthisangle,theinitiative
takenbytheCommission withits'Europe2000'Com­
munication istobewarmlywelcomed ,sinceaneffective
relocation policyalsodemandsaCommunity rolein
regionalplanningwhichdoesnotencroachuponthe
responsibilities andpowersofnationalandregional
authorities (l).12.Conclusions andrecommendations foraCom­
munitystrategy
11.10.2.Theimportance ofproximity toraw
materialandsourcesofenergyhasdiminished asa
factorinbusinesslocation :however ,itispreciselytheir
outlyingsituationandcommunications shortfallthat
preventsthemorebackward regionsfrombenefiting .
Consideration oftheoverallproblemsoftransportand
allformsofcommunication inaCommunity frame­
work—thebackbone ofwhichwouldbethetrans­
Europeannetwork—wouldfacilitatethenecessarybal­
ancebetweenthecentreandperipheral areas,witha
viewtoextending linesofcommunication towardsthe
non-member Mediterranean countries andEastern
Europe .12.1.Althoughithasomittedcertainimportantpoli­
ciessuchasthatforenergy,themainaimoftheabove
analysishasbeentohighlightthequalitative andquan­
titativeshortcomings ofECpoliciesinrespectof
cohesion,andtoexplainwhyregionaldisparities have
steadilyincreaseddespite15yearsofregionalpolicy
assistance .Nevertheless ,wemustnotforgetthat:
—inabsoluteterms,economic andsocialconditions
inmanyoftheareasunderconsideration haveseen
apalpableimprovement ,
—merelytohaveprevented anevenmoredramatic
increaseinthedisparities wouldcountasarelative
success(ifitwerecapableofbeingproved),
—theadvantages whichEconomic andMonetary
Unionandthesinglemarketbringtothemore
developed areasarealsointheinterestsoftheless
favouredregions,becausetheymaketheCom­
munitymorecompetitive ontheworldstage.11.10.3.Acomprehensive schemetolinkupCom­
munityrailwayswouldinparticular giveamajorboost
totheroleofrailtransport ,andwouldalsorepresent
ausefuldevelopmental benchmarkforCommunity
financial assistance .Closercooperation between
nationalcompanies andastandardized Europeannet­
work,aimedspecifically atabsorbingtheever-growing
volumeofgoodstraffic,wouldconstitute avitalstep
towardsthecreationofaEuropeanrailnetwork .
11.10.4.Thesignificant financialeffortrequiredfor
theupgrading andextensionofEurope-wide transport
linkswilldemandamajorinputofprivatecapital,
andinfrastructure costswillhavetobepaidbyusers.
However ,apublic-sector contribution remainsessential
toprojectswheregainsareprimarilyofasocio-econ­
omicnature.Thisisthecaseintheoutlyingregions,
withalowerpopulation densityandgreaterdistances ;
italsoappliestomedium-distance publictransport
routes,andtomultimodal infrastructures whichare
economically justifiable inthelongtermfromthestand­
pointofprogressanddevelopment .12.1.1.However ,therearetwofurtherconsider­
ations :
—theadvantages ofEMUforthelessfavouredregions
aremainlylong-termones,whileintheshorterterm
theseregionsarefacedwiththecostsofadjustment .
Thistimelag,whichunderpinstheapproachofthe
CecchiniReportontheCostofNon-Europe ,does
notfavourcohesion ,
—economicandsocialcohesiondoesnotsimplymean
anabsoluteimprovement inconditions ;italso
involvesarestoration ofbalance,andthus'real
convergence 'inthesenseofcloseralignment of
disposable incomes,economicandsocialstructures ,
welfareandindustrial-relations systems .
Economic andsocialcohesion isinfactapolitical
conceptbasedonthelevelofregionaldisparities which
isconsidered politically andsociallyacceptable .As
suchitvarieshistorically ,andwillbecomeincreasingly
restrictive astheCommunity achievesEconomic and
PoliticalUnion.11.10.5.Withregardtotheremovalofbarriersto
freemovement ,throughprogressive abolitionofquota
restrictions androadhaulage,itisworthrecallingthe
(')OJNoC339,31.12.1991,p.18.

21.4.92 NoC98/78 OfficialJournaloftheEuropeanCommunities
munitypolicies,andtoharnessthemtoeconomicand
socialcohesion .12.2.AtCommunity andnationallevel,therecon­
tinuetobetwooptions :
—eitherwedivertresources tothedisadvantaged
regionswiththeintention (orhope?)ofhelping
themtodevelop,12.3.2.Tothisend,theCommission shouldsubmit
totheCouncilanActionProgramme forEconomic
andSocialCohesion ,coveringalltheCommunity 's
economicandsocialpolicies .
—orweencouragedevelopment inregionswherethe
production systemismostefficient,andthenredis­
tributetheresourcesproduced .12.4.IfalltheCommunity policiesincorporated the
goalofcohesion ,coordination ofthestructuralpolicies
couldbemoreactive.Backedbyanappropriate admin­
istrativestructure ,thiscoordination whouldhelpcreate
aneffectofsynergybetweenthevariousmeasures
adopted i1).Thiswouldenhancetheroleofregional
policyandofthestructural funds,notonlybecause
ofthetransferofresourcesbutalsobecausegoals,
strategies ,planningframework anddevelopment guide­
lineswouldbeprovidedforallCommunity policies .Themainproblemwiththefirstoptionisthepractical
difficultyofallocating resourceseffectively ,coupled
withthefactthatthebenefits (aswehavesoughtto
show)donotallremaininthelessadvantaged regions.
Thesecondoptionoffersanindirectadvantageforall,
andfastergrowthofECaveragepercapitaincome;but
thesocialandenvironmental costsarehigher,andthe
disparities areincreased .
12.2.1.Superficially ,theCommunity haschosenthe
firstoption,inlinewiththeEECTreaties.Ithasrejected
simpleincomesupportandhasusedthestructuralfunds
toboostthepotentialforincomegrowthoftheweaker
regions.Inpractice,pursuitofthisoptionhasnot
achievedthedesiredresult.Thestructural fundsmobil­
ize0,3%ofCommunity GDPandcannotbythemselves
ensurecohesion ,particularly whencertainothervalid
Community policiestendtoaggravateexistingdispar­
ities.12.5.Midwaythroughthereformofthestructural
funds,theresultsarerelativelysatisfactory interms
bothoffinancialcommitments andoftheframingof
integrated operatingprogrammes .Muchstillneedsto
bedoneandmanyimplementing difficulties remain :
complicated procedures ,toomanylayersofredtape,
lackofflexibility ,failuretoinvolvethesocialpartners
systematically .Alltheseproblemscouldundermine the
partnership systemwhichisoneofthemainfeatures
ofthereform.Ontopofallthis,implementation of
theprogrammes hassometimes beenhampered bythe
macroeconomic constraints onthepublicspending
capacityofcertainMemberStates.
12.3.Regionalpolicyandstructural fundsarean
importantsymbolicandquantifiable expression ofthe
Community 'spoliticalcommitment tocohesion .But
theycannotsolvetheproblemalone,eveninthelonger­
term.12.6.Betweennowandtheendof1992,important
decisionswillbetakenonthenewfinancialperspectives
andnewregulations tocomeintoforcein1993.Now
isthusthetimetoputforwardfurtherreforminthe
lightofexperience andofthenewneedsbroughtby
Economic Union.
Thiscontrasts withthegreatweightwhichthe
Intergovernmental Conference onPoliticalUnionhas
giventoeconomicandsocialcohesion ,insertingitin
firstplaceamongtheobjectivesoftheUnion(Art.b)
andmakingitthesubjectofaseparateprotocol .12.6.1.TheCommittee considers thatthestructural
fundsshouldbeallocatedmoresubstantial resources ,
asthedrivetowardseconomicconvergence isrestricting
thepublicexpenditure ofcertainMemberStates.It
wouldalsobehelpfuliftheCommunity revenuesystem
weremorecloselytiedtothepercapitaGDPofthe
individual Member States.Thisintention isenshrined
inthefinalparagraph oftheprotocoloneconomic
andsocialcohesionadoptedbytheIntergovernmental
Conference .Hencetheincreasing importance oftheCommunity 's
otherpolicies,andofimplementation ofthefirsttwo
paragraphs ofArticle130b(see1.3.11),particularly as
regardsthecommonagricultural policyandEconomic
andMonetary Union.
12.3.1.TheCommittee considers itvitaltoensure
synergybetweenregionalpolicyandalltheotherCom­(')CourtofAuditorsReport,OfficialJournalof12December
1990,chapter7,paras7-91.

21.4.92 NoC98/79 OfficialJournaloftheEuropeanCommunities
12.6.2.Theincreaseinresourcesandinpolitical
responsibilities broughtbyPoliticalUnionwillrequire
aproportional increaseinthegoverningpowersofthe
Community institutions ;indemocratic controlbythe
EuropeanParliament ;andinthefullinvolvement of
theESCandtheotherinterestedparties (nationaland
regionalauthorities ,socialpartners).
12.6.3.IftheCommission istoprovideaplanning
framework layingdowntheCommunity 'sregional
planningobjectives ,itsregionalpolicymeasuresmust
bemorealivetothestructural ,social,institutional
andmacroeconomic characteristics oftheindividual
regions.Inthiscontextitisimportant todevelopthe
partnership withtheregions .Thedecisiontakenbythe
Intergovernmental Conference onPoliticalUniontoset
upaCommittee oftheRegionscouldmakeauseful
contribution tothis.
12.6.4.Atthesametime,thereareanumberof
reasonsformakinggreateruseofsubsidiarity :theneed
totakebetteraccountofregionalcircumstances ,tocut
redtapeandsimplifyprocedures ,andtoimprovelocal
andregionalauthorities 'politicalandtechnicalcapacity
tocarryoutregionalplanningmeasures .
12.6.4.1 .TheCommunity supportframeworks are
provingtheirworth.Theyshouldbemademoreflexible
andmoreadaptabletotheareainvolvedandtochang­
ingproblems ,providing afull-scale 'programme agree­
ment',tobeelaborated underthefullresponsibility of
thelocalauthorities .Inparallelwiththis,surveillance
oftheCSFsbytheCommission andmonitoring com­
mitteesshouldbeextended tocovercoordination with
otherCommunity measures .
12.6.4.2 .However ,thispresupposes greatertechni­
calsupporttohelptheregionalandlocalauthorities
planandadminister measuresmoresatisfactorily ;this
isvitaltothesuccessofregionalpolicy.
12.6.5.Simplerprocedures fortheoperatingpro­
grammeswouldfacilitateanincreaseintheCom­munity'sdirectassistance inconnection withtheexten­
sionoftheresourcesearmarked fortheCommunity­
interestprogrammes ,whichmightevenbedoubled .
12.6.6.Involvement ofthesocialpartnerswastried
onanexperimental basis(albeitonlyatthelevelof
information )in1989and1990atthejointinitiativeof
theCommission ,ETUCandUnice.Theresultswere
encouraging ,thoughtherewereseriousshortcomings
atnationalandregionallevel.Theconsensus andsyn­
ergieswhichsuchinvolvement cangenerateshouldbe
viewedasindispensable tosuccessful economic and
socialcohesion .Thenewregulations shouldtherefore
makeformalprovisionforinvolvement ofthesocial
partners .Thisinvolvement shouldbepractisedatall
levels,intheformsdeemedmostsuitablebycommon
agreement .TheCommittee alsoproposesdissemination
andanalysisoftherecommendations madeinthepre­
sentOpinion,incollaboration withtheCommission ,
openingadebatewiththesocialpartnersintheregions
whicharemostaffected .
12.6.7.Greaterinvolvement ofprivatecapital
(especiallyoflargenationalfirmsandmultinationals )
intheoperatingprogrammes isofkeyimportance .
Programme agreements couldbeconcluded between
thepublicauthorities (Commission ,national,regional )
andtheprivatefirmconcerned ,withtheinvolvement
ofthesocialpartners .Favourable termscouldbeoffered
toreduceinvestment risksforaspecificstart-upperiod.
12.7.TheCommittee welcomes thedecisionunder
whichtheCommission istodrawupanannualreport
oneconomicandsocialcohesion .TheCommittee pro­
posesthecreationofapaneloftop-levelindependent
expertswiththetaskofevaluating theprogressmade
towardseconomicandsocialcohesion .Thereportof
thispanelshouldbepresentedbeforetheCommission
drawsupitsownreportsothatthelatttercantake
accountoftheconclusions reachedbythepanel.The
panelofexperts'annualreportandtheCommission 's
reportshouldbesenttotheEuropeanParliament and
theEconomicandSocialCommittee fortheirOpinions .
DoneatBrussels,27February1992.
TheChairman
oftheEconomicandSocialCommittee
MichaelGEUEN1CH

NoC98/80 OfficialJournaloftheEuropeanCommunities 21.4.92
APPENDIX
totheOpinionoftheEconomicandSocialCommittee
Thefollowingamendments ,whichreceivedatleastaquarterofthevotescast,weredefeatedinthecourse
ofthedebate :
Point5.1
Inthelastlineofthispoint,replacethewords'allovertheCommunity 'with:'inanumberofregionsofthe
Community '.
Reason
ThelagisnotevidentinallMemberStates.
Voting
For:35,against :45,abstentions :15.
Point5.3.1
Amendthefirstindenttoread:
'—someindustrialized MemberStateswhichadoptamorepreventiveapproachandconcentrate onraising
generalskilllevelsonanongoingbasis;'
Reason
Thisisamoreaccuratedescription ofthesituation .
Voting
For:28,against :56,abstentions :15.
Point11.4.4
Deletethispoint.
Reasons
Thecontentofthisparagraph isconfusinganditisunnecessarily controversial :itappearstocallfor
Community levelcollectivebargaining andthereisnoconsensus insupportofsuchaproposal .Furthermore ,
thereisnohardevidencewhatsoever tosupporttheclaimthatactionasdescribedwouldhaveapositive
effectonthedevelopment prospectsofdisadvantaged regions.
Theretentionofthisparagraph wouldweakentheimpactoftheOpinionwhichelsewherecontainsmore
relevantviewstowhichattention shouldbedrawn.
Voting
For:29,against :69,abstentions :none.
Point11.6.1
Deletethefinalindent.
Reason
Uniformapplication ofCommunity lawmustnotbecalledintoquestion .
Voting
For:30,against :62,abstentions :3.