Report from the Commission to the Council, the European Parliament, the Economic and Social Committee and the Committee of the Regions : second Report on Economic and Social Cohesion
Date: 2001-01-31
Institutions: European Commission
Subjects: Cohesion Fund, activity report, economic and social cohesion, economic policy, regional disparity

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 31.1.2001
COM(2001) 24 final

REPORT FROM THE COMMISSION TO THE COUNCIL, THE EUROPEAN
PARLIAMENT, THE ECONOMIC AND SOCIAL COMMITTEE AND THE
COMMITTEE OF THE REGIONS

SECOND REPORT
ON ECONOMIC AND SOCIAL COHESION

REPORT FROM THE COMMISSION TO THE COUNCIL, THE EUROPEAN
PARLIAMENT, THE ECONOMIC AND SOCIAL COMMITTEE AND THE
COMMITTEE OF THE REGIONS

SECOND REPORT
ON ECONOMIC AND SOCIAL COHESION

INTRODUCTION

The role of the Cohesion Report

Article 159 of the Treaty states that every three years the Commission should present ‘a report
on the progress made towards achieving economic and social cohesion and on the manner in
which the various means (including different Community policies) provided for in (the)
article have contributed to it.’ This report is the response to this requirement. Article 45 of the
General Regulation on the Structural Funds specifies the contents of the report.

The Commission adopted the First Cohesion Report at the end of 1996. This was the basis for
the first Cohesion Forum held in April 1997 and for the proposals contained in ‘Agenda 2000
- for a stronger and wider Union,’ which led to the reform of cohesion policy adopted by the
Council in June 1999.

The Commission has chosen to present the Second Report on Economic and Social Cohesion
at the beginning of 2001, which falls immediately after the first phase of the implementation
of the reform of the Structural Funds, and after certain key decisions have been taken as
regards financial allocations and geographical eligibility for support. It is, therefore, already
possible at this stage to make a broad ex ante assessment of the possible impact of the reform.

The second Report also contains an updating of the regional analysis contained in the Sixth
and last Periodic Report on the situation and development of regions published in 1999. Such
an updating is more necessary than before since the Cohesion Reports replace the Periodic
Reports which the Commission has published since the beginning of the 1980s.

First analysis of cohesion in an enlarged Union

As the Treaty and the general Regulation on the Structural Funds require, the Report analyses
the changes in cohesion and the factors which contribute to it. Without prejudging the timing,
the procedures or the order of countries entering, the working hypothesis adopted relates to an
enlarged Union of 27 Member States.

So far as the data allow, each part of the Report includes consideration of the situation in an
enlarged Union. This should be the context for analysis, rather than in terms of a more static
analysis of the respective situation in the present 15 Member States and the 12 countries with
which accession negotiations are taking place. An analysis of regional features in Turkey, the
13th candidate country with which negotiations have not yet begun, is included separately.
This will be the subject of a more systematic analysis in future reports after negotiations have
begun.

II

Launching the debate

The report develops a set of conclusions and recommendations with a view to opening up a
debate on the future of cohesion policy after 2006 in an enlarged European Union. The
Commission is convinced that for the future, important changes will be required to a policy
which was designed for the present Member States. While enlargement is major part of the
explanation for the need for change, it is not the only one in view of the far reaching
economic and social and territorial changes affecting the present EU15. These changes are
also examined in the report.

The debate which will ensue will involve the EU institutions and agencies, Member States
and regional and local authorities, as well as the relevant economic and social interests, non-
governmental organisations, universities and other academic institutions. The Commission
itself is organising a Cohesion Forum in Brussels on 21 and 22 May 2001 to provide an
opportunity for the exchange of ideas and discussion of future cohesion policy. The candidate
countries will be fully involved in this consultation exercise.

At a later stage, the Commission will set out proposals which will then be presented to the
European Parliament and the Council of Ministers for a new cohesion policy to take effect
from 1 January 2007.

III

Synthesis of the report
on economic and social cohesion

Table of contents

PART I : Situation and trends

PART II : Contribution of Community policies to cohesion

PART III : Economic and social cohesion policy : the results

CONCLUSIONS AND RECOMMENDATIONS

TEN ISSUES FOR PUBLIC DEBATE ON THE FUTURE OF COHESION POLICY

IV

SYNTHESIS OF THE COHESION REPORT

PART I: Situation and trends

A narrowing of income disparities in the EU15

In the EU today, disparities in income (GDP) per head between Member States and, more
particularly, between regions, remain considerable. The average income per head of the 10%
of population living in the most prosperous regions is, for example, 2.6 times greater than the
bottom 10%.

The disparities, however, have narrowed over time. In the three least prosperous Member
States (Greece, Spain and Portugal), average income per head has risen from 68% of the EU
average in 1988 to 79% in 1999, a reduction of a third in the initial gap. Disparities between
regions have narrowed by less, partly because the gaps have widened between regions within
certain Member States.

Lower income per head at regional level is associated with lower output per person employed,
lower levels of education and training – despite significant progress achieved in recent years -
less research and development activity and innovation, as well as a slower pace of
introduction of the new information and communication technologies. On the other hand,
there has been a marked improvement in relative infrastructure endowment in less prosperous
regions, a key factor in their longer-term development prospects.

A step change with enlargement

With the enlargement of the Union, the economic landscape is set to change significantly. An
analysis of the situation as it stands today points to a doubling of the income gaps between
countries and regions, a doubling in the sense that if a Union of 27 existed tomorrow:

–

–

at national level, over one-third of the population would live in countries with
an income per head less than 90 % of the Union average - the current threshold
for eligibility for aid under the Cohesion Fund - compared to one-sixth in the
present EU15.

level,

at regional
the average income per head for the bottom 10% of
population, living in the least prosperous regions in EU27, would be only 31%
of the EU27 average. In the EU15 today, the income per head of the bottom
10% of population equates to 61% of the average.

At national level, in a Union of 27 the countries separate into three main groups. The most
prosperous group comprises 12 of the current Member States of the Union – all except
Greece, Spain and Portugal - where income is above average. This is followed by an
intermediate group of Greece, Spain and Portugal, together with Cyprus, Malta, Slovenia and
the Czech Republic, where income per head is around 80% of the EU27 average, with 13% of
the total EU27 population. The real change compared to the Union of today, however, would
be the existence of a third group comprising the 8 remaining candidate countries where
income per head is around 40% of the EU27 average. This is a significant group accounting
for around 16% of the population of the EU27.

V

As an example, infrastructure in the candidate countries is inadequate in quantity and often of
poor quality, while evidence suggests that labour force skills and the kind of education and
training provided do not match the needs of a modern market economy. As regards transport,
the Transport Infrastructure Needs Assessment estimates the total cost of constructing trans-
European networks in these 12 countries at
90 billion, while several studies put the cost of
complying with Community environmental standards at
50-100 billion, giving an overall
amount of

15-20 billion a year, for the next 10 years, for the two sectors.

€

€

€

In sum, the evidence demonstrates that considerable progress has been achieved in the present
EU15 in reducing income gaps between regions, though on past trends it is likely to take
another generation before regional disparities are eliminated. Enlargement widens the
disparities markedly. Given existing levels of income per head in the candidate countries,
convergence between regions in the enlarged Union would take at least two generations if it
occurred at the same pace.

Employment: some signs of progress

Employment in the EU15 rose by over 2 million during the 1990s, but this was not sufficient
to significantly increase the employment rate - the proportion of the population of working
age in employment - which remained at just over 60%, well below the ambitious objective of
70% fixed for 2010 by the Lisbon European Council. The average figure, however, conceals
substantial differences across the Union. Only 4 Member States had an employment rate in
1999 above 70%, while in Greece, it was only around 55% and in Spain and Italy, even lower.
10% of the Union’s population lived in regions where well below half of those of working age
were in employment (44%).

Despite strong growth of employment of women, mostly in part-time jobs (one woman in
three in the Union works part-time), their employment rate was 19 percentage points below
that of men in 1999. All of the employment growth in the Union over the 1990s was in
services, the largest increases occurring in the most prosperous regions and in high-skilled
jobs. At the same time, because of skill mismatches, labour shortages are beginning to emerge
in many regions, especially in new sectors of activity and particularly in information
technology.

The persistence of wide gaps in unemployment in the EU15

Disparities in unemployment remain wide in the Union. In 1999, Greece, Spain, France, Italy
twice the rate in
and Finland had unemployment
Luxembourg, Netherlands, Austria and Portugal where the figure in each case was below 5%.
Regional disparities are much more pronounced: the 10% of population in the worst-affected
regions - mostly regions where development was lagging, but some of which were undergoing
restructuring - had an unemployment rate in 1999 of 23%, nearly 8 times the average for
those in the least-affected regions (3%).

rates of more than 10%, at

least

Labour markets in the candidate countries: an incomplete transition

While there are superficial similarities between labour markets in the candidate countries and
the EU15 - in 1999, unemployment averaged 10.2% in the former 9.3% in the latter, while the
average employment rate was much the same in the two - there are major underlying
differences, which are a legacy of the ongoing process of transition. Five key features are
worth highlighting:

VI

–

–

–

–

–

women in the candidate countries are continuing to withdraw from the labour market,
though participation rates are still higher than those in most parts of the Union;

employment in traditional industries remains high even after the loss of 25-50% of
jobs over the 1990s;

agricultural employment, at 22% of the total, is 5 times the average for the Fifteen
(4.5%), though its importance varies markedly between the countries;

labour productivity remains lower than in the EU15;

employment in services has grown significantly, but at a much higher rate in the
capital cities than in other parts of the countries.

In sum, the return of stronger economic growth in the second half of the 1990s has generally
had favourable consequences for employment and unemployment in the EU15 but the effect
in terms of reducing regional disparities in income and employment has been more limited. In
the candidate countries,
the transition process remains incomplete, with the risk that
unemployment could rise in many regions in the period ahead. But the outlook for labour
markets in an enlarged Union will be heavily influenced by demographic trends. In the EU15,
these will lead to an ageing of the labour force and could result in it declining in number after
2010. In the candidate countries the pattern is broadly similar, but an important feature here is
the expected growth in the number of young people aged 20-35. In an enlarged Union, this
would be an important balancing factor in an otherwise ageing population and labour force.

Social cohesion and the incidence of poverty: a persistent problem

In 1996, 18% of the population in the Union, or one in six, had income below the poverty
level.1 The countries where the proportion was lowest, Denmark and the Netherlands
(11-12%), are also those with income per head above the EU average. At the other extreme,
20-25% of the population in Portugal and Greece had income below the poverty line. The
contrast is even sharper in respect of long-term, or persistent, poverty which affects only 3%
of people in Denmark and the Netherlands but 12% in Portugal and 10% in Greece.

There are many root causes of poverty and particular groups are especially at risk, including
people with low education, old-age pensioners, the unemployed and others not in work, lone-
parent families and families with large numbers of children. Many poor families have more
than one of these characteristics.

While comparable data for the candidate countries are not yet available, the evidence suggests
that rural areas are most affected by poverty.

The territorial dimension: persistent imbalances

territorial

important

The most
imbalance in the Union today is that between the less
developed regions and the rest. At the same time, spatial disparities in the Union reflect a
more complex reality than indicated by differences in income and employment between
regions. This reality has to do with the potential for development and is implicit in Article 158

1

According to the EUROSTAT definition, which is the proportion of the population with income equal
to or below 60% of the median in their own country.

VII

of the Treaty, which refers to the need to promote a harmonious development of the Union as
a whole.

For the Commission, and for the Member States, this was the rationale behind the European
Spatial Development Perspective (ESDP), which was the first coherent effort to clarify the
nature of the major territorial imbalances across the Union as a whole. These imbalances and
the need to address them assume an added dimension with enlargement, if only because the
land area of the Union will have doubled in relation to the early 1990s once the candidate
countries have entered.

High geographical concentration of activity in the Union

Economic activity is concentrated in a core part of the Union situated in the triangle extending
from North Yorkshire in the UK to Franche-Comté in France and Hamburg in Germany.
While this area accounts for only one-seventh of the Union’s land area, a third of the
population live there and almost half (47%) of income is produced there. In other comparable
economies, like the US, the pattern of activity is more dispersed.

For the EU, this concentration has negative implications not only for peripheral regions but
also for the central regions themselves, particularly in terms of traffic congestion and pressure
on the environment and health, which could in the long-term offset the apparent advantages.

Urban areas: growth centres for achieving polycentric development…

The concentration of population in central areas is reflected in a high degree of urbanisation
and a disproportionately large share of the highly skilled functions associated with the
knowledge economy being located there: business headquarters, research installations and the
most highly qualified workers. The net result is a level of productivity some 2.4 times higher
than in peripheral areas. The counterpart of this concentration is that the Union lacks the kind
of polycentric pattern of activity which is undoubtedly a factor in the territorial cohesion of
the US, in its less pronounced regional disparities in income and employment and, perhaps, in
its competitiveness.

…but with pockets of deprivation

The Union’s urban areas, however, are also those where social and economic disparities are
most marked and certain districts have high levels of poverty and exclusion. Differences in
unemployment and dependency rates, for example, are wider within some cities than between
regions in the Union. (The Commission’s urban audit identified a number of cities where
unemployment varied by a factor of 10 between districts.)

Varying circumstances in the rural areas

The extent of rural areas varies significantly between Member States, from the Nordic
countries and Ireland, where two out of every three people live in such areas, to Belgium,
Germany and the UK, where only one in eight does.

The population living in rural areas is increasing, if to differing degrees, in all Member States
and employment growth is higher there than in the rest of the Union, reflecting their
comparative advantages. Equally, however, many remain in difficulty because of their many
handicaps.

VIII

Border regions: the problems shift eastwards

Border regions, which are home to one in four Europeans, often suffer from problems of
accessibility and lack of economic opportunities because of the fracture created by an
international frontier. With the creation of the single market, backed by cross-border
cooperation programmes supported by European funds, for the most part existing internal
border regions no longer show significant differences in income per head and unemployment
compared to the Union as a whole. In general, the same applies to those regions in the EU15
bordering candidate countries, although there are important differences between the regions
concerned. For these regions, the situation could change in the future, in the sense that they
are in the frontline in the more competitive circumstances after enlargement.

In the candidate countries, a significantly larger proportion of the population live in border
regions (6 out of every 10 people), than in the Union, the main problem areas being in the east
along frontiers with third countries.

Specific areas

Islands and archipelagos, mountain and peripheral areas - including the ‘outermost’ regions -
are an important part of the Union and share many common physical and geo-morphological
characteristics and economic disadvantages. These regions generally suffer accessibility
problems which make their economic integration with the rest of the Union more of a
challenge. Accordingly, a large number already receive EU regional aid - 95% of both
mountain areas and islands are covered by Objective 1 or 2. At the same time, their social and
economic conditions vary widely and two of the most prosperous candidate countries are
islands (Cyprus and Malta).

IX

PART II: Contribution of Community policies to economic and social cohesion

This part of the Report examines the manner to which Community policies have contributed
to cohesion, as stipulated in the Treaty (Article 159), and the implications for enlargement of
the Union.

1. Economic and monetary integration policies

Economic and Monetary Union

Macroeconomic stability helps to achieve economic convergence

For high rates of economic growth to be sustained in lagging regions of the Union, it is
important that structural policies are allied to macroeconomic policies which ensure financial
stability. The establishment of a single currency makes the maintenance of such stability
easier to achieve.

Over the 1990s, in the run-up to monetary unification, inflation was reduced considerably in
the cohesion countries, especially in Greece and Portugal, from well above the EU average to
around 2½%. At the same time, growth of GDP was above average in all four cohesion
countries in the second half of the 1990s. Nominal convergence was, therefore, accompanied
by real convergence.

This tendency was particularly marked in Ireland, while convergence has occurred more
slowly in Spain and Portugal and more recently in Greece.

The introduction of the Euro makes differences more transparent and capital more mobile

The introduction of the Euro should lead to increased competition and, therefore, to greater
market efficiency. By reducing transaction costs and interest rate differentials, it should lower
the price of capital and increase its availability in lagging regions. Capital is likely to flow
more easily to areas where the returns are highest, implying that the specific features of
different regions will assume more weight
finance. The least
competitive regions will therefore be particularly exposed.

in the competition for

At the same time, regional variations in labour costs will become more transparent, which
should help to focus attention on underlying differences in productivity, a major cause of
differences in regional competitiveness.

The internal market

The decisions taken in 1988 and 1992 to strengthen the Union’s support to regions with
structural difficulties were motivated by a recognition that closer economic integration would
not necessarily permit the reduction of regional disparities and could, initially at least, lead to
them widening. Cohesion policy therefore sought to help less developed regions benefit from
the advantage of European integration and to enable the Union as a whole to fully exploit its
growth potential.

The progress achieved towards a more integrated economy, now extending to the applicant
countries as well as the present Member States, is reflected, in particular, in convergence of
prices across the Union, expansion of trade and growth of direct
investment between
countries.

X

The extent of price convergence differs between sectors

In contrast to the prices of manufactures, which have tended to converge across the Union,
differences persist for most services, which underlines the local nature of markets in a number
of sectors. Convergence towards EU prices also seems to be occurring in the more advanced
candidate countries, at least for traded industrial goods.

Significant growth of trade

The EU economy is becoming more integrated into the global economy as well as internally.
Closer integration is being accompanied by growing similarity in the composition of trade
between Member States.

Trade flows between the Union and the candidate countries have increased markedly during
the 1990s, reflecting the progressive move towards a free trade area planned for 2002. The
Union already accounts for 60% of total exports of the candidate countries while these
account for 10% of Union exports. The composition of trade between the two suggests that
they do not compete in the same type of product.

Growth of foreign direct investment (FDI)

FDI is particularly important in some Member States, especially Ireland, Sweden and the
Benelux countries. Mergers and acquisitions, which doubled between 1991 and 1999, account
for a significant part of this.

Union direct investment in the applicant countries is also growing considerably. Since such
flows now amount, on average, to around 5% of the GDP of the recipient countries and some
20% of investment, they have a major impact on their growth and productive potential.

On the other hand, these flows are very small in relation to Union GDP. They seem to be
aimed more at supplying the home market than at exporting back to the EU and are, therefore,
unlikely to have a depressing effect on employment and wages in the Union.

Tendencies to concentration or dispersion?

A key question concerns the extent to which economic integration is likely to lead to some
sectors of activity concentrating in a few regions to exploit economies of scale. In practice,
there seems to be a general trend towards concentration in manufacturing, but the extent
varies between industries and is occurring at a very slow pace because of the scale of the
investment required to change the locational distribution of activities significantly (Ireland
and Finland, for different reasons, are exceptions). The risk exists that such a concentration
would increase the vulnerability of some regions to external shocks which affect particular
sectors concentrated there.

The effects of integration and the need for accompanying policies

The increased competition generated by closer integration and the diminished possibility of
protecting local industries are likely to put a premium on technical know-how and to reduce
the demand for low skilled workers even further. The response to this should be to raise the
levels of education and training of the work force and to orient training towards the skills
required in growing sectors. Education policy and active policies for employment and social
development therefore have an important role to play in accompanying economic integration.

XI

At the same time, the candidate countries will need to comply with the requirements of the
‘acquis’ (the body of Community law, including directives, regulations as so on) which is
likely to add to production costs and affect the ability of their businesses to compete with
those in the present Member States.

However according to the studies which have been carried out, enlargement of the single
market to include the candidate countries should have generally beneficial effects for all parts
of the Union, especially for those on the two sides of the border between the old and new
Member States.

Competition policy

Competition policy improves the functioning of the internal market

State aids provided by Member States have a potentially important effect on the regional
distribution of economic activity. In the period 1996 to 1998, they accounted for 2½% of total
public expenditure in the Union or over 1% of EU GDP (in other words, roughly the same
size as the Community budget as a whole) as compared with 0.45% of GDP allocated to EU
structural policies.

The scale of expenditure on them, however, varies significantly between Member States.
Although the gap narrowed in the latter part of the 1990s, it is still the case, according to the
latest figures, that the more prosperous countries spend more than the cohesion countries, so
offsetting to some extent the effect of EU structural policies in the latter.

In an attempt to reduce this negative effect, more objective and transparent criteria were
established by the Commission during the course of 1999-2000 for defining eligibility for
regional aid. As a result, the proportion of the EU population living in regions qualifying for
such aid was reduced from 46.7% to 42.7% and assistance has become more concentrated on
the most disadvantaged areas. Nevertheless, because of the decisions made by Member States,
it was not possible to achieve a better correspondence between the regions eligible for EU
structural support and those assisted by State aids.

2. The Common Agricultural Policy : prices and agricultural markets

Successive reforms have greatly changed the concept of the Common Agricultural Policy
(CAP) and the way it works. During the 1980s, the CAP was directed at reducing official
prices of agricultural produce and compensating for the effects of this on farmers’ income
through direct payments (direct aids), the use of which was generalised under the 1992
reform. A new reform with two important strands was introduced as part of Agenda 2000.
First, official prices were lowered with the aim of strengthening the competitiveness of the
sector while ensuring a reasonable standard of living for producers. Secondly, a new
framework was established for rural development policy, which became the second pillar of
the CAP.

Significant changes in the distribution of expenditure between countries

Accordingly, direct aids and support for rural development have accounted for a growing
share of total expenditure on agriculture, while only 29% of spending under the EAGGF-
Guarantee went on market support and payments to exporters in 1998 as against 82% in 1992.

XII

The CAP, through market support measures and direct aid in particular,
involves large
transfers between Member States as well as between sectors of economic activity and between
social groups.

In 1998, as in 1993, net transfers were positive for three of the four cohesion countries.
Portugal, however, traditionally a low beneficiary, remained a net contributor, despite its
share of total agricultural expenditure rising from 0.6% to 1.6%. The change in the scale of
net transfers, however, differed between Member States. In absolute terms and in relation to
their agricultural area, three Member States (France, Germany and Spain) absorb over half of
EAGGF-Guarantee expenditure. On the other hand, if transfers are expressed in relation to
agricultural employment, Denmark and Belgium are the main beneficiaries.

But very different regional effects

The level of support to agriculture has increased in relation to the number employed in all
regions of the Union, largely because of a continuing fall in employment. Overall, the 1992
reform has not radically altered the distribution of support between regions, although it has
increased the amount going to regions producing cereals, oil seed and beef, so to many
regions in France, Spain and Ireland. Support to producers is lower in the least prosperous
regions.

There remains a marked difference between the southern and the northern regions in respect
of the economic size of agricultural holdings. The average size of those located in the 20
regions with the smallest size of holding (all situated in the south) declined by just over 2%
between 1993 and 1997. At the same time, it grew by almost 25% in the 20 regions with the
largest size of holding, all these being in the north.

3. Horizontal policies

Employment policy and the development of human resources

Although Member States are responsible for developing and implementing employment
policies,
there is a clear need for coordination, elaboration of common objectives and
exchange of information at the Union level. This is the reason why a European Employment
Strategy was launched in the Treaty of Amsterdam in 1997, with priority being given to active
labour market measures. Its most visible component is the ‘Luxembourg process,’ within
which the ‘employment guidelines,’ adopted by the Council each year, are translated into
‘National Action Plans’ (NAPs) in each Member State. These are then evaluated annually in
the ‘Joint Employment Report,’ adopted by the Commission and the Council.

The Luxembourg process

The Luxembourg process is based on four operational pillars: employability of the labour
force; development of entrepreunership; adaptability of enterprises and those in employment
and support
to reduce
for equal opportunities. The objective of policy is two-fold:
unemployment and increase employment, in part to ensure the long-term sustainability of the
European social model. These objectives were confirmed by the European Councils in Lisbon
and Nice.

In addition, after the Nice European Council, a process for the coordination of national plans
for social inclusion was begun.

XIII

Although it is difficult to identify the specific contribution of the Employment Strategy, the
favourable employment developments which have occurred in the recent past seem to suggest
that a virtuous circle has been created, in which Member State macroeconomic policies of
stability and structural reform are an important part.

Regional disparities in employment and unemployment

Labour market performance continues to vary widely between regions, which suggests the
need for the development of a regional and local employment strategy.

Labour shortages are beginning to appear in a number of Member States at the same time as
unemployment remains high, reflecting the mismatch between the jobs on offer and the labour
skills available. This requires action both to raise the level of education and training and to
direct it to towards sectors of activity in which the demand for labour is growing, while
ensuring that priority is given to groups at risk. Despite the general increase in levels of
education, too many young people still leave school without adequate qualifications. There is
also a need to reduce the risk of exclusion of those with low skills from the technological
revolution. All the NAPs include specific measures aimed at target groups for tackling this
problem.

Improvements can be identified in the way Member States address equal opportunities,
especially in Finland and Ireland. Nevertheless, more could be done in many countries.

2002: Evaluation and new proposals

In the proposed employment guidelines for 2001, the Commission has focused on achieving
full employment, the role of the social partners, continuing training throughout a person’s
working life and social inclusion. An overall evaluation of the results of the strategy and of
the objectives will be carried out in 2002.

Environmental policy

The pursuit of economic and social cohesion and the protection of the environment are
complementary objectives. Even though environmental protection may initially increase the
costs of production or, more accurately, make them more visible, the effect should not be
overestimated. The cost of implementing all the directives on water and waste treatment as
well as the measures resulting from the Kyoto conference should amount to only around 0.5%
of Union GDP.

Environmental protection should not be regarded solely as imposing costs on the economy,
but equally as a means of improving the quality of life, especially in problem urban areas.

Higher costs, but also advantages for least prosperous regions…

In the case of policies on water and waste, which are critical for environmental protection,
there needs to be considerable investment to tackle problems in the cohesion countries and the
least prosperous regions. The Structural and Cohesion Funds will help cover the cost of this in
lagging regions and bring standards up to those elsewhere.

XIV

… for the weakest social groups…

The cost of environmental protection, as in the case of implementing the framework directive
on water, will sometimes fall on the weakest members of society, because of the transfer of
some of the costs involved on to users, notably on to households and farmers, under the
‘polluter pays’ principle.

The measures involved, however, also contribute to social cohesion, in respect of public
health and in terms of the jobs created. Although the likely effect on employment seems
modest at the Union level, several tens of thousands of jobs could, nevertheless, be created
over the next few years as a result of the directives on water and waste treatment.

…and for the candidate countries

The candidate countries face the same problems as the cohesion countries but to a greater
extent, particularly in respect of waste treatment. The Union is already helping to finance the
investment required through ISPA and after accession, this will be one of the priorities for the
Cohesion Fund.

4. Other Community policies

Research and development

The Community research and technological development policy (RTD) is focused on the
pursuit of excellence in order to strengthen the Union’s position in relation to its international
competitors. In terms of territorial balance, the establishment of a European Research Area
opens up further prospects for integrating research and regional development.

A more even distribution of knowledge…

By requiring the involvement of partners from several Member States, the Framework
Programme helps improving the exchange of knowledge and the joint development of
technologies. The proportion of projects involving at least one participant from an Objective 1
region has risen from 27% in 1994 to 41% in 1998. In the cohesion countries, however,
participants tend to be located in the centres of excellence in the capital cities or most
prosperous regions.

…greater mobility of researchers…

The cohesion countries are well represented in programmes designed to encourage the
mobility of researchers, many of whom are given an opportunity to spend time in non
cohesion countries’. This, however, should not lead to a brain drain towards central areas,
where research is already concentrated, which could compromise balanced territorial
development in Europe, a problem which might also arise in the candidate countries.

…and a need for new approaches in disadvantaged regions

It is important to create in lagging regions the proper framework conditions for research and
innovation. Improvements in the international career opportunities of young researchers and
an increase in RTD resources are not sufficient by themselves to expand their innovative
capacity. In these regions, it is important to create more career opportunities for researchers.

XV

Transport policy

The objective of the common transport policy is to ensure access throughout the Union to
suitable transport services which respond to user demand.

More efficient use of resources

With the entry of new Member States, there will be an even greater need to use Community
resources more efficiently, which means better assessment of alternative projects, increased
mobilisation of private sources of
finance, greater utilisation of existing capacity,
improvements in the quality of service and more respect for the environment. On this last
point, new technologies, like intelligent transport systems and intermodal equipment, can
radically reduce the negative effects of transport.

The trans-European transport networks

The trans-European transport networks are improving access to remote peripheral regions and
islands, opening up border areas through the construction of new routes across natural barriers
and achieving a better balance of activity along the coastline.

Community measures need to be aimed at ensuring the mobilisation of public and private
organisations and companies to carry out the investment required for constructing the network
defined in the 1996 Guidelines.2
to introduce major
modifications to the guidelines. A first step has been made in this direction by including ports
in the plans and other changes are foreseen to equip lagging regions and to improve the
distribution of the major traffic flows in the Union. There is also a need to tackle the growth
of goods transport by road which threatens sensitive areas and already congested routes for
long distance haulage, this means putting in place a genuine European freight network, based
so far as possible on rail and waterway.

is also necessary, however,

It

The continued construction of high-speed lines coupled with a trans-European network of
airports will provide fast international travel which is essential for reducing the territorial
fragmentation of the Union, while the progressive introduction of quality and safety standards
harmonised at the EU level is also a major aim of policy.

Trans-European transport networks,
therefore, have an important effect on territorial
development and regional disparities, as well as on the distribution of activity, the functioning
of the labour market and trade flows, as emphasised by the European Spatial Development
Perspective (ESDP).

Energy policy

Energy: an important factor in competitiveness and sustainable development

There should be no marked differences between regions in the availability of energy and
prices. Despite the efforts undertaken, however, there is not yet a single market for energy in
the Union.

2

Decision 1692/96/CE.

XVI

in embryonic form and their
Common rules for environmental protection are still
implementation could have positive or negative effects on particular sectors of activity and
regions. Sustainable development requires an intensification of programmes for increasing
energy efficiency – but also an improvement in the means for managing and controlling
atmospheric emissions and the application of market mechanisms to encourage this. There is
also a need to introduce legislation which encourages the use of renewable energy sources.

Dependency and the need for diversification

The extent of dependence on external sources is a constraint on development in the Union as a
whole. This dependency, which is set to increase if the use of renewable sources and more
rational energy use are not encouraged sufficiently, could well penalise lagging regions the
most in the event of a supply shock.

Enterprise policy

The Lisbon European Council set the Union the objective of becoming the ‘most competitive
and dynamic, knowledge-based economy in the world.’ To attain such a goal, and to support
employment creation, requires entrepreneurship to be encouraged and an environment
favourable to change and innovation to be developed.

Enterprise policy is intended to help achieve this objective for the whole of the Union,
without distinguishing a priori between different areas. Nevertheless, certain measures
address problems which particularly affect lagging regions. These include help in accessing
risk and start-up capital (especially for SMEs), policies for the diffusion of innovation and
entrepreneurial best practice, and support for tourism, often a key sector for the development
of these regions.

Common fisheries policy

The Common Fisheries Policy is focused on four major areas: the conservation of fish stocks,
the restructuring of the fleet, the organisation of markets and fishing agreements with third
countries. While the sector is small relative to the EU economy as a whole (accounting for
only 0.2% of GDP and 0.4% of employment in 1997), concentration in coastal and peripheral
regional
areas (including the outermost areas) gives it a particular
development. These areas are in many cases disadvantaged, 70% of fishermen and 60% of
total employment in the sector being located in Objective 1 regions in 1997.

importance for

Because of this concentration, many of the measures supported by the Common Fisheries
Policy, which are intended to strengthen the competitiveness of the sector, contribute to
economic and social cohesion, particularly fishing agreements with third countries as well as
measures on fish farming and processing.

The restoration of a sustainable balance between fish stocks and fishing will necessitate a
significant reduction in capacity, catches and the number of fishermen. Accompanying social
and economic measures to maintain employment in areas dependent on fishing and their
viability (restructuring within and outside the sector, vocational retraining, and so on) will
become increasingly necessary. This is the aim of the Financial Instrument for fisheries
Guidance (FIFG).

XVII

PART III: Economic and social cohesion policy: the results

Over the ten years since the reform of the Structural Funds, significant progress has been
made in terms of convergence and cohesion in the Union.

Impact of structural policy since 1989

Increased financing

The finance made available through the Funds almost doubled between 1989 and 1999, rising
from 0.27% of EU GDP to 0.46%. The transfers were most pronounced in the cohesion
countries, the main beneficiaries, equivalent to over 10 years to 1.5% of GDP in Spain, 3.3%
in Portugal and 3.5% in Greece. In Greece and Portugal, Community transfers represent over
10% of investment.

Increased financial and geographical concentration

Following the decisions taken by the Berlin Council in the perspective of the first stages of
enlargement, the amount of finance allocated to cohesion policy in the present 15 Member
States will be reduced by 2006 back to the level in 1992 – 0.31% of GDP of the present
EU15.

The concentration of finance in lagging regions will, nevertheless, enable the average amount
of aid per head to be maintained for the period 2000 to 2006 at the same level as in 1999.
Overall, 60% of the total of the Structural and Cohesion Funds will be allocated to Member
States, which, together, account for no more than 20% of EU GDP and 70% will be
concentrated in lagging regions.3

The geographical concentration of Structural Fund intervention on the regions most
in
difficulty has never before been as high, only 41% of the EU15 population living in regions
eligible under Objective 1 (lagging regions) and Objective 2 (regions undergoing
restructuring) in 2006. Nevertheless, concentration is limited, on the one hand, by the high
degree of fragmentation of areas eligible under the new Objective 2 and, on the other, by the
lack of coherence with the map of State regional aids.

The impact of structural policies: positive but uneven effects

Between 1988 and 1998, the difference in income per head between Objective 1 regions and
the EU average narrowed by one-sixth, GDP per head in PPS in the former increasing from
63% of the average to 70%. Within this general trend, a number of regions, in particular those
in Ireland, the new German Länder and Lisbon, have performed better than the average.
Nevertheless, rates of employment and unemployment at the regional level have shown little
sign of converging.

In the case of Objective 2 and 5b regions, available data seem to indicate that employment
and unemployment tend to have changed in a more favourable way than in the rest of the
Union. In particular, the average unemployment rate in Objective 2 areas declined by 2.2
percentage points over the period as compared with 1.3 points in the Union as a whole.

3

Regions where GDP per head is below 75% of the EU average.

XVIII

Over the period 1989 to 1999, structural intervention had a significant effect in Greece and
Portugal, GDP at the end of the period being an estimated 9.9% higher in the former and 8.5%
higher in the latter as result of intervention. The effect was less in Ireland (3.7%) and Spain
(3.1%), the Structural and Cohesion Funds forming a smaller proportion of GDP there. This
significant contribution to growth was accompanied by more limited effects on the level of
unemployment especially in Ireland and Spain.

Strengthening factors underlying competitiveness

The Structural and Cohesion Funds do not only stimulate demand by increasing income in the
regions assisted. By supporting investment in infrastructure and human capital, they also
increase their competitiveness and productivity and so help to expand income over the long-
term. Structural intervention, therefore, tackles the root causes of regional imbalance and is
aimed at strengthening the factors which provide the basis for sustained growth. Improving
systems of
transport, supporting SMEs, RDT and innovative capacity, strengthening
education systems and improving the environment have, therefore, been the main focus of
intervention.

Transport infrastructure has expanded significantly, investment co-financed by the Structural
and Cohesion Funds achieving time savings of, for example, 20% in Spain, through an
improvement in the motorway network, and 70% in Portugal in the case of rail freight.

Around a sixth of firms located in Objective 1 regions were recipients of support to SMEs,
creating over 300,000 new jobs. In the case of Objective 3, the rate of placement of people
who had followed a training programme varied between 25% and 50% according to the
country and the groups targeted.

Improving employability in the Union

While the human resource measures taken under Objective 1 have contributed to the
development of the regions concerned, those taken under Objective 3 have helped young
people, the long-term unemployed and those threatened by exclusion to find employment.
However, the modest scale of Community funding in relation to national expenditure has
often weakened the specific targeting of measures in a context in which national employment
priorities tend to take precedence. Although co-financed measures tend to be more effective
the more they are concentrated on those who have the greatest difficulty finding employment,
targeting on the most vulnerable groups has remained limited. Nevertheless, over the period
1994 to 1999,
the placement rate of recipients who participated in training measures
increased, the rate varying between 30% and 80%. As regards Objective 4, which had a slow
and difficult start, some of the evaluations undertaken suggest that the benefits were divided
between an improvement in the competitiveness of firms and an increase in the skills of some
categories of worker.

Community Initiatives: their cross-border and transnational nature increases the added value
for the Community

Community Initiatives have enabled a common approach to recurring problems in the Union
to be developed. The development of cross-border and transnational cooperation, under
INTERREG, and the strengthening of partnership at
local level, which is a feature of
LEADER and URBAN, are of most significance in terms of Community added value.

XIX

Structural Funds procedures : increased efficiency of public intervention

Medium-term strategic programming has had a significant influence on national and regional
development policies.

The Structural Funds have also helped spread the use of evaluation of public intervention and
of linking the results achieved more clearly to the finance allocated. The advances made in
this respect, however, vary between Member States.

Community assistance is an effective means of mobilising private capital as well as loans,
especially from the European Investment Bank, as witnessed by major infrastructure projects
in Greece.

The principle of partnership has enabled local elected representatives, social and economic
organisations, non-government organisations and associations to be more involved in
decision-making. However, apart from the formal respect for the obligation, the extent of
partnership in practice has differed greatly.

Financial procedures have often proved complex and a source of payment delays.

Prospects for the 2000-2006 programming period

A renewed effort to ensure the added-value of Community intervention

With the new regulatory system for the 2000 to 2006 period, the Commission has attempted
to increase the added-value of Community intervention and to improve its visibility on the
ground. Four elements are worth highlighting:

–

–

–

–

a better formulation of Union priorities with the adoption by the Commission of
guidelines for Structural Funds intervention, even if
these guidelines remain
‘indicative’ at the request of the Member States;

the obligation, as clearly indicated in the legislation, to mobilise partnership at
different stages of the programming process ;

the formulation and diffusion of ideas on Community policy, notably through the
establishment of the European Spatial Development Perspective (ESDP), published
in 1999 ;

taking into account the employment strategy, to reinforce and to improve job quality.

Prospects for Objective 1 regions

Because of the slight reduction in assistance in relation to the preceding period decided by the
Berlin European Council, the effect of structural intervention on economic growth will be
smaller than in the past, especially in Spain, Portugal and, above all, in Ireland. The effects on
investment, however, will remain significant, especially in Portugal and Greece, giving rise to
long-term gains in productivity.

In other Objective 1 areas, especially the new German Länder and the Mezzogiorno, the effect
of the Structural Funds on the supply side should be significant, though smaller than in the
previous period.

XX

A strategy focused on the factors underlying competitiveness

The Community guidelines have made it possible to adjust the focus of regional development
strategies for the 2000 to 2006 period. In general, there is increased emphasis on structural
factors underlying competitiveness which determine the long-term growth of Objective 1
regions, in particular, research and innovation, information technology and human capital.

Other modifications involve, for example, an improved balance between means of transport in
favour of rail, a reduction in direct payments to firms and greater attention given to
environmental considerations and sustainable development in the formulation of policy, to
urban areas and to equal opportunities.

The challenge of more effective management

The role of evaluation was strengthened by the 1999 reform, especially through the
introduction of the performance reserve which will be allocated in 2003 on the basis of the
therefore, become a management
results of the mid-term evaluation. Evaluation has,
instrument in its own right.

It is premature to draw lessons from the simplification resulting from the new regulatory
system. Indeed, the process of approving programmes by the Commission has not yet been
completed. The Commission’s role has been refocused on the strategic aspects of
programming. Accordingly,
in the negotiations with the Member States and regions
concerned, it examines the priorities proposed particularly carefully while decentralising
implementation largely to the Member States and the relevant administrative authorities.

A first assessment of the effects of decentralisation will only be possible after a few years.
The focus of this should be on verifying whether decentralisation has benefited Member
States and regions and on identifying the measures which need to be taken in order further to
increase simplification in programming and management.

XXI

CONCLUSIONS AND RECOMMENDATIONS

Introduction

The evidence examined in this report shows that over the previous programming periods
(1989-93 and 1994-99) Community cohesion policies have had some notable success. This is
perhaps most visible in the case of the regions where development is lagging behind, where
there has been a general process of catching up in economic and social terms.

At the same time, looking ahead to the next period of Community regional polices, after the
end of the current planning period in 2006, the analysis in this report suggests the need to take
particular account of:

–

–

the important increase in social, economic and territorial disparities resulting from
enlargement;

the far-reaching effects of ongoing social and economic trends such as globalisation,
the radical
transformation of the European economy towards knowledge-based
activities, the changing structure of population and so on.

In addition, a future reform of cohesion policies should take the opportunity to increase the
added value and the visibility of Community policy. Ideally, reform should be accompanied
by a strengthening of the effort to ensure that the other Community policies contribute to
cohesion as much as possible, consistent with the pursuit of the objectives which they are
principally designed to achieve.

Drawing on the analysis of the report, the following sections attempt to set out the main issues
to be addressed in order to prepare the basis for a debate on the future of cohesion policies.
Here, it is important to place the main issues in their correct logical order. Past experience of
reforming cohesion policy reveals an increasing tendency for discussion at Member State
(Council) level to concentrate on financial aspects. For example, in the negotiations on the
financial perspectives for 2000 to 2006 (‘Agenda 2000’), discussions on cohesion policy
probably focused more on the amount and division of funding between Member States than
on the content of the policy. Arguably, a more logical order would be to begin with the
content - and, in particular, to identify priorities for future cohesion policies - before going on
to address issues relating to the delivery system and financial allocations.

Promoting the factors determining convergence

To remain credible, Community cohesion policy must support those actions that are most
likely to contribute to the reduction of the economic, social and territorial disparities in the
Union. A system based simply on fiscal transfers is not enough and the Union must support
the factors that play a decisive role in promoting competitiveness and help to reduce the
profound imbalances affecting its territory. In short, supporting investment in physical and
human capital must remain the key objective of Community cohesion policy before and after
enlargement.

Beyond this broad statement, it is not easy to identify the priorities, especially in the longer-
term perspective of the period post-2006. For example, a decade ago few could have imagined
the role and significance that the new information technologies would assume in today’s
economy and society. Today, it is difficult to imagine an economic and social development
strategy which would not have the promotion of these technologies as a major component. In

XXII

spite of the difficulties, there are, at the same time, certain points of reference for considering
future priorities.

In general, it is evident that the level of productivity is a key factor in the process of growth
and the convergence, in real terms, of national and regional economies. Productivity is
determined to a major extent by the quality of human resources, physical infrastructure
endowment and the capacity for innovation.

The quality of the labour force is determined, in part, by the level of education and, in part, by
the updating of knowledge and skills throughout working life. The evidence suggests that
matching the available skills of the work force with those required by an economy undergoing
fundamental change has become a major problem. The demographic outlook, and its likely
consequences in terms of falling numbers in the labour force in the next decade in the EU15,
can only add to this problem, although the demographic imbalances are less marked in a
Union of 27 in view of the rising numbers of young people in the candidate countries. Making
the best use of all its human resources is clearly a major long-term challenge to the Union.

An adequate endowment of physical infrastructure of a high standard remains a necessary
condition for economic development. Within the Union, while the regional gaps have closed
in certain sectors such as telecommunications or road transport, more remains to be done in
others (for example rail transport, centres of research, etc), especially in the least developed
regions. In the candidate countries,
the assessments
available at present point to major gaps in key economic infrastructures. Priority needs to be
given to promoting the development of the major trans-European networks in transport,
telecommunications and energy and their connection with regional secondary networks.

the information is incomplete but

Investment in knowledge and in new communication technologies is likely to continue to be
the basis of long-term growth in Europe. This is a positive factor for the Union as a whole,
although the new activities associated with the knowledge society are tending to concentrate
in certain urban centres giving rise to a dense network which inter-connects the economies of
Europe’s central heartland. In order to avoid a widening of the imbalance between centre and
periphery, a long-standing feature of the EU15, ongoing investment in the new technologies
will be needed in order to link the peripheral regions into the major European networks,
including the ‘new periphery’ resulting from enlargement to the East and South. Moving to a
knowledge based economy and society depends also on an integrated approach combining the
various dimensions of knowledge: education, training, research and development, innovation
and the information society.

Finally, strengthening the capacity to innovate requires a greater focus on the environment in
which businesses operate. In particular, there is a need to improve the interaction between
firms, especially small firms, and research centres, universities and public bodies.

A key reference point for future actions: environment and sustainable development

Efforts to raise productivity and promote growth for one generation must not, however, be at
the expense of the next. In other words, the development path followed must also be a
sustainable one, a general point which needs to be reflected in all investment decisions.

A key consideration is that economic development can only be secured in the long-term by
the prudent use of natural resources. In this regard, the availability and quality of water are
particular problems in the Mediterranean. Cooperation between countries is one way of

XXIII

addressing water problems but certainly not
treatment, water pricing, environmental control of emissions into the water are others.

the only one. Investment

in waste water

In addition, it is important to encourage investment which serves to limit the damage which
industry, agriculture and households can do to the environment, which means, in particular,
the construction of facilities for treating wastewater and household and industrial waste.
Investment in this area is a priority in the candidate countries.

Identifying priorities for economic and social cohesion

‘to promote overall harmonious
According to the Treaty,
development’ with the particular aim of
‘reducing disparities between the levels of
development of the various regions and the backwardness of the least favoured regions or
islands, including rural areas’ (Article 158).

the Community must act

Based on the analyses in the report with regard to the long-term problems as well as the
opportunities, facing the Union, it is possible to identify certain priorities with an economic,
social or territorial dimension for future cohesion policy.

Among the priorities which have an important
suggested for illustrative purposes:

territorial dimension, the following are

• The least developed regions. This remains the principal priority of EU cohesion policy
and the analysis of the report confirms that there are major gaps in income and opportunity
between the least developed regions and the rest of the Union, although a process of
gradual convergence is discernible within the EU15. With enlargement, however, the gaps
widen once again.

– With the reduction of gaps in endowments in certain types of infrastructure in
the less developed regions of the EU15, less emphasis will need to be placed
on basic investment and more on raising business competitiveness. Basic
infrastructure needs remain considerable in the candidate countries.

–

–

The challenge for all of these regions in an enlarged Union is one of creating
an innovative environment based around a qualified workforce, research and
development and the information society.

Even if the human resource gaps are closing, eliminating the weight of the past
in terms of the low level of qualification of the adult labour force is a long-term
challenge in the EU15. In the candidate countries, the challenge is to adapt
rapidly the workforce to a modern market economy.

• The urban question, which is at the heart of economic, social and territorial change.
Cities are a key location for the pursuit of a strategy for cohesion and sustainable
development.

–

–

Many kinds of disparity are concentrated in cities, where problem areas in
which exclusion and deep poverty prevail are in close proximity to areas of
high prosperity.

It is in the urban areas where the environmental pressures are the most acute.

XXIV

–

–

Cities are economic centres for the development of the surrounding suburban
and rural areas.

Networks of large cities can stimulate a more balanced and polycentric form of
development in which medium-sized towns and cities can play a key role.

• The diversification of rural areas. These areas continue to experience large-scale
changes. Their future depends in large measure on their links with other areas, including
towns and cities.

–

–

–

Agriculture is no longer a major source of employment though it continues to
be the main user of rural land as well as the key determinant of the quality of
the countryside and the environment.

The revitalisation of rural areas and the maintenance of population depend on
the development of new activities outside agriculture, notably in services.

Cohesion policy must play the major role in the diversification of the rural
economy, complementing rural development policies financed by the CAP
which is focused on adapting agriculture to new economic realities as well as
on strengthening the competitiveness of rural areas.

• Cross-border, transnational and interregional cooperation. This is a priority par
excellence for the Union in order to promote integration and reduce the economic and
social fragmentation created by national borders. The internal market and cross-border
cooperation have enabled border regions to become more integrated with the rest of the
Union.

–

The internal border regions of the EU15 have, with the support of INTERREG,
developed new forms of cooperation which the elimination of frontiers alone
would not have been sufficient to create. Their social and economic situation
has improved significantly over recent years, with closer integration into the
internal market.

– With enlargement, there will be a renewed need for cross-border measures to
promote cooperation between the candidate countries and the Union, as well to
assist the regions within the candidate countries that share common frontiers
with third countries to the east and to the south, including the Mediterranean
rim.

–

The Union should promote transnational cooperation areas, within a framework
adapted to the development of networking between regional and local
economies and to new forms of administration.

• Areas undergoing industrial restructuring. The return of sustained growth across the
European continent has to some extent hidden the often serious territorial and regional
effects of industrial restructuring.

–

Job losses are continuing in many industries such as textiles, cars, coal and
the
steel production, as well as some service sectors.
liberalisation of trade in 2005 for textile imports represents a particular
challenge.

In this regard,

XXV

– Where such sectors are concentrated geographically,

there can be severe
consequences for the local and regional economy, with the need to promote
new opportunities and the retraining of workers who lose their jobs.

– While encouraging economic diversification, territorial policy should also take
account of the distribution of activity across the different parts of the Union.

• Areas with severe geographical or natural handicaps. In certain parts of the Union,
efforts to achieve full integration with the rest of the European economy run into difficulty
because of particular geographical or natural handicaps.

–

–

–

These areas – outermost regions, islands, mountain areas, peripheral areas,
areas with very low population density – are often a key component of the
Union’s environmental and cultural heritage.

There are often acute difficulties in maintaining population.

Additional costs for basic services including transport can impede economic
development.

Among the priorities under economic and social cohesion policy relating to employment and
social policy, which have both a general and regional dimension, are:

• More and better jobs. the rate of job creation in some parts of the Union remains low,
while significant skill gaps persist to constrain economic and social convergence between
regions.

–

–

–

A more strategic approach to employment policy across the EU could provide a
valuable framework for coordinating Community intervention. Negotiations
over current ESF programmes have demonstrated the value of a strategic
dimension as provided by the European Employment Strategy.

Employment policy needs to adopt a proactive approach to anticipate the
effects of industrial change.

There needs to be more targeting on the specific requirements of both
individuals and particular
factor underlying
disparities in prosperity across the Union is the difference in the qualifications
and skills of the labour force.

regions, given that a major

• Supporting the New Economy and the Knowledge Society. The impact of the new
economy is far-reaching in terms of both the pace of change and its consequences for
policy. The dangers of an emerging digital divide highlight the need to tackle risks of
exclusion from the information society.

–

–

Life-long learning is an essential response to economic change. It is important,
however, that access to this is not confined to those already in the most highly
qualified jobs.

There must be a more affordable access to the tools of the information society
accompanied by ICT literacy.

XXVI

–

Over the past three decades, the level of educational attainment in the Union
has increased markedly, especially in the least developed regions. But there
remains scope for improvement in their education and training systems to
reduce the emerging digital divide. This applies also to the candidate countries
where vocational training systems in particular are often poorly adapted to the
needs of new sectors.

• Promoting social

inclusion: The level of poverty and social exclusion remains
unacceptably high in the European Union. Many of the causes can be traced directly to the
labour market and to the failure of policy to address the needs of those without the skills
necessary to compete for jobs.

–

–

–

Better access to the labour market, creation of new employment opportunities
and skill development are of major importance in the fight against social
exclusion.

In order to address the deep-seated problem of pockets of social exclusion,
labour market policies are becoming increasingly localised, involving broader
local partnerships and responding to specific local needs. Local employment
development, the ‘third element’ in the European Employment Strategy, could
be strengthened in future Community policy.

The concept of policy additionality (extending or deepening national policy)
must be applied to social inclusion policies and could be supplemented with the
concept of ‘policy territoriality’ aimed at increasing the spatial concentration
of scarce resources to achieve a greater impact.

• Equality of opportunity. Discrimination in all its forms is a waste of talent and resources
in a situation where the evidence points to the growing need to make the best use of a work
force set to decline in the coming years. Equal access to the labour market is both a
fundamental right and a sound economic policy.

–

–

–

A strong policy commitment to the creation of a labour market open to all is
essential to cohesion.

Policies to promote and support the participation of women in the labour
market are a key part of the employment rate targets set at Lisbon.

The most significant progress will come about
employment gap between men and women.

reducing narrowing the

While the above target areas are not entirely new in themselves, they represent a difference of
approach compared to that which has been characteristic of the priority ‘Objectives’ up to
now. It is an approach inspired to some extent by the experience of certain Community
Initiatives such as URBAN or LEADER which have shown how efforts focused on a clearly
defined European priority can, if deployed at the right level, attract a great deal of interest,
generate new thinking and activities. An aspect not to be ignored is that these actions, where
they have been operated successfully, have probably done most to create a positive image of
Union cohesion policy among its citizens.

XXVII

The priority areas should not be seen as a simple substitutes for the existing Objectives. Given
the rapid pace of economic change, and the challenges that it poses, the formulation of future
policy - and perhaps the territorial dimension in particular - needs to take account not only
existing problems but, more importantly, to anticipate future ones. Accordingly, there is a
basic need for a cohesion policy which has a more global and longer-term vision and which
seeks to follow a proactive approach. This would also mean that future policy would focus not
just on problems but also on opportunities for economic and social cohesion and the reduction
of territorial imbalances.

This was the kind of approach that characterised the work undertaken by the Member States
and the Commission on the European Spatial Development Perspective (adopted in Potsdam
in 1999) which had as an objective the promotion of more balanced territorial development in
Europe. Inspired by this work, the Commission could at a later stage propose a strategy for
territorial development to the other institutions of the Union as a basis for future policy in this
field.

In sum, future cohesion policy should be targeted on the factors that promote convergence
and on a limited number of priorities of Community interest, in order to achieve concentration
of scarce resources.

How should the delivery system for future economic and social cohesion policy be
organised ?

While Agenda 2000 achieved many advances in improving the delivery system which are set
out in the report, the new circumstances of enlargement, the reshaping of priorities and the
need to continue to the drive to achieve greater value-for-money call for further reflection on
the means by which the policy is delivered. At this stage it is only possible to address the
broad issues and consider options. The third cohesion report in three year’s time would have
the role of specifying more clearly how the next generation of cohesion policies should be
delivered.

The principal issues addressed in the following sections are as follows:

–

–

–

the effective targeting (‘concentration’) of the limited resources available in an
enlarged Union

the particular challenge of enlargement in the current period

cohesion policy in an enlarged Union after 2006, including certain financial aspects.

The effective targeting of the limited resources available in an enlarged Union

The starting point is that a future cohesion policy needs to be able to address not only the new
Member States and regions, but also the regions in the present EU15 where the analysis of the
report confirm the existence of often profound regional and territorial disparities.

It is clear, however, that when the next programming period begins in 2007, the presence of
new Member States composed almost entirely of regions with a general need for support for
economic development, will necessitate a massive refocusing of the effort in order to achieve
a significant catching up within a reasonable period. At the same time, the least developed
regions of EU15 will have ongoing needs even if they appear less severe in relative terms.

XXVIII

The basic principle must be the same as in the past in that
limited resources must be
concentrated on a limited number of problems of Community interest and areas, in order to
achieve the necessary critical mass.

Maintaining priority support for regions where development is lagging behind

For the less prosperous regions, the maintenance of direct zoning (see box), for reasons of
objectivity and transparency, represents the most appropriate method for concentrating
support on regions most in difficulty.

The use of GDP per head (measured in terms of purchasing power standards - PPS) as a
criterion and its level of application (NUTS 2 regions) still seem to be appropriate, as
indicated by the comparative analysis presented in the first part of the report. For reasons of
transparency and efficiency, however, there is a need to determine the principles which should
apply to the definition of statistical territorial units – ie the regions.

How should the threshold for eligibility be set?

The eligibility threshold (currently set at 75% of the EU average GDP per head, see box)
needs to be decided on the basis of the following two considerations. First, enlargement will
automatically reduce the average level of GDP per head in the Union substantially. On the
latest data available (1998), the application of a threshold of 75% of GDP per head in a Union
of 27 Member States would reduce the population in the present EU15 eligible for Objective
1 assistance by more than half. This raises the question of how to treat regions in EU15 that
have improved in relative terms even if underlying conditions are the same as before
enlargement.

Secondly, disparities between lagging regions in the enlarged EU would be wider than at
present, with some regions having a level of GDP per head of three-quarters of the EU
average and others only around a quarter. The number of regions involved is not only greater,
they have more profound needs.

XXIX

Methods of defining eligible regions and areas

The different Objectives and Community Initiatives of the Structural Funds are currently
targeted either vertically (regionally) or horizontally (by theme).

Horizontal targeting applies to the present Objective 3 financed by the European Social Fund,
which has become the Community instrument for supporting the European Employment
Strategy at national level. Following this approach, actions aimed at improving national
education and training systems can be supported across the whole of the Union, within the
limit of the resources available.

A regional targeting approach begins with the definition of a list of eligible regions and areas.
Actions can be supported only within these localities. In practice, two methods have been
applied in this respect:

Direct regional zoning

The Commission constructs an exclusive list of areas eligible for support. These can be
defined in cooperation with the national authorities, as in the case of the present Objective 2,
or by the Commission alone on the basis of statistical criteria applying to the Community as a
whole, as for the current Objective 1.

This method enables intervention to be concentrated in eligible areas in a direct and
transparent way. In the case of Objective 1, the use of the criterion of low GDP per head
(defined as less than 75% of the EU average), expressed in terms of purchasing power
standards, which is a simple, comparable and relatively robust indicator, has enabled the list
of regions receiving assistance during the 2000-2006 period to be drawn up objectively.

Direct zoning, however, lacks flexibility in the face of changing regional circumstances,
which, in the case of Objective 2, has led to the Commission being directly involved in the
definition of very detailed maps, a task for which its competence and the legitimacy of its
involvement are in doubt. In particular, outside the larger, least developed regions of the
Union, the Commission has insufficient statistical and other information necessary to identify
problem areas, a difficulty which has been compounded by the increasing complexity of the
problems themselves and their spatial distribution.

Indirect zoning

In this method, eligible areas are decided by national governments on the basis of a set of
parameters established by the Commission. This is the approach adopted by some Community
Initiatives.

Indirect zoning has the advantage of being flexible and can resolve difficulties experienced
under Objective 2, so long as the resources available attain the critical mass needed to be
effective (as in the case of URBAN). This method can also be applied to horizontally-targeted
policies, and some Member States have chosen on their own initiative to introduce regional
targeting of intervention under Objective 3.

Insofar as there is cofinancement by the state, it is important that state aid rules (both
geographical and sectoral) are respected.

XXX

Four options for determining eligibility and temporary support

In the light of the foregoing, the exercise of Community cohesion policy in relation to lagging
regions could take one of the following four forms:

–

–

–

–

the application of the present
threshold of 75% irrespective of the number of
countries joining the Union. This option on its own would eliminate a large number
of regions in EU15. Their future eligibility for EU support would depend on the
priorities and criteria for support outside the least developed regions.

the same approach, but where all regions above this threshold but currently eligible
under Objective 1 should receive temporary support (phasing-out), the level being
higher the closer their GDP to the eligibility threshold. Two levels of temporary
support could be envisaged, one for regions which, because of the extent of their
convergence at the end of the 2000-2006 period, would no longer be regarded as
having lagging development in an EU15, the other, set at a higher level, for those
which would have been below the 75% threshold without enlargement;

the setting of a GDP per head threshold higher than 75% of the average, at a level
which would reduce or even eliminate the automatic effect of excluding those
regions in the EU15 simply because of the reduction in the average EU GDP per
head after enlargement. It should also, however, be set at a level which excludes
those regions which would no longer qualify at the end of the current programming
period in an EU15 without enlargement;

the fixing of two thresholds of eligibility, one for the regions in EU15 and one for the
candidate countries, and leading de facto to two categories of lagging region. This
could have a similar result to the previous solution in financial terms in a situation
where the aid intensity per head from Union funds is related to regional prosperity.

A further consideration relates to cofinancing rates (the ratio of Community to national
support). After enlargement, the prosperity gap within the group of regions defined as least
developed would be so large that a special maximum co-financing rate might be need to be set
(relatively high) level to reflect the lower prosperity, and national budgetary capacity, of the
very poorest Member States concerned.

A distribution of finance according to objective criteria

In the light of the needs, it would be difficult to sustain the case for a reduction in the
resources allocated to the lagging regions – including any temporary support – as a share of
the total funds available.

The essential question is that of how to ensure that the distribution of financial resources is as
objective as possible according to needs. The decisions in this field under Agenda 2000
reflect considerable progress with regard to the use of objective criteria applied across the
Community, at least as far as the least developed regions are concerned. This was one the
more significant outcomes of the implementation of Agenda 2000. This way of proceeding
should be maintained in the future, as a major element of the cohesion ‘acquis.’

XXXI

But a number of questions need to be addressed, including the following:

–

–

–

Should the existing criteria which have been used - population, regional and national
prosperity and unemployment - be extended in the next round to include the
employment rate, given the present prospects for the labour market and the
conclusions of the Lisbon European Council on this? This is a question to consider in
the light of the way the level of structural unemployment develops in Objective 1
regions over the next few years. At present, many of these regions still have a very
high rate of unemployment.

Should the structural gaps between the regions and the Community average become
part of the criteria for allocating funds?

Should the performance reserve become a more significant part of the Structure
Funds? It would almost certainly be desirable to strengthen the conditionality
attached to this instrument to achieve the expected results, including in relation to the
pursuit of good financial management.

Maintaining the momentum in favour of an objective methodology depends heavily on the
joint efforts of the Commission’s statistical office, Eurostat, and national statistical offices to
improve the quality of the harmonised data at the Community level. The extension of data
series to cover the candidate countries, and to make available data on purchasing power
standards at regional level, are major priorities for the success of future exercises to determine
the next list of regions in which development is lagging.

For the rest of the territory: indirect zoning?

Lagging regions are not the only ones with structural problems. Cohesion policy also needs to
continue providing support to other parts of the Union to encourage actions of common
interest. But
in the light of the greater limitations on resources compared to the least
developed regions, an appropriate means of targeting is essential.

In the light of the problems that have emerged in the direct zoning of aid under Objective 2
for the period 2000-06, it would seem that the process of concentration could be more
satisfactorily achieved by opting for an indirect zoning method. Here, the defining feature is
that the concentration of resources is an integral part of the programming process (see Box).
The Commission would no longer set rigid eligibility criteria, only a lower limit on the level
of overall public financial support – from Community and national sources - in order to
ensure that the resources mobilised achieve the critical mass to have a real impact (as under
the URBAN Initiative).

In such circumstances, the programming of the different priority domains would need to be
undertaken on the basis of an allocation of resources by Member State. There are a number
ways in which this could be done, but the simplest would probably consist of a national
allocation according to population (outside the least developed regions) adjusted by an
appropriate indicator, or indicators, of socio-economic conditions. On the basis of the national
allocation the Member States would programme actions at national and regional
level,
drawing from a limited number of the priority areas of the sort illustrated above. A strategic
vision of the priorities and opportunities drawn up by the Commission with regard to the
subjects of Community interest would play an important role in setting the efforts in each
Member State in a Community context.

XXXII

Consideration also needs to be given to the national and/or transnational methods of
programming, focusing especially on the role of the Member States and the Commission, on
the conduct of partnership, on the techniques required for territorial analysis and on the
criteria for guiding Community action.

Particular cases

The present border regions in the Union have in general reached much the same level of
development as the rest of the Union, as shown in Part I of this report. This fact demonstrates
the value of past Community intervention in this area. There is therefore a case for including
cross-border cooperation programmes in the general programming of the Structural Funds
(“mainstreaming”).

Border regions with lagging development would, of course, be eligible for support in the same
way as any other region if they comply with the general criteria adopted.

The outermost regions of the Union have particular handicaps as result of their distance from
the rest of the Union and their special position is reflected in the Treaty. Article 299(2), as a
policy instrument, allows the European Union to maintain and reinforce actions to promote
the integration of the outermost regions into the Community , taking account of their unique
character. To this end, in March 2000 the Commission established a strategy for sustainable
development in the outermost regions. It has already introduced new initiatives in the fields of
State Aids, agriculture, the Structural Funds, tax and customs policy, as well as promoting the
co-ordination of the Structural Funds and the European Development Fund in the areas
containing these regions. The Commission has undertaken to consider how their needs should
be best reflected in future cohesion policies.

The particular challenge of enlargement in the current period

Since the reform of the Structural Funds in 1988, the management of Community cohesion
policy in terms of monitoring, evaluation and control has been steadily reinforced.

This is the context in which the candidate countries are preparing to join the Union. At
present, the pre-accession instruments are assisting their preparations, while the PHARE
programme will in the future devote a large part of its resources to Objective 1 type
programmes, within a medium-term planning framework, which although ‘indicative’ will
prepare the way for the overall strategic programming of future Community support from the
Structural Funds.

The Commission must take all necessary steps to ensure that, as in the case of the EU15,
programmes take account of the situation and the specific difficulties in the new Member
States. It should aim to help the authorities concerned to define their programmes in the light
of Community priorities.

The question of the administrative capacity of the candidate countries

The implementation of regional development policy is a new task for the authorities in the
candidate countries, which have limited funds at their disposal. Indeed, there is no tradition of
such a policy, and the decentralisation which it implies, in countries used to centralised
planning arrangements.

XXXIII

The process of administrative construction (or 'institutional building') is therefore very
important, especially as compared with previous occasions of Union enlargement, when all
that was required was the simple adaptation of policies and national legislation to the need to
implement the Structural Funds.

The first objective is to create a policy at the national level. This was the subject of a special
assistance programme (SPP) enabling the candidate countries to prepare, with the support of
PHARE, for the implementation of the Structural Funds by establishing a competent authority
and the necessary procedures, particularly for coordination between Ministries. Budgetary
procedures also need to be put in place to enable them to co-finance programmes and to
manage and control the use of Community resources.

There is a need, in addition, to support decentralisation, which is related to the general effort
to achieve three major objectives – the consolidation of democracy, the development of
partnership and an increase in economic efficiency.

The second aspect is the definition of an intervention strategy aimed at ensuring the effective
use of Structural Fund resources and at reducing development disparities in global terms and
within countries to avoid the risk of excessive concentration.

The candidate countries also have to build the administrative capacity to define strategies,
prepare programmes and manage the corresponding budgets, particularly the funds which
come from the Community budget, under the same conditions as the present Member States.
During the accession negotiations, the Commission will examine very closely the ability of
the candidate countries to meet all the conditions required for them to be able to receive
financial transfers.

The financial resources up to the end of 2006

Given that there will be a number of new Member States during the current planning period
2000-06, there are certain matters to be considered in relation to finance during this period.
The first relates to the financial perspectives until 2006 decided by the Member States at the
European Council in Berlin, including a package to support both interventions in EU15 as
well as in the candidate countries for the period before and after accession. After the
European Council in Nice in December 2000, it seems likely that the first accessions will take
place in 2003-2004. This enlargement scenario differs from that which was the basis of the
Berlin decision. It will therefore be necessary to take account of the effective date of
accession of new Member States. A phasing-in system may be necessary for the assisted
regions in the future Member States, where Structural Funds would be progressively
increased over time, in line with their capacity to absorb aid, as was indeed the case during
the two previous planning periods.

A second matter concerns the distribution of resources between the Cohesion Fund and the
Structural Funds. These funds will, in effect, succeed ISPA, in the first case, and PHARE and
SAPARD, in the second (with a ratio at present of one-third and two-thirds, respectively, in
terms of their financial weight). Allocating a higher proportion, say one-third, to the Cohesion
Fund seems to be justified by the needs of the countries concerned in respect of transport
infrastructure and the environment.

Two other considerations argue for a larger weight being accorded initially to the Cohesion
Fund in the candidate countries in relation to the proportion allocated to the present Member
States. First, a management-by-project approach might prove to be more suited to the

XXXIV

authorities who still lack programming experience; secondly, the high rate of co-financing
and the fact that the principle of additionality does not apply to the Cohesion Fund would
facilitate the absorption of Community funding.

The distribution of Structural and Cohesion Fund resources between the new Member States
will be determined according to the same principles, methods and objective criteria as applied
to the present Member States.

Cohesion policy in an enlarged Union after 2006, including certain financial aspects.

As the report explains, important modifications to the different aspects of the management of
cohesion policy were made during the adoption of Agenda 2000. These were aimed at
increasing decentralisation, promoting partnerships and integrating evaluation more
effectively into the decision-making process. More rigorous financial management and
control, based on a clearer and more meaningful division of responsibilities between the
Member States and the Commission, was also introduced. On this last point, the objective is
to reduce significantly the incidence of fraud, but above all of irregularities which represent
the overwhelming majority of the cases brought to the attention of the Commission.

The new system is only now beginning to be applied. The next Cohesion Report will contain
a first assessment of results of the changes, but certain elements can already be outlined,
which need to be further examined in the context of the preparation of the new planning
period after 2006.

In relation to partnership, there has been a growing tendency to decentralise decision-
making as regards national and Community policies. There is a undoubtedly a need to
strengthen the role of regional and local authorities and of those on the ground by, for
example, programming at the local level when appropriate. In addition, if in the future
indirect zoning is the method retained for targeting resources, it would be essential that it is
accompanied by guarantees regarding the involvement of regional and local authorities.

Programming of actions could operate in two phases. In a first step, the Commission could
set out a global strategy comprising the different economic, social and territorial dimensions
in partnership with the Member States at national level and transnational level with a view to
identifying priorities including those of particular Community interest. This would help to
determine how finance is allocated by priority. Afterwards, programming would be
decentralised to the appropriate level, for example at regional, urban or transnational level.

For lagging regions, integrated programming remains a major means of obtaining positive
results in terms of their economic, social and territorial development.

It is may be possible to make use of a call for tender procedure for the implementation of
some programmes, enabling the best proposals to be selected completely transparently. The
selection could be made at different
levels (regional, national or transnational and in
cooperation with the Commission) which would strengthen the links between the results
achieved and the finance allocated.

The principle of additionality (requiring Community funds to add to, rather than substitute
for, national funds) was simplified considerably for the period 2000-06. Experience will
confirm if it has become more effective as a way of contributing to the added value of
Community cohesion policy. At the same time, it remains a highly aggregate figure in the

XXXV

sense that it does not apply to individual programmes, but to all programmes under a single
Objective in a given Member State.

It is therefore lacking in transparency, and it might be worth considering the possibility of
calculating additionality at the programme level rather than (as at present) at the Member
State level especially for programmes aimed at the less developed regions. At the same time,
it is important not to underestimate the difficulties in terms the availability of data that this
would imply, a traditional constraint on attempts at
in this field. The
methodology will be evaluated in the light of the experiences in the implementation of the
additionality principle which will take place in 2003 and 2005.

improvement

Evaluation has now been firmly established definitively as an integral part of programming
procedures. The ‘performance reserve’ is one of the important innovations brought about by
Agenda 2000. As already discussed, the link between the finance allocated and the results
achieved needs to be strengthened.

Improving the coherence between the Cohesion Fund and the Structural Funds

The Cohesion Fund, which was established by the Treaty is targeted on Member States in
which GNP per head is less than 90% of the Community average and which have established
a programme for macro-economic convergence. As a complement to the Structural Funds, it
has proved a useful
instrument for promoting investment and in helping the cohesion
countries to catch up.

Matters for consideration for the future concern the amount of financial resources which
should be allocated to the Fund in absolute terms and to strengthen the coordination of the
support provided with that provided by the Structural Funds.

The Treaty limits the Cohesion Fund to the financing of investment projects in transport
networks and the environment. While the Cohesion Fund applies at national level, there
would be clear advantages in selecting projects so as not to increase regional disparities and to
avoid excessive concentration in the more prosperous capital cities and surrounding regions.

At present, the share of the Cohesion Fund in total expenditure on structural policies in the
Member States concerned is around 18%. Whether the same balance between the Cohesion
Fund and the Structural Funds is appropriate to the new Member States is a matter for further
consideration, possibly after a transition period.

The allocation of the resources of the Cohesion Fund between recipient countries should be
decided on the basis of purely objective criteria as in the case of the Structural Funds at
present. The need for objectivity will become more important for all Member States after the
accession of new countries.

In order to strengthen the coordination between actions supported by the Cohesion Fund and
those supported by the Structural Funds, the two should be made part of a unique framework.
For cohesion countries, the Cohesion Fund should become the only instrument for financing
large transport and environmental projects in lagging regions.

The financial aspects of cohesion policy in an enlarged Union after 2006

The evidence presented in the report on national, regional and social disparities demonstrate
that there is an increased need for cohesion policy in an enlarged Union. The analysis in Part I
of the main report shows that economic and social disparities within the Union will widen

XXXVI

considerably with enlargement. The challenge of maintaining economic and social cohesion
will therefore increase.

Inevitably the bulk of the financial effort would be addressed to the new Member States. In a
real sense, the size of the global financial package will determine the level of ambition on the
part of the Union in tackling problems which persist in the EU15, especially in its lagging
regions. It is within this framework that discussion on the budget for cohesion policy has to be
set.

While it is premature to put forward budgetary proposals for cohesion policy after 2006 -
which in any event would have to be considered as part of a global discussion on future
Community policies - it is appropriate to recall a few figures and to give a few reference
points to assist debate.

Between the 1988 reform and 1999, the Union strengthened its cohesion policy in terms of the
financial resources devoted to it in absolute terms and relative to the Community budget as a
whole. Under Agenda 2000, the Commission initial proposal was to maintain the level of
financial support reached in 1999 for the EU15 (0.46% of GDP) throughout the 2000-2006
period.

€

In the event, the European Council in Berlin allocated
213 billion to structural measures in
30 billion a year. The
the 15 Member States for the 2000-2006 period, an average of
resources given as pre-accession aid (
3 billion) and the sums reserved for the countries
which join between 2002 and 2006 form an additional part of the overall package for
cohesion policy. In addition, cohesion policy for new Member States after accession was set
12 billion in 2006. These decisions together set
at a progressively increasing figure reaching
the total amount in effect at 0.45% of the GDP in the enlarged Union of 21 Member States in
2006, virtually the same as at the beginning of the period for EU15.

€

€

€

The same percentage needs not necessarily be taken as a reference point for future cohesion
funding but it must be clear that, in order to remain credible, regional and cohesion policy
needs to deploy resources commensurate with needs in the circumstances which prevail.

Enlargement and the ceiling on transfers

Under the current rules for the period 2000-06, transfers from the Structural and Cohesion
Funds are limited up to a maximum of 4% of national GDP a year in all Member States. As a
figure determined in relation to the situation in the present Member States, in an effort to keep
the transfer from the Union to levels that can be managed by the recipient administrations, it
is a ceiling that will have important consequences for some of the least prosperous candidate
countries when they join the Union.

In the new context, the following constraints must therefore be reconciled:

–

–

Addressing the cohesion objective, especially the enormous development needs of
the candidate countries;

Taking proper account of the absorption capacity of these countries in economic,
financial and administrative terms.

Taking full account of the relative prosperity of the countries concerned would give rise to
significant risks as regards their absorption capacity and the balance of public expenditure.
Consequently, addressing the question of the ceiling would only be relevant in exceptional

XXXVII

circumstances, such as in the case of projects financed by the Cohesion Fund which represent
a particular Community interest.

Continuing pre-accession for other candidate countries

Assistance for pre-accession, modified if necessary, should continue to apply to the candidate
countries which have not yet joined the Union on the 1st January, 2007. The amount of
finance required should be the subject of an objective evaluation in relation to needs, the
capacity for absorption and the number of countries in receipt of the support.

Increasing the contribution of other policies

Community policies have their own objectives and their effect on cohesion is difficult to
assess in a number of cases, but it is necessary, as a complement to a stronger geographical
and thematic concentration of the Funds, to reinforce synergies and the complementarity
between cohesion and other community policies.

Certain community policies contribute indirectly to economic and social cohesion by helping
to create more favourable conditions for development in less prosperous Member States and
regions.

This is true of Economic and Monetary Union which helps to achieve macroeconomic
stability in the cohesion countries in particular which, because it is favourable for investment
and economic growth, is a necessary, though not a sufficient, condition for real convergence.

The same is true of the internal market, which, together with structural reforms, has an
important influence on social cohesion across regions. The Union is undertaking a major
effort to reform product, capital and labour markets. The reduction of the disparities between
regions requires investment aimed at increasing the economic potential of the less developed
regions.

Faster growth does not automatically lead to closer regional integration and reduced income
inequalities. Accordingly, further reforms, a reduction in barriers to competition in some
markets, especially in services, and the support of cohesion policy are needed to reap the full
benefits from the catch-up process in some Member States and to reduce existing inequalities
between regions.

EMU like the internal market needs to be complemented by accompanying policies so that all
Member States and regions can benefit fully from economic and monetary integration. In this
respect, maintaining structural spending which complements the Structural Funds, particularly
in the fields of education, training and employment, as well as research and technological
development, is essential for the overall effectiveness of cohesion policy.

Competition and cohesion policies are complementary, since the ceiling imposed on regional
State Aids benefits the less prosperous countries most of all. This thrust of policy needs to be
pushed further to establish more equitable conditions for competition, while taking account of
the role played by services of general interest in territorial cohesion.

The European Employment Strategy,
is necessary for cohesion. It should, however, be
adapted to different regional and local circumstances in order to respond better to the very
different performances of labour markets. This objective has already been taken into account
in the measures supported by the Structural Funds for the period 2000 to 2006. But national

XXXVIII

budgets do not identify clearly the way in which strategic objectives are translated into
financial commitments, which makes it difficult to detect such a move.

Other Community policies have a major effect on the territorial structure of the Union

The Common Agricultural Policy has largely achieved the objectives set, which focus on
improving the competitiveness of European agriculture. The change in the CAP means that it
benefits some cohesion countries today more than before, but its contribution to territorial
cohesion remains very variable and depends on regional systems of agricultural production.
The second pillar of the CAP, rural development policy, needs to be on a quite different scale,
especially in areas which are affected most by the continuing changes in agricultural policy.

In some small coastal areas, fisheries accounts for a significant share of employment. For the
Common Fisheries Policy, the challenge is to restore a sustainable balance between fish
stocks and fishing. Since activities linked to fishing are concentrated in less favoured areas,
accompanying social and economic policies are required to enable diversification to take
place.

The trans-European transport networks are an instrument of territorial development and can
have a significant effect on regional disparities as highlighted by the European Spatial
Development Perspective (ESDP). There needs, however, to be greater complementarity
between the policy on large networks and Structural Fund programmes and when the
guidelines for trans-European networks are revised, more account should be taken of the
cohesion objective.

All the analysis carried out in the Cohesion Report shows the importance of research and
innovation for competitiveness. Despite some progress under the 5th Framework Programme,
research and development (RTD) is still concentrated in the most central and competitive
regions. To make the European Research Area a concrete reality, the emphasis needs to be put
on the regional dimension of RTD through networking and improving the coordination with
the Structural Funds. The challenge here is to ensure that lagging regions become full partners
in this area.

Environmental policy, with economic and social cohesion,
is one of three pillars of
sustainable development. The design of this policy should give more consideration to
territorial disparities and specific features as well as to the financial effect on regions of the
measures envisaged.

The Community budgetary system and cohesion

As regards the overall Union Budget, a balance between contributions and the distribution of
expenditure for each Member State is not an objective in itself. Individual Member State
contributions are, however, becoming more proportional to GNP. Union expenditure reflects
the content and priorities of Community policies, only cohesion spending being inversely
related to regional GDP per head.

XXXIX

Strengthening the contribution of other policies to the cohesion effort

With enlargement, the globalisation of the economy and the development of the knowledge
society, the Union is facing unprecedented economic and social changes. It is, therefore,
necessary for other Community policies to increase their contribution to economic and social
cohesion, as foreseen in the Treaty.

It is important to consider the response to the greater need for coherence, complementarity
and efficiency of Community policies and the instruments necessary to make this happen.
This consideration forms part of the work initiated by the White Paper on Governance.

XL

10 QUESTIONS for PUBLIC DEBATE on the FUTURE of COHESION POLICY

1)

2)

3)

4)

5)

6)

7)

8)

9)

What will be the role of cohesion policy in an enlarged Union of nearly 30 Member
States in a context of rapid economic and social change? How is it possible to further
economic convergence and preserve the European model of society?

How should Community policies be made more coherent? How should the
contribution of other Community policies to the pursuit of cohesion be improved?

How should cohesion policy be modified in preparation for an unprecedented
expansion of the Union? Should cohesion policy also address territorial cohesion in
order to take better account of the major spatial imbalances in the Union?

How can cohesion policy be focussed on measures which have a high Community
added value ?

What should be the priorities to bring about balanced and sustainable territorial
development in the Union?

How should the economic convergence of lagging regions of the Union be
encouraged?

What kind of Community intervention is required for other regions?

What methods should be used to determine the division of funds between Member
States and between regions?

What principles should govern the implementation of Community intervention?

10)

What should be the response to increased needs with regard to the economic, social
and territorial dimensions of cohesion?

XLI

Second Report on Economic and Social Cohesion

Part I – Situation and trends

I.1
I.2
I.3
I.4

Economic cohesion .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 3
Social cohesion.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 13
Territorial cohesion: towards a more balanced development
.  .  .  .  .  .  .  .  .  .  . 29
Factors determining real convergence .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 37

Part II – Contribution of Community policies to cohesion

Economic and Monetary Union (EMU).  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 69
II.1
Internal market .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 73
II.2
Competition policy .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 79
II.3
The Common Agricultural Policy: price and market policies .  .  .  .  .  .  .  .  .  . 81
II.4
Employment, human resource development and cohesion .  .  .  .  .  .  .  .  .  . 89
II.5
Environment policy .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 93
II.6
Research and Development policy .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 99
II.7
Transport policy .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 105
II.8
II.9
Energy policy .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 107
II.10 Enterprise policy .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 109
II.11 The Common Fisheries Policy .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 113

Part III — The EU Budget and the contribution of structural policies to economic

and social cohesion

III.1 The EU Budget and economic and social cohesion .  .  .  .  .  .  .  .  .  .  .  .  .  . 117
III.2 The contribution of structural policies to economic and social cohesion:

results and prospects .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 121

Regional features in Turkey .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 157

The Statistical Annex to this report will be published as a separate document. References in the text to tables,
graphs and maps in the Annex, which are all prefixed by the letter ‘A’, relate to this document.

i

Second Report on Economic and Social Cohesion

ii

Part I — Situation and trends

I.1

I.2

I.3

I.4

Economic cohesion .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 3

Social cohesion .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 13

Territorial cohesion: towards a more balanced development

.  .  .  .  .  . 29

Factors determining real convergence .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 37

1

Part I — Situation and trends

2

I.1  Economic cohesion

Overview of the European economy

The EU economy today is heavily reliant on services,
which now account for 67% of output and 66% of em-
ployment, in both cases up by 5 percentage points
from 10 years ago. Correspondingly, the importance
of manufacturing and agriculture is tending to de-
cline. This shift towards the service sector is likely to
continue, while agriculture and manufacturing will
continue to experience consolidation of production in
higher value added activities and a fall in output and
employment in others. In most applicant countries,
output and jobs are still concentrated in agriculture
and manufacturing, and within these in lower value-
added subsectors, suggesting more restructuring in
the future.

Growing trade and foreign direct investment have
meant a gradual opening up of national economies in
the EU towards both other Member States and the
rest of the world. In 1999, exports amounted to 32% of
EU GDP and imports to 31%. Both figures are the
highest recorded since statistics began to be col-
lected in the modern era, confirming the long-term
growth in trade in the EU, despite fluctuations over the
business cycle. Both are forecast to increase further
in the future. Some 60% of trade was within the EU, il-
lustrating the dependence of EU countries on each
other, though, at the same time, interdependence
with the rest of the world is also increasing.

The EU will continue to experience significant
changes in the competitive environment over the next
few years, which will affect the economy in general
and cohesion in particular:

•

continuing economic pressure from globalisa-
increasing international competition and
tion,

•

•

restructuring within particular sectors. Since sec-
tors tend to be concentrated in particular regions
and to involve particular social groups, restruc-
turing is likely to pose a challenge to both regional
and social
since
globalisation tends to bring with it more stand-
ardisation and uniformity, it is important for the
opportunities which it opens up to be balanced
with the need to maintain cultural identities in dif-
ferent parts of the EU;

cohesion.

addition,

In

it

enlargement and the challenge of integrating the
applicant countries into the EU. Although en-
largement will in the long-term be universally ben-
eficial,
is likely in the short-term to bring
pressure for restructuring, as firms in applicant
countries face increased competition, in a con-
text where their low income and output already
pose challenges to cohesion;

the information revolution. In a real sense, infor-
mation technology is tending to reduce the physi-
cal isolation of peripheral parts of the Union and
increase their ‘virtual’ isolation, insofar as the key
is access to the technology,
to development
rather than access to markets. The key barriers
are, therefore, low education and social factors,
rather than transport costs. Although the change
is as yet more potential than actual, it is likely to
become much more of a reality in the coming
years. It may well have a beneficial effect on re-
gional cohesion, bringing the disadvantaged pe-
riphery closer to the centre, but
it could be
damaging for social cohesion. Education will be-
come increasingly important to avoid a division of
society between the technologically literate
‘haves’
illiterate
‘have-nots’.

technologically

and

the

3

I.1  Economic cohesion

Divergence and convergence
in economic performance

Disparities between Member States
remain despite strong convergence

The present EU can be divided into two groups of
countries in terms of gross domestic output (see Ta-
ble A.1 in the Annex). There is a clear gap between
Spain, Greece and Portugal, where GDP per head,
measured in terms of purchasing power standards to
indicate relative levels of wealth, is only 67-82% of the
EU average, and the other Member States, where it is
similar to or above average.

This is despite significant convergence achieved by
these three countries over the past decade. As a
group, their GDP per head rose from 68% of the EU
average in 1988 to 79% in 1999. Individually, the gap
between Spain and Greece and the EU average nar-
rowed by 9-10 percentage points in each case, and
for Portugal by 17 percentage points. Although the
overall gap in GDP per head of the three countries
with the rest of the EU was reduced by a third over this
period, at this rate of convergence, it would still take
another 20-30 years for it to be eliminated completely.
This underlines the long-term nature of the conver-
gence process, though whether it takes more or less
time to achieve complete convergence depends on

whether and to what extent there is a change in un-
derlying conditions and in the context in which growth
takes place.

An encouraging sign in this respect is the strong per-
formance of Ireland, which 10 years ago was in-
cluded in the least prosperous group of countries with
GDP per head of only 70% of the EU average but now
has a level 14% above average.

An important point to emphasise in this context is that
convergence of GDP per head in terms of PPS de-
pends not only on differential rates of output growth,
on GDP growing faster in the cohesion countries than
in other Member States, but also on relative price de-
velopments, which affect the PPS adjustment (see
Box on GDP and other measures of the regional
economy).

Disparities between regions
have narrowed but by less

Disparities are even wider between regions in the EU1
(Map 1 and Table 1). The 10% of regions with the
highest GDP per head consist largely of northern
capital cities and the most prosperous southern Ger-
man and northern Italian regions. Broadening this to
the top 25% leads to the inclusion of many UK re-
gions, some Austrian, Belgian and Dutch regions and

1

GDP per head (PPS) by country and regional extremes, 1998

Index EU26=100

EU26 excludes Malta

Hamburg

Bruxelles/ 

Brussels 

300

250

200

Trentino-

Alto 

Adige

Utrecht

Île de France

Southern 

and 

Eastern

Oberbayern

Comunidad 

de Madrid

Sterea 

Ellada

150

Antwerpen

100

Hainaut

Inner London

Wien

Uusimaa 

(Suuralue)

Stockholm

Salzburg

Lisboa/Vale 

do Tejo

Berks, Bucks & 

Praha

Oxfordshire

Bratislavský 

Kraj

Languedoc-

Roussillon

Chemnitz

Extremadura

Ipeiros

Calabria

Border, 

Midland 

and 

Western

Flevoland

Västsverige

Burgenland

Itä-Suomi

Cornwall & 

Isles of Scilly

Jihozapad

Açores

Kozep-

Magyarorszag

Yugoiztoche

Stredocesky

Eszak-Alfold

Yuzhen Tsentralen

Mazowiecki

Bucuresti

Západné 

Slov.

Východné 

Slovensko

Lubelskie

Nord-Est

B DK D EL E F

IRL I L NL A P

FIN S UKBGCY CZ EEHU LT LV PL

RO SI

SK

50

0

4

300

250

200

150

100

50

0

 
I.1  Economic cohesion

Canarias (E)

Guadeloupe

Martinique

Réunion

(F)

(F)

(F)

Guyane (F)

Açores (P)

Madeira

(P)

1  GDP per head by region (PPS), 1998

Index, EU26 = 100

< 30

30 - 50

50 - 75

75 - 100

100 - 125
≥ 125

no data

Kypros

SIG16
SIG16

Source: Eurostat

0

100

500 km

© MEGRIN for the administrative boundaries

5

I.1  Economic cohesion

Madrid and Rome (Lazio). The bottom 10% of regions
consist predominantly of those in Greece and the
French DOMs and also include some regions in Por-
tugal, Spain and southern Italy, while the bottom 25%
include many other Spanish and Portuguese regions,
the remaining part of Southern Italy and Eastern Ger-
many, as well as some peripheral regions in France
and the UK.

The contrast between the top and bottom 10% is
stark. The regions at the top have an average GDP
per head 60% above the EU average, or 45% if re-
gions where commuting is important are excluded,2
while those at the bottom have a level nearly 40% be-
low. In other words, in the top 10% of regions, GDP
per head is around 2½ times that in the bottom 10%.
Similarly, the top 25% of regions have a level twice
that of the bottom 25% and account for a third of total
EU GDP as against a sixth in the case of the latter.

However, there was significant convergence over the
period 1988 to 1998 (see Map A.1). In the bottom 10%
of regions, GDP per head rose from 55% of the EU av-
erage to 60%, though in the bottom 25%, it only rose
from 66% of average to 68%. (These increases are
not as dramatic as reported in the 6th Periodic Re-
port, where the top and bottom regions were defined
merely in terms of numbers of regions instead of the
population they cover.)

Again, this underlines the long-term nature of conver-
gence, since the gap between the bottom 10% of re-
gions and the EU average narrowed by only 11% over
these 10 years.

Regional disparities within countries
are large, but may be stabilising

In addition to regional disparities across the EU as a
whole, there are in many cases large disparities
within individual Member States (see Table A.2 and
Graph 1). The divided economies of Italy and Ger-
many are obvious examples, but in most countries,
one region, or a few of them, have levels of GDP per
head far above, or below, the national average. Capi-
tal cities, such as London or Paris (Ile de France),
tend, in particular, to have levels much higher than
average,3 while in many remote and rural regions,
such as Ipeiros in Greece, Calabria in Italy and
Açores in Portugal, GDP per head is well below that
elsewhere. This firmly demonstrates the fact
that
countries cannot be treated as homogenous

6

Table 1  The most and least prosperous
regions in the Union, 1988-1998

GDP per head (PPS) as % of EU average

Regions

EU15

10% +

10% -

ratio

25% +

25% -

ratio

1988

155,3

55,1

2,8

134,1

66,6

2,0

1998

160,9

61,0

2,6

137,1

68,3

2,0

EU27

1998

176,9

31,1

5,7

152,0

44,3

3,4

10% + and 25% + : the regions with the highest GDP per
head(PPS),accountingfor10%and25%respectivelyofto-
tal population in the Union
10%-and25%-:theregionswiththelowestGDPperhead
(PPS), accounting for 10% and 25% respectively of total
population in the Union
Source: Eurostat, calculations DGRegio

economies and that it is important to consider re-
gional as well as national features and trends.

The tendency observed in the First Cohesion Report,
for regional disparities in GDP per head to widen over
time seems still to hold in a significant number of Mem-
ber States but in some others, disparities between re-
gions have narrowed a little (see Table A.3 and Graph
2). Nevertheless, the recent reduction in disparities
which has occurred in a few Member States may sim-
ply be cyclical, since lagging regions tend to converge
more in periods of growth than during recessions.4

2

Disparities in GDP per head, 1987-98

PPS (EU=100), standard deviation

EU15 (by region)

EU15 (by Member State)

30

20

10

0

New NUTS 
breakdown

Without new Länder

30

20

10

0

1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998

 
Moreover, substantial disparities remain, especially in
some of the less prosperous Member States.

Oporto and the Algarve, though disparities have nar-
rowed over the past 10 years.

I.1  Economic cohesion

For example, while GDP per head does not differ much
between regions in Greece, a gap has opened up in re-
cent years between the main centres of economic ac-
tivity around Athens and Thessaloniki and the rest of
the country. Indeed, since the closure of land routes to
the rest of the EU through the former Yugoslavia, the
port and airports in Athens are the main entry and exit
points for trade with the rest of the world. In conse-
quence, the regions in the remote and mountainous in-
terior remain the poorest in the EU mainland.

In Spain, the second largest country in terms of land
area in the EU, the pattern of development is also var-
ied. GDP per head remains relatively high in Madrid
and Cataluña and has risen further over the past de-
cade. Other regions in the north, notably Navarra and
Pais Vasco, have also performed well, but those in the
remote north-east and underdeveloped south have
tended to do less well, GDP growing by less than the
EU average in the former and hardly at all in the latter,
which are among the least developed parts of the EU.
Accordingly, regional disparities in Spain have wid-
ened further.

Disparities are also wide in Portugal, development
being concentrated along the coastal strip, in Lisboa,

3

GDP per head (PPS), 1999

Migration has been a feature in Sweden and Finland,
from the sparsely populated, remote regions in the
north – as well as from the east in the latter – as eco-
nomic recession hit hard in the early 1990s. Outward
migration has continued since then, despite the par-
tial recovery in GDP per head.

Disparities are both wide and long-standing between
the north and south of Italy. Despite the economic up-
turn elsewhere, GDP per head in the Mezzogiorno
has continued to stagnate at around 60-70% of the
EU average. Only in Basilicata has growth over the
past decade been significant and even here, GDP
per head only rose from 63% of the EU average to
72% between 1988 and 1998.

GDP per head in terms of PPS in the new German
Länder, where growth was very rapid in the first few
years following unification, was also around 68-70%
of the EU average in 1998.

Disparities double in scale with
the inclusion of applicant countries

It is instructive to examine the disparities which would
the applicant
exist

in the Union at present

if all

Index, EU26 = 100 

250

200

150

100

50

0

Average group 3

Average EU26

Average group 2

Average group 1

L DK

IRL NL A B D S UK

FIN I F

E CY P SI EL CZ HU SK PL EE LT LV RO BG

Applicants
EU15

250

200

150

100

50

0

7

 
I.1  Economic cohesion

countries5 were considered together with the existing
15 Member States. However, it is recognised that by
the time these countries actually enter the Union their
GDP per head could be higher than at present, de-
pending on their economic performance in the inter-
vening period and the effect of accession itself on
this.

It also has to be recognised that there are significant
differences between the candidate countries, not
only in terms of GDP per head but also in terms of their
economic performance since the transition was initi-
ated, which in part reflects the pace and extent of re-
forms during this period (see Box).

Three groups of countries can be distinguished in the
EU of 27 in terms of GDP per head instead of the pres-
ent two (Graph 3). The existing EU Member States,
apart from Spain, Greece and Portugal, form the first
group with GDP per head 20% above the new aver-
age. These three cohesion countries plus Cyprus, the
Czech Republic, Slovenia and almost certainly Malta
(though no PPS figures are available) form the

second group, with GDP per head between 68% (the
Czech Republic) and 95% (Spain) of the EU 27 aver-
age, while the remaining 8 applicant countries form
the third group, with GDP per head below this (and,
on average, only 40% of the EU27 average, though
56-58% for Slovakia and Hungary).

Enlargement will, therefore, pose a challenge to co-
hesion in two ways (Table 2). First, it will more than
double the population living in regions with GDP per
head of less than 75% of the present EU average –
EUR 20,213 per head – from 71 million to 174 million,
or from 19% of the EU15 total to 36% of the EU27 total
(or to 26% of the EU27 total if the EU average GDP per
head is reduced to that of the 27 countries, ie EUR
16,504).

Secondly, it will increase the intensity, or scale of dis-
parity. In 1998, GDP per head in the lagging regions
of the Union averaged 66% of the present EU aver-
age. In lagging regions in the applicant countries, it
was much less than this (around 37% of the present
the two groups of regions
EU average), so that

Recent economic developments in the candidate countries

The long-term growth potential of the candidate coun-
tries is substantial and this is likely to benefit the present
EU Member States in future years.

Deficits have been financed to a large extent by capital
inflows linked to privatisation, but new investment has
also increased in a number of countries.

The economic performance of the candidate countries
in Central Europe has, in most cases, improved signifi-
cantly since the mid-1990s, though because of the
growth of the EU over this period, there has been little
convergence in terms of GDP per head. At the same
time, regional disparities within the countries have
tended to widen, especially between the capital cities
plus the regions bordering the EU and eastern areas.
Future policies will need to tackle these disparities.

While GDP growth in the candidate countries taken to-
gether (but excluding Turkey) was only 2.2% in 1999,
that is less than in the EU15, in five of them (Slovenia,
Hungary, Cyprus, Poland and Malta), it exceeded 4%.

Apart from Romania (and Turkey), inflation has stabi-
lised at around 10% a year or even below, though the
relatively slow reduction of inflation in Hungary and Po-
land remains a concern.

While the balance of payments on current account has
improved in a number of countries, the deficit remains
significant in Estonia, Latvia, Lithuania and Poland.

Despite efforts to reduce the budget deficit in most
countries, public finance sustainability remains a cause
of concern.

The privatisation of large enterprises is underway in
Hungary, the Czech Republic, Estonia and Bulgaria
and, to a lesser extent, in Latvia. In Poland, the rate of
privatisation has been sustained but restructuring has
only just begun in the iron and steel industry and agri-
culture. In banking, privatisation has progressed in the
Czech Republic, Bulgaria, Latvia and Slovakia, as well
as in energy supply and telecommunications.

The macroeconomic situation in the candidate coun-
tries is mixed, with favourable aspects (growth poten-
tial, FDI, the growth and shift of trade flows and even
inflation) and others which are weaker (the current ac-
count deficit, unemployment and the budget deficit).
But the situation in these countries cannot be compared
directly with that in the present EU Member States,
given their starting point and the importance of
restructuring.

8

together had a GDP per head of less than half (48%)
the average.

On the basis of the present data, the statistical effect
of including the 12 applicant countries is to reduce
the EU average GDP per head by 18%. As a result of
this hypothetical exercise, 27 of the regions in the ex-
isting EU with some 49 million inhabitants are raised
above 75% of the average of the 27 countries. This, of
course, does nothing in itself to resolve the develop-
ment problems of the regions concerned, it just signi-
fies that their relative position is improved by the entry
of regions even worse off than themselves.

Given the present data and assuming that the EU
were suddenly expanded by 12 Member States, the
challenge to cohesion, therefore, in an EU27 can be
said to be twice as widespread and twice as large in
scale as at present. The challenge, moreover, is likely
to persist for a long time. If the applicant countries
were to experience the same rate of growth as the co-
hesion countries over the past decade, their present
level of GDP per head implies a convergence pro-
cess lasting for at least two generations. Even with the
kind of growth experienced in Ireland over the past
decade, it would take 20 years before they reached
90% of EU15 GDP per head.

Regional disparities also
double with enlargement

The inclusion of the 12 applicant countries has virtu-
ally no effect on the identity of the regions with the
highest GDP per head in the Union,6 but completely
changes the composition, and relative level of in-
come, of the regions with the lowest level. The bottom
10% of regions (in terms of population) in an enlarged
EU consist entirely of those in eastern Poland, Bul-
garia and Romania together with Lithuania and Lat-
via. The 25% of regions with the
lowest GDP per head comprise
almost all the regions in the ap-
plicant countries and most of
those in Greece, Açores and
Madeira
and
Andalucia and Extremadura in
Spain.

Portugal

Index used

in

I.1  Economic cohesion

enlarged Union. It is also noteworthy how much GDP
per head of the 10% of the bottom regions is reduced,
falling from 61% of the EU average at present to only
31% of the average for an enlarged EU. Whereas at
present, only Ipeiros in Greece has an income less
than half the EU average, in an enlarged EU, some 79
million people would live in regions with GDP per
head less than in Ipeiros.

As in the case of disparities between countries, the
ratio of GDP per head in the top regions to that in the
bottom in the enlarged Union is around double the ra-
tio for the present EU. The top 25% of regions in an en-
larged EU, therefore, would have an average level of
GDP per head of 3.3 times that of the bottom 25% as
against a ratio of 1.9 in the present EU, while the top
10% of regions after enlargement have a level 5.3
times the bottom 10% as compared with a ratio of 2.4
at present.

Trends towards convergence

The use of different economic models to explore
trends in regional development can be helpful both in
indicating the likely outcome in future years if these
trends remain the same, and if regional economies
continue to perform as in the past, and in identifying
the key factors that need to change if convergence in
GDP per head is to occur. Three main conclusions
emerge from these models.

First, if past trends continue, it will take a number of
decades for regional disparities in the present EU to
be eliminated.

Secondly, there can be no guarantee that such an
elimination will occur. More specifically, while re-
gional economies might converge over time to their
own equilibrium level of GDP, given the underlying

In EU15

EU15=100
EUR 20213

In EU26

EU15=100
EUR 20213

EU26 = 100
EUR 16504

46

71

19%

66

97

174

36%

48

70

125

26%

46

9

Table 2  Summary statistics for regions below 75% of EU
GDP per head, 1998

Number of regions falling below 75 %

It is noteworthy that very few re-
gions from the current EU ap-
pear in the list of
the least
regions of an
prosperous

Population in those regions (millions)

Population as a proportion of EU15/26

Average GDP/head (PPS) of regions
falling below 75%

EU26 excludes Malta
Source: Eurostat, calculations DG REGIO

I.1  Economic cohesion

conditions which prevail and their own factor endow-
ments, there is no necessary reason why this process
in itself should lead to a convergence towards the EU
level of GDP per head and to a reduction in regional
disparities in these terms in the Union. The only way to
be sure of the latter is if there is a change in the under-
lying conditions themselves and in relative factor en-
dowments (in terms of capital of all kinds and different
labour force skills). The primary objective of regional
and structural policies is precisely to bring about
such a change.

Thirdly, it is of key importance for convergence of re-
gions towards the average EU level of GDP per head
that disparities in human capital endowment – ie in
the skills of the labour force – are eliminated, or at
least significantly reduced. This implies, in turn, a
need both to improve education and training systems
in lagging regions and to widen access to these, as
well as a need for enterprises in these regions to use
the potential skills available more effectively and to
adapt more rapidly to changes in technology and in
the organisation of work.

10

GDP and other measures of the regional
economy

GDP per head in terms of PPS is the key indicator for
assessing levels of economic development in re-
gions and disparities in this. Its position is enshrined
in the Structural Funds regulations and in Article
87(3)a of the Treaty on competition policy, both of
which have been unanimously approved by the
Member States. It is also conventionally used by nu-
merous international
institutions (including the
World Bank, IMF, OECD and UN) as well as universi-
ties and research institutes, central banks and pri-
vate enterprises as the single most useful measure
of economic performance. The reasons for this in-
clude the following:

(cid:127) GDP is, almost by definition, the best measure of

the output of the regional economy.

(cid:127) Leaving aside problems of commuting, which are
significant only in a few cases, and of income from
capital, it is a good proxy for regional income be-
fore public and private transfers. For cohesion
purposes, it is important, at least initially, to mea-
sure the regional income taking account only of
what is generated locally without including trans-
fers from outside or those going outside. To give
an obvious example, a region which had a low
level of production might well have a much higher
level of final income because of large social secu-
rity transfers, but it would still be a less favoured
region.

(cid:127) GDP per head is statistically robust and is usually
readily available at regional level for a reasonable
period of time.

(cid:127) Since price levels vary considerably between
countries at prevailing exchange rates, it is nec-
essary to adjust for this in order to measure the
real command over goods and services of a given
sum of money. Expressing GDP in terms of pur-
chasing power standards (PPS) is a means of
making such a correction.

At present, the PPS adjustment is calculated on the
basis of national price levels and, therefore, leaves
out of account regional differences in prices, which
can be significant particularly where there are wide
variations in income between regions. The cost of
living, for example, is much higher in the north of It-
aly than in the south and, in principle, this should be
allowed for in the regional GDP per head figures.

I.1  Economic cohesion

Despite the usefulness of GDP per head at PPS, it is of
interest to consider other measures of the regional
economy (see Table A.4).

Changes in GDP per head in PPS over time

It is important to recognise that GDP per head in PPS
terms can change in one economy relative to another
not only because of a difference in the rate of GDP
growth in real terms (so-called ‘real’ convergence) but
also because of a change in relative price levels. This
potentially complicates the analysis of changes over
time insofar as a relative increase in GDP per head
which arises from a reduction in the relative price level –
or from a re-estimation of the PPS adjustment – might
have slightly different implications than one which re-
sults from a relative growth in real GDP.

GDP without the PPS adjustment:
wider disparities, but a similar pattern

The simplest alternative indicator is to measure GDP
per head in Euros rather than PPS. This shows the mar-
ket value of output in each region rather than real in-
come levels (see Map A.2).

Such a measure increases the scale of differences be-
tween regions. Since price levels are positively corre-
lated with the wealth of a region, low GDP per head in
less prosperous regions tends to be partly offset by a
lower cost of living.

The most striking change is for regions with GDP per
head furthest from the EU average. The level in Portugal
as whole falls from 76% of the EU average (in PPS
terms) to just 50%, below that of Greece. Conversely, in
Sweden and Denmark, where the cost of living is very
high, GDP per head is markedly higher when measured
in terms of Euros (23% higher in the latter).

Extending the comparison to include the applicant coun-
tries, their average GDP per head is reduced from 38% of
the EU15 average in PPS terms to just 16% in Euro terms.
The lowest levels of GDP per head are in eastern areas.
Even in Slovenia, GDP per head in Euros is little more than
45% of the EU average as opposed to nearly 71% in PPS
terms.

GNP: allowing for income transfers

can significantly affect
the income available for
expenditure on goods and services in an economy. Re-
missions from migrant workers have been an important
source of income for a number of countries and regions
in the past (such as southern Italy, for example), while
the repatriation of profits by foreign-owned enterprises,
and the receipt of profits earned abroad, are equally im-
portant in a number of economies at the present time.
These flows of income to and from abroad are included
in the measure of gross national product or GNP.

Unfortunately, data are not available for GNP by region
in the Union, largely because of the difficulties of mea-
suring income flows at this level. Nevertheless, data for
GNP at national
level are available and these show
some differences from those for GDP for a few Member
States. In particular, GNP for Ireland was over 13% less
than GDP reflecting the importance of profits earned by
foreign-owned enterprises, which are not necessarily
spent in Ireland (though equally, neither do they neces-
sarily go out of the country). In 1999, therefore, GNP per
head in Ireland in terms of PPS was below the EU aver-
age whereas GDP per head was well above.

For similar reasons, GNP in Luxembourg was also sub-
stantially lower than GDP, by almost 10%. In other Mem-
ber States, however, apart from Greece where inflows
from abroad added just under 3% to income, the differ-
ence between GDP and GNP was around 2% or less.

Median consumption: an indicator of
the standard of living of the average household

Median consumption per head, measured in PPS terms, is
another useful indicator. This is derived from household
budget surveys and measures the goods and services
purchased by households and individuals rather than pro-
duced in the economy. In contrast to GDP, it, therefore, in-
cludes imports and excludes exports, which can be quite
significant at the regional level. It also implicitly excludes
income transferred abroad; which as noted above is sig-
nificant in the case of Ireland.

Since the distribution of incomes is generally quite
skewed, the median income is less than the mean and
more indicative of a typical household or person. Be-
cause consumption tends to fall below income by more,
the higher the growth in the economy, it will usually lag
behind GDP per head as economies converge.

As stated above, GDP has the advantage of excluding
income transfers and so relates more closely to the in-
come generated within an economy. Such transfers,
however, are not confined to those made for redistri-
butive reasons but also include remissions or receipts
of income by both individuals and companies, which

The indicator, however, is not available in the EU at a re-
gional level. Nevertheless, national comparisons are in-
teresting. Portugal has the lowest level, with a typical
consumption of only 58% of the EU average, largely be-
cause of the skewness of income distribution. The other
two cohesion countries – Greece and Spain – however,

11

I.1  Economic cohesion

have very similar levels of median consumption and
GDP in relation to the rest of the EU.

Green accounting: closer to implementation,
but much work remains before it is operational

A final concept of interest is ‘green accounting’, the at-
tempt to incorporate environmental costs into economic
figures. The case for green accounting is that the normal
measure of GDP, calculated at market prices, leaves out
of account the depletion of exhaustible resources and
other costs imposed on the environment by production
and associated activities.7 Green accounting is, therefore,
an attempt to measure the ‘true costs’ of the loss of scarce
resources and the environmental damage caused by pro-
duction and to incorporate explicit estimates of these, in
terms, for example, of the cost of developing alternative
resources or cleaning up the environment, in the calcula-
tion of GDP.

The problem of putting monetary values on items which
are to a large extent intangible is, however, severe and as
yet no generally accepted estimates have been produced
of ‘green’ GDP. A more limited approach is to produce es-
timates of the pollution produced in particular sectors or to
distinguish environmental expenditure and to list these fig-
ures alongside the relevant part of the national accounts
as an addendum item. This, however, tends to mean that
such estimates are viewed as very much subsidiary to the
GDP figures. The Commission has opted for an intermedi-
ate approach, that of satellite accounts for specific assets,
such as forests, mineral stocks, water reserves and air

quality. Where possible, monetary values are calculated
for specific aspects of each, such as the value of forests,
in terms of the timber they produce or the recreation they
provide, or the costs of cleaning up water reserves to a
particular standard. Otherwise physical values are calcu-
lated, such as for CO2 emissions.

Collaboration over the past three years between the Re-
gional Policy and Environment DGs and Eurostat in the
Commission and various national statistical offices8 has
begun to yield results and a comprehensive dataset on
the environment is in the process of being produced and
categorised by different kind of asset, though there are
many gaps, especially in respect of monetary values. This
is generating some surprising results. For instance, for-
ests in the EU (valued at around EUR 400 billion) are worth
twice as much as total oil and gas reserves (around EUR
200 billion). This, moreover, counts only their value in
terms of timber and the figure would be much higher if it in-
cluded their intrinsic or recreational value.

This is consistent with World Bank estimates9 that, even
in rich countries, total natural assets were, on average,
worth as much as, or more than, total physical assets
such as buildings or machinery.

However, there is still much to be done to make the most
of such estimates. It is planned gradually to produce
them more systematically and regularly and to generate
a consistent time series. A regional breakdown, how-
ever, is a long way off.

In the First Cohesion Report and in the Fifth and Sixth Periodic Reports, the top and bottom 10 and 25 regions were used to measure
disparities. Since the NUTS regions vary in size, however, this is liable to give misleading results over time if the population covered
by the regions in question changes significantly. This is all the more the case with the addition of the applicant countries, which
increases the number of NUTS 2 regions to 260. The figures reported in the text therefore relate to the regions with the highest and
lowest levels of GDP per head which account for 10% or 25% of population in the EU.
These are regions which are considered by Eurostat to have relatively high or low GDP per head largely because of commuting,
which accordingly omits cases where GDP is produced to a significant extent by people living outside the region or where the
people living in a region derive their income to a significant extent from elsewhere. See Eurostat (2000) ‘Statistics in focus’, Theme 1,
1/2000.
Some of this is due to commuting and the non-inclusion of people contributing to GDP in the population figures.
See the Box in section 1.1 of the 6th Periodic Report for a fuller explanation of this effect.
These are Estonia, Latvia, Lithuania, Poland, the Czech Republic, Slovakia, Hungary, Slovenia, Romania, Bulgaria, Cyprus and
Malta.
The notable exception being the inclusion of Prague, where part of the high GDP per head is almost certainly due to commuting.
For further reading on the theory and practice of green accounts, see World Bank (1996) ‘Green national accounts: policy uses and
empirical experience’.
See Eurostat (1999) ‘Towards environmental pressure indicators for the EU’ and Eurostat (forthcoming) ‘Towards an environmental
accounting framework for the EU’.
World Bank (1995) ‘Monitoring environmental progress’.

1

2

3
4
5

6
7

8

9

12

I.2  Social cohesion

For the past three years, there has been strong em-
ployment growth across the Union, which has both re-
duced unemployment significantly and provided job
opportunities for people entering the labour market
for the first time or returning after a spell of inactivity.
Most of the jobs created have been in services, as in
previous years, the majority in advanced business
and communal services – health care, education,
recreational and cultural activities – many of which
demand a high level of skill and education from the
people who perform them.

with an increased rate of net job creation for a given
growth in GDP. The rate has, therefore, fallen from
10.7% in 1997 to 8.3% in August 2000 and is set to fall
below 8% in 2001, a level last seen before the reces-
sion of the early 1990s. Despite this encouraging
trend, unemployment remains unacceptably high in
many parts of the EU, though if economic growth can
be sustained at its present rate, over the coming de-
cade it could gradually cease to be the major eco-
nomic problem facing the EU, which it has been for
the past 20-25 years.

At the same time, partly because of the shift towards
advanced services and high-skilled jobs,
labour
shortages have begun to emerge on a significant
scale in many parts of the economy, even in areas
where unemployment remains relatively high. These
shortages are likely to get worse as the recovery pro-
ceeds, particularly in information technology where
the demand for labour is growing rapidly and where
already a substantial number of jobs remain unfilled.
Unless they are effectively addressed, they will tend
increasingly to slow down the pace of development.

Since the early-1970s, unemployment has increased
rapidly during recessions but fallen more slowly dur-
ing periods of economic recovery, while regional dis-
parities in levels have remained significant (see
Graph A.1 in the Annex). However, over the period of
recovery since 1994, when unemployment in the EU
reached a peak of 11.2%, the process of job creation
has increasingly gained strength. Nevertheless, it is
too early to be sure whether the cycle of falling unem-
ployment followed by a rebound to a higher level is at
an end. This depends on both maintaining economic

Nevertheless, there remain substantial disparities in
levels of employment and rates of unemployment be-
tween different parts of the Union as well as between
different social groups, which manifest themselves in
pockets of deprivation and exclusion.

Employment and unemployment

Unemployment and the labour market

Unemployment in the EU is declining at present, re-
flecting the continuing growth of the economy and la-
bour market reforms, which seem to be associated

Growth of employment and GDP in the 
Union, 1975-98

Annual % change

Employment
GDP lagged 2 quarters

4

6

5

4

3

2

1

0

-1

-2

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

6

5

4

3

2

1

0

-1

-2

13

 
I.2  Social cohesion

level, or preferably
growth at around its present
above, which in itself should result in a high rate of net
job creation (Graph 4), and increasing the employ-
ment-intensity of growth above the long-term trend of
the past 20 years.

Unemployment combined
with growing skill shortages

At the same time as unemployment is falling, labour
shortages are emerging as an increasingly important
obstacle to growth right across the EU. This was re-
ported explicitly in the National Action Plans for 2000
of Belgium, Denmark, Ireland, the Netherlands, Fin-
land, Sweden and Italy, though in the last, predomi-
nantly in the north of the country. Moreover, recent
surveys of employers in other Member States have in
most cases pointed to the difficulty of recruiting staff
with the requisite skills as a major problem hindering
expansion.

The coincidence of relatively high levels of unemploy-
ment and labour shortages ought not to come as a
surprise. It essentially reflects the highly differenti-
ated nature of the labour market and the lack of co-
herence between the growth of demand for labour
and the skills on offer among those looking for a job.
Indeed, recruitment difficulties tend to be reported in
particular sectors even in periods of recession. As re-
covery gathers pace and as unemployment falls – or,
more accurately, as the excess supply of labour di-
minishes – it is only to be expected that labour short-
ages, or skill bottlenecks, will become more serious,
the more so, naturally, in regions where unemploy-
ment is relatively low, but also in other areas where
the skills of the unemployed do not match the de-
mand of employers. If economic growth at present
rates is sustained over the longer term, the problem of
skills imbalance could well be compounded by the
projected slowdown in labour force growth, or de-
cline in some regions, over the next 10-15 years (see
the section on demographic trends below).

Although recruitment difficulties are at present re-
ported in some parts of the Union in all sectors, from
information technology to agriculture and retailing, it
is evident that there is a growing shortage of workers
with IT skills in all Member States. According to the
Commission report on job opportunities in the Infor-
mation Society, up to 500,000 jobs are currently va-
cant because of the lack of people with the requisite
skills to fill them. Studies suggest that the problem is

14

likely to get worse in the future, as, indeed, is the case
in other parts of the world, the US especially. In the
longer term, therefore, this could come to exercise an
increasing constraint on economic growth and em-
ployment creation in the EU. It is a problem which can
be tackled both by expanding the number of people
trained in IT skills and adapting education and train-
ing systems to accomplish this and by encouraging
the inward migration of those with the necessary
skills, or the education to acquire them, from other
countries (an approach at present being followed by
the US).

Wide disparities in employment
remain between Member States ...

As economic recovery continued in the EU, employ-
ment increased by over 2 million in 1999, or by 1.4%,
slightly higher than in 1998 (1.3%) and the highest
growth rate of the 1990s. The number employed in
1999 was, therefore, for the first time higher than in
1991 at the start of the recession. The employment
rate, however – the proportion of those aged 15 to 64
in work – at 62.1% was still slightly lower than at the
beginning of the decade.

Despite a general improvement in labour market con-
ditions, large differences still exist between Member
States. Between 1997 and 1999, employment growth
varied from over 3% a year in Ireland and Spain to un-
der 1% a year in Germany, Italy and Austria. In gen-
eral, those Member States with above average GDP
growth also recorded relatively high growth of
employment.

Since 1994, there has only been a slight narrowing of
disparities in employment rates across the Union,
stemming partly from relatively large increases in em-
ployment in Ireland and Spain, where the proportion
of working-age population in work is below average.
This convergence is likely to continue if economic re-
covery is sustained, though above average employ-
ment growth needs to spread to Italy and Greece, in
particular, if disparities are to be narrowed signifi-
cantly. In 1999, the employment rate was below 60%
in Spain and Belgium (if only slightly), while it ex-
ceeded 70%, the target set for the EU in 2010 by the
Lisbon Summit, in Denmark, the Netherlands, Swe-
den and the UK.

... but are even wider between regions

Disparities in employment are even more substantial
between regions than between countries within the
EU. In 1999, the employment rate in the top 10% of re-
gions in the EU (defined as those with the highest
rates accounting for 10% of total population) aver-
aged 77%, whereas the employment rate in the bot-
tom 10% (defined in an equivalent way) averaged
under 44%. As at the beginning of the decade, most
of the regions in the top group are located in the UK,
most of those at the bottom in Italy and Spain (Map 2).

The extent of regional disparities varies significantly
between Member States. While they are very narrow
in some countries (the Netherlands, Austria and Swe-
den), they are extremely wide in others (particularly It-
aly, where the gap between high employment regions
in the North and low employment regions in the South
is over 25 percentage points, but also Spain and Por-
tugal – around 15 points).

There is little sign of any marked reduction in dispari-
ties over the 1990s. While across the EU as a whole,
they have narrowed since 1997, this followed a wid-
ening over the early 1990s (see Graph A.2). In Italy,
Portugal and, to a lesser extent, Spain, the gap in re-
gional employment rates appears to have widened
over the period of recovery. Moreover, in Greece, em-
ployment rates fell in most regions over the 1990s.

Achieving a more balanced development in terms of
employment remains one of the biggest challenges
for the Union in the future and one which is likely to re-
quire continued policy intervention, in developing re-
gions, to help strengthen their economic base, and in
those undergoing restructuring, to help smooth the
shift to growing sectors of activity.

The gender gap in employment remains
pronounced despite gains made by women

The number of women in employment has risen
strongly in the EU over the past ten years. As a result,
the gap in employment rates between men and
women narrowed significantly over the 1990s, by
some 5 percentage points, though in 1999, it was still
some 19 percentage points. Moreover, it should be
noted that over 70% of net additional jobs going to
women between 1994 and 1999 were part-time. In the
latter year, around a third of all women in employment
in the EU worked part-time as opposed to 6% of men.

I.2  Social cohesion

The gender gap is even wider in many Member States
and regions. In regions with a high rate of net job cre-
ation, both men and women tend to benefit by being
able to find employment, while job shortages in low
employment regions generally seem to hit women
harder than men. The gender gap is, therefore, nar-
rowest in the three Nordic countries and the UK and
widest in Italy, Spain and Greece.

The small gap in many – but by no means all – parts of
Northern Europe reflects, on the one hand, a longer
tradition of gender equality, positive social attitudes
towards women working and child-care provision. On
the other hand, it also reflects a high proportion of
part-time employment among women (see Map A.3).
Indeed, the relative number of women with full-time
jobs in lagging regions is not very much lower than in
the rest of the EU.

The growth of part-time working is closely related to
the development of the service sector, in which firms
tend to be more flexible over working hours but in
which there is also a growing need to employ people
at weekends and in the evenings. Women therefore
have more possibility for combining paid employ-
ment and family responsibilities, so increasing their
ability to pursue working careers.

Large-scale job losses in agriculture

Employment in agriculture in the EU has declined
markedly, from 7.6% of the total employed in 1988 to
5.6% in 1993 and 4.4% in 1999. The largest decline
between 1993 and 1999 occurred in Ireland (by 4.5
percentage points) and Greece (4.3 points).

The importance of multiple jobs has also remained
much the same, 28.7% of farmers having a paid job
outside agriculture in 1997. In Sweden, Finland and
Germany, the figure was over 45%. In the southern
Member States, where 26% of farmers had multiple
jobs, almost 63% of the work force was employed
part-time.

Services are key to employment growth

Over the past 25 years, all of the rise in employment in
the EU has occurred in services while jobs in industry
and agriculture have declined. Over the period of
1994 to 1999, the share of employment in services
rose by some 2½ percentage points, continuing a
long-term shift of both employment and output

15

I.2  Social cohesion

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towards this sector, which is evident in all Member
States.

Employment growth in services, however, has been
lower in the EU over the 1990s than in the US and this
has been combined with more job losses in agriculture
and industry. Indeed, in the EU, growth of employment
in industry has been relatively small even over the pe-
riod of economic recovery since 1994, though this is
partly due to a significant reduction in Germany, where
the pace of recovery has been modest.

is for

The development of services has occurred at differ-
ent rates across the Union. In 1999, the general pat-
tern of employment
the highest
(Map 3)
employment regions – predominantly located in the
UK, Netherlands and the three Nordic countries – to
have a large share of jobs in services, and the lowest
employment regions – largely located in the Mediter-
ranean – to have a high concentration of jobs in agri-
culture. In between, there are regions with a high
share of employment in industry – predominantly lo-
cated in an arc covering eastern France, parts of Ger-
many and northern Italy.

Overall, services account for a major part of dispari-
ties in employment rates across the EU. Most of the
additional jobs which exist in high employment re-
gions as compared with low employment ones are in
services, though mostly in the more advanced sec-
tors, education, health care, business and financial
services, where skill and education requirements are
relatively high. This underlines the importance of a
well-educated work force for boosting employment
as well as the development of the knowledge-based
economy.

Regional disparities in unemployment
remain pronounced

Unemployment varies substantially between regions
in the EU (Map 4). Despite economic recovery, unem-
ployment rates were still over 20% in some parts of
southern Europe in 1999. There were also, however, a
number of areas in northern Europe undergoing re-
structuring, where rates were well over 15%.

Regional disparities in unemployment have widened
over the 1990s, following the reduction which oc-
curred in the high employment growth years of the
late 1980s. While economic recovery has reduced
disparities slightly since 1995, it has so far failed to

I.2  Social cohesion

offset the widening during the earlier period of reces-
sion. Accordingly, while unemployment in regions
where rates were lowest (taking those accounting for
10% of total population) averaged 3% in 1999, much
the same as in the early 1970s, it averaged 23% in
those where rates were highest (excluding the French
DOMs), much higher than 25 years ago.

The regions with the lowest unemployment in the EU
were much the same in 1999 as 10 years before, as
were those where rates were highest. Much the same
is true in Member States, where regional differences
are similarly wide (Graph 5). As in the case of employ-
ment rates, differences between regions are greatest
in Italy, where, in 1999, the rate in those with the high-
est levels (in the south) was almost 25 percentage
points higher than in those with the lowest (in the
north). On the other hand, in all regions of Austria, the
Netherlands and Portugal, unemployment was below
the EU average.

Long-term unemployment falling
but still a serious problem

The fall in unemployment in recent years has been ac-
companied by a reduction in long-term unemploy-
ment. Between 1997 and 1999, the number of people
who had been out of work for a year or more declined
by more than overall unemployment, from 49% to
46% of the total unemployed, suggesting that active
labour market measures combined with high rates of
net job creation have improved access to employ-
ment for those most disadvantaged on the labour
market.

The rate of long-term unemployment in the EU, how-
ever, is still higher than at the beginning of the 1990s. It
is particularly high in southern Italy, in a number of
Greek regions and in Belgium, where over 60% of
those out of work were long-term unemployed in 1999.
By contrast, the proportion was under 20% in a number
of regions in Austria, the UK and Finland (Map 5).

Overall, long-term unemployment is much higher in
regions with high overall unemployment and has de-
clined hardly at all over the economic recovery in the
lagging regions. This reflects the persistence of
structural problems in these areas, such as mis-
matches between the jobs on offer and the skills avail-
able on the labour market, which are unlikely to be
resolved simply by higher rates of economic growth
the national or EU level, which need to be
at

17

I.2  Social cohesion

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I.2  Social cohesion

Canarias (E)

Guadeloupe

Martinique

Réunion

(F)

(F)

(F)

Guyane (F)

Açores (P)

Madeira

(P)

Kypros

SIG16
SIG16

4  Unemployment rates by region, 1999

% of labour force

< 5.55

5.55 - 8.25

8.25 - 10.95

10.95 - 13.65
≥ 13.65

EU7 = 9.6
Standard deviation = 5.4
D (Sachsen) and F (DOM): NUTS1

Sources: Eurostat and NSI

0

100

500 km

© MEGRIN for the administrative boundaries

19

I.2  Social cohesion

combined with active measures to improve the em-
ployability of those affected and help them adapt to
structural change.

have experienced a fall in unemployment in the most
lagging regions.

Unemployment of young people
declining in EU ...

Labour market developments
in the candidate countries

Rates of unemployment in the EU remain much higher
for young people under 25 than for older people and
for women as opposed to men. Young people in the
labour force are almost twice as likely to be unem-
ployed as those of 25 and over. In Spain, Finland and
Italy, youth unemployment was over 30% in 1999 and
in some regions in southern Italy and Spain, over 50%
(Map 5).

Despite the fact that most of the net additional jobs
created over the past 10 years have gone to women,
job growth has only just kept pace with the rising num-
ber of women joining the labour market. Conse-
quently, unemployment among women is still much
higher than for men in most parts of the EU, with rates
for women exceeding 35% in parts of Spain and Italy.

While unemployment of young people has declined
by more than for those of 25 and over during the pe-
riod of recovery, the rate for women has fallen by less
than for men. Unlike in the case of the long-term un-
employed, however, both young people and women

In recent years, the data available on employment
and related developments in the candidate countries
have improved significantly with the introduction of la-
bour force surveys in most of them, on the same basis
and adopting the same conventions as the EU Labour
Force Survey conducted by Eurostat. However care
should be taken in interpreting the figures which re-
sult from these surveys because, even though the
conventions are the same, they reflect a different un-
derlying reality.

In the candidate countries of Central Europe (CECs),
employment has fallen significantly since the begin-
ning of the transition as a result of a large fall in output
as well as restructuring. In the CECs as a whole, the
number employed is estimated to have fallen by
15-20% between 1989 and 1997, with the largest fall
occurring in the early years of transition (1989 to
1993). By 1994-95, conditions had stabilised and in a
number of countries, employment began to rise,
though by not nearly enough to compensate for the
In 1998 and 1999, economic
earlier job losses.

5

Unemployment rates by country and regional extremes, 1999

% labour force

Calabria

Andalucía

Dessau

Languedoc-

Roussillon

Hainaut

Dytiki 

Makedonia

Yugoiztochen

Warminsko-

Mazurskie

Východné 

Slovensko

Itä-Suomi

Inner 

London

Mellersta 

Norrland

Yugooz

apaden

Ostravsky

Eszak-

Magyarorszag

Groningen

Alentejo

Wien

Stockholm

Border, 

Midland 

and 

Western

La 

Rioja

Alsace

Southern 

and 

Trentino-

Eastern

Alto 

Adige

Utrecht

Ober-

österr.

Centro 

Ålan

Berks, Bucks & 

Oxfordshire

Nyugat-

Dunantul

Praha

Ionia 

Nisia

Vlaams 

Brabant

Ober-

bayern

Mazowieckie

Sud-Est

Bratislavský 

Kraj

Bucuresti

B DK D EL E F

IRL I L NL A P

FIN S UK BG CY CZ EE HU LT LV MT PL

RO SI

SK

30

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21

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
I.2  Social cohesion

growth slowed down again and employment began
to fall in most countries, most especially in the Czech
Republic, Slovakia and Estonia. In Hungary, how-
ever, partly because of the earlier implementation of
economic and labour market reforms than in other
countries, GDP continued to grow and employment
increased by around 3% a year between 1997 and
1999.

In 1999, the overall employment rate of the candidate
countries averaged just under 61% of working-age
population, only slightly lower than in the EU. Dispar-
ities in employment rates, however, widened be-
tween countries over the 1990s as employment fell,
the scale of decline reflecting, on the one hand, the
success of the transition and, on the other, the extent
to which jobs remained protected against market
forces, as well as the extent of employment in subsis-
the employment rate
tence agriculture.
ranged from some 54% in Bulgaria to 66% in the
Czech Republic.

In 1999,

Regional disparities in employment in the candidate
countries are narrower than in the EU, but still sub-
stantial. In the top 10% of regions (defined, as above,
as those with the highest rates accounting for 10% of
their total working-age population), the employment
rate averaged almost 70%, in the bottom 10%, it was
under 52%. Disparities are also wide in a number of
countries, reflecting the difference between the capi-
tal city region and the others (in Slovakia, the gap be-
tween the top and bottom 10% of regions was 17
percentage points).

Employment of women in the CECs has, in many
cases, declined by less than that of men over the tran-
sition period, partly because of the concentration of
jobs losses in industry, partly because of the growth
of service activities. Although the employment rate of
men exceeds that of women in all candidate coun-
tries, the gender gap has remained smaller than in
most EU Member States. Moreover, many fewer
women work part-time in the former than in the latter
and the difference between men and women is much
less pronounced. (Overall, some 8% of all those in
employment work part-time in the candidate coun-
tries as opposed to 18% in the EU and women ac-
count for only 58% of all part-timers as against 80% in
the EU.)

22

The changing sectoral pattern of
employment in candidate countries

Economic transition in the CECs implies a marked
shift in the sectoral pattern of employment, though
comparison of the present structure with that in the
EU suggests that there is still a long way to go. There
remain significant differences between regions both
in the structure of employment and in unemployment
(see Box).

Employment in industry is estimated to have fallen by
between 25-50% in the CECs over the 1990s, but de-
spite this, the proportion of workers employed in de-
clining industries in many regions remains high.

Many regions with high employment in agriculture
have also suffered a disproportionate loss of jobs,
though agricultural employment in most candidate
countries remains far above the level in the EU. In
1999, taking the countries together, it accounted for
almost 22% of the total as against only 4.5% in the EU,
indicating that the process of modernisation has still
to be undertaken and that potentially severe social as
well as economic problems remain to be tackled in
the future.

Employment in services has risen significantly in all
candidate countries, though by not nearly enough to
compensate for the job losses in industry and agricul-
ture. Services account for only around 46% of the total
in work in the region as a whole compared with 66% in
the EU, which indicates the scale of the change which
lies ahead.

Overall, many regions in the CECs have a less diversi-
fied employment structure than their counterparts in
the EU and, at the same time, have to contend with
problems of high unemployment, poor infrastructure,
low investment and lack of enterprise. The objectives
of future regional policy in the CECs are, therefore, to
diversify the sectoral pattern of economic activity, to
strengthen infrastructure and support facilities, to
identify locational advantages and development po-
tential and to remove obstacles to growth.

Poverty

There has been growing concern about the issue of
social cohesion over the past few years. Disparities

Four types of regional labour market developments in the CECs

I.2  Social cohesion

Unemployment rates in the CECs were only slightly
higher than in the EU in 1999 (10.2% on average as
against 9.3%). Unemployment, however, varie signifi-
cantly from region to region. Overall, four types of region
in terms of
labour market developments can be
distinguished:

in the service sector and benefit

(cid:127) The major metropolitan areas (most notably the capi-
tal cities) have experienced a significant rise in em-
ployment
from
favourable geographical location, a high level of in-
vestment, a skilled labour force and better infrastruc-
ture endowment. These regions enjoy
lower
unemployment and higher wage levels compared to
other regions. Job growth is fuelled mostly by newly
established private-owned small and medium-sized
enterprises and foreign investment. Most prominent
examples are urban centres such as Prague,
Bratislava and Budapest which have the lowest un-
employment rates and the highest share of employ-
ment in services in their countries.

(cid:127) The Western border regions, in part included in the
above group, which were in an unfavourable, periph-
eral position during the previous regime, but which
have benefited from their location since the transition
began. Proximity to the EU, relatively well developed
infrastructure, low labour costs combined with labour
force skills have all contributed to stimulate markets
and encourage investment. In addition, they have
benefited from increased trade (such as cross-bor-
der retail) and tourism. In Hungary, western regions
have witnessed falling unemployment in recent years
and a positive inflow of investment as have those in
Slovakia and the Czech Republic. Even Polish re-
gions bordering Germany which have relatively high
unemployment rates tend to have a more diversified

industrial structure and more SMEs than other parts of
the country. Overall, most of the Western border re-
gions show a long-term positive trend in employment
and economic development.

(cid:127) The majority of the most disadvantaged regions are
the rural regions located at the Eastern periphery of
an enlarged EU. These tend to have relatively poor in-
frastructure, little investment and unfavourable eco-
nomic structure characterised by a predominance of
agriculture and low educational attainment of the la-
bour force. The partial return to subsistence farming
and outward migration has slowed down the rise in
unemployment in some cases. In most of these re-
gions, employment is falling. Structural reforms in ag-
riculture are likely to lead to large-scale job losses in
future years.

by

affected

privatisation,

(cid:127) Old industrial regions have been most adversely af-
fected by economic transition. These have been se-
verely
enterprise
restructuring and closures, the reorientation of trade
from secure markets and the loss of subsidies. The
decline of heavy industry has played a significant role
in widening disparities in the CECs. These regions
have failed to create new job opportunities and to at-
tract new business or foreign investment. Most of
these regions have high rates of unemployment and
difficulties of re-integrating workers into the labour
market because of their low and outdated qualifica-
tions. The most prominent example is the industrial
north and west of Poland which has experienced
large-scale decline. Many of the regions have yet to
undergo significant restructuring which remains a
major challenge and could cause serious social and
economic problems.

between social groups and the overall dispersion of
income seem to have widened in the 1980s and early
1990s, and this is often attributed to economic devel-
opments, in particular, globalisation, increasing com-
petition on world markets, the information revolution
and the resultant restructuring of the economy, as
well as demographic trends and changes in society.
The trend seems to have slowed down or even re-
versed itself since the mid-1990s, but disparities be-
tween social groups remain unacceptably high.

economic success. Regions which are unable to mo-
bilise the economic potential of large sections of their
population are handicapped in the increasingly com-
petitive global market place, while disparities can
breed social unrest which itself can damage eco-
nomic performance.

Poverty high, especially
in the cohesion countries

Social cohesion is not only an important goal in its
own right, but it is also a key factor contributing to

There are various definitions of poverty. The UN mil-
lennium summit, for example, defined an absolute
measure of poverty as a state in which someone has

23

I.2  Social cohesion

less than $1 a day to live on. Few people if any in the
EU are in this position, though given price levels and
the nature of the economy and society in the Union, a
sum of significantly more than this would be neces-
sary to prevent someone living in absolute poverty
here. What this sum should be is very difficult to de-
fine. Partly because of this, it has long been decided
that a relative measure is more relevant for assessing
poverty in the Union, in the sense that this is more in-
dicative of deprivation in relation to the living stan-
dards of people generally. Accordingly, the focus
tends to be on the proportion of the population with in-
comes below a certain level relative to the average,
though again there is scope for disagreement about
the appropriate level to take.1

In practice, the main measure of poverty used in the
EU at present is the Eurostat definition: the percent-
age of people with an income of 60% or less of the
median income in the country in which they live.2 Al-
though this means that the poverty line, in terms of ab-
solute values, differs between countries,
is
indicative of
relative deprivation in the country
concerned.

it

Using this measure, 18%, or more than one in six, of
people in the EU had an income below the poverty
level in 1995. This proportion does not seem to have
changed much in recent years, though the figures
which exist on a comparable basis are only for the pe-
riod 1993 to 1995, which is too short to determine
much about changes. While early indications are that
the proportion might have declined since 1995, this
remains to be confirmed.

Population with income below the poverty 
line, 1995

% population

Below threshold in 1995
Below threshold for 3 consecutive years

A : no data for persistent poverty; 
FIN, S: no data

DK L NL A D F

B

E IRL

I UK EL P

EU

24

21

18

15

12

9

6

3

0

6

24

21

18

15

12

9

6

3

0

24

The countries in which the proportion of people with
poverty levels of income is lowest are Denmark, Lux-
embourg, the Netherlands and Austria (and probably
Finland and Sweden as well, though they did not par-
ticipate in the 1996 European Community Household
Panel survey on which the figures are based). Not
only are the poverty rates in these four countries only
around 11-12%, but this is relative to a national in-
come which is higher than the EU average (Graph 6).

At the other extreme, the countries where the poverty
rate is highest are Portugal and Greece, in which
21-22% of the population have income below the pov-
erty line. This understates the scale of the problem in
an EU context, since these two countries have the
lowest level of median income in the Union. A further
point of interest is the persistence of poverty, as indi-
cated by the proportion of people with income below
the poverty line in each of the three years for which
comparable data are available. This is clearly more
important than the figure for a single year, which may
reflect only a temporary state of affairs for some of
those concerned. Persistent poverty in the EU is
slightly less than half the figure for a single year, 7% of
the people covered between 1993 and 1995 having
an income below 60% of the median in each of these
three years, as opposed to 17% in 1995 (the figure
being lower than that quoted earlier because not all
the people were surveyed every year).

There is some tendency for the persistence of poverty
to be disproportionately higher in countries with high
poverty rates in 1995. In Denmark and the Nether-
lands, persistent poverty affected only 3% of the pop-
ulation, only a quarter of the proportion in 1995, which
means that not only is poverty low in these two coun-
tries, but for most, it is a temporary state of affairs.
Conversely, in Portugal, which had the highest level
of poverty in 1995, more than half (12% of the popula-
tion) were affected by persistent poverty, while in
Greece, the figure was only slightly less (10% of the
population). The main exception to the general rela-
tionship is the UK, where the proportion with income
below the poverty line in 1995 was relatively high
(19%), but where only 7% of people had income be-
low this level in each of the three years.

For the candidate countries in Central Europe, there
are no comparable data available. The studies which
have been undertaken, however, suggest that the fig-
ures might be higher than in the EU as income disper-
sion has widened over the 1990s due to the reduction

 
I.2  Social cohesion

in employment and a decline in real wages of the less
skilled. They also show that poverty in rural areas, on
which research has been carried out, is a serious
problem (see Box ‘Rural income and poverty in the
candidate countries’).

risk in Portugal, Spain, France Belgium and Italy – in-
deed, in Italy (where the risk of poverty is highest for
large families), they are at no more risk than other
households.

Factors linked to poverty: unemployment,
low education and one parent families

Links between education and earnings:
the implications of a single market
for graduates for cohesion countries

The causes of poverty are numerous, but here are a
few factors which are strongly associated with low in-
come, particularly on a persistent basis (see Table
A.5). In the EU, six categories of people are at particu-
lar risk of having a poverty level of income: the unem-
ployed,
those with low
education, those in retirement, families with many
children and those of working-age not in employment
(because of disability, for example).

lone parent

families,

A number of people fall into more than one of these
groups. For example, a large proportion of the unem-
ployed have low education. The first three character-
istics, however, are the most noteworthy. In the EU as
a whole – though not necessarily in individual Mem-
ber States – the unemployed and lone parents are
three times more likely than people generally to fall
below the poverty line, reflecting in both cases the
loss of income from employment (a disproportionate
number of lone parents are not in work). Many of
these and others with low incomes have low educa-
tional attainment. Moreover, the information revolu-
tion is likely to mean that poor education will become
a more important determinant of poverty in the future.

The main characteristics of those with poverty levels
of income differ between Member States, reflecting
variations in both social policy and social structure.
For example, the unemployed are at particular risk in
the UK, where they are four times more likely to have
low incomes than people generally, while in Den-
mark, they are only slightly more at risk than average.
This reflects the more comprehensive and generous
unemployment benefit system in the latter than the
former. Nearly half (46%) of lone parents and their
children have poverty levels of income, largely be-
cause they are not in paid employment, though the
situation varies markedly from one country to another,
reflecting, in particular, levels of childcare provision
and support. The families concerned are most at risk
in the UK and Ireland, where they are 5 or 6 times
more likely than average to have income below 60%
of the median. Conversely, they are at relatively low

The link between education and income levels is of
particular interest (see Graph A.3). While in all Mem-
ber States, income increases significantly with edu-
cational attainment
levels, people with university
education or the equivalent tend to have similar in-
come levels (adjusted for cost of living) across the
EU, which suggests perhaps the emergence of a sin-
gle market for graduates. Although many obstacles
remain, such as a lack of transferability of qualifica-
tions or language difficulties, there are signs of in-
among young
creased international mobility
graduates, in particular. A possible effect of this is a
trend towards equalisation of graduate pay across
countries, while earnings of those with lower qualifi-
cations continue to vary . The widening income gap
which results in the less prosperous countries may
put increasing pressure on social cohesion.

An uncertain long-term trend

The factors underlying poverty levels of income give
mixed messages for long-term trends in social cohe-
sion. On the one hand, continued economic growth
and higher levels of employment may reduce the pro-
portion of people with low income, insofar as the rela-
tive numbers without earnings from work are
reduced. On the other, social trends mean that the
number of lone parent families may continue to in-
crease. Moreover, while education levels are rising
across the EU, especially in the lagging regions, the
growing dependency on information technology, and
the high level of general education which is a precon-
dition for being able to use this effectively, threatens
to put those with low education levels at an increasing
disadvantage.

Transfers: an important weapon
in the fight against social exclusion

Social transfers (other than pensions), which account
for 9% of total household income in the EU, make a
to maintaining social
significant

contribution

25

I.2  Social cohesion

cohesion. Over half go to the poorest 20% of the pop-
ulation and make up over half their final income.

The effect of social transfers is evident if the proportion
of people below the poverty line is compared with what
it would be in the absence of transfers (Graph 7 and, in
Annex, Graph A.4). In most Member States, transfers
(in this case including pensions, some of which are
from private sources) reduce the poverty rate by
30-40%.3 In Denmark, the figure is higher, while in Italy
and Greece, and to a lesser extent Portugal, social
benefits have much smaller effects on the distribution
of income, reflecting both their smaller scale and less
targeting on those with the lowest incomes.

In the UK and Ireland, in both of which social transfers
reduce poverty rates substantially, the high propor-
tion of people with low income is to a large extent due
to a wide dispersion of
income before transfers,
which in turn reflects the wide dispersion of wages (as
revealed, for example, by the Eurostat, Structure of
Earnings Survey for 1995).

Despite the contribution of social transfers to maintain-
ing social cohesion, it should be emphasised that, re-
tirement pensions apart,
they tend to tackle the
symptoms rather than the underlying causes of pov-
erty. As such, they do not in themselves provide a
long-term solution to the problem. It is therefore impor-
tant for them to be accompanied by structural mea-
sures aimed at tackling the root causes, in particular,
unemployment, low education and inadequate skills, a
lack of child-care support facilities and so on, which will
also help to increase the growth potential of the econ-
omy.

Population with income below the poverty 
line before and after transfers, 1995

% population

Total, before transfers
After transfers

DK

L NL

A

D

F

B

E IRL

I

UK EL

P

35

30

25

20

15

10

5

0

7

35

30

25

20

15

10

5

0

26

income and poverty in candidate

Rural
countries

In most countries, agricultural income has declined
significantly since the beginning of transition. This
has been particularly marked in Poland, Slovakia
and Romania. There are a number of reasons for this
trend. First, at the beginning of transition, there was
a sharp adjustment to world market prices, where
trade was liberalised leading to a reallocation of re-
sources in the agricultural sector. This was associ-
ated with declining terms of trade as input prices
rose and producer prices fell. In many countries
farmers reduced intensity of input use and shifted,
particularly in sectors dominated by small scale
farming, towards labour-intensive production sys-
tems. Low opportunity costs of labour, linked to
more general economic restructuring and lack of al-
ternative sources of employment in rural areas sup-
ported this tendency. The result has meant that farm
incomes, which before transition were at or above
national wage levels, are now in many countries
considerably lower than national wage levels.

The picture is, nevertheless, varied across the can-
didate countries. Agricultural income per labour unit
has remained relatively high in the Czech Republic
and Hungary and to a lesser extent in Slovakia. In
contrast, incomes are far lower in the remaining
countries, particularly in Poland and Romania, re-
flecting very high levels of employment in agricul-
ture combined with low productivity. In all candidate
countries, current evidence would suggest that ag-
labour incomes are considerably lower
ricultural
than in the European Union, even when adjusted for
purchasing power. In contrast, income per hectare
remains relatively high in almost all countries except
Poland and the Baltic States, particularly when the
purchasing power of farm income per hectare is
compared with the EU. It is, therefore, important to
stress the considerable variations in factor combi-
nations and income potential across the CECs.

Without major restructuring, the prospects for agri-
cultural labour income in these countries are poor
for macroeconomic reasons, and in particular, due
to real exchange rate developments. First, eco-
nomic growth in the CECs, increasing labour costs
in-
and real appreciation of exchange rates will
crease the competitive pressure on agriculture.
Secondly, these trends will be associated with a rel-
in-
ative fall
comes. In order to maintain sustainable income
levels agriculture will require major restructuring.
On the other hand, an increase in labour opportunity

in purchasing power of agricultural

 
I.2  Social cohesion

costs in the rest of the economy will provide an incentive
for labour to move out of agriculture. This will depend
largely on reducing structural impediments to labour
adjustment. In this context, it is important to note that un-
employment in many rural areas remains high despite
satisfactory growth rates in the economy as a whole.

These low levels of agricultural income per labour unit
translate into significant rural poverty. Recent research
from the World Bank suggests that poverty as defined
by the population below 50% of average income is con-
siderably more concentrated in rural areas in Poland,
Romania, Lithuania, Latvia and Bulgaria (Graph 8).
Even in Hungary, where agricultural incomes are com-
paratively high, significant rural poverty exists. As the
World Bank study shows there are many reasons out-
side the agricultural sector that create vulnerability to
poverty in rural areas – low levels of human capital, lack
of infrastructure, lack of alternative sources of invest-
ment and peripherality.

8

70

60

50

40

30

20

10

0

Concentration of poverty in rural areas in 
CECs

% total households

Households in rural areas
Households with < 50% average income in rural areas
Households with < 33% average income in rural areas

BG

CZ

EE

HU

LV

LT

PL

RO

70

60

50

40

30

20

10

0

1

2

3

There is scope for debate about whether the level of income taken should be in relation to average income in the EU or individual
Member States or even regions. In practice, there are various problems with comparisons based on an EU-wide average income
level, since the measure tends to be dominated by the large differences in average income between Member States rather than
reflecting differences in the dispersion of income within these. In other words, a measure of poverty calculated in relation to average
income in the EU largely indicates differences in national rather than individual levels of income. At the same time, irrespective of the
merits or otherwise of measuring poverty on a regional basis, the data are simply not available to do so.
In the First Cohesion Report, the previous definition used by Eurostat was used to determine the poverty line, ie an income per head
of 50% or less than the mean. In practice, for most countries the two measures give similar results. However, the new definition is
preferable, especially for making comparisons over time, because the median is a more stable measure of average income than the
mean in that, since it relates to someone in the middle of the income distribution, it is not affected by extreme values. The figures
reported in the text are derived from the European Community Household Panel. It should be noted that data for Belgium are at
present being revised.
It is interesting to compare this with the reduction in regional disparities due to transfers. The First Cohesion Report found that total
government expenditure, including social spending, reduced interregional disparities in Member States by 10-30%, ie by less than
the reduction achieved in interpersonal disparities, which are generally more of a focus of national policy.

27

 
I.2  Social cohesion

28

I.4  Factors determining real convergence

Productivity, competitiveness
and economic performance

Competitiveness is often viewed as a key indicator of
the success or failure of policy. The term literally re-
fers to producers competing with each other in the
same market. However, there is a related concept of
the economic performance of regions and countries,
which can also be termed ‘competitiveness.’

Despite the fact that there are competitive and un-
competitive firms in every region, there are common
features which affect the competitiveness of all firms
located there. These features include physical and
social infrastructure, the skills of the work force, an in-
stitutional framework and a culture conducive (or not
conducive) to innovation and the efficiency of public
institutions (especially managerial capacity at the re-
gional level). In addition, success breeds success;
the presence of strongly competitive firms in a region
tends to stimulate other firms and to encourage fur-
ther investment.

Over recent years, a standard definition of regional
and national competitiveness has begun to emerge,
which relates to the achievement of ‘high and rising
standards of living and high rates of employment on a
sustainable basis.’1 Although traditional measures of
competitiveness tend to focus on GDP per head,
there are other important factors affecting economic
performance. The Lisbon summit underlined the cru-
cial link between Europe’s economic strength and its
social model. Effectively targeted social protection
helps economies adapt to change. By promoting
greater social cohesion it can help reduce the under-
use of human resources. It is also important to keep in
mind the contribution of other factors such as the
the natural environment, quality of
quality of

healthcare, social services and so on. Indicators of
this type help enrich our understanding of economic
development, though further work is needed to de-
velop better measures of progress in these areas.

In practice, GDP per head can be broken down into
two main components: the employment rate, or the
proportion of working-age population in work, and
productivity, or GDP per person employed. Since a
high level of one does not necessarily go with a high
level of the other, they are considered separately be-
low, both in aggregate and by sector, before examin-
ing investment and other key factors underlying
productivity.

Trends in regional economic performance

For the EU as a whole, economic performance over
the past 25 years has tended to be stronger in terms
of productivity and often weak in terms of employ-
ment. This has sometimes led to concerns about ‘job-
less growth’, though, in practice, employment has
always increased when GDP growth has been more
than 2% a year or so. The problem has been maintain-
ing this rate of growth over the long-term. Over the de-
cade 1989 to 1999,
for example, annual growth
averaged 1.9%, but because GDP per person em-
ployed rose by 1.4%, employment increased by only
0.5% a year. In the long-term, achieving high employ-
ment growth and high productivity growth are not
necessarily in conflict with each other. Indeed, to the
extent that productivity growth increases competi-
tiveness and, therefore, enables higher growth of
GDP to be achieved, they are complementary. The
challenge in lagging regions, however, is to develop
a mix of policies which boost productivity without ad-
versely affecting levels of employment.

37

I.4  Factors determining real convergence

While in most, but not all, lagging regions, employ-
ment levels are less than in the rest of the EU, in all of
them, productivity is below average. Two main
groups can be distinguished:

•

•

those with employment rates similar to, or in a few
cases above, the EU average, which need to
catch up in terms of productivity, measured by
GDP per person employed. These are mostly in
Portugal, Greece and the eastern part of Ger-
many, where in the first, productivity is typically
only around 40% of the EU average and in the
other two, around 60% of the average.

those lagging in terms of both productivity and
regions in
employment. These include most
Spain and southern Italy, where employment
rates can be as low as 40% as against an EU av-
erage of over 60%. In these cases, low employ-
ment is, exceptionally, a more important reason
for low GDP per head than low productivity.

Sectoral analysis: low productivity in agriculture

The sectoral structure of economic activity shows an
interesting pattern, if sectors are divided into agricul-
ture; industry (mainly manufacturing); distribution,
transport and hotels and catering; business and fi-
nancial services and non-market and other services
(principally health, education and public administra-
tion) (see Table A.18 and Map 8). Productivity is high-
est
in business and financial services, gross
value-added per person employed in the EU being
over twice the average for the economy as a whole.2 It
is slightly above average in industry and just below
average in distribution, transport and hotels and in
non-market and other services.3 In agriculture, pro-
ductivity is only around half
the average for all
sectors.

Poor performance often linked to
concentration in less productive sectors

In all three of the cohesion countries, overall employ-
ment rates are low to a large extent because of low
in business and financial services,
employment
where productivity is relatively high (though this
should be interpreted with caution because of high
value-added in the protected financial services sec-
tor). On the other hand, the share of employment in
distribution, transport and hotels and in non-market
and other services is similar to the EU average, as is

38

the level of productivity. Employment is much higher
than elsewhere in agriculture where productivity is
very low.

This pattern is reflected at the regional level (Map 9).
Three sets of regions can be distinguished in the EU
of 27 Member States (though not all fit the classifica-
tion neatly):

•

•

•

lagging regions with a high employment in agri-
culture, often an above average share of employ-
ment in industry and low employment in services.
These are notably in the southern Member States
and in Central European countries, except for the
Czech Republic, Slovakia and Hungary. While
agricultural employment in the EU is under 5% of
the total, in some regions in Spain and Portugal, it
is over 15% and in regions in Greece and the
most eastern parts of the applicant countries,
over 20%;

regions with high employment in industry. Many
of these are concentrated in a central arc, stretch-
ing from the West Midlands in England, eastern
France and northern Spain,
through southern
Germany and northern Italy to the Czech Repub-
lic, Slovakia and Slovenia. Although many of
these regions are prosperous, many are not, re-
flecting the significant variation in value-added
between manufacturing industries;

regions with high employment in services. These
are regions where the share of employment in this
sector is 70% or more. Most of these regions are
prosperous and include a number of capital cities
in the north of the EU, but the group also includes
regions in southern France, Spain and Italy,
which have relatively low levels of GDP per head
and where employment is concentrated in basic
services, many of them catering for the tourist
trade.

The long-term trend towards services and
the restructuring required in lagging regions

Over many years, there has been a tendency in the
Union for employment in agriculture and industry to
decline – though in the latter, the number employed
has stabilised in recent years, even if the share has
continued to fall – and for employment in services to
expand. This trend, however, as noted above, has
some way to go in many regions, particularly in

I.4  Factors determining real convergence

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39

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
I.4  Factors determining real convergence

Canarias (E)

Guadeloupe

Martinique

Réunion

(F)

(F)

(F)

Guyane (F)

Açores (P)

Madeira

(P)

9  Regions with highest agricultural, industrial or service employment, 1999

Kypros

SIG16
SIG16

Agriculture (top 10%)

Agriculture (top 25%)

Industry (top 10%)

Industry (top 25%)

Services (top 10%)

Services (top 25%)

40

Top 10% and 25% of total population
EL, RO, SK: 1998
BG, LT, LV: 1997
D (Sachsen): NUTS1
Sources: Eurostat and NSI

0

100

500 km

© MEGRIN for the administrative boundaries

lagging ones. Indeed, even in the most prosperous
regions, employment in services is still growing. Be-
tween 1990 and 1999, employment in services in the
EU increased by some 12 million, while in the rest of
the economy it declined by 9 million. Most of this de-
cline occurred during the recession years of the early
1990s, though during the recovery since 1994, agri-
cultural employment has continued to fall (by around
1.3 million), while employment in industry has re-
mained broadly unchanged. In the lagging regions,
there will be a continuing shift of employment out of
agriculture on a substantial scale in future years,
though not necessarily job losses in industry. Indeed,
in some regions, employment in manufacturing, es-
pecially where it is still below the EU average, might
well increase, as it has tended to do in recent years. In
the central industrial regions, on the other hand, em-
ployment in manufacturing in many cases could de-
cline, at least as a share of the total, though in many of
these a shift has already occurred to high
value-added activities, as noted below.

The restructuring of employment in future years is
likely to be even greater in the candidate countries,
where jobs in many regions remain concentrated in
agriculture and/or industry.

It should be noted in this context (see maps of em-
ployment and productivity by sector) that the shift in
employment out of industry, and to a lesser degree
out of agriculture, in the more prosperous regions in
the EU has not necessarily been accompanied by a
similar decline in the share of value-added generated
in these sectors. Indeed, in many cases, productivity
has increased significantly in industry, as employ-
ment has concentrated in high value-added activi-
ties. This demonstrates the potential for maintaining a
small but highly competitive manufacturing sector as
a key part of the regional economy.

Shifts of activity within sectors as
important as shifts between them

An important aspect of lagging economic develop-
ment in the less prosperous regions in the EU is the
concentration of activity in low value-added sectors
(though, it should be emphasised, productivity in the
same sector can vary significantly across the Union).
This reflects differences in both the efficiency of per-
forming the same activities and the degree of

I.4  Factors determining real convergence

concentration in higher or lower value-added parts of
the broad sectors concerned.

For example, business and financial services have
relatively high value-added per person employed in
the cohesion countries (as in some of the candidate
countries), which partly reflects high interest rates
(which push up value-added in financial services)
and low competition, but also perhaps the under-de-
veloped nature of these services in relation to poten-
tial demand. On the other hand, manufacturing,
which has an above average level of value-added per
person employed in most countries, has relatively low
productivity in the three cohesion countries (as well
as in most of the candidate countries). This difference
in part reflects a tendency for high value-added and
high-tech parts of manufacturing to concentrate in
the more prosperous Member States.4

In agriculture, value-added per person employed is
around 80-90% of the EU average for all sectors in the
more prosperous countries, but only 40% of this in
Spain, 25% in Greece and just 13% in Portugal (and
16% in Austria). (In the candidate countries, the figure
is even lower.) These figures reflect both the need for
diversification into higher value-added activities and
the long-term potential
for significant productivity
growth in the sector.

Demography and migration

Population in the EU is set to decline ...

At the beginning of 2000, the population in the EU
stood at 376 million, substantially less than in China
(1.2 billion) or India (1 billion), but significantly more
than in the US (272 million) or Japan (126 million). As-
suming trends in birth and death rates and in migra-
tion continue, EU population is projected to grow very
slowly between 2000 and 2005 (by only 0.2% a year)
and then hardly at all (by under 0.1% a year) from then
until 2022, when it is expected to start declining. In
2010, therefore, population is forecast to reach 385
million and in 2025 to be only slightly higher (388 mil-
lion). From 2008, population is set show a natural de-
cline but this will be offset for a few years by net
inward migration.

Trends in population, however, vary markedly be-
tween different parts of the Union. While population is

41

I.4  Factors determining real convergence

still growing in most regions even if slowly, in some,
predominantly in Spain,
Italy, Germany and the
Nordic countries, it is already declining (see Map
A.11). Between 2000 and 2010, more regions in Ger-
many and Italy are projected to show a decline, in ad-
dition to some in France, the UK and Austria. On the
other hand, population is expected to continue in-
creasing at a relatively high rate in a number of re-
gions in southern Spain, the south of France and
Greece as well as in parts of Germany, the Nether-
lands and the UK.

By 2025, almost 90 of the 200 or so regions, defined at
the NUTS 2 level, accounting for half of all the people
living in the EU, are projected to be experiencing
population decline, including all those in Italy but also
a number in virtually all Member States.

Declining regions in the EU are, therefore, character-
ised by low income levels, high unemployment and a
large proportion of the work force employed in agri-
culture and industry (see Graph A.9). In addition, they
tend to have a relatively small number of young peo-
ple, reflecting their migration to other areas as well
as low fertility rates, and a low density of popula-
tion, reflecting the rural nature of many of them. There
are, however, notable exceptions to the latter,
since a number of densely-populated regions (eg
Brussels and Attiki, where Athens is located) have
also experienced a reduction in population in recent
years. Indeed, a tendency to ‘suburbanisation’, the
movement out of city centres to the suburbs and
neighbouring regions, which is often described as
‘urban sprawl’, is evident in many major conurbations
across Europe.

... as it is in the candidate countries

Population ageing in the EU will accelerate ...

Demographic trends are even more adverse in the
candidate countries. While in most of the 12 coun-
tries, population grew at a relatively high rate in the
1970s and 1980s, due to high fertility rates and in-
creasing life expectancy, in the 1990s, fertility rates
fell dramatically and life expectancy declined. In ad-
dition, there was significant outward migration, with
only the Czech Republic, Malta and Cyprus experi-
encing a net inward movement over the period 1990
to 1999 (see Map A.12).

As a result, population growth has already begun to
fall in most of the countries. In 8 of the 12, population
declined over the 1990s. Between 1995 and 1997, it
fell in 32 out of the 52 regions, defined at the NUTS 2
level and there was net outward migration in 31 of
them. In the wider European area, therefore, and in-
cluding these countries with the existing EU Member
States, population decline is likely to occur several
years earlier than indicated above. (The projections
for the 12 countries are based on UN forecasts.5)

Regions with declining population

Demographic trends are affected by social and eco-
nomic developments. Migration flows, in particular,
are related to regional differences in labour market
conditions, people moving from areas of low job
growth to ones with more employment opportunities,
and, over the longer-term, such differences can also
affect birth and death rates.

Population in the EU is ageing rapidly. With low birth
rates, the proportion of young people under 15 has
declined for a number of years and is projected to
continue to do so in the future, falling from 17% in
1998 to 14.5% in 2025. By contrast, the proportion of
those aged 65 and over is rising significantly and is
set
to increase even faster after 2010 as the
baby-boom generation begins to reach this age. Ac-
cordingly, the proportion is projected to increase
from around 16% of total population in 1998 to 22% by
2025. Moreover, within this, the relative number of
people of 80 and older is rising faster still.

These trends will have important consequences for
social welfare and taxation systems across the EU. In
particular, the prospect is for a growing number of
people above retirement age who will need to be sup-
ported by those in employment. All Member States
will experience an increase in the old-age depend-
ency rate (the number aged 65 and over relative to
those of working-age, taken here as 15 to 64), but the
extent of this is likely to vary significantly between
them. The most marked increases are expected to be
in Italy, Sweden, Finland and Germany and the small-
est in Ireland, Portugal and Luxembourg.

The trend is likely to be similar, if less pronounced, for
the overall dependency rate, the total above and be-
low working-age in relation to those of working-age,
despite the projected decline in the number of
children6 (Map 10). At present, there are some 49 po-
tential dependants in the EU for every 100 people of

42

I.4  Factors determining real convergence

working age; in 2025, there are expected to be 58.
The number is projected to be particularly high in
most regions in France, Sweden and Finland.

average age of those of 15 to 64 in the candidates
countries will also increase,
though at a slightly
slower rate than in existing Member States.

The retirement of ‘baby-boomers’ together with the
declining number of young people is set to reduce
working-age population in the EU from around 2010
onwards, and this is projected to fall from around 251
million now to some 243 million in 2025. At the same
time,
those of 15 to 64 will
increase.

the average age of

... as it will in the candidate countries

The pace of population ageing in the enlarged EU, ie
including the candidate countries as well as the exist-
ing Member States, might be slower, but only slightly.
In most candidate countries, active policies of en-
couraging population growth during the 1970s and
1980s were reversed in the 1990s. While the average
age of their populations is lower than in the EU at
present, it is likely to increase rapidly over the next 25
years, as falling fertility rates reduce the relative num-
ber of young people under 15 in all countries apart
from Malta. By 2025, the proportion of young people
in total population is, therefore, projected to be even
less than in the present EU.

On the other hand, the proportion of people aged 65
and over in these countries is, on average, less than in
the EU at present. Accordingly, old-age dependency
rates are also lower and, in many regions, well below
those in EU Member States, with the exception of Ire-
land (Map 10).

The relative number of elderly people will also in-
crease substantially, though only in the Czech Re-
public is the number expected to rise above the EU
average by 2020. Nevertheless, both the average
old-age dependency rate and the average overall de-
pendency rate are expected to be only marginally
lower in an enlarged EU than indicated above.

The same is true of the prospective decline in work-
ing-age population, which is projected to occur from
about the same time in the candidate countries as in
the present EU. The number of people aged 15 to 64
is expected to rise slightly from the present 72 million
until 2009 and then to fall to 66 million in 2025.
Working-age population in an enlarged EU is, there-
fore, likely to reach a peak of 328 million in 2010 and
to decline to 309 million by 2025. As in the EU, the

The labour force in the EU
is set to decline and to age ...

The trends in working-age population described
above will inevitably affect the growth and age struc-
ture of the labour force in the EU, though this will be in-
fluenced as much by changes in participation as by
demography. These, in turn, will be determined by a
range of economic and social factors, most espe-
cially by the availability of jobs, but also by education
developments, social attitudes towards women work-
ing, the availability of child-care support, the age of
retirement, the details of pension schemes, the struc-
ture of households and so on.

If current demographic and participation trends per-
sist, the labour force is projected to grow in the EU up
to 2010, when it will reach 183 million.7 Thereafter, it
will start to decline, falling to some 175 million by
2025. The onset of decline, however, is likely to differ
significantly between regions (Map 11). Neverthe-
less, in almost all regions in the EU, the number of
economically active people is expected to be falling
by 2025, though at widely differing rates. The decline
is projected to be particularly marked in Italy, Ger-
many and Spain, the labour force falling by over 1 mil-
lion in each case.

Because of demographic trends and possible
changes in participation, the relative number of peo-
ple of 50 and over in the labour force is expected to in-
crease in all Member States, from an average of
around 20% of the total now to 30% in the early 2020s.
In the Nordic countries, where participation is not ex-
pected to change much, the increase in this propor-
tion is likely to be relatively small, while in Italy and
Spain, where birth rates are low and participation
rates of women could increase markedly, it might be
substantial.

... which could have profound
economic consequences

As noted above, these trends could have far-reach-
ing economic consequences, especially for
the
sustainability of social protection and health care sys-
tems, which will be put under increasing pressure by
the growth in the number of elderly people.

43

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I.4  Factors determining real convergence

Canarias (E)

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(P)

11  Projected decline in the labour force

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45

I.4  Factors determining real convergence

Accordingly, attention needs to focus on the possibil-
ity of increasing participation among older people as
well among women, the prime source of labour force
growth in the future.

At the same time, such a possibility brings into focus
the problem of maintaining, updating and extending
the skills of the people concerned, which is already a
concern given the ageing of the work force. In many
countries, the pursuit of early retirement policies up
until recently have enabled this problem to be ig-
nored. Moreover, the perception that returns to the
training of older workers are relatively low, whatever
the reality, means that employers are often reluctant
to undertake the necessary investment. This reluc-
tance tends to be compounded by the perceived dif-
ficulties of the training process and of older workers
learning new skills. These difficulties, however, can
be greatly reduced if the training of such workers be-
comes part of a process of lifelong learning, which in
turn means that people acquire new skills throughout
their working lives and are accustomed to doing so.
This kind of development, which requires a change in
attitudes as well as in working practices, is essential if
the potential of older workers is to be effectively
tapped, which could prove vital for EU producers to
remain competitive on world markets.

It is equally important to ensure that women – or in-
deed men – returning to work after a period of ab-
sence due to family reasons have access to the
training they need to update their skills and learn new
methods of working, so that they can both find suit-
able jobs and contribute effectively to the develop-
ment of the EU economy.

The prospective decline in the number of young peo-
ple might have the effect of diminishing youth unem-
ployment, though this in the long-term depends more
on their skills and the rate of job growth than on num-
bers perse. The decline in young people entering the
labour market has been accompanied by an increase
in the number remaining in education and initial voca-
tional training longer. In a knowledge-based econ-
omy, it is essential that this trend continues. At the
same time, the growing recognition of the importance
of workplace training as well as formal tuition means
that in a number of countries the labour force partici-
pation of young people is increasing as they combine
paid employment with continued education.

46

Whatever measures are taken to increase participa-
tion, the extent to which it increases for women and
older workers as well as young people, ultimately de-
pends on the rate of job growth, which in turn is likely
to depend on the pace of economic development.
(The process, it should be emphasised, is not solely
one-way, since more skilled and enterprising people
joining the labour market is itself likely to boost com-
petitiveness and economic growth.) This will deter-
mine whether unemployment declines and job
shortages emerge or whether, despite the falling
number of people of working age, unemployment in
the Union increases again.

The labour force in many parts of northern Italy is, for
example, projected to decline significantly in future
years on the basis of past trends and, indeed, labour
shortages are already beginning to emerge. In the
longer-term, however, if economic growth and net job
creation can be sustained at high levels, this might
encourage more people – women in particular whose
participation is well below the EU average in most
areas – to join the labour force and ease shortages.
(Participation of women in northern Italy has
increased markedly over
the past 10-15 years,
whereas in southern Italy, where job growth has been
depressed, it has hardly changed.)

Inward migration could increase but
it should not be overemphasised ...

Recent studies conclude that large-scale migration
flows from the candidate countries are unlikely to oc-
cur and should not be overemphasised in the en-
largement agenda. Since, however, convergence of
income per head in the CECs to EU levels will be a
long process, migration is almost certain to increase
once free movement is possible. Estimates are that
net migration to the EU could amount
to some
335,000 a year immediately after entry barriers are re-
moved, but that this would fall to below 150,000 within
a decade.8 At this time, the number of people living in
the EU from the CECs could reach 2.9 million and an-
other 10 years later, 3.7 million, rising to a peak of 3.9
million 30 years after the introduction of free move-
ment of labour. This implies a growth in CEC nationals
resident in the existing EU Member States from 0.2%
of total population in 1998 to only just over 1% in 30
years time. On these estimates, concern that mi-
grants from the CECs will swamp EU labour markets
are, therefore, ill-founded.

People moving from the CECs are likely to go mainly
to Germany and Austria, where the numbers are al-
ready high. Estimates are that some 65% will go to the
former, 12% to the latter, and within these countries,
primarily to border regions and centres of economic
activity – in Germany, to southern regions bordering
the Czech Republic rather than to the new Länder, in
Austria,
to eastern areas. Regions bordering the
CECs are also likely to experience increased tempo-
rary inward migration and commuting. This concen-
tration could, however, give rise to social tensions in
the areas concerned.

... and could ease labour shortages

Perhaps the most interesting and potentially impor-
tant conclusion from recent studies is that, unlike the
EU, many CECs are likely to experience a significant
growth in younger people aged 20 to 35 over the next
decade or so. This represents an opportunity for the
enlarged EU, insofar as it gives employers the possi-
bility of taking on young people with high education
attainment levels. Indeed, if economic recovery con-
tinues at the pace currently expected, then it will also
be a time when skill shortages are likely to become
more acute.

In fact, there is also evidence in the EU of labour
shortages in less skilled activities in a number of re-
gions, even in some where unemployment is rela-
Immigrants could potentially help to
tively high.
relieve shortages in these areas as well, though it is
important that adequate measures are introduced at
the same time to integrate those concerned into the
local community and prevent them becoming socially
excluded.

In this regard, a recent Commission Communication
on a Community Immigration Policy (COM(2000)757)
proposed the adoption of a controlled immigration
policy as one of the responses to the problems im-
plied by demographic trends and pointed to the po-
tential contribution of immigration to the European
Employment Strategy.

Although the outflow of young people might tend to
damage the development potential of the regions
from which they move in the short to medium-term,
especially as those moving are likely to include a dis-
proportionate number of the most highly educated,
return, with the expertise and
their subsequent

I.4  Factors determining real convergence

know-how they have acquired, could give a major
stimulus to development in the CECs.

Nor is enlargement likely to pose
serious problems for EU labour markets

It is unlikely that the free labour movement will have a
major effect on EU labour markets as a whole, though it
could affect Member States differentially according to
the specific circumstances which exist. CECs at pres-
ent are small in economic terms, which means that in-
creased imports from them are likely to affect prices in
goods markets, and so wages and employment, only
to a limited extent. According to a recent study, for ex-
ample, immigration averaging some 200,000 a year
over the next 15 years would reduce earnings by under
1%.9 In border regions, however, the effect on labour
markets could be more significant, as it could be in
sectors which are most exposed to competition from
CEC imports, though equally there are potential gains
from the proximity of new markets.

Investment

Investment the key to growth
in candidate countries

Indicators of investment are a good barometer of the
growth potential of an economy10 (see Graphs A.10
and A.11). Investment (as measured by gross fixed
capital formation) is higher in relation to GDP in the ap-
plicant countries than in current EU Member States –
25% of GDP as against 20% in 1998. It is essential for
this differential to be maintained or even increased if
the applicant countries are to achieve the high growth
rates necessary to catch up with the EU economies.
High investment perseis no guarantee of success – it
must be well targeted and coupled with technical prog-
ress (see below) – but it is a necessary condition.

The level of investment, however, differs significantly
between applicant countries. In the Czech Republic,
Slovakia and Poland, investment is as high as 30% of
GDP. By contrast, in the countries with the lowest lev-
els of GDP per head, it is generally much less (only
around 11½% of GDP in Bulgaria in 1998).

In the Union, Portugal, the country with the second
lowest level of GDP per head, has the highest invest-
ment in relation to GDP (28%), while in Spain and

47

I.4  Factors determining real convergence

Greece, as well as Ireland, it is also well above the EU
average. Sweden, on the other hand, with GDP per
head around the EU average, has the lowest level
(17% of GDP).

The capital stock: lagging economies
still have much catching up to do

In judging the effect of capital formation on economic
performance, it is important to consider not just cur-
rent investment flows, but also the accumulated stock
of capital which these have built up over time.11 The
data on this, however, involve a high degree of esti-
mation and should be regarded as indicative only.
Nevertheless, some interesting conclusions can be
drawn.

The main observation is that more prosperous coun-
tries have a larger stock of capital than less prosper-
ous ones. In the three cohesion countries, capital
stock in 1999 is estimated at only EUR 33,000 per
head as opposed to EUR 54,000 in the EU as a whole
and EUR 75- 80,000 in Denmark, Germany and Aus-
tria (see Table A.19 and Graphs A.12 and A.13). The
cohesion countries, therefore, have only 60% of the
capital per head available in the EU as a whole.

Since the capital stock is built up over a great many
years, it tends to change only slowly and is dominated
by past investment. This is most clearly so for build-
ings, which can be used effectively for decades,
though even machinery and equipment can often
have a useful life of 10 years or more.

9

Investment in knowledge

Nevertheless, because of the higher rate of invest-
ment, the gap between the cohesion countries and
the rest of the EU is narrowing, if slowly – 10 years ago
capital stock in the former averaged only 54%
of that in the EU as a whole. However, while the cohe-
sion countries are catching up in relative terms, in
absolute terms they still spent less than the EU aver-
age on investment per head of population over the
past decade – EUR 10,000 as opposed to EUR
13,000.

Investment in knowledge:
the basis for long-term growth

While capital expenditure on physical assets is im-
portant, intangible investment in research and devel-
opment, education and information technology is
becoming even more important for economic devel-
opment in the Union.

Growth over the long-term, therefore, is attributable
not to just to an increase in the fixed capital stock, but
more significantly to technical improvements which
increase the efficiency with which capital – and la-
bour – is used.12 Moreover, the information revolution
means that investment in technological advance is
likely to become even more important in the knowl-
edge-based economy of the future.

It is, therefore, important to review the extent of invest-
ment in knowledge across the EU as well as in fixed as-
sets. This gives rise to somewhat different conclusions,
since many of the countries with below average rates of
fixed investment are among the largest
investors in technology. In particular,
Sweden, with the lowest fixed invest-
ment rate in the EU, has the highest rate
of investment in knowledge (Graph 9).
France, the UK and Finland are similarly
low investors in physical assets but high
investors in knowledge.

15

12

% GDP

(*) Including church and voluntary sector
Definition of public and private varies between countries

R&D private sector

R&D public sector

Private education (*)

L: R&D data not available
B: Education data for Flanders region only
A: Breakdown of R&D not available

Education

9

6

3

0

On the other hand, the three cohesion
countries, as well as Ireland, spend
less than average on investment
in
knowledge. While their high rate of ex-
penditure on fixed capital formation is
closing the gap in their capital stock
with the rest of the EU, their low invest-
ment in less tangible assets is not a se-
cure basis for longer-term growth in a
digital age.

L EL I

IRL E P B D NL A UK F

FIN DK S

EU3

EU15

DK/FIN/S

15

12

9

6

3

0

48

 
Infrastructure endowment

Most public investment in Member States as well as
that supported by the Structural Funds goes on infra-
structure. An adequate endowment of infrastructure
is a necessary, but not sufficient, condition for the
economic development and competitiveness of a re-
gion, an important factor determining both the loca-
tion of economic activity and the kinds of activity or
sector which develop. Investment in infrastructure is
essential for reducing the effect of distance between
regions, especially between those on the periphery
and those in the centre. Other conditions, however,
need to be met in parallel if the increase in accessibil-
ity in peripheral regions is not to become a threat
rather than an opportunity.

Transport infrastructure

Transport infrastructure, in particular, plays an impor-
tant role in reducing regional disparities and improving
the competitiveness of regions by facilitating trade and
the movement of labour. Improvements in infrastruc-
ture reduce both the time and the cost of transporting
goods and so increase productivity and alter the com-
parative advantage of being located in different re-
gions. Equally, they have a similar effect on ‘travel to
work’ time, so extending the boundaries of local labour
markets and increasing effective labour supply.

Transport infrastructure, however, remains largely
the responsibility of government and is still an impor-
tant component of structural and regional policy. De-
spite the privatisation of particular means of transport
over recent years (especially high-speed rail and
motorways), the cost of investment in basic infra-
structure remains too high to be covered by the pri-
vate sector. In addition, when deciding investment in
new infrastructure, the subsequent recurrent cost of
maintenance should be taken into account.

Road transport remains dominant

Roads are the predominant means of travel. In 1997,
they accounted for 86% of all journeys made in the EU
(measuring these in terms of passenger miles) and
94% of those made by land. Moreover, the transpor-
tation of goods by road is continuing to increase, ac-
counting for 43% of all transport of goods in 1997
(measured in terms of freight-miles) as against 31% in

I.4  Factors determining real convergence

1970. Excluding that carried by air and sea, they ac-
counted for 74% of all freight transported in the EU,
while only 14% went by rail and 12% by inland water-
way and pipeline.

The development of motorways has increased the
density of road transport. Although the scale of the
road network at Union level has remained broadly un-
changed, the length of motorways increased by 40%
over the 10 years 1988 to 1998, due notably to growth
in the 4 cohesion countries, where many roads have
been converted to motorways. Over this period, the
density of motorways13 in these four countries taken
together rose from below the Union average (43%) to
around the same level, the largest increase occurring
in Spain, where the density rose from 63% of the aver-
age to 136%. On the other hand, while there was also
substantial growth in Ireland and Greece, density is
still well below the average (12% of the average in Ire-
land in 1998 as against under 2% in 1988, and 17% in
Greece as opposed to their being no motorways at all
in 1988).

At the regional level, growth has followed a similar
pattern. Although the density of motorways remains
higher in central or the most developed regions in
each country than in Objective 1 or peripheral re-
gions, growth has been concentrated in the latter.

Motorway networks are less developed in the Nordic
countries (in Finland, density is only 41% of the EU av-
erage and in Sweden, 65%), especially in the most
northerly, sparsely populated regions covered by
Objective 1, reflecting their geographical, and demo-
graphic, features.

The EU average, however, should not be regarded in
itself as an objective to be reached in some kind of
mechanical way. Every region has its own specific
needs in this regard, in terms of both the overall scale
of transport networks and particular modes of trans-
port. A minimum level of transport infrastructure is
necessary for regional competitiveness, but this is not
necessarily the same level in all regions. Moreover,
quality and safety may be just as important for devel-
opment (Graphs 10 and 11).

Reduction in rail transport despite modernisation

The importance of rail transport in the Union has di-
minished in spite of the modernisation of the network
in a number of countries. In 1997, rail accounted for

49

I.4  Factors determining real convergence

6% of all passenger travel in the EU as against 10% in
1970. The decline in freight transport by rail has been
even more pronounced, falling from 21% in 1970 to
8½% in 1997, and between 1990 and 1997, the
amount of goods carried by rail fell by 7% whereas
the amount carried by road rose by 29%.

The decline of traffic has been accompanied by a slight
decline in the size of the rail network, as measured by
the miles of track, and little reduction in either national
or regional disparities in the EU. Indeed, in the cohe-
sion countries, rail density14 declined from 66% of the
EU average in 1988 to 61% in 1998, due in particular to
the closure of many lines in Spain and Portugal.

Nevertheless, the rail network has been modernised
to some extent in the cohesion countries. In 1999,
24% of lines were double track as against 17% 10
years earlier and 39% were electrified, up from 32% in
1988. The rate of modernisation was highest in Spain,
while in Greece both the length and standard of track
remained very low (45% of the EU average as regards
rail density, with only 12% of lines double track and no
lines at all electrified). This, however, is due in some
part to the geographical features of the country – the
large number of islands and the mountainous areas
(see Graphs A.14-A.16).

Sea transport: vital for island and coastal regions

The cost of infrastructure investment for sea transport
is limited to the construction, maintenance and mod-
ernisation of ports which tends to be much less costly
than road construction. In addition, although slow,
sea and inland waterway transport is the least costly

and most envoronmentally-friendly form. Nor is it
affected by problems of congestion or capacity.

Sea transport accounted for 70% of the transportation
of EU visible exports in 1997 and 30% of intra-Com-
munity trade. By contrast, only 7% of freight in the EU
went by inland waterway.

Sea transport remains particularly important for trans-
portation around the coasts of the EU and between
the mainland and the many islands, even after the
construction of several fixed links – the Oresund and
the Channel Tunnel, in particular. In 1998, it ac-
counted for 41% of all freight transported in the EU,
both within and between Member States. The UK was
responsible for 20% of this, Italy for 16% and the four
cohesion countries together for 22%.

The volume of traffic going through the main ports in-
creased significantly between 1990 and 1998, espe-
cially through those of medium size, including, in
particular, Algeciras in Andalucia and Dublin, though
traffic is still well below that handled by the largest
ports in northern Europe, Rotterdam (where it is 10
times larger) and Antwerpen (3 times larger).

More notably, the growth of container ports has been
more evenly spread across Europe. Five of the 12
largest ports in the EU are in the Mediterranean, in-
cluding Giora Tauro in Italy, and these have experi-
enced higher growth than those in northern Europe.
The bulk of container freight is transported by road
from and to the ports, except in Belgium and the Neth-
erlands, where more goes by inland waterway. In
France and Germany, although rivers and canals are

10 Roads index, 1988 and 1998

11 Motorway index, 1988 and 1998

Index EU all regions=100

1988 all regions

1988 Objective 1 regions

1998 all regions

1998 Objective 1 regions

Index EU all regions=100

1988 all regions
1988 Objective 1 regions
1998 all regions
1998 Objective 1 regions

450

400

350

300

250

200

150

100

50

0

400

350

300

250

200

150

100

50

0

400

350

300

250

200

150

100

50

0

B DK D EL E F IRL I

L NL A P FIN S UK EU

B DK D EL E F IRL I

L NL A P FIN S UK EU

450

400

350

300

250

200

150

100

50

0

50

 
 
I.4  Factors determining real convergence

not used to their full potential, there is a relatively high
use of rail. By contrast, in the cohesion countries, al-
most all container transport is by road (89% to 98%).

proportion of the total, is in a poor state. In an en-
larged Union of 27 countries, the main features of the
system in the candidate countries are as follow:

The importance of intermodal transport is still very low
in the EU as a whole. Only 12% of goods are con-
veyed from ports to inland destinations by means
other than road (see Table A.20).

Transport systems in the candidate countries:
outdated infrastructure developing
differently than in the EU

Although the same broad tendencies are apparent in
the candidate countries as in the Union, in terms of
shifts between modes of transport, the starting-point
and the overall development of transport there is very
different. In the first place, the volume of traffic stag-
nated during the 1980s and declined markedly dur-
trends in the
reflecting similar
ing the 1990s,
economy and in trade. The volume of freight trans-
ported fell by 22% between 1980 and 1998, whereas
it grew by 52% in the Union over the same period.

As in the Union, however, road transport has become
predominant. Despite the overall decline in the vol-
ume of goods transported, freight going by road in-
creased by 19% between these years, though this is
still much less than in the Union where it doubled.
Moreover, in 1998, only 47% of freight went by road
as against 74% in the Union, while rail transport,
though in decline, remained important, accounting
for 42% of the total as against 14% in the Union. In-
deed, most freight still goes by rail in the Baltic States
and Slovakia, whereas much the larger part goes by
road in the Czech Republic and Bulgaria.

So far as sea transport is concerned, the main ports in
the CECs are Constance, in Romania, Ventspils in
Latvia and Gdansk and Szceczin in Poland. The
amount of traffic going through these is similar to that
handled by the medium-sized ports in the Mediterra-
nean and only 5-10% of that handled by Antwerpen.
Nevertheless, the Baltic ports are growing rapidly.

Inland waterways are of marginal importance except
in Romania and Slovakia, where they account for over
10% of all goods transported.

Transport infrastructure in the candidate countries is
in overall terms less extensive than in the Union, and
though representing a larger
the rail network,

•

•

•

in the case of roads, all the countries, except Es-
tonia, Lithuania and Poland, have a significantly
less extensive network than the EU average. In
Poland, it is similar to that in Ireland, while in Esto-
nia and Lithuania as well as in the Czech Republic
and Slovakia, it is more extensive than in three of
the cohesion countries (see Graph A.17);

there are in general many fewer motorways than
in either the EU as a whole or the cohesion coun-
tries. While motorway construction over the past
10 years has increased markedly in the Union,
and in the cohesion countries, in particular, it was
minimal in the candidate countries. The density of
motorways is highest in Slovenia and Lithuania,
where it exceeds that of Portugal, whereas in Po-
land, which like Ireland is well endowed with
roads, they are almost non-existent;

railways are the most developed means of trans-
port. The total length of track is in general greater
than in the EU and almost double that in the cohe-
sion countries. In the Czech Republic, it is twice
the EU average and in Hungary, Slovakia, Latvia
and Poland, 1½ times. Nevertheless, in terms of
the standard of the network, the comparison is
much less favourable. The proportion of electri-
fied lines is well below the EU average except in
Bulgaria and Poland, while, as in the cohesion
countries, there are also many fewer double-track
and high-speed lines.

The main problems to address, therefore, if transport
networks are to further territorial balance in an en-
larged EU, are:

•

•

•

the ageing of the infrastructure in the candidate
countries because of lack of investment in the
1980s and 1990s;

the need to integrate networks in the candidate
countries into the EU transport system as a whole
as well as in the trans-European networks;

the need to strengthen the intermodal aspect of
transport systems, especially as regards links be-
regions and less
tween ports in peripheral

51

I.4  Factors determining real convergence

favoured areas inland. In contrast to the candi-
date countries,
infrastructure in the cohesion
countries tends to be modern and better inte-
grated with that in the rest of the EU, because of
the large-scale investment in the 1990s. Never-
theless, the rail network remains less developed
than elsewhere and links between different
modes of transport, which, inter alia, are impor-
tant for internal communication within less fa-
voured regions, are inadequate.

Energy

The availability of energy in a region, the flexibility of
supply in terms of the diversity of different sources
and a high degree of self-sufficiency are important for
regional development, in that they help define the lim-
its to growth and employment. In addition, the type of
output produced, the consumption of energy per unit
of output and the capacity to reduce environmental
pollution will determine the ability of a region to de-
velop in a sustainable way.

Over the past 10 years, energy consumption in the
Union has continued to increase as GDP has grown.
Energy intensity, measured by the amount of energy
used per unit of output has declined, though less sig-
nificantly than in the 1980s. Between 1988 and 1998,
GDP in the EU grew by 25% in real terms while energy
consumption increased by 6%, a reduction in energy
intensity.

Consumption of energy per head of population in the
Union increased by 1.6% between 1988 and 1998,
the rise being particularly marked in the cohesion
countries, which started the period with a level under
half the EU average but which increased consump-
tion by almost 40% over these 12 years. This increase
was largely the result of their economic growth and
the energy intensity of consumption. This was espe-
cially the case in Portugal and Greece, the two coun-
tries with the worst performance in terms of energy
use. Even though consumption per head in these two
countries remains well below the EU average, mainly
because of the their low level of GDP per head, con-
sumption per unit of GDP increased substantially in-
stead of declining as elsewhere. High economic
growth in Spain was accompanied by an increase of
over 30% in total consumption of energy and a small
rise in the energy intensity of consumption. This, nev-
ertheless, remains below the EU average, as it does

52

in Ireland, which experienced a significant reduction
in the energy intensity of consumption (of 33%)(see
Graph A.18).

Water and the environment

For economic development to be maintained over the
long-term it also needs to be sustainable in environ-
mental terms. If the growth of an economy has dam-
aging effects on the environment, this will ultimately
limit its development. Accordingly, the availability of
resources and the measures taken to protect the en-
vironment are factors which determine the long-run
regional economies and which,
performance of
therefore, merit special attention.

Reserves and use of water

In the EU, estimates of renewable water reserves are
relatively low – around 3,200 cubic metres per head
of population a year as compared with an average in
the world as a whole of 7,300. Nevertheless, the Euro-
pean countries have adequate reserves in overall
terms, since the annual rate of abstraction is only
around 660 cubic metres per head.

The distribution of reserves, however, varies signifi-
cantly between regions. Reserves per head are 5
times greater than average in Finland and Sweden,
as well as Norway, and 3½ times greater in Ireland,
while they are only around half or less of the average
in Denmark, Belgium and Germany (see Graph A.19).
In relation to land area, the variation in reserves is
wider still. In Norway, they are 60 times larger than in
Spain, 30 times larger than in Sicily, eastern Greece,
the central parts of Poland and Hungary and the ar-
eas around the Romanian-Bulgarian border.The
availability of water reserves, however, depends not
only on their quantity but also on the level of use,
which depends, in turn, on a number of factors, such
as the kind of industrial and agricultural production,
the level of household consumption and the potential
for treatment and re-use of waste water. Across Eu-
rope as a whole (including the candidate countries
and the European Economic Area as well as the EU),
the overall rate of abstraction a year is only 16% of
available reserves. Moreover, since a large part of the
water abstracted is returned to the original source,
net final consumption amounts to only 5% of reserves.
In the EU, the situation is slightly less favourable, the

annual rate of abstraction amounting to 21% of re-
serves and the net rate to just under 7%.

Water use varies significantly between Member
States. The rate of consumption is relatively high in
Belgium (43% of reserves) and Germany (35%) be-
cause of population density and high industrial use.
In the Mediterranean countries, agricultural irrigation
is responsible for most of the water extracted. In
Spain, where the annual rate of abstraction is over
30% of reserves, 60% goes to agriculture, in Portugal,
52% and in Italy, 50%, while in Greece, the figure is as
high as 80%. In Greece and Portugal, however, the
overall rate of abstraction is relatively low (under 10%
of reserves).

Nevertheless, it is the extent to which water ab-
stracted is returned to its source which also deter-
mines the relative abundance or scarcity of reserves
in each country. While more than 80% of water ab-
stracted is returned to source in Belgium and Ger-
many, in Spain and Italy, the figure is only 40% (see
Graph A.20).

The treatment of waste water
and household waste

Improvements in irrigation techniques in agriculture
and in the treatment of waste water from industry and
domestic consumers have increased the efficiency
with which water reserves are used. In agriculture in
the Mediterranean, new irrigation methods are en-
abling water to be re-used as well as treated, while
the treatment of salt water is also likely to improve the
relative situation in southern Europe.

Given that most of the population in Europe lives in
towns and cities, it is important to pay as much atten-
tion to the damage that household waste disposal
can do to the environment, as that caused by industry
and agriculture. A policy of creating public aware-
ness and of putting in place the necessary infrastruc-
ture to treat water and dispose of waste is essential to
reduce the pressure on the environment.

So far as the treatment of domestic water is con-
cerned, 90% of the population in the EU is connected
to main water supply and 70% to main drainage.
There are, however,
large regional variations.
Whereas in northern Europe as a whole, 90% of the
population is connected to a main drainage system
for treating waste water, in the cohesion countries, the

I.4  Factors determining real convergence

proportion varies from 27% in Portugal to 58% in
Greece (see Graph A.21). Moreover, in Belgium, it is
only 32%. In the candidate countries, 40% of the pop-
ulation is not connected to a main water supply sys-
tem and only 42% of waste water is treated, and only a
small proportion of this to the level required by Com-
munity standards.

Household waste is treated in very different ways in
different parts of the Union, in terms of whether it is in-
cinerated, recycled, buried or simply dumped. Al-
though the southern Member States tend to produce
much lower levels of household waste than the rest of
the EU (see Graph A.22), they also have much less in
the way of
treatment systems. Whereas 60% of
household waste was recycled in the EU as a whole in
1995, and 80% in Germany and France, in Greece,
the figure was only 5%, in Portugal, 30% and in Spain
45%.

Although the candidate countries have already intro-
duced recycling of waste on a relatively large scale in
order to compensate for their shortage of primary re-
sources, nearly all of them are having difficulty meet-
ing the recycling targets set out in the Community
directive (50% of waste recycled by 2001 for current
Member States). Recycling installations have not
been modernised and a number have even had to be
closed down because of lack of public funds. The
Czech Republic, for example, currently recycles only
15% of the packaging waste produced, Slovenia,
29%, and Hungary, 32%. The situation is likely to de-
teriorate further in the future as the higher rate of eco-
nomic growth, which will probably occur, could
increase the amount of waste produced (according
to the European Environmental Agency Report for
1999).
the support of structural
measures in this area is required in order to sustain
economic development in the enlarged Union.

In consequence,

Human resource development

The competitiveness of an economy depends, as
noted above, not only on its physical capital, but also
on the knowledge possessed by its entrepreneurs
and labour force. Effective educational and training
systems are, therefore, important for raising produc-
tivity and fostering economic growth. There are, how-
ever, striking differences in education and training
across Europe.

53

I.4  Factors determining real convergence

Significant variations in educational attainment
levels between Member States

Growing number of qualified young people

Despite the gradual reduction of educational dispari-
ties over the past 30 years, there is still a large gap in
educational attainment levels between the cohesion
countries and the rest of the Union. In particular, in the
former a large proportion of the population aged 25 to
59 has only a low education level, ie no educational
qualifications beyond compulsory schooling (1999:
75% in Portugal, some 65% in Spain and around half
in Greece and Ireland). The same is true for Italy,
where more than half of those in this age group have
low education.

By contrast, in the three Nordic countries, Belgium
and the UK, more than a quarter of those aged 25 to
59 has a high (or tertiary) level of educational attain-
ment (university degree or the equivalent) (Map 12).

The applicant countries: higher educational needs
than figures indicate

In the Central European candidate countries, a large
proportion of the population aged 25 to 59 has an up-
per secondary level of education, particularly in the
Czech Republic and Poland, where the figure is over
70%.

Recent studies, however, offer a less optimistic as-
sessment and suggest that the high proportion of
people with educational attainment levels beyond el-
ementary schooling is mainly due to lower vocational
schools offering a basic form of training: ‘The fact of
having a relatively high number of workers with edu-
cational attainment above elementary schooling was
mainly a by-product of the presence in these coun-
tries of lower vocational schools offering generally
one to two years of training in narrowly defined occu-
pations up to the completion of compulsory school-
ing. These lower vocational schools were actually
part of the basic schools and were indeed not even
formally considered as part of the secondary system
of these countries.’15 In addition, there is a question
mark over the quality and nature of vocational training
at upper secondary level, which in many cases
seems outdated. This underlines the need for devel-
oping appropriate human resources strategies in
these countries in order to avoid low skills slowing
down economic and social development.

54

Technological advance and continuing globalisation
are increasing the demand for skilled labour. The ed-
ucational attainment level of young people in the EU
has been rising continuously for the past 30 years or
more. In 1999, only 27% of young people aged 25 to
34 in the EU had no qualifications beyond compul-
sory schooling as compared with 48% in the in the 50
to 59 age group. Similarly, 49% of those aged 25 to 34
had upper secondary level education as against only
35% of the 50 to 59 age group, while 24% of 25 to 34
year-olds had a university degree or equivalent as
opposed to 17% of those aged 50 to 59. It is expected
that the number of people enrolled in higher educa-
tion will double in the next ten years and this will strain
the higher education systems in Europe.

The increase in educational attainment levels is evi-
dent in all Member States. It is particularly marked in
the cohesion countries, as well as in Italy, where aver-
age education levels of older people are relatively
low. The proportion of 25 to 34 year olds in the cohe-
sion countries with an upper secondary level qualifi-
cation in 1999 was twice as high as among those
aged 50 to 59 and the difference was similar in the
case of tertiary education (Graph 12). As a result, the
gap in attainment levels between Member States is
narrowing.

At the same time, there is a stronger upward trend in
the education attainment levels of women than men
and in almost all Member States women in the youn-
ger age groups have attained a higher level of educa-
tion than their male counterparts.

Nevertheless, the number of young people who leave
the education system prematurely with only the most
basic skills is still substantial; these young people are
unable to respond adequately to the demand of a
continuous updating of knowledge and competen-
cies throughout life, which is needed due to the accel-
scientific and
erating pace of
economic evolution of society.

technological,

In the European Union, an average of 22% of young
people between 18 and 24 years old only acquire
lower secondary education at most.16 Some Member
States lie significantly above this average. Further-
more, there are also alarmingly high rates in certain
urban or peripheral areas as well as in disadvantaged
social groups.

I.4  Factors determining real convergence

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55

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
I.4  Factors determining real convergence

The problem is most serious in Portugal where over
45% of 18 to 24 year-olds fail to go on from compul-
sory schooling to further education or vocational
training.

In the learning society, social stratification is increas-
ingly based on a division between the haves and
have-nots in terms of skills and qualifications. Drop-
ping out from school, therefore, has much more last-
ing consequences than it had in the past, since it can
mark an individual for life and greatly narrow the
range of career choices open to them. Schools are at
the centre of the learning society and life-long learn-
ing begins there.

Failure at school affects all sections of society, but not
all equally. Surveys show that those dropping out of
school come predominantly from low-income families
where there is a history of failure. Many come from
broken homes or from immigrant or refugee families
which have not integrated successfully. Dropping out
of school is, therefore, related to a range of social,
health, family and financial factors. Although it is only
one element of a cumulative process of social depri-
vation, it is often the critical one which deprives young
people of the skills, qualifications and social contacts
required to succeed or even to play a meaningful role
in society.

The fight against school failure is at the heart of the
debate on educational reform; it is essential for sus-
taining a knowledge-based economy and for

12

Population with university or equivalent 
qualifications by age group, 1999

% population in age group

maintaining a cohesive society and a democracy in
which everyone can participate.

An increase in education level is also evident in the
candidate countries. In most of them, the proportion
of people aged 25 to 34 with upper secondary educa-
tion is significantly higher than among those aged 50
to 59 years, though the proportion with tertiary level
education is much the same and remains relatively
low among young people. Enrolment rates in universi-
ties are, therefore, in general significantly lower than
in the EU.

Employment prospects
rise with level of education

In almost all EU Member States, the level of education
is an important determinant of finding employment.
Except for Greece, and to a lesser extent Portugal,
unemployment in the EU is much lower among those
with high educational attainment levels than those
with lower ones. In 1999, the average rate of unem-
ployment of those aged 25 to 59 with a tertiary level of
education was 5% as against 8% for those with upper
secondary level and 12% for those with only basic
schooling. In some Member States, unemployment
rates of people with low education were 3 to 4 times
higher than for those with high education (Graph 13).

The link between education and employment rates is
even closer, especially for women. This is because a
large proportion of women with low education – and a
significant proportion of men – are not part of the la-
bour force at all. In other words, educa-
tion levels affect not only the chances
of being unemployed, but also of being
economically active.

25-34

50-59

BG, CY, LT, MT, SK: no data

40

35

30

25

20

15

10

5

0

A similar pattern is evident in the candi-
date countries. The difference in unem-
ployment rates between those with
differing levels of education is very
marked in the Czech Republic, Hun-
gary, Poland and Slovakia, where
those with a low educational attainment
level are up to 7 times more likely to be
unemployed than those with a high
attainment.

In Greece, Spain and Italy, in particu-
lar, as well as in most of the candi-
a
date

countries,

however,

B DK D EL E F

IRL I L NL A P

FIN S UK CZ EE HU LV PL

RO SI

40

35

30

25

20

15

10

5

0

56

 
I.4  Factors determining real convergence

significant number of young people aged 25 to 34
with a high level of education have difficulty finding
a job after completing their studies, which con-
trasts sharply with the position of older people with
similar qualifications.

It should also be emphasised that differences in em-
ployment prospects between men and women per-
sist. Women with a given level of education are more
likely to be unemployed than men with a similar level
in most parts of the EU. Inequalities are particularly
marked in Greece, Spain and Italy. By contrast, in
most of the candidate countries, women seem to be in
less of an unequal position than in the EU.

Finally, it should be noted that there is a clear positive
relationship between levels of educational qualifica-
tions and earnings. In all Member States, those em-
ployed full-time with tertiary education earn
significantly more on average than those with upper
secondary education. The difference is over 50% in
Germany, France and Austria, and 100% in Portugal.
The difference in earnings between those with upper
secondary and those with lower secondary education
is much less in most Member States (10-20%), but still
significant.

Access to continuing training still varies markedly
between Member States

Continuing education and training are essential
both for the job prospects of individuals and for
maintaining the competitiveness of a modern

cate that access to training is almost certainly less
in the cohesion countries than elsewhere.

Although it took no account of the quality and rele-
vance of training, a recent OECD survey suggests
that the duration of job-related training also varies sig-
nificantly between the countries covered. Annual
hours of training undertaken by employees, there-
fore, ranged from 27 in Belgium (Flanders only) to 57
in the Netherlands.17

LFS evidence suggests in addition that younger
workers tend to receive more training than older ones.
Whereas only 2.5% of those aged 55 to 59 in the EU
had participated in training or education in the refer-
ence weeks, the figure for those aged 25 to 29 was
10% and for those aged 30 to 34, 8%. Moreover, there
seems to be a clear link between educational attain-
ment levels and access to training, in all Member
States, those with high education having much more
opportunity to receive training than those with lower
levels. Greater efforts are, therefore, needed to pre-
vent the problems of people with low initial education
being compounded by having only limited access to
continuing training.

Adaptation of educational systems to ICT has
started, but still has some way to go

For students to make a smooth transition into the
modern labour market, they need to be exposed to in-
formation and communications technology (ICT) in
ICT into the
school. Although the integration of

economy. While indicators suggest
that participation in job-related train-
ing for those in employment has in-
creased throughout Europe,
they
also show that participation in train-
ing is still relatively low and that there
large disparities between
are still
Member States.
In 1999, only just
over 10% of employees in the EU cov-
ered in the Labour Force Survey
(LFS) had undertaken any training at
all during the previous four weeks.
Participation rates varied from under
5% in around half the Member States
to over 20% in Netherlands, Den-
mark, Finland and Sweden. Although
these figures involve a high degree of
uncertainty and are not fully compa-
rable between countries, they indi-

13

Unemployment rates by education level, 1999

% labour force

Lower Secondary
Upper secondary
Tertiary

BG, CY, MT, SK: no data

25

20

15

10

5

0

B DK D EL E F

IRL I L NL A P

FIN S UK CZ EE HU LT LV PL

RO SI

E15

25

20

15

10

5

0

57

 
I.4  Factors determining real convergence

education system is becoming increasingly wide-
spread across the EU, as Member States implement
the conclusions of
the Lisbon Council and the
eLearning initiative, which called for a strengthening
of ICT in systems of education, ICT is included in the
primary and lower secondary curriculum in the major-
ity of EU and candidate countries. The extent of prog-
ress in this area is, however, difficult to assess. While
national data exist, there are no EU harmonised data
available.

A pilot OECD study suggests that access to ICT in edu-
cation, measured by the number of students per com-
puter, varies significantly across the EU.18 While
primary schools in Finland, Sweden, and Denmark typ-
ically have between 11 and 14 students per computer,
the figure in Italy and Portugal ranges from 50 to 150. In
secondary schools, whereas there are an average of 7
students per computer in Sweden, Finland and Ireland,
in Portugal, the figure is 65. In both primary and sec-
ondary schools, access to computers is lower in almost
all Member States than in the US.

Innovation and RDT

Innovation ‘isameansbywhichlessfavouredregions
can move immediately alongside the developed re-
gions,notbyattemptingtoimitatewhatthelatterhave
alreadyachievedbutbytryingtolaythegroundwork,
in accordance with their own features and require-
ments(...),foradaptingtotheconditionsofcompeti-
tiveness in a global economy.‘19

It is widely accepted today that the ability of regional
economies to withstand competition and adapt to tech-
nical change is related to their capacity to innovate.
This, of course, is not new, but the increasing impor-
tance of knowledge (as compared with natural re-
sources, physical capital and labour supply)
in
determining economic performance puts technology
and innovation high on the regional development
agenda.

The Lisbon European Council reiterated the impor-
tance of research and development, and innovation,
for economic growth, employment creation and so-
cial cohesion. It emphasised the need to create a Eu-
ropean research and innovation area and asked the
Commission and Member States to carry out a series
of measures in order to meet the aims set out in the

58

Commission Communication, ‘Towards a European
Research Area.’

The importance of innovation was highlighted by
the European Council, which called for, inter alia, a
challenging programme for enhancing innovation
and economic reform. The Commission’s communi-
cation on ‘Innovation Policy in a knowledge-driven
economy’20 set broad policy guidelines for enhancing
innovation in the EU. As innovation has come to be
understood as a key element in economic develop-
ment policy, so the importance of the regional dimen-
sion has been increasingly recognised. Many
measures are most effectively conceived at a re-
gional level, where the needs of enterprises, and the
in which they operate, can best be
environment
assessed.

Understanding of the process by which technology
and innovation affects regional development has
evolved over time. Rather than innovation being seen
as a linear process from basic research to commer-
cial success, a more interactive model has emerged,
which recognises the importance of the environment
in which firms, and SMEs in particular, operate. In-
deed, since SMEs lack the articulation of business
functions of large firms, they have to rely more on
making use of capabilities external to the firm.

Innovation has, therefore, been associated with con-
cepts of network formation and management and of
clustering. In this respect, it no longer depends solely
on how firms, universities, research institutes and
regulators perform, but, increasingly, on how they
work together, particularly at the regional level.

In the EU today, the capacity to innovate varies signifi-
cantly from one region to another, both in quantitative
and qualitative terms. To give an insight into these vari-
ations,
the Commission presented in September
200021 a first outline of a European innovation score-
board, which indicates the extent of disparities in this
area across the EU. Certain Member States, particu-
larly the Nordic ones, scored quite highly, sometimes
even higher than the US. In terms of the number of indi-
cators with values significantly above the EU average,
Sweden had the highest score (with 12 out the 16 indi-
cators, 20% or more above average), followed by Fin-
land (8), Denmark and Germany (both 7).

The following examines, first, the structure of na-
tional scientific and technological systems and,

second, how the capacity for innovation varies across
the EU.

Though converging, significant
differences remain at the national level ...

Expenditure on research and technological develop-
ment (RTD) relative to GDP has increased in recent
years in the cohesion countries, but, Ireland apart, the
rise has not been enough to close the gap with the
rest of the Union significantly. The technology gap
between the cohesion countries and the four Member
States where expenditure is highest
(Germany,
France, Sweden and Finland) has widened rather
than narrowed (Table 5).

Business expenditure on RTD declined relative to
overall expenditure in Portugal, Greece and
Spain between 1995 and 1998, as it did in the EU
as a whole, though it rose in the top four Member
States, and even more so in Ireland. As a result,
the gap in innovation between the former three
cohesion countries and the latter five could widen
further, which could, in turn, reduce the chances of
their competitiveness in EU or world markets
improving.

in Greece and
Government expenditure also fell
Spain, though this was in line with developments else-
where in the Union, while it remained unchanged in
Portugal. The increase in overall expenditure in these
three cohesion countries was, therefore, due to a rise
in spending on higher education, which can be seen
as a prerequisite for raising the skills of their labour
force.

I.4  Factors determining real convergence

capacity of businesses to absorb new technology
and know-how developed elsewhere; the capability
of the work force to use this technology and adapt to
new techniques; the entrepreneurial spirit to seek out
new market opportunities and the availability of risk
capital for innovation (see Table A.21).

The few data available on the candidate countries22
suggest that since the beginning of the 1990s, the
funds available for RTD have been reduced (applied
research more so than science), competition for
funds has increased and the demand for public RTD
has fallen markedly. In 1995, RTD intensity in most
countries was similar to that in the cohesion countries,
while in Slovakia, Slovenia and the Czech Republic,
both public and private expenditure on RTD was
closer to the EU average.

The human resource potential in RTD in many of the
candidate countries is relatively strong, as a legacy of
the major role accorded to RTD under the socialist
system, which means that they are well placed to
catch up with present EU Member States, so long as
there is a fundamental restructuring of the RTD sys-
tem (see Map A.13).

... particularly in terms of human resources

The quality of human resources is the major factor be-
hind the invention and diffusion of technology and it is
a precondition for increasing the capacity of a given
economy to absorb new innovations. The difference
in this respect between the most advanced countries
in the EU and the cohesion countries has been re-
duced during the 1990s, but it remains the case that
the former have around three times as many research
staff in firms as the latter.

The significant gap in RTD expenditure which exists
between the cohesion countries and other Member
States, especially in terms of business spending, in-
dicates a need for more
encouragement
for firms
to undertake research ac-
tivities and, accordingly,
the adaptation of RTD poli-
cies to this end. This
means taking a broader
view than simply redistrib-
uting EU expenditure on
RTD to these countries. In
lagging regions, in partic-
ular, attempts need to be
the
made to increase:

Government expenditure on
RTD/gross expenditure on RTD

Higher education in RTD/gross
expenditure on RTD

Gross expenditure on RTD/GDP

Business expenditure on RTD/ gross
expenditure on RTD

Table 5  Expenditure on RTD in the cohesion countries and
the rest of the EU, 1995-98

Explanation of symbols:=stable, ↑ rise, ↑↑ large rise, ↓ reduction, ↓↓ large reduction

P

↑

↓

=

↑

EL

↑

↓

↓↓

↑ ↑

E

↑

↓↓

↓

↑

IRL

↑ ↑

↑ ↑

↓

↑

EU

Top 4

↓

↓

↓

↑

↑

↑

↓

=

59

I.4  Factors determining real convergence

Firms in the most developed regions can count on
better-targeted public assistance schemes

Technological capacity highly
concentrated at the regional level ...

A third dimension of the ‘technology gap’ takes the
form of differences across the Union in the quality and
quantity of schemes for public assistance. In the case
of public assistance for innovation, measured in
terms of state aid to RTD in manufacturing, in the most
developed Member States the amount provided over
the period 1995 to 1997 was over 10 times larger rela-
tive to employment than in the lagging countries. In
Denmark, Finland, France, Austria, Germany and the
Benelux countries, the figure in each case was above
the EU average, while in the cohesion countries, it
was under 60% of the average. In addition, in the lat-
ter a much smaller share of state aids is allocated
to RTD than in other parts of the Union, even though
their RTD and innovation needs are greater than
elsewhere.

Patent activity reflects differences
in national innovation systems

Patent applications have long been used as mea-
sures of innovative activity, the output of RTD and the
extent of the links between the scientific system and
the productive sector. This indicator for the cohesion
countries is well below the EU average, despite some
convergence over the 1990s. Patent applications in
Spain, Portugal and Greece amounted to 20% of the
EU average in 1998 as against 10% in 1989 (Map 13).

In sum, therefore, the scientific and technological
systems in cohesion countries are characterised by
low RTD intensity, over-representation of the public
sector, low involvement of the private sector, weak
links with business and low levels of
technology
transfer.

Such differences give rise to problems as regards
providing support since they suggest that injections
of aid would bolster the existing (public-oriented) sys-
tem, so perpetuating and even reinforcing the struc-
tural problems of the system itself. In consequence,
regional development policies should focus on
strengthening the environment in which firms operate
and, in particular, the link between the scientific sys-
tem and business.

60

The regional distribution of innovative capacity in the
EU reflects the structure of national scientific and
technological systems, though regional differences
within Member States serve to widen disparities even
further.

There is a strong concentration of RTD and innovation
in the most advanced regions of the EU, the top ten
regions (in Germany, the UK, France and Finland) ac-
counting for around a third of all expenditure in the
Union. At the same time, 17 of the 25 regions with the
lowest RTD intensity (less than 25% of the EU aver-
age) are Objective 1 regions. Similar disparities are
evident for business expenditure, human resources
and patent applications.

Interregional differences are particularly large in the
cohesion countries. In Greece, for example, over half
of RTD expenditure is incurred in Attiki (where Athens
is located), which is also responsible for two-thirds of
patent applications. In Spain, over three-quarters of
business RTD is located in just three regions (30% in
Madrid alone).

... so affecting the innovative
nature of economic activity

High RTD intensity in the private sector and efficient
links between the scientific sector and businesses
are key to innovation and, in turn, economic growth. In
almost all the top 25 regions in terms of employment
in high-tech sectors (over 12% of the total), RTD inten-
sity is also relatively high. In the 25 regions with the
lowest RTD intensity, employment in high-tech sec-
tors (4% or less of the total) is very low. According to
the preliminary results of the second Community Sur-
vey on Innovation, the former group of regions are
those with the highest innovation intensity in manu-
facturing, the highest number of enterprises with in-
turnover from
novation activities and the highest
innovative products. Most regions in Greece, Spain
and Portugal, on the other hand, are at the other ex-
treme (see Map A.14).

The importance of the regulatory,
organisational and institutional environment

These structural differences in science and technol-
the
ogy alone cannot explain the weakness of

I.4  Factors determining real convergence

Canarias (E)

Guadeloupe

Martinique

Réunion

(F)

(F)

(F)

Guyane (F)

Açores (P)

Madeira

(P)

SIG16
SIG16

0

100

500 km

© MEGRIN for the administrative boundaries

61

13  European patent applications, average 1997 to 1999

Number per million inhabitants

< 30

30 - 90

90 - 150

150 - 210

≥ 210

no data

EUR15 = 119.4
Standard deviation = 116.3
D (Sachsen): NUTS1

Source: Eurostat

I.4  Factors determining real convergence

structure of economic activity in lagging regions.
There is increasing consensus that the failure of firms
in the regions concerned to innovate is not due pri-
marily to scientific or technological problems, but to
shortcomings in the regulatory, institutional and or-
ganisational environment
in which firms have to
operate.

In the less favoured regions, this environment is often
characterised by a combination of structural weak-
nesses, such as lack of a dynamic business services
sector, a poorly developed financial system, weak
links between the public and private sectors, sectoral
specialisation in traditional industries with little incli-
nation to innovate, low levels of public support for in-
novation and aid schemes which are poorly adapted
to the needs of local SMEs. In view of this, a primary
aim of regional policy should be to help develop new
forms of organisation and institutional cooperation,
and so improve the ‘structural’ competitiveness of
firms located in lagging regions, and encourage re-
sources to be shifted into more dynamic and innova-
tive areas of economic activity.

The knowledge economy

Information and communication technology (ICT) is
at the base of the knowledge economy. This makes it
possible to store, process and circulate a growing
amount of data rapidly and inexpensively and is an in-
creasingly important source of productivity gains.

The transition towards the information society, how-
ever, is not just about technology. The change in-
volved is potentially the most far-reaching since the
Industrial Revolution and deeply affects the organisa-
tion of both the economy and society. Managing this
change is one of the main challenges facing the Un-
ion today.

To this end, the European Commission’s ‘eEurope –
An Information Society for all’ Initiative, endorsed by
the European Council in Lisbon in March 2000, is
aimed at increasing the rate of uptake of digital tech-
nologies and at ensuring that everyone has the nec-
essary skills to use them.

percentage points faster than other sectors, in real
terms, effectively driving economic growth in the
EU.23 ICT industries accounted for around 4% of em-
ployment in the EU in 1997,24 and it is estimated that
one in every four new jobs is created in ICT or related
sectors.25 If the attention is widened to encompass
the so-called ‘knowledge-based sectors’ these have
accounted for around a quarter of employment and
for most of the growth in jobs in recent years.26

Liberalisation of the market combined with increas-
ingly rapid technological innovation is favouring com-
petition in telecommunication provision, bringing
down costs and enhancing the choice and quality of
services in most parts of the EU. The price of access-
ing Internet has dropped sharply in the recent past,
though price remains a barrier to more widespread
use in some countries.

The potential is enormous

Electronic commerce (e-commerce) is expanding
rapidly, forcing firms to rethink their business pro-
cesses and creating, at the same time, new forms of
organisation, including new types of market and dif-
ferent kinds of business relationships. Internet-based
business to business (B2B) e-commerce, the main
component, estimated at 80% of the total now and
90% by 2003, is developing fast and it is estimated
that it will increase by over 90% a year over the period
1999-2003.27

and

process

increasing

The use of e-commerce technologies in B2B relation-
ships can increase efficiency through reducing and
rationalising business processes. The effects are al-
ready apparent in product design (shortening the de-
sign
customisation
possibilities and the standardisation of parts), and
production and logistics (lower inventory costs, faster
production, lower supply costs). The spread of B2B
relationships in the US is estimated to have the poten-
tial for reducing business costs by between 13% and
23%.28 While the e-commerce market is less devel-
oped in the EU, a reduction in operating costs aver-
aging 18% and in the cost of sales of 15% is expected
(see Graph A.24).

How regions adopt and master ICTs
is key to their economic performance

On average, EU countries spend an estimated 6% of
GDP on ICT (see Graph A.23). Information and com-
munication industries are growing by more than 5

ICT penetration, defined as the value of
ICT
expenditure29 as a share of GDP, is an important

62

I.4  Factors determining real convergence

average, though in both Slovenia and, to a lesser ex-
tent, Estonia, the number is higher.31

Mobile phones and cable may
provide alternative access to Internet ...

Though variations exist in the penetration of mobile
telephones across the EU, differences do not reflect
relative levels of prosperity. All the Nordic countries
have a relatively high rate of penetration as does Italy,
but in Greece, Spain, and Portugal, the rate is also
around the EU average or above. Most countries,
however, including the cohesion countries, which
have a relatively low ownership of PCs and/or limited
Internet access, have high levels of telephone use,
which opens up the possibility of using mobile
phones to access the Internet in the future.

It is evident that the high use of mobile phones in the
Nordic countries is partly a consequence of their geo-
graphical features and the dispersion of population
over large areas. In the southern Member States, by
contrast, the rapid growth in use reflects the low qual-
ity, or lack, of fixed lines (see Graph A.25).

Perhaps unexpectedly, the use of mobile phones is
somewhat lower in rural areas (39% of households)
than in urban areas (45%).

The rate of penetration of mobile phones in the candi-
date countries at the end of the 1990s was only
around a quarter of the EU average, though increas-
ing rapidly (at 108% a year between 1996 and 1999).

Telephone lines and mobile phone penetration, 
1998/99

Total number of lines per 100 people (left axis)

Mobile  phones as % total lines (right axis)

measure of a country’s transition towards the Informa-
tion Society as well as of its innovative capacity and
competitiveness. The difference in terms of this mea-
sure between cohesion countries and other EU Mem-
ber States is small and tending to narrow – the highest
rate of growth in expenditure over the period 1991 to
1999 occurred in Greece, together with Italy. In abso-
lute terms, however, given their low level of GDP, co-
hesion countries will have to invest relatively large
amounts in ICT in the future in order to catch up.

Though improvements in the standard of information
and telecommunication infrastructure is a key deter-
minant of the capacity to participate in the Information
Society, other factors play an equally, and increas-
ingly, important role, such as public awareness, the
level of educational attainment, the role played by the
public sector in promoting the Information Society
and the organisational and investment capacity of
firms.

The telecommunication
infrastructure gap is closing

Over the past 20 years, differences between Member
States in access to a fixed-line telephone have nar-
rowed significantly (Graph 14). In most EU countries,
the proportion of households with a telephone line is
around the EU average of 92%, but it is still as low as
69% in Portugal as against 97% in Sweden.30 While
the figure in Finland is only 78%, this is compensated
to a significant extent by the large proportion of
households with a mobile telephone and no fixed-line
phone (18%, almost five times the EU
average). The same phenomenon is
also evident, though to a lesser extent,
in Portugal (12%) and Ireland (where
only 84% of households have a
fixed-line phone), but a fifth of Portu-
guese households and a tenth of Irish
households do not have access to tele-
phone services at home at all as
against an EU average of just 4%. Nev-
there are marked differ-
ertheless,
ences between regions – of over 15
percentage points – in the proportion
of households with fixed lines in Ger-
many, France and Italy.

14

140

100

120

80

40

60

In the candidate countries, the total
number of telephone lines per 100 in-
the EU
habitants is less than half

20

0

S

FIN L DK I F UK SL NL A

E15 EL P D

IRL B EE E CZ HU LV LT BG

CEC PL

RO

60

50

40

30

20

10

0

63

 
I.4  Factors determining real convergence

Technology in this area is developing fast, offering
new means of access to the Internet – through third
generation mobile services with greater band-width –
as well as ISDN, xDSL, cable and digital TV connec-
tions. Since in the future, the level of broadband ac-
cess is likely to become much more important for
business and household Internet use, the availability
of this will be a key issue.

... but access to the Information
Society remains uneven

There are significant differences across the Union in
the use of PCs at home and in access to the Internet
(Graph 15). France apart, there seems to be a clear
North-South divide in the rate of internet connection.
In Greece, Spain, Portugal and Italy as well as Ire-
land, the rate is half the EU average of 12%, while in
the Nordic countries, it is well over 20% (in Sweden,
51%). In Greece, Portugal and Ireland, PC ownership
is also low.

In the candidate countries, the number of PCs per
100 people has increased steadily. Three groups of
countries can be distinguished: Slovenia, with a rate
similar to the EU average; Poland and the Czech Re-
public among others, with rates similar to the cohe-
sion countries; and Romania and Bulgaria , with rates
of between 10% and 25% of the EU average.

In the EU, there is also clear evidence of a social di-
vide, with high income households being six times
more likely to be connected to the Internet than low in-
come ones. In addition, a higher proportion of house-
(13-15%) is connected to
holds in urban areas
Internet than in rural areas (8%). These differences,
however, seem to arise more from lack of awareness
about the possibilities offered by the Internet than
from the cost (45% of EU households without access
report not being interested and 9% not to know about
the Internet at all, as against 11% citing cost as a rea-
son for non-connection).

Business use of the Internet is relatively high in a num-
ber of Member States, especially in the Nordic coun-
tries, though marked variations remain across the EU.
For example, 76% of SMEs in Sweden are connected
to the Internet but only 16% in Portugal.32 While SMEs
surveyed recently, reported that they were moder-
ately well informed about the potential of the Internet,
a third did not have access. In cohesion countries, the
number without access is higher than elsewhere in
the EU, which is in line with the Commission analysis
that low awareness of the potential benefits and op-
portunities and a scarcity of ICT skills, along with the
often weak content of software at present, are the
main barriers to the development of the Information
Society.

The focus of structural policy in this area should,
therefore, be on strengthening the demand side, and
in particular, the capacity of firms, institutions and in-
dividuals to use ICT effectively.

15 Access to PC equipment and the internet, 

1999

% population

70

60

50

40

30

20

10

0

PC but not Internet
Internet

70

60

50

40

30

20

10

0

S

DK

NL

L

B

FIN UK

F

D

A

E

I

P

IRL

EL

EU15

European Commission (2000), ‘The competitiveness of European industry’. See also European Commission (1999) ‘The Sixth
Periodic Report on the Regions’ (section 2 on competitiveness), OECD (1996) ‘Industrial competitiveness’, Oxford Review of
Economic Policy (1996) ‘International competitiveness’ Vol. 12, no.3.
EU13 figure, until the UK and IRL present their statistics. The UK is due in the coming months, IRL may not come at all (presentation of
these figures is optional and not a regulatory requirement).
In non-market services, the figure for productivity should be interpreted with caution since the public sector does not generate profits
and, therefore, value-added consists entirely of wages and salaries.
See, for example, Midelfart-Knarvik, Overman, Redding and Venables (1999) ‘The location of European industry’.
These projections do not take account of future EU membership, which could affect the underlying trends, particularly of migration,
though most of this movement is likely to occur between these countries and the existing EU Member States, but also, in the
longer-term, birth and death rates.

1

2

3

4
5

64

 
I.4  Factors determining real convergence

6

7

8

9

10

11

12
13

14

15

16
17
18

19
20
21
22

23
24

25

26
27
28
29

30
31
32

These rates, it should be noted, are only demographic indicators. While they reflect the problems implied for social welfare and
taxation systems, there are other equally important factors which need to be taken into account, particularly the number of people of
working age who are actually in employment and paying taxes and social contributions.
Based on the latest Eurostat regional labour force scenarios, compiled in 1998, which are combined with the population projections
produced in 1997. The scenarios cover 204 regions NUTS 2 level regions in the EU over the period 1995 to 2025. The baseline
scenario which is referred to in the text assumes the continuation of most current trends but some reduction in regional imbalances.
European Integration Consortium (DIW/CEPR/FIEF/IAS/IGIER) 2000, The Impact of Eastern Enlargement on employment and labour
markets in the EU Member States, study for DG Employment and Social Affairs of the European Commission; Berlin/Milan.
Bauer, T. and Zimmermann, K.(1999): Assessment of possible migration pressure and its labour market impact following EU
enlargement to Central and Eastern Europe, Study for the UK Department of Education and Employment, IZA and CEPR,
Bonn/London, Germany/UK.
Gross fixed capital Formation is investment net of disposals. Gross refers to the fact that it does not take into account depreciation or
consumption of capital. Fixed means that only investment which is used for more than a year is considered.
Gross capital stock is calculated by cumulating past investment and deducting the cumulated value of investment that has been
retired. Net capital stock includes depreciation and is thus probably the better measure.
eg Abramovitz (1989) ‘Thinking about growth’.
Density is measured by a composite index which indicates a region’s endowment in relation to the EU average. Specifically, it is an
arithmetic average of the number of miles of motorway relative to its land area and population.
Measured in the same way as for roads, by a composite index of the length of track in a region relative to its land area and population
in relation to the EU average.
See study on ‘The impact of eastern enlargement on employment and the labour market in the EU Member States’ (part B Strategic
Report, chapter 3.3).
Eurostat, Labour Market Survey 1998.
See OECD: Education at a glance 2000, p.195ff.
See OECD: Education policy analysis 1999, p.49ff. The study only provides 1997/98 data for the following 10 EU Member States:
Belgium (Flemish Community), Denmark, Finland, France, Ireland, Italy, Netherlands, Portugal, Sweden, UK.
CEC (1995), ‘Green Paper on Innovation’, European Commission, Luxembourg.
COM(2000)567 of 20 September 2000.
Innovation policy in a knowledge-driven economy – COM (2000) 567 of 20 September 2000.
‘Impact of the enlargement of the EU towards the associated Central and Eastern European countries on RTD-innovation and
structural policies’, European Communities 1999.
‘Job opportunities in the Information Society’, CEC 1998, p. 4.
‘Measuring the ICT Sector’, OECD (2000). The ICT sector is defined on the basis of 11 ISIC classes. For manufacturing, the products
of an ICT industry must ‘be intended to fulfil the function of information processing and communication including transmission and
display or must use electronic processing to detect, measure and/or record physical phenomena or to control a physical process.’
For services, the industry ‘must be intended to enable the function of information processing and communication by electronic
means.’
Information Society industries include content industries (eg publishing, audio-visual, advertising) and ICT-related industries (eg
computer and software, computer-related services, telecomminications equipment and services).
See Employment in Europe, 2000, Chapter 3.
Based on International Data Corporation (IDC) data, Internet Commerce Market Model, 1999.
Goldman Sachs US (1999), ‘B2B: 2B or not 2B, e-commerce/internet’ Goldman Sachs Investment Research.
ICT expenditure includes IT hardware, software and services, telecommunication equipment and telecommunication services, at
market value.
Gallup Residential Survey (2000).
European Survey of Information Society (ESIS) in Central and Eastern European countries, CEC 1999.
The Gallup survey of small and medium-sized enterprises (SMEs) (2000) .

65

I.4  Factors determining real convergence

66

Part II – Contribution of Community policies to cohesion

II.1

II.2

II.3

II.4

II.5

II.6

II.7

II.8

II.9

II.10

II.11

Economic and Monetary Union (EMU) .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 69

Internal market .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 73

Competition policy .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 79

The Common Agricultural Policy: price and market policies .  .  .  .  . 81

Employment, human resource development and cohesion.  .  .  .  .  . 89

Environment policy .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 93

Research and Development policy.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 99

Transport policy .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 105

Energy policy .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 107

Enterprise policy.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 109

The Common Fisheries Policy .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 113

67

Part II – Contribution of Community policies to cohesion

68

II.1  Economic and Monetary Union (EMU)

Based on the rationale that macroeconomic stability
is conducive to higher real growth and that Member
States’ economic policies should be consistent within
a currency area, the EC Treaty defines several criteria
of economic convergence which need to be met in or-
der to participate in the Euro. Having reached a high
degree of sustainable convergence regarding price
stability, the government financial position (deficit
and debt), exchange rates and long-term inter-
est-rates,
the Council decided in May 1998 that
11 Member States could adopt the Euro as from
1 January 1999. Among those 11 Member States
three are cohesion countries (Spain,
Ireland and
Portugal) and the fourth cohesion country, Greece,
has joined the Euro area at the beginning of the year
2001.

Enhanced stability in the cohesion countries would
have been more difficult to achieve outside the frame-
work of EMU. This framework is based on coordina-
tion and surveillance of economic policies pursued
by Member States, which have the main responsibil-
ity for these. The results achieved by the cohesion

countries in terms of stabilisation since the beginning
of the 1990s have been impressive, in particular in
Greece and Portugal where inflation rates in 1990
were 20% and 13% respectively. The historically
unique degree of stability in the cohesion countries
provides improved conditions for private investment,
which have already contributed to above EU average
growth rates in recent years. Cohesion countries’ per-
formance in terms of nominal convergence, ex-
pressed by low inflation rates, and real convergence,
expressed in above EU average real GDP growth,
have occurred in parallel during the second half of the
1990s (Graphs 16 and 17). This trend has been par-
ticularly strong in the case of Ireland which is a good
example of how real and nominal convergence go
hand in hand since the mid-1980s, when a long-term
strategy of a consistent, stability-oriented macroeco-
nomic policy-mix was started (see Box). Catching-up
In
was somewhat slower in Spain and Portugal.
Greece, important achievements in nominal conver-
gence since the mid-1990s have translated into a
positive growth differential vis-à-visthe EU which had
not been the case since the 1970s.

16 GDP growth in cohesion countries, 1990-99

17 Price inflation in cohesion countries, 1990-99

Annual % change (in real terms)

Annual % change

Greece
Spain
Ireland
Portugal
    EU15 

12

10

8

6

4

2

0

-2

-4

12

10

8

6

4

2

0

-2

-4

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

25

20

15

10

5

0
1990

Greece
Spain
Ireland
Portugal

1991

1992

1993

1994

1995

1996

1997

1998

1999

25

20

15

10

5

0
2000

69

 
 
II.1  Economic and Monetary Union (EMU)

In order to ensure that these achievements in terms of
stabilisation are not merely temporary, procedures of
multilateral economic surveillance and coordination
have been reinforced within the EU, which encom-
pass different areas of economic policy, such as bud-
getary policies, employment policies, structural
reform and macroeconomic dialogue with the social
partners. Given the achievements in macroeconomic
stability, more emphasis has now been put on the
smooth functioning of product, capital and labour
markets which allow the full benefits of EMU in terms
of growth and cohesion to be realised. Although tak-
ing place at varying speeds in different Member
States,
the liberalisation of markets and the
privatisation of public enterprises have not only con-
tributed to budgetary consolidation by reducing the
need for subsidies, but – even more importantly –
have also improved the overall efficiency and com-
petitiveness of these economies. Without sufficiently
open and flexible markets, Ireland’s high growth rates
would hardly have been sustainable. The creation of
more efficient product and capital markets in the
1990s has enabled the Portuguese economy to move
rapidly towards macroeconomic stabilisation without
creating major imbalances. Labour market reforms in
Spain in the second half of the 1990s have contrib-
uted to higher growth in both employment and GDP.
reforms in the cohesion
Nevertheless, structural
countries, particularly in Greece, need to be further
reinforced.

The introduction of the Euro also benefits growth due
to increasing market integration through the lower
transaction costs achieved from eliminating the need
for currency exchange and the associated risk, as
well as the costs of comparing prices. An idea of the
size of the initial regional effects of monetary union
can be gained from the trade-related exchange costs
estimated for 1994.1 The estimates were produced by
multiplying the trade of each region with other
Euro-area countries by the respective bid-offer
spreads between currencies participating in the Euro
(Figure A.15). The results suggest that it is national
rather than regional characteristics which determine
the scale of economies and that exchange costs are
high in regions where:

exchange rate volatility vis-à-visthe stable core of
the Deutschmark area had been high, which
means, in particular, for regions in Spain, Ireland,
Italy, Portugal and Finland;

•

70

•

•

the share of foreign trade with other Euro-area
countries is high, which is especially the case for
the six founding members of
the European
Community;

the share of production of manufacturing goods
is high, as in the north-east of Spain, the east of
France, the north-east of Belgium, the north-east
of Italy and the north of Portugal; by contrast, in
major cities and peripheral regions, where ser-
vices predominate, exchange cost savings are
relatively small.

These initial or static effects of the introduction of the
Euro will trigger dynamic effects on the structure of
production as competition increases, economies of
scale are realised, products become more diversified
and the pace of innovation and growth is accelerated.
Accordingly, there are likely to be changes in regional
markets for goods, capital and labour. Some specific
effects of monetary union on capital and labour mar-
ket integration are worth mentioning.

Lower transaction costs are likely to affect the price
and availability of capital, since interest rate differen-
tials between participating Member States will be re-
duced because of the disappearance of exchange
rate risk premiums and an increase in the efficiency of
financial markets which were previously fragmented.
Since January 1999, financial markets in the Euro
area all trade in Euros, the most visible sign of mone-
tary union. Capital can more easily be transferred
within the EU to investment in locations where it yields
the highest return, which is no longer subject to the
uncertainty caused by the possibility of exchange
rate fluctuation. As a result, the specific characteris-
tics of different regions assume more weight in the
competition for mobile capital.

A widespread concern regarding the impact of the
Euro on labour markets is that by making it easier to
compare wages in participating countries, greater
transparency could lead to them being equalised.
However, wage differences between countries reflect
underlying differences in productivity. Regional com-
petitiveness depends not only on labour costs as
such, but on costs in relation to labour productivity
(i.e. on unit labour costs) among many other factors.

II.1  Economic and Monetary Union (EMU)

The Irish experience

The basis of the recent performance of the Irish econ-
omy was established during the 1980s, though the most
striking results did not appear until the mid-1990s. In es-
sence, it was the fear of an unsustainable growth in pub-
lic debt and in debt interest – particularly because a
large part of debt was in foreign hands (over 40% in
1987) – which sparked a rethink of policy and a move to-
wards budgetary consolidation.

Budgetary consolidation was achieved mainly by con-
trolling public expenditure which was reduced from
50% of GDP to around 30% – in part through a reduction
in debt interest – and which served to transform a bud-
get deficit of over 10% of GDP in 1985 into a surplus.

At the same time, tax reductions and fiscal reform
played an important role in the tripartite agreements
reached between Government, trade unions and em-
ployers (on four occasions since 1988), which enabled
a growth of labour costs to be achieved which was com-
patible with low inflation and a substantial improvement
in competitiveness. Moreover, because the growth in
real terms was well below the growth of productivity, it
also led to a marked increase in the profitability of in-
vestment. Despite pay restraint, real wages were able to
grow significantly, especially in the second half of the
1990s, fuelling a strong increase in private consumption
and domestic demand.

Budgetary consolidation and wage moderation en-
abled the Maastricht criteria to be fulfilled and monetary
conditions to be eased. This, together with conver-
gence of interest rates towards the level required by
EMU, the strengthening of competitiveness and in-
creased profitability created particularly favourable
conditions for rapid growth of output and employment
during the latter part of the 1990s, without endangering
price stability.

the improvement

Because of
in competitiveness,
growth was export-led from the beginning. Moreover,
investment progressively became a more important
source of growth as capacity utilisation increased, prof-
itability rose and monetary conditions eased. Between
1994 and 2000, investment increased by over 13% a
year, rising from around 16% of GDP to 25%.

Foreign direct investment (FDI), which remained a key
objective of development strategy, was important not
only in expanding the capital stock but also in transfer-
ring technology. This led to clusters of highly competi-
tive and dynamic foreign-owned manufacturing
companies being established, particularly in electron-
ics and pharmaceuticals, and more recently, in interna-
tionally traded services, such as financial services and
call centres.

The macroeconomic policies pursued were coupled
with an active structural policy, including training of the
work force to avoid high rates of growth being con-
strained by shortages of skilled labour. Growth of the la-
bour force was stimulated by reform of the tax and
social protection systems as well as by the return of emi-
grants. The employment rate, therefore, increased from
around 52½% of working-age population in 1985 to
62½% in 1999.

The other element which deserves emphasis is the con-
tribution of the Structural Funds, which not only in-
creased the net capital
inflow into the economy but
more importantly co-financed structural measures for
regional development, expansion of infrastructure and
increased training of the work force. Ireland demon-
strates what can be achieved if Structural Funds assis-
tance is integrated into a coherent policy which, in
particular, maintains healthy macroeconomic condi-
tions and which is supported by social consensus. It is
an example of ‘good practice’ of the first order.

1

Hallet, Martin 1999, The Regional impact of the single currency, in Manfred M. Fischer and Peter Nijkamp (eds.), ‘Spatial dynamics of
European integration – Regional and policy issues at the turn of the century’, Springer-Verlag: Berlin, pp. 94-109.

71

II.1  Economic and Monetary Union (EMU)

72

II.2  Internal market

Integration and structural policies

This section examines, first, the extent of economic
integration in the wider Europe – in both the existing
EU Member States and the candidate countries – in
terms of the convergence of price levels, the expan-
sion of trade and the growth of direct investment. Sec-
ondly, it considers whether the structure of economic
activity, in terms of its distribution between sectors, is
becoming more or less similar between countries and
regions, which reflects the extent to which these are
becoming more or less specialised in the production
of particular goods and services. Thirdly, it examines
the possible social effects of closer integration.

Competing economic theories suggest that, on bal-
ance, closer integration should lead to a narrowing of
disparities between the economies involved. How-
ever, such convergence is by no means assured and
where it occurs, it could take a longer time than is so-
cially or politically acceptable. The analysis of the
previous chapter confirms that differences in income
(GDP) per head both between Member States and re-
gions appear, in fact, to have been reduced over
time.

Within the global trend, there have been significant
differences of experience, and while catching up has
been rapid for some parts of the Union, for others, the
gaps have failed to close. Attributing cause and ef-
fect to these developments is difficult. In effect, they
have coincided with, on the one hand, moves towards
economic and monetary union, and, on the other
hand, the introduction of cohesion policies to in-
crease investment in the weaker parts of the Union
under the Structural Funds. In Part III of this Report,
the impact of the latter policies is examined in more
detail.

Price differences,
trade and investment flows

Narrowing price differences

As economic integration proceeds, costs of transac-
tions between markets tend to decline so narrowing
price differences. In the Union, the evidence sug-
gests that prices across the Union are indeed becom-
ing more similar (as shown by a recent study based
on a Eurostat price survey of 270 product groups1).
This is particularly so for manufactured goods, which
are generally subject to trade, though in some cases
– motor vehicles, for example – prices still differ mark-
edly between Member States. Price differences con-
tinue to exist, however, for most services, including
housing, and non-traded goods, reflecting the varia-
tion in local market conditions (see Table A.22 in
Annex).

industrial
Evidence also suggests that prices of
goods, especially machinery and equipment,
in
some of the more advanced Central European coun-
tries have already become similar to those in the EU,
which is perhaps to be expected given that a large
part of the market is supplied by imports from the
Union.

Conditions in financial markets in the EU, which were
already becoming integrated during the 1990s, have
become increasingly similar since the introduction of
the Euro. This is particularly evident as regards nomi-
nal long-term interest rates, which reflect both expec-
tations of future inflation rates and conditions on
capital markets, which have converged to much the
same level (see Graph A.26).

73

II.2  Internal market

Cohesion country trade patterns approaching
those in the more prosperous Member States

Trade between EU Member States continued to ex-
pand during the 1990s, the increase being particu-
larly pronounced for Finland and Sweden following
their accession to the EU. At the same time, there was
an even stronger increase in the trade of all Member
States, especially Ireland, with countries outside the
Union. This reflects two factors: first, the continued
process of globalisation and the further reduction of
trade barriers in the context of the Uruguay round,
secondly, the higher rate of growth of markets in the
rest of the world, especially the US, than in the EU
(see Graphs A.27-A.29). The EU economies, there-
fore, seem to be becoming more closely integrated
into the global economy at the same time as their inte-
gration with each other continues to increase.

The effects of economic integration can also be seen
in the changing pattern of trade, which tends to be-
come more similar between countries as they be-
come more interdependent. The evidence on trade
flows indicates that the extent of intra-industry trade
(which measures the similarity of the composition of
exports and imports) is high for all EU Member States.
This index, calculated for the EU12 (ie the euro-zone)
countries’ intra-EU trade from 1988 to 1998, shows
that Greece, Ireland and Portugal still have a consid-
erably lower degree of intra-industry trade than all
other countries, which is suggestive of the existence
of a ‘development gap’ regarding their productive
structure. In Portugal, however, intra-industry trade
has increased significantly even though the index is
still lower than for all other countries except Greece.
For most other countries, the index has increased,
with the biggest increase having taken place for
Spain, which has now a higher level than many other
Member States (see Graph A.30).

CECs are not competing in the same sections
of the market as EU Member States

Trade between the EU Member States and the 13
candidate countries (ie including Turkey) expanded
rapidly over the 1990s, boosted in part by European
agreements, and the former have become by a long
way the most important trade partners of the latter.
Between 1993 and 1999, the value of trade between
the two groups of country multiplied by almost three
times, to EUR 210 billion. The candidate countries to-
the total external
gether accounted for 13.7% of

74

exports of the Eu in 1999. The EU trade surplus with
them declined significantly in 1999 but still stood at
EUR 25.8 billion, 45% of it with Poland and 20% with
Turkey. Both the EU share of CEC exports and the
share of EU goods in CEC imports have continued to
increase. The figures are highest in Hungary, where
the EU share of imports was 64% in 1999, while 76%
of Hungarian exports went to the EU, and in Estonia,
where the figures were 65% and 73%, respectively.
Growth in both these shares is also evident in the
other countries, even in those, like Latvia and Lithua-
nia, where they were relatively low.

The provisions on free trade in the European agree-
ments with the 10 CECs have opened the way to their
economic integration with the EU, and the additional
agreements on agriculture, recently adopted, will ad-
vance this further. As a result, the proportion of agri-
cultural
from duty has more than
doubled from 36% to 81%, in the case of imports into
the EU, and from 18% to 39%, in the case of exports to
the CECs. Moreover, it has been agreed to pursue ne-
gotiations with each of the countries with a view to in-
creasing these figures further.

trade exempt

In general, all countries are likely to gain from an ex-
pansion of trade, particularly those which have al-
ready established trade relations and close
interdependencies in certain sectors, which tend to
be those closest to the EU, on the one hand (Hungary,
the Czech Republic, Poland and Slovakia), and to the
CECs, on the other hand (Austria, Germany and the
Nordic countries)(see Graphs A.31 and A.32).

The composition of trade between the EU and the
CECs broadly conforms with expectations, given re-
spective comparative advantages. EU exports are
more concentrated than CEC exports in high-tech
and advanced manufactures where labour skills are
important. For most CECs, exports largely consist of
relatively labour-intensive products, especially in the
case of Romania, Poland and Slovakia, as well as re-
source-intensive ones, especially as regards the Bal-
tic States and Bulgaria. On the other hand,
the
composition of exports of Slovenia, Hungary and the
Czech Republic are more similar to their imports from
the EU and consist to a larger extent of high-tech
products
vehicles,
especially).

(engineering

goods

and

Moreover, for the latter countries especially, intra-in-
dustry trade has grown relative to inter-industry trade

over the 1990s. Nevertheless, a detailed analysis of
the kinds of product traded within commodity groups
reveals that EU exports are concentrated in higher
unit value, higher quality section of the market, where
labour force skills and R&D are important, whereas
the CECs specialise in the lower price and lower qual-
ity end of the market, producing, for example, compo-
nents which are then exported to the EU for assembly
into final products. Of the CECs, only Hungary ap-
pears to be moving towards more technology- and
skill-intensive engineering industries.

The conclusion seems to be that most of the CECs are
not yet effectively competing in the same sections of
the market with even the southern EU Member States,
given the large differences in unit values between the
exports of the two which exist. This suggests that the
fear among the latter that enlargement could result in
a large loss of their export markets is misplaced.

Trade accompanied by growing
Foreign Direct Investment in the EU ...

Economic integration occurs not only through trade
but through foreign direct investment (FDI), by busi-
nesses setting up branches in other countries, to gain
access to the market – especially important as re-
gards services – and to take advantage of lower pro-
duction costs. Provisional data from Eurostat (on FDI
averaged over the years 1998 and 1999) indicate that
FDI inflows are larger for Ireland, Sweden and the
Benelux countries relative to GDP than for other Mem-
ber States, though in the case of Ireland and the Neth-
erlands, most of this originates from countries outside
the EU (see Graphs A.33 and A.34).

A large part of FDI takes the form of mergers and acqui-
sitions, the number of which almost doubled between
1991 and 1999 (from 2872 to 5572, most of the in-
crease taking place since the recovery in 1994). The
number of mergers between EU companies, or be-
tween companies where an EU company is a bidder,
has risen significantly in recent years, suggesting a
move towards increased concentration of economic
activity and a strong desire of companies to become
larger, perhaps to be able to compete more effectively
in international markets (see Graph A.35).

… with important flows into the East

EU companies are responsible for most of FDI flows
into CECs, which increased significantly during the

II.2  Internal market

second half of the 1990s. Although the scale of flows
is negligible in relation to the GDP of EU Member
States, it is substantial in relation to the GDP of the re-
cipient countries (annual flows amounting to around
5% of GDP of CECs) and is responsible for a large
part of their total capital investment (around 20%). As
such, FDI has had a major impact on growth and pro-
ductive potential.

Much of this FDI, however, has been concentrated in
three countries, Hungary, the Czech Republic and
Poland, each of these accounting for 25-30% of the
total (see Graph A.36). Although FDI figures are not
reported at the regional level in a comparable way,
selected data show that capital cities and their sur-
rounding regions and the industrialised regions bor-
dering the EU received a disproportionate share of
investment (two-thirds of FDI to Hungary went to Bu-
dapest, 62% of the total going to Slovakia went to the
Bratislava region, almost half of flows to Latvia went to
Riga and the Tallinn area accounted for 80-90 % of
FDI going to Estonia).2

FDI flows unlikely to affect
employment and wages in the EU

According to most studies, the main motive for invest-
ing in CECs is to gain access to their markets. The fact
that over half of investment is in non-traded sectors
demonstrates this, but it also seems to be the case so
far as investment in traded sectors is concerned. This
view is also supported by the fact that most FDI takes
the form of mergers and acquisitions of existing com-
panies rather than investment in ‘green field’ sites (i.e.
in new production facilities). Accordingly, it would
seem that investment in CEC ought not to affect em-
ployment and wages in the EU greatly and that it com-
plements, rather than replaces, exports from the EU.

The impact of integration:
concentration or specialisation?

There is an ongoing debate as to whether closer eco-
nomic integration, and in particular, the introduction of
a single currency into a Single Market, is likely to in-
crease or reduce the degree of regional specialisation,
which is important for assessing whether or not regions
are likely to become more or less vulnerable to sec-
tor-specific shocks. The evidence of the US, at least so
far as manufacturing is concerned, points to speciali-
sation increasing,3 but it cannot necessarily be as-

75

II.2  Internal market

sumed that US experience will be replicated in Europe.
This uncertainty is reinforced by the fact that studies so
far have tended to focus on manufacturing industry,
where the factors giving rise to increased concentra-
tion and agglomeration – in the form of economies of
scale in production and proximity to suppliers and
other producers in the same industry – are most evi-
dent. In practice, however, manufacturing is becoming
less important in the Union in terms of both GDP and
employment, accounting for only around a quarter of
the latter, and the future location of economic activity in
the EU will depend critically on the location pattern of a
number of key services (the ‘new economy’), which will
not necessarily follow that of manufacturing.

Differing trends in regional
concentration of sectors

Studies confirm that manufacturing activity in the
Member States is slowly becoming more concen-
trated.4 The trend is not uniform, however. A number
of industries that were initially spatially dispersed
have become more concentrated, mainly unskilled
labour-intensive ones with declining output or slow
rates of growth (textiles, clothing and footwear, in par-
ticular), which have become more concentrated in
southern Europe. For the regions dependent on these
sectors today, there is an increased vulnerability to
economic shocks similar to that which has provoked
economic restructuring in the northern regions over
recent decades. At the same time, around half of me-
dium and high tech industries that were initially spa-
tially concentrated remained so (aircraft, motor
vehicles, electrical engineering, for example), while
others with a highly skilled labour force and with rela-
tively high rates of growth (office machinery, radio, TV
and communications, precision instruments, for ex-
ample) became more dispersed. The latter have typi-
cally spread from the central part of the Union to
Ireland, Finland and southern Member States (see
Table A.23).

Analysis of the forces underlying the changes indi-
cates that resource endowment and market potential
(proximity to main markets) are of key importance.
Within the former, endowment of capital, the driving
force behind the location of capital-intensive indus-
tries in the 1970s, seems to have lost importance in
relation to the availability of an educated labour force,
which has become key to determining the location of
skill-intensive industries in the 1980s and 1990s. As
educational attainment levels are likely to become

76

more similar across the Union, this should be a factor
working against increased spatial concentration. At
the same time, market potential has become increas-
ingly important
industries with
for the location of
strong forward and backward linkages, central loca-
tions attracting industries higher up the value-added
chain. On the other hand, the importance of market
potential for industries with large potential economies
of scale has declined markedly over the period.

Services an increasingly important
but complicating factor

Analysis at the regional level and the inclusion of ser-
vices in the picture seems to alter the conclusions,
though so far the analysis conducted has incorpo-
rated only very broad service sectors so that the re-
sults need to be interpreted with caution. Not
surprisingly, when a few broadly defined service sec-
tors are included, regions appear to have become
more similar in terms of the sectoral structure of their
economic activity, since all regions have experi-
enced a shift towards services. Whether this result is
repeated once services are disaggregated much
more and once business services, in which job cre-
ation has been especially high, are distinguished, re-
mains to be investigated, although it
is perhaps
significant that the broad category of market ser-
vices, together with financial services, seems at pres-
ent to be relatively highly concentrated.

Nevertheless, whatever the locational forces at work,
a general conclusion of the studies carried out is that
the structure of economic activity tends to be slow to
change, because of the scale of investment required
over the long-term to alter the pattern markedly. Over
the past 20-30 years, therefore, the sectoral distribu-
tion of economic activity has not changed greatly in
most Member States and regions. There are, how-
ever, exceptions, such as Ireland, where growth has
been more rapid and FDI much higher than else-
where, or Finland, where the decline in GDP in the
early 1990s and the subsequent restructuring of eco-
nomic activity, caused in part by the collapse of the
former Soviet Union, have been greater than in other
parts of the Union.

The social effects of integration

While increased specialisation will tend to favour
those employed in the sectors for which demand is

expanding in the different economies – highly-skilled
workers in the more advanced economies,
low-
skilled workers in the less advanced ones, where pro-
duction is concentrated in low-wage, labour-inten-
sive activities – in reality, as seen above, the outcome
is unlikely to be this simple. Most trade in the EU is of
an intra-industry kind, where similar goods are ex-
changed, and this is likely to become increasingly the
case in future years.

In practice, the decline in demand for low-skilled
workers, and the consequent social problems
caused by their unemployment, tends to result from
technological advance, which favours the more
highly skilled, and highly educated, more than from
trade. This implies that the problem for policy is not to
seek to slow down the process of integration, but to
increase the education and skill levels of workers, as
well as to increase the relevance of what they are
taught for the jobs for which demand is expanding.

A recent World Bank study of income distribution in
80 countries over four decades provides encourag-
ing evidence that there is a close relationship be-
tween overall growth and the average income of the
poorest 20% of the population, and that this is the
case irrespective of the degree of openness to for-
eign trade.5 At the same time, in many countries, the
relative position of the poorest in society has not im-
proved greatly over this period, and in some it has de-
teriorated. Similarly, the distribution of income is more
unequal in the US than in Europe and social exclusion
is no less of a problem (though it seems to arise from
different sources, from a withdrawal from the work
force and low rates of pay more than from unemploy-
ment) despite the closer economic integration be-
tween regions.

This suggests, as in the case of regional conver-
the policies accompanying closer
gence,

that

II.2  Internal market

economic integration, in this case social protection
and active labour market policies, have an important
role to play in determining the outcome. Closer inte-
gration creates a more favourable environment for a
reduction in social inequalities, but it does not neces-
sarily ensure that such a reduction is realised.

Concluding remarks

The conclusion which seems to emerge from this
analysis is that the process of economic integration
tends to favour a general trend towards a narrowing
of disparities. Nevertheless, economic theory sug-
gests that this is conditional on integration being
complete whereas partial integration may well have
adverse effects. European policies to establish eco-
nomic and monetary union and the breaking down of
barriers appear to have contributed positively to con-
vergence, not least, by promoting greater macroeco-
nomic stability,
trade through
increased internal
lowering transaction costs in their widest sense and
more competition, all of which are favourable to eco-
nomic growth.6

At the same time, the impact at the level of individual
regions is unpredictable, given that faster growth is
inevitably accompanied by economic restructuring
and given the multiplicity of factors – social and politi-
cal as well as economic – that contribute to economic
development. In these circumstances, it seems es-
sential to adopt a wide-ranging approach with a num-
ber of different measures aimed at
tackling the
factors which determine competitiveness. This is the
political conclusion on which the Member States have
agreed, as reflected in successive generations of
structural policies that are the subject of analysis in
Part III of the report.

1

2

3

4

5

European Commission, Market integration and differences in price levels between EU Member States, in ‘The EU Economy – 1999
Review’, (European Economy) Brussels/Luxembourg 1999.
Cf. DIW/ EPRC, ‘The Impact of EU Enlargement on Cohesion’, draft final report of a study for the Regional Policy DG of the European
Commission, Berlin and Glasgow 2000, p. 39f.
See Paul R. Krugman, Lessons of Massachusetts for EMU, in Francisco Torres/ Francesco Giavazzi (eds.), ‘Adjustment and growth
in the European Monetary Union’, Cambridge 1993, pp. 241-269.
Karen-Helene Midelfart-Knarvik/ Henry Overman/ Stephen Redding/ Anthony J. Venables, ‘The Location of European Industry’;
report prepared for the Economic and Financial Affairs DG of the European Commission, Economic Paper No. 142, Brussels 2000. In
spite of some differences in data and methodology, many of the results have been confirmed by another study carried out for the
Commission: Karl Aiginger/ Michael Böheim/ Klaus Gugler/ Michael Pfaffermayr/ Yvonne Wolfmayr-Schnitzer
(WIFO):
‘Specialisation and (Geographic) Concentration of European Manufacturing’; Enterprise DG Working Paper No. 1; Background
paper for the ‘The Competitiveness of European Industry: 1999 Report’, Brussels 1999.
David Dollar / Aart Kraay 2000, ‘Growth Is Good for the Poor’, The World Bank, Development Research Group, Washington D. C.,
March 2000; (can be downloaded from www.worldbank.org/research).

77

II.2  Internal market

6

While the high costs of accessing markets initially lead firms to be geographically dispersed and to produce for local markets, their
eventual reduction makes central regions more attractive. The proximity of a large market and the realisation of economies of scale
can lead to a process of agglomeration. However, full integration which results in the near elimination of transaction costs can make
peripheral regions, which have maintained their low cost advantage, attractive locations for firms.

78

II.3  Competition policy

The provision of State aid is one of the instruments at
the disposal of national and regional authorities to influ-
ence the spatial distribution of economic activity. The
results of the Eighth Survey on State aid in the EU1 show
that State aid still occupies a central place in the indus-
trial and regional policies of most Member States. Over
the period 1996 to 1998, the total amount of State aid
granted in the Union averaged EUR 79.8 billion a year,
or 2.4% of total government expenditure (though this
was slightly less than over the period 1994 to 1996 –
see Table 6).

The results of the Survey show that there are signifi-
cant disparities between Member States in the grant-
three indicators
In terms of all
ing of State aid.

presented in the table below, the difference between
the lowest and the highest level is three to one.

The following features are apparent:

•

expenditure on State aid per person employed
and per head of population in the four cohesion
countries in terms of Euros has remained well be-
low the EU average, and well below that in many
of the more prosperous Member States, such as
Germany, Italy, France and Belgium, though the
gap deminished over the period 1994 to 1998; in
the period 1996 to 1998, the cohesion countries
accounted for 10.5% of total expenditure on State
aid in the EU as against 9.5% in the period 1994 to
1996;

Table 6  Overall national aid in Member States 1994-1996 and 1996-1998

% GDP
(at 1997 prices)

EUR per person
employed

EUR per head

% Government
expenditure

1994-96

1996-98

1994-96

1996-98

1994-96

1996-98

1994-96

1996-98

Austria

Belgium

Denmark

Germany

Greece

Spain

Finland

France

Ireland

Italy

Luxembourg

Netherlands

Portugal

Sweden

UK

EU15

0.65

1.26

0.99

1.97

1.36

1.14

0.50

1.11

0.88

1.83

0.99

0.65

1.37

0.99

0.54

1.32

0.65

1.18

0.94

1.45

1.24

0.98

0.47

1.13

0.99

1.57

0.53

0.62

1.63

0.78

0.52

1.12

342

698

526

1.007

352

367

249

588

389

809

624

362

260

476

227

591

353

677

513

786

334

318

248

618

497

712

343

349

323

388

223

526

143

255

257

430

131

132

96

225

137

314

324

127

117

220

99

235

147

249

257

327

125

120

97

237

188

276

188

126

148

178

100

214

1.17

2.33

1.60

3.96

2.38

2.47

0.85

2.02

2.12

3.38

2.24

1.23

2.98

1.49

1.17

2.54

Excluding agriculture and Structural Funds expenditure

1.23

2.26

1.59

2.95

2.25

2.22

0.85

2.08

2.66

3.04

1.27

1.24

3.44

1.24

1.20

2.35

79

bringing about a sizeable reduction in the coverage
of aid. In the course of 1999-2000, new regional aid
maps were established for each Member State. The
main aims were achieved, in that the new maps were
defined on the basis of a transparent and objective
method which ensured equal treatment for all Mem-
ber States. At the same time, the total population in
the EU covered by regional aid was reduced from
46.7% to 42.7%. A strict application of the eligibility
criteria has resulted in a tighter demarcation of the as-
sisted regions, enabling Member States to focus re-
gional assistance on the regions suffering the most
severe economic problems and so increasing its
effectiveness.

A final element to take into account is the role that ser-
vices of general economic interest can play in lag-
ging regions, as stated in Article 16 of the Treaty.

II.3  Competition policy

•

the volume of State aid has declined in recent
years, especially in the more prosperous Member
States, where expenditure per head and per per-
son employed is above the EU average. The main
exception is France, where in recent years, ex-
penditure increased significantly, in both abso-
lute and relative terms.

Given its effect on the regional distribution of eco-
nomic activity and income, the control of State aid will
remain a key instrument of Community cohesion pol-
icy. Allowing high levels of State aid in the most pros-
perous Member States and regions would undermine
the effectiveness of both Community and national re-
gional policy efforts in support of the weakest regions.
Financial assistance to support businesses in the lat-
ter is vital to correct regional disparities, and it is im-
portant
this is not
the effectiveness of
compromised by the granting of disproportionate
State aid elsewhere. Strict control of State aid should,
therefore, be regarded as an essential complement
of Structural Funds support for the less favoured
regions.

that

Regional State aid is by far the largest single category
of State aid in the EU. Between 1996 and 1998, Mem-
ber States granted EUR 18.8 billion in State aid for re-
gional purposes, which represented 57.6% of all
State aid granted to industry and services in the Un-
ion. In the 1990s, there was a proliferation of regional
aid measures throughout the Community, and a grad-
ual extension of the areas qualifying for regional aid,
giving rise to a real danger of the effectiveness of re-
gional aid being undermined as a means of furthering
economic and social cohesion.

At the end of 1997, the Commission adopted new
Guidelines on national regional aid, with the aim of
strengthening control over its deployment. These
consolidated the criteria used to assess the compati-
bility of national regional aid measures and clarified
the rules for the demarcation of regions qualifying for
aid under Article 87(3)(a) and (c) of the Treaty. Mem-
ber States were invited to bring their existing regional
aid systems into line with the new rules by the year
2000.

A key element of the exercise was the review of re-
gional aid maps in each country, with a view to

1

Commission of the European Communities, Eighth survey on State aid in the European Union, COM(2000)205 Final, 14.4.2000.

80

II.4 The Common Agricultural Policy: price and market
policies

Political and budgetary aspects

Developments, current situation and prospects

In expenditure terms the Common Agricultural Policy
(CAP) is the most important policy of the EU. The CAP
reform of 1992 and the Agenda2000reform initiated
a shift from price support policies to direct payments
for farmers based on historical yields.

In July 1997, the publication of Agenda 2000 pre-
sented a new reform of the CAP. A number of key pri-
orities were defined,
including securing the
competitiveness of the agricultural sector, encourag-
ing cultivation methods which contributed towards
maintaining and improving rural areas and land-
in-
scapes and protecting the sources of farmers’
come, while at
the same time encouraging the
development of the rural economy as a whole. The re-
form included two important strands. First, official
prices were reduced. Secondly, a new framework
was established for rural development policy, which
was regarded as the central element in the reform
and, from then on, as the second pillar of the CAP.

Budgetary aspects

In 1998, the Guidance and Guarantee sections of the
EAGGF, ie the source of the overall financing of the
two pillars of the CAP, accounted for 54.6% of the Eu-
ropean Union budget, or EUR 43.3 billion. Price and
market support from the Guarantee section of EAGGF
alone represented 48.9% of total Community expen-
diture, or EUR 38.7 billion (all the following references
in this section to the EAGGF are to the Guarantee sec-
tion). The prospects for the period 2000 to 2006 are
for a broadly unchanged level of overall agricultural

expenditure but for a reduction in relative terms, to
EUR 44.8 billion in 2002, 46.8% of total appropria-
tions, and EUR 42.5 billion in 2006, 46.0% (Graph 18).

Since the 1992 reform, direct payments for assis-
tance and, to a lesser extent, the amount going to ru-
ral development, represent growing shares of total
expenditure on agriculture at the expense of spend-
ing on market support and payments to exports. The
latter two categories accounted for only 29% of total
expenditure in 1998 as against 82% in 1992 (see
Graph A.37 in Annex).

The substitution of direct aid payments for market
support has increased the share of subsidies in agri-
cultural income. In 1998, subsidies represented, on
average, 28.6% of agricultural income in the Union as
against 15% in 1990 and 5% in 1980. Overall, they
have contributed to stabilising income.

18 EAGGF expenditure, 1983-2000, and forecasts 

for 2001-06

EUR billion

EAGGF-Guidance

EAGGF-Guarantee

%

EAGGF as % of Community budget (right axis)

80

70

60

50

40

30

20

10

0
1995
1984
1983
For 2001-06, no breakdown available between EAGGF-Guarantee and EAGGF-Guidance

2002

2003

2004

2005

2006

2001

1990

1992

1998

2000

1988

1997

1987

1999

1991

1986

1989

1993

1985

1994

1996

50

40

30

20

10

0

81

 
II.4  The Common Agricultural Policy: price and market policies

to a lesser extent, Germany
France (23.2%) and,
(14.3%) remain the main beneficiaries of the EAGGF.
Since 1998, Spain (13.7%) has taken third place ahead
of Italy. These three countries receive more than half of
total EAGGF expenditure. For the rest, the share of Por-
tugal, though low, has increased over the past 10
years, from 0.6% to 1.6% (see Table A.24).

The ranking of Member States, however, is changed
considerably if expenditure is related to the numbers
employed in agriculture. The cohesion countries, ex-
cept for Ireland, are at the bottom of the list because
of the large numbers employed. Where, as in the
Mediterranean, a more labour-intensive type of pro-
duction predominates (in Greece, Spain, Italy and
Portugal), some 8½% of employment is in agriculture,
due in part to smaller average farm size. EAGGF ex-
penditure per person employed, however, has
tended to increase over the past 10 years, as employ-
ment has declined, and the gap between countries
receiving the least (Portugal
in particular) and the
most has narrowed (see Table A.25).

Contribution of agricultural price and
market support to national cohesion

The impact of the CAP – or at least the first pillar – on
cohesion is linked to the large redistribution of income
among European citizens stemming from transfers
between social groups, sectors, regions and Member
States. The current shift from price support to direct
payments implies a shift in transfer flows. This has
distributional implications for consumers and taxpay-
ers. With market price support, low income consum-
ers pay a disproportionate share of transfers relative
to their share of income and they are, therefore, ex-
pected to benefit from reduced domestic price levels.

The CAP also involves large transfers between Mem-
ber States and regions. The amount of such transfers
can be calculated from budgetary information together
with estimates of the effect of international trade.1

The patterns of transfers between Member States in
1998 was very similar to that in 1993: net contributors
and net beneficiaries were the same (see Table
A.26). In 1998, net transfers were positive for 5 Mem-
ber States, three of which were cohesion countries
(Spain, Ireland and Greece). The change in the scale
of such transfers differs between Member States. The
amount rose considerably for Spain and France

largely because of

in-
between 1993 and 1998,
creases in direct payments (especially to cereal pro-
ducers). The rise was smaller for Ireland and was the
result of positive trade transfers, high payments to
beef and veal producers and a small contribution to
the agricultural budget. The amount of net transfer
declined for Greece and Denmark,
though it re-
mained positive – for Greece, largely because of di-
rect payments and a low budgetary contribution, for
Denmark, because of positive trade transfers.

The remaining 10 Member States are net contributors
to the CAP. Portugal is the only cohesion country for
which net transfers were negative in 1998 as well as in
1993, the result of a low level of direct payments re-
ceived and of a high level of protection against im-
ports. Except for the Netherlands, which receives a
low level of direct payments, the net contribution of all
these countries declined between 1993 and 1998.

Contribution of agricultural price and
market support to regional cohesion

In general,

Regions play an increasingly important role in the op-
eration of the CAP, even if this differs markedly be-
regions are
tween Member States.
responsible, on the one hand, for measures relating
to rural
land use (environmental protection, agri-
tourism and infrastructure, for example) and, on the
other, for providing support for specific agricultural
sub-sectors.
In this regard, differences between
Member States are large: While Italian regions man-
age around 70% of the agricultural budget in Italy,
agricultural measures undertaken by French depart-
ments (which are much larger than those undertaken
by regions) account for only around 2% of the budget
in France.

The effect of the 1992 reform

Producers of cereals, oil seed and meat have bene-
fited from the direct payments introduced under the
1992 reform. This system provided compensation for
the loss resulting from the alignment of European to
world prices and, ipsofacto, prevented income from
agriculture falling in a number of regions and even led
to an increase in some cases. The regions affected
most by the new system were the cereal-producing
areas of France (Centre, Poitou-Charentes), Ger-
many (Bayern), Spain (Castilla y León, Castilla-la
Mancha) and Portugal (Alentejo) as well as the

82

II.4  The Common Agricultural Policy: price and market policies

Canarias (E)

Guadeloupe

Martinique

Réunion

(F)

(F)

(F)

Guyane (F)

Açores (P)

Madeira

(P)

SIG16
SIG16

0

100

500 km

© MEGRIN for the administrative boundaries

83

14  CAP total support per AWU, 1995-1996

EUR/AWU (1985 constant prices)

< 3000

3000 - 5000

5000 - 10000

10000 - 15000
≥ 15000

no data

CAP direct payments plus other transfers
B, D, NL, UK : NUTS1
IRL, A, FIN : NUTS0

Source: Eurostat - De Rose

Note: AWU = annual work unit

II.4  The Common Agricultural Policy: price and market policies

livestock areas of Ireland, the UK (Scotland, Wales,
South West), France (Basse-Normandie) and Ger-
many (Bayern). The result was an increased level of
support in terms of the amount of aid in relation to ag-
ricultural employment (Map 14).

Production aids are also used for other products,
such as olive oil, so providing support to many pro-
ducers in the Mediterranean regions, and cotton, pro-
duced mainly in Greece. There have, in addition,
been improvements, this time due to market forces, in
wine-growing regions as well as in those producing
fruit and vegetables: La Rioja and Andalucia in Spain,
Puglia in Italy, Aquitaine in France as well as many re-
gions in the Netherlands and Baden-Württemberg in
Germany. In general, Mediterranean products have
proved to be relatively competitive on world markets
and their share in total agricultural output has in-
creased, due partly to the modernisation of distribu-
tion systems in a number of coastal regions.

Total transfers to agriculture, including indirect as
well as direct payments, have increased in relation to
the number employed in all regions of the Union, the
largest rise occurring in French regions (especially
those producing cereals) and those in the new
Länder in Germany. In terms of assistance relative to
agricultural land area, regions in Greece receive the
highest level of support in the Union.

Overall, the reform did not radically alter the distribu-
tion of support between European regions. In 1996,
as in 1991-92, the regions where the level of support
per person employed in agriculture is relatively low in
relation to the gross value-added per person em-
ployed are located in the Netherlands, Portugal,
Spain, Italy and Greece (ie they are situated on the
bottom right-hand side of Graph A.38).

At the same time, the reduction in market price sup-
port most affected the regions with a high level of
value-added per person employed, which led to a
more equitable distribution of aid between regions.
Moreover, a number of regions continued to receive
much the same level of support following the reform,
direct payments compensating for the reduction in
market price support, while others experienced a re-
duction. The result is a weakening of the relationship
between the level of aid to regions and agricultural
performance. Wine-growing regions, for example,
like those producing fruit and vegetables, succeeded
their agricultural
in maintaining, or

increasing,

income, despite benefiting only to a very limited ex-
tent from direct and indirect aid.

Although the 1992 reform led to a more equitable dis-
tribution of support across regions, it also became
more dispersed. The distribution of transfers in rela-
tion to GDP per head (Graph A.39, which shows the
cumulative proportion of transfers in relation to the
population of regions ordered by GDP per head)
shows that:

•

•

the effect of the CAP is negative in the least pros-
perous regions, which account for around 20% of
EU population (the graph showing that these re-
ceive less in transfers than their relative level of
GDP per head);

the regions benefiting most are those between
the 2nd and 6th deciles in terms of GDP per head.

Contribution of agricultural price and
market support to social cohesion

Over the past few years, a number of different models
of agricultural production have developed, distin-
guished by their structure, methods and aims:

•

•

•

a ‘productive’ model, geared towards interna-
tional markets and increasingly concentrated in a
few areas in the Union. Taking gross value-added
per annual work unit as a measure of productivity,
the highest values are found in Denmark, Cham-
pagne-Ardenne and Picardie in France and
Sachsen-Anhalt in Germany;

an ‘adaptive’ model, concentrated in particular
regions and on particular products and targeted
on local or national markets. This form of agricul-
ture is based on traditional, local produce and is a
response to an increasing demand for higher
quality among consumers;

a ‘transition’ model, which is subject to increasing
constraints and permanent change, with farmers
continuously changing their methods of produc-
tion and what they produce in response to the
development of large agricultural markets, in-
creased competition and the ever greater pres-
sure from agri-food chains;

84

II.4  The Common Agricultural Policy: price and market policies

•

a ‘marginalisation’ model, characterised by struc-
tures of production which are increasingly unsta-
ble and precarious and which, if they are not
capable of adapting, are set sooner or later to dis-
appear. Taking farms below 4 ESU2 as an indicator
of precariousness, the regions in question include
Centro in Portugal, Valle d’Aosta, Abruzzi,
Basilicata and Molise in Italy and Galicia in Spain.

This typology of models is confirmed by an analysis of
the average economic size of agricultural holdings in
1997 and the change between 1993 and 1997 for the
20 regions with the lowest and the highest levels (see
Table A.27). There is a marked distinction between the
southern and the northern regions. The 20 regions with
the smallest size of holding are all situated in Greece,
Spain, Italy and Portugal, Moreover, the average eco-
nomic size of agricultural holdings declined over the
4-year period by 2.2%, while it increased in the top 20
regions, all located in the north, by 24.6%. Furthermore,
employment in agriculture tends to be higher in the re-
gions with small holdings, such as in Crete, where al-
most 38% of employment was in agriculture in 1997,
where the average size of holdings was only 4.7 ESU
and where this declined by 10% over the period.

inequitable, since support is still fixed on a ‘per hect-
are’ basis (which means that support increases with
economic size). Before the reform, the system of sup-
port favoured farms with a certain level of production
and, defacto, of a relatively large size (of 16 ESU and
over). Although direct payments have become more
important since the reform, the main beneficiaries re-
main the large holdings (over 40 ESU). The inequality
is seen even more
of
acutely if account is taken of the fact that 10% of hold-
ings in the EU account for two-thirds of the total stan-
dard gross margin and half account for 95%. The
CAP, therefore, continues to support the develop-
ment of large specialised units at the expense of
small and medium-sized farms, which play a major
social and economic role in a number of regions
(Graph 19).

the distribution of support

The enlargement perspective

The inclusion of the 10 Central European candidate
countries in the Union (ie leaving aside Cyprus and
Malta) would lead to:

Although the 1992 reform reduced expenditure on
market support in favour of direct payments, the dis-
tribution of support in relation to farm size remains

•

an increase of 2.4 times in the number employed
in agriculture (from 6.9 million in 1998 to 16.6
million);

Table 7  Value-added and employment in agriculture in the Union and the CECs

Value-added

Employment

Value-added

Employment

Belgium

Denmark

Germany

Greece

Spain

France

Ireland

Italy

Luxembourg

Netherlands

Austria

Portugal

Finland

Sweden

UK

EU15

EUR mn

3233

4449

23724

8813

21897

39876

4105

32167

117

10742

4354

3765

4289

4538

15566

181635

%

1.4

2.9

1.2

8.1

4.2

3.1

5.4

3.0

0.7

3.1

2.3

3.9

3.7

2.1

1.2

2.4

000s

95

90

1034

704

1020

968

136

1118

3

232

229

611

148

121

421

6930

7.4

4.3

8.5

5.4

1.9

3.0

6.2

12.6

6.4

3.0

1.6

4.5

%

2.4

3.3

2.9

Bulgaria

Cyprus

Estonia

17.8

Hungary

Latvia

Lithuania

Malta

Poland

Slovak Republic

Czech Republic

Romania

Slovenia

EUR mn

2308

356

294

2323

235

986

85

6735

841

2277

6405

715

%

21.1

4.4

6.3

5.5

4.3

10.3

2.7

4.8

4.6

4.6

17.4

4.1

000s

770

30

54

263

172

345

:

2704

179

250

4851

96

%

24.4

10.2

8.8

7.0

17.2

21.4

:

18.1

8.1

5.3

44.0

10.8

CEC 12 / 11

EU 27 / 26

23559

205194

6.8

2.6

9715

16645

22.0

8.4

Source: National Accounts; Labour Force Survey; National Statistical Institutes; calculations DG REGIO

85

II.4  The Common Agricultural Policy: price and market policies

•

•

an increase of 12.7% in the gross value-added of
the agricultural sector (in Euros);

an increase of 5.4% in total agricultural imports
(intra- plus extra-Community) and of 4.9% in
exports.

With almost 10 million people employed, agriculture
in the Central European countries is a considerably
larger source of jobs than in the EU. Productivity,
measured in terms of valued-added per person em-
ployed, is, however, only 9% of the level in the Union.
Nevertheless, in relative terms, the contribution of ag-
riculture to GDP, as to employment, is much larger in
the CECs – particularly in Romania and Bulgaria –
than in the EU (Table 7).

Although data from current Agricultural Eco-
nomic Accounts in the CECs make accurate compari-
is possible to identify broad
sons difficult,
differences between the candidate countries and the
Union.

it

•

In Poland and Romania, very low labour produc-
tivity reflects the large proportion of micro and
small farms in total production combined with a
labour per hectare.
relatively high density of
These types of structure,
inherited from the
pre-transition period in Poland and to a lesser
extent Romania, reflect the presence of consider-
intensive and semi-subsistence
able labour
agriculture. Bulgaria is perhaps more polar-
ised between small-scale labour-intensive farm-
ing
cereals
production.

large-scale

extensive

and

•

•

In Hungary, the Czech Republic and Slovakia, la-
bour productivity is higher reflecting the impor-
tance of large structures and the development
towards more market oriented farms. In Slovenia
levels of value-added are significantly increased
by market price support policies.

The Baltic States lies somewhere between the
two groups. Here, recent low levels of productiv-
ity reflect the significant recession and restructur-
ing which have occured in recent years.

In all cases, low productivity per hectare and per
labour unit correspond to a high labour/capital ra-
tio in comparison with the European Union and a
comparatively low level of input use (Graph 20).
This reflects relative factor costs in the CECs as
well as barriers to investment. In the Czech Repub-
lic, Poland and Hungary, capital per employee is
no more than a third of that in France, if commercial
holdings alone are taken into account. This falls
substantially, particularly in Poland, if smaller hold-
ings are included. In these countries, national sta-
tistics suggest that there is perhaps one tractor for
every 20 agricultural workers.

Structures and subsistence farming

A common feature of countries where, before 1989,
agriculture was largely collective is the gradual clos-
ing of the gap between, on the one hand, large collec-
tive or state-owned holdings and, on the other, very
small private units (like those in mountain areas in Ro-
mania). The average size of remaining state-run hold-
is declining
ings,

including private cooperatives,

19 Production subsidies per AWU by group of 

20 Value-added in agriculture in Central 

farms classified by ESU, 1990-92 and 1995-97

European countries, 1998

EUR/AWU at 1985 values

1990/92

1995/97

AWU = Annual Work Unit 
ESU = European Size Unit

12000

100

Index, EU=100 (in Euros)

Value-added per hectare of utilised agricultural area

Value-added per person employed

10000

8000

6000

4000

2000

0

80

60

40

20

0

100

80

60

40

20

0

0 -<4

4-<8

8-<16  16-<40  40-<100  >= 100  All size

BG

CZ

EE

HU

LV

LT

PL

RO

SI

SK

12000

10000

8000

6000

4000

2000

0

86

 
 
II.4  The Common Agricultural Policy: price and market policies

considerably, while that of private holdings is gradu-
ally increasing.

Market support policies

In Poland and Slovenia, where the private sector was
already important before the transition in 1989, struc-
tural change is less pronounced. In Poland, the size
of private holdings is only increasing slightly as the
land from state-owned farms is privatised, though, in
general, their small size represents a handicap in the
longer term (see Table A.28).

Increasingly, this distinction between small private
holdings and large collective farms is being replaced
by a dualism between market oriented competitive
farms and a semi-subsistence sector. This latter is a
factor contributing to low levels of productivity, lack of
market orientation and resistance to structural
change in a number of candidate countries. Although
no standard definition of subsistence farming exists,
it is generally associated with small holding size, fam-
ily agricultural work as a part-time or supporting activ-
ity, high levels of on-farm consumption as well as an
important role in extended family structures.

Subsistence farming is not a new phenomenon in the
CECs. Household plots played an important role in
the pre-transition period. However, its scale has in-
creased since transition, reflecting a response to
economic and social adjustment. The importance of
subsistence farming varies markedly between coun-
tries remaining significant in Romania, Bulgaria and
Poland. In contrast, it plays only a small role in Hun-
gary, the Czech Republic and Lithuania.

Subsistence farming defined in these terms reflects,
therefore, both historical factors but equally a rational
response to high levels of rural unemployment, low in-
comes and the nature of social security systems. For
example, more than a million Polish farmers receive
an agricultural pension, absorbing the major part of
the agricultural budget. Such social security transfers
play an important part in agricultural household in-
come and could easily account for more than half of
total agricultural household income in some coun-
tries. Subsistence farming can, therefore, play an im-
portant role in overall family welfare and, equally, in
absorbing labour where alternative sources of em-
ployment are scarce. However, rural poverty remains
a considerable problem in the CECs (see Box in Part
I, Social cohesion).

In general, data from the OECD suggest that current
market support policies in the CECs, with the excep-
tion of Slovenia, and to a lesser extent Poland, have
had little effect on agricultural value-added and sec-
toral income. It should be emphasised that due to the
acknowledged limitations of these data, conclusions
should be seen as indicative of broad trends. On av-
erage, the CECs have moved from a position of nega-
tive market support over the past years to a situation
close to neutrality. This, however, may hide implicit
market support due to significant differences in qual-
ity between domestic production and world markets,
particularly in the livestock sector. On the other hand,
it also reflects price competitiveness and (in some
cases) policy choices to maintain low prices, particu-
larly in the cereals sector. In this respect, cereals and
oilseed play an important role in final agricultural out-
put, particularly for large producers such as Hungary
and Romania. Macroeconomic restructuring and ex-
change rates trend play an equally important role,
particularly in Bulgaria and Romania. The picture in
most countries is, therefore, of low levels of support
gradually increasing over time, with the exception of
Slovenia which has levels of support similar to those
in the Union.

When the structure of market price support is exam-
ined by hectare or livestock unit (see Graph A.40),
levels of support for oilseed and cereals are generally
low or negative in the candidate countriess with the
notable exception of wheat in Poland. Despite of con-
siderable policy intervention, price support in the live-
raised domestic prices
stock sector has not
significantly above world prices, although there is an
implicit transfer due to quality differences particularly
for beef and pork. The only areas of major ,support
are for sugar and milk. Here, as in the EU, support for
sugar is relatively concentrated. It is notable that the
application of EU prices to the CECs would increase
levels of market price support without raising them to
EU levels. This reflects lower yields per hectare and
per livestock unit.

The effect of current market support policy in the can-
didate countries on national cohesion and farm in-
comes in most countries is relatively small given the
low level of transfers from consumers to producers,
with the exception of milk and, perhaps, sugar. How-
ever, there are significant transfers in Slovenia and in
some sectors in other countries such as Poland. As

87

II.4  The Common Agricultural Policy: price and market policies

alternative employment and reliance on subsistence
farming can be contributory causes of rural poverty.
Nevertheless, subsistence farming can also play an
important role in maintaining agricultural and rural
household income and may, in some cases, comple-
ment social security or, indeed, substitute for labour
market measures. At the same time, however, subsis-
tence farming has created a problem of under-em-
ployment, which remains to be tackled in the future
by attempting to achieve a more balanced and diver-
sified development of the areas in question. In this
respect, the creation of alternative sources of em-
ployment and functioning labour markets would ap-
pear as important as improved general skill levels.

prices move towards EU levels and production in-
creases, these transfers will also increase, with corre-
sponding effects on income, although it is not unclear
how this will affect the semi-subsistence sector.

Prospects

Enlargement towards to Central Europe gives rise to a
number of challenges as regards national and re-
gional disparities in the Union. The overall impact on
EU15 growth and employment is likely to be small.
But achieving productivity gains in the CECs and
dealing with the consequences of such gains in rural
areas, particularly from labour adjustment, is very im-
portant. Agricultural and rural development policies
are particularly significant here, given the important
role of agriculture in many areas.

Enlargement will clearly widen disparities in the EU
between rural areas and between these and urban
areas. Price convergence between the CECs and the
EU15 will increase transfers from consumers to pro-
ducers in the CECs, but these positive effects on
farming income may be offset by a range of factors
undermining the competitiveness of CEC agriculture
(eg real exchange rate appreciation). It should be
noted, however, that these processes reflect broader
economic adjustment and are already underway in
the pre-accession period.

Many CECs are characterised by a dualistic structure
of farms. For the more market oriented farms, the key
challenge would appear to be the need for better
functioning factor markets. On the other hand, the
small size of holdings farm structures and high levels
of employment in agriculture pose particular chal-
lenges for improving the efficiency of the sector, par-
ticularly since the social costs of so doing appear to
be high.

In a number of countries, and particularly in Romania
and Bulgaria, where employment in agriculture has
increased in both absolute and relative terms, there
has been migration from urban to rural areas as eco-
nomic conditions have worsened. Agriculture has,
therefore, been important in absorbing the shock and
has enabled essential needs to be met. The small size
of farms, low labour productivity and incomes, lack of

For preliminary estimates, see ‘First Report on Economic and Social Cohesion’.
Economic size is conventionally expressed in terms of the European Size Unit (ESU), corresponding to a standard gross margin
(SGM) – the difference between gross agricultural output and the costs associated with that output – of EUR 1200. The Farm
Accountancy Data Network considers ‘very small’ holdings to be those below 4 ESU.

1
2

88

Employment, human resource development and

II.5
cohesion

The European Employment Strategy (EES) was
launched only a few years ago at the end of 1997 and
is built on several processes. The Union’s role is a co-
ordinating one, the Member States remaining respon-
sible for the design and delivery of employment
policy.

This method establishes a balance between EU Union
level coordination in the definition of common objec-
tives and outcomes and Member State responsibilities
in deciding the detailed content of policy.

... which represents a new method of coordination

A new operational framework,
particularly in the Luxembourg process ...

The Luxembourg process embodies a number of ele-
ments which are important for its success:

•

•

First, it is founded on commonly defined objec-
tives, which are based on shared values among
the Member States and cover issues which are
felt to be of common concern for employment
policy.

These objectives are transparent and, therefore,
open to public scrutiny and criticism.

• A number of appropriate ways to measure prog-
ress towards the desired outcomes are defined
either
in terms of quantitative or qualitative
indicators.

• As the focus is on outcomes at the EU level, the
definition of the means and conditions under
which programmes and policies are imple-
mented is left to individual Member States, which
are responsible for their own employment policy.

•

Peer pressure through annual examination and
comparative review is used to steer the course of
policy and enhance the effectiveness of action.

The European Employment Strategy is based on a
number of key principles, which distinguishes the
‘Luxembourg’ open method of coordination from pre-
vious attempts to develop a credible European ap-
proach to employment policy. These principles are:

•

Subsidiarity. The definition of the means and con-
ditions under which programmes and policies are
implemented is left to individual Member States.

• Convergence. Commonly agreed employment
objectives are pursued through concerted ac-
tion, where each Member State contributes to
raising the EU average performance. This princi-
ple has been made more concrete still by the Lis-
bon European Council in March 2000, where full
employment was adopted as an overriding goal
of the Union, together with the objectives of rais-
ing the overall employment rate in the EU from
62% to 70% by 2010 and the employment rate of
women from 52½% to over 60%.

• Management by objectives.

• Country monitoring.

• An integrated approach. The Luxembourg pro-
cess does not involve only Ministries of Labour
national
but
and

Employment,

commits

89

II.5  Employment, human resource development and cohesion

governments as a whole as well as a wide range
of other interested parties.

A learning strategy, reviewing itself ...

Objectives

The objectives of the Luxembourg process are given
operational meaning in the Employment Guidelines’
four pillars: employability (enhancing the chances of
individuals to remain in, enter or re-enter the labour
market, providing early assistance to the unem-
ployed, preparing young people for the world of work,
making the tax-benefit and training systems more
employment friendly), entrepreneurship (developing
a culture of enterprise, making it easier to start and
run businesses), adaptability (helping employees
and enterprises to be more flexible, modernising the
legal and organisational framework of employment),
equal opportunities (developing pro-active policies
which will enable more women to take up employ-
ment, at all levels and in all sectors, better reconcile
work and family life and facilitate a return to work after
a period of absence).

The force of Recommendations

The instrument of Recommendations – first used for
2000 – has demonstrated its value in focusing Mem-
ber State efforts on key challenges. Most Member
States have taken action to respond to the Recom-
mendations addressed to them. The 52 Recommen-
dations adopted for 2000 referred to youth
unemployment, long-term unemployment, disincen-
tives to employment embodied in the tax or benefit
systems, the employment potential of the service sec-
tor, social partnership, gender gaps and statistical
systems. Most of the Recommendations have been
kept (entirely or in amended form), because their im-
plementation exceeds the timeframe of a single year;
8 Recommendations were dropped because suffi-
cient progress had been made – as regards services
(Belgium, Germany, Ireland, Italy), the administrative
burden on companies (Spain), statistical systems
(Germany, UK) and social partnership (France). New
Recommendations were included, putting additional
emphasis on two new priority issues, which deserve
increasing policy attention: achieving a more bal-
anced policy-mix across the four pillars through a
more comprehensive approach and lifelong learning.
For 2001, the Commission proposes to address the
Recommendations to Member States (see Table A.29
in Annex).

90

It is noteworthy that the Luxembourg process itself is
subject to critical assessment. In 2000, a ‘Mid-term
Review’ was carried out in order to identify the im-
provements it initiated and the weaker points where
further action could be needed. The review identified
some important changes and successes (in particu-
lar, it brought the employment challenge and the em-
ployment objectives to the forefront of European and
national debate, linked economic and social policy
more closely together, created an integrated frame-
work for structural reform, led to increased involve-
ment of a wide range of actors and to greater
transparency of employment policies and increased
political accountability), while enabling the Guide-
lines to be refocused on the main Lisbon objectives.
But
it also identified a number of continuing
challenges.

Despite overall improvement, regional differences in
labour market performance remain substantial and
have increased further in some Member States.

The regional pattern of employment has changed lit-
tle since 1980, and there appears to be little evidence
of a more balanced distribution of net job creation be-
tween regions.

The Employment Guidelines took account of this situ-
ation from the outset and drew attention to the role of
local and regional authorities in employment policy.
As noted in the Joint Employment Report 2000, the
importance of action at local and regional level is in-
creasingly recognised by Member States, but more
needs to be done to increase cooperation between
the different levels of government to develop a com-
prehensive regional and local employment strategy;
regional and local authorities and other local actors
need to become more involved in the design and im-
plementation of the relevant guidelines, so adding a
local dimension to the EES. This point is reflected in
the proposed Guideline 12.1

Labour market bottlenecks are emerging in a number
of Member States. These call for targeted action to
improve employability, both in general and of people
at risk of social exclusion, in particular. Education
systems and continuing training are of crucial
importance.

II.5  Employment, human resource development and cohesion

Despite improvements in education systems (often
supported in Objective 1 regions by the Structural
Funds), a number of young people still leave educa-
tion too early with too few qualifications. This can lead
to difficulties adapting to technological change and
to social exclusion. The cohesion countries face the
greatest difficulties in this respect. Measures to com-
bat early school leaving feature in all of the National
Action Plans (NAPs) produced for 2000, except that
of Spain. Most Member States have broadened sup-
port for young people with learning difficulties. Many
have introduced specific measures aimed at target
groups (people with disabilities, ethnic minorities,
disadvantaged young people) and at areas where
drop-out rates are high. For example, France, the
Netherlands, Portugal, Sweden, and the UK have es-
tablished special educational action zones designed
to keep young people in education and training , to in-
crease rates of achievement and tackle social
exclusion.

The clear benefits from the Information Society repre-
sent a threat for those excluded from the IT revolution.
The Lisbon Summit highlighted the major efforts
needed to ensure that all share in these benefits.
There are a number of examples of efforts in Member
States (Greece, Portugal) to provide education and
training for people with learning difficulties through
ICT and to develop special support to improve ICT
skills for unskilled workers and for those in specific
sectors. This should promote social inclusion in the
Member States concerned. Action, however, is un-
even across the Union and more needs to be done.

All the NAPs put employment policies for people with
disabilities firmly on the policy agenda. In many Mem-
ber States, there has been a shift in emphasis away
from programmes targeted at those with disabilities
towards a more mainstream approach, which en-
courages them to participate in general active labour
market programmes. However, there are specific
measures in a number of Member States. Three of the
cohesion countries (Portugal, Greece and Spain)
have set targets for the participation of people with
disabilities in training and other employability
measures.

There is also some evidence from the NAPs for 2000
to suggest that Member States are taking greater ac-
count of the needs of ethnic minorities in the develop-
ment of employment policy. Nevertheless, there are
differences between Member States both in the

interpretation of what is meant by ethnic minorities
and in the policy-mix between promoting direct inte-
gration in the labour market and measures to fight dis-
crimination. Most
tend to focus on integration.
However, a few Member States adopt a mix of the two
(Denmark, Sweden, UK). In some Member States
(France and Portugal), there has been a public de-
bate on discrimination at work, reflecting consultation
undertaken at the EU level by the Commission on the
implementation of Article 13 of the Treaty.

The horizontal objective of gender mainstreaming
has been only partly implemented and policies still
tend to be presented as gender-neutral.

Over the five years to 1999, almost two-thirds of the
6.8 million net additional jobs in the EU were taken by
women. However, over 70% of
these jobs were
part-time. Other labour market indicators suggest
that there is still some way to go to achieve greater
equality of opportunity in the labour market.

The NAPs confirm that Member States have improved
their implementation of gender mainstreaming. How-
ever, although there has been some progress in im-
proving the gender-impact analysis of policy
initiatives (particularly in Finland and Ireland), many
countries appear to lack plans or measures in this
regard.

It has not been easy in all cases to coordinate the Lux-
embourg process with the budget process, which
translates the objectives, commitments and mea-
sures envisaged into (possibly multi-annual) budget-
ary allocations.

Similarly, there remains the challenge of integrating,
at the national level, the contribution of other instru-
ments, such as the European Structural Funds (and in
particular, the European Social Fund), into the imple-
mentation of the NAPs.

The translation of the objectives within the adaptabil-
ity pillar into action is lagging behind. Much of the ac-
tion under this pillar is the responsibility of the social
partners, who have a major stake in contributing to
more and better jobs and whose cooperation is
needed for implementing measures in the workplace.
Not all Member States make it easy for the social part-
ners to be involved, and many NAPs, through inade-
quate reporting, fail to reflect activity and initiatives
actually taking place. Nonetheless, the onus is on the

91

increasing
unemployment,
combating
employment rates, improving the adaptability of
the labour force and the responsiveness of labour
markets, reducing gender gaps and developing
lifelong learning.

II.5  Employment, human resource development and cohesion

social partners to become more active, and more
transparently so, in this regard. In order to encourage
progress, the Employment Guidelines 2001 invite the
social partners to create ‘a process within the pro-
cess’, ie to be responsible for the development of,
and reporting on, actions within their remit which are
consistent with the overall objectives in the Employ-
ment Guidelines.

... adapting to new circumstances ...

for

the Employment
The Commission proposal
Guidelines 2001 has also been influenced by the Lis-
bon Summit conclusions. Overriding strategic priori-
ties have been included in an introductory section.
The new emphasis put on full employment, the role of
the social partners, lifelong learning, educational at-
tainment and social inclusion have also been taken
into account. Some of the Guidelines have been ra-
tionalised (eg lifelong learning is now addressed in
one instead of several Guidelines) or clarified (eg the
potential role of local and regional authorities in em-
ployment policy) and more concrete targets have
been included. New issues, such as labour market
bottlenecks and undeclared work, have been
addressed.

... and preparing for the future

The Luxembourg process is treaty based (Article
128) and as such there is no time limit defined. In
2002, the overall results of the strategy and its objec-
tives will be reviewed and an overall impact – evalua-
tion will be carried out to enable policy makers to
consider strategic options for a revision of the Guide-
lines. This evaluation process will start soon (at Mem-
ber State and EU level) and should provide the
necessary information for
the political decisions
needed in 2002. Two separate strands need to be
distinguished in the exercise:

•

policy evaluation, focusing on those areas where
the Employment Guidelines can be expected to
have influenced policy choices at national level
as well as the effect of those choices;

• macro-evaluation, assessing the progress made
towards achieving the key objectives of the EES –

1

‘All actors at the regional and local levels must be mobilised to implement the European Employment Strategy …Member States will
encourage local and regional authorities to develop strategies for employment in order to exploit fully the possibilities offered by job
creation at local level.’

92

II.6  Environment policy

Social and economic objectives,
including a
strengthening of cohesion, are not in conflict with en-
vironmental aims but are complementary. There is no
inherent contradiction between the pursuit, on the
one hand, of higher economic growth in the weakest
regions and Member States and, on the other, im-
provements in the environment. Indeed, environmen-
tal quality is a key element of quality of life in any
region. Environmental
improvements can, accord-
ingly, increase the attractiveness of a region for out-
side investors and its economic potential – for the
growth of tourism, for example. In addition, weaker
members of society, notably those in inner city areas,
or lagging regions, in particular, stand to benefit dis-
proportionately from improvements. Growth in the
lagging regions, moreover, will enhance their willing-
ness and ability to pay for a cleaner environment.

However, there is an interaction between the two poli-
cies, and this interaction has to be managed to en-
sure there are gains on both fronts.1 ‘Improved
environmentalquality...willhavetocomemostlyfrom
changes in economic activity and socio-economic
policies‘2 and it is important to assess these changes,
in terms not just of environmental benefits but their ef-
fects on cohesion.

The starting point for analysing the interaction is that
environmental policy, by necessitating additional in-
vestment to reach higher standards or by imposing
new taxes on environmentally damaging activities,
seems to increase costs. In reality, however, it makes
the costs of environmental damage more visible. Any
costs, moreover, need to be weighed against the bene-
fits noted above, even if these tend to be more difficult
to quantify. The costs should not be overstated; esti-
mates tend to show that they are very small relative to
overall costs of production, especially when implemen-
tation is via market-based instruments. For example,

one of the most ambitious parts of environmental policy
in the EU is to achieve the Kyoto targets for reducing
emissions of greenhouse gases. Yet the estimated cost
of this is around EUR 7.5 billion a year – only 0.09% of
EU GDP3 – which has to be set against the benefits of
avoiding the damaging effects of accelerated climate
change.

However, while, in overall terms, cost increases tend
to be relatively small, they can often be concentrated
in particular regions or sectors or on particular social
groups. The fact that the long-term benefits of envi-
ronmental protection outweigh the costs may not be
true for everyone in society. Environmental measures
can, therefore, have significant distributional implica-
tions.4

There are, therefore, three main questions to ask in
analysing the cohesion impact of environmental
policies:

•

•

•

do the costs of implementation fall disproportion-
ately on less prosperous Member States, regions
or social groups?

do the benefits, eg in terms of increased quality of
life, accrue disproportionately to these?

are there gains to employment?

In some cases, such as in respect of the pursuit of the
Kyoto targets, it is difficult to identify or quantify signif-
icant differential effects. However, in two key areas of
environmental policy, waste and water, differential ef-
fects can be identified.

93

II.6  Environment policy

European waste policy

which means the costs falling on these countries will
be much less than elsewhere.

The Fifth Environmental Action Programme ‘Towards
sustainability’, reiterates the priorities for waste man-
agement in the following order of preference:5

1 Where possible, the generation of waste should

be prevented

2

If this is not possible, it should be reused

Moreover, in terms of benefits, they are likely to see a
relatively large reduction in landfill waste disposal
and up to 46,000 new jobs created in managing such
programmes (4,000 in Ireland, 9,000 in Portugal,
10,000 in Greece and 23,000 in Spain).

3 Otherwise, it should be recycled

Waste in the CECs

4

If not, waste should be sent for energy recovery

5 Only if none of the above are possible, should

landfill be used as the last resort

According to a study for the Commission,6 there are a
number of elements which are relevant for cohesion.

First, the production of waste is less in the cohesion
countries than in the EU as a whole, ranging from 90%
of the average (Ireland) to only 65% (Greece). Ac-
cordingly, the potential implementation cost of waste
policy is proportionately lower in cohesion countries
although, as GDP per head in these countries contin-
ues to converge to the EU average, they may produce
more waste.

Secondly, however, the Cohesion Countries lag be-
hind in the treatment of waste.

This is true both for the most virtuous form of treat-
ment, recycling (Portugal, in particular, recycles only
4% of total waste as opposed to an EU average of 9%)
and for the worst form of disposal, landfill (93% of
Greek waste ends here, as opposed to an EU aver-
age of 66%). Only in Spain is the disposal profile simi-
lar to that in the EU as a whole, and even here, this
applies much less to the lagging regions

The cost of meeting the waste management targets
is, therefore, likely to fall just as (or even more) heavily
on these countries (except Spain) as it does on the EU
as whole, despite their lower waste production. All of
them, except Spain, have, accordingly, been given
an extension until 2006 to meet the first set of targets.
In addition, the Cohesion Fund is making a major con-
tribution to costs – over EUR 200 million annually, cov-
ering up to 75% of costs (see ‘Cohesion Fund
investments in environment and waste treatment’),

The situation in the Central European candidate
countries is similar to that in the cohesion countries.
The production of municipal waste is low (typically
70% of the EU average), but growing fast (it is fore-
cast to increase by 50% over the period 1995 to
2010). Moreover, the proportion disposed of in landfill
sites is high (typically 80% or more). The problem is
particularly serious in Poland, where almost 99% of
waste is disposed of in landfill sites, which cover a to-
tal of 3020 hectares and include the dumping of 1000
tonnes a year of (incinerated) dangerous medical
waste. This highlights a typical problem in many can-
didate countries that landfill sites often do not meet
EU safety standards.

An additional problem in some countries is the waste
liability inherited from past activities, both military and
industrial. For example the production of shale oil in
Estonia over the past 60 years has left spoil heaps
over 100 metres high, which not only blight the land-
scape but contaminate the groundwater. The dam-
age being caused by shale oil production represents
a major challenge for policy given the implications of
any reduction for regional development and energy
supply.

Similar policy conclusions apply as for the cohesion
countries. Despite producing less waste, candidate
countries will need to spend as much, if not more, per
head than the EU average in order to implement the
acquis, in a context where incomes are much lower.
The Cohesion Fund and ISPA (the pre-accession
structural instrument) are likely to make a significant
contribution to this. In terms of employment, the esti-
mates for current Member States suggest that imple-
menting the acquiscould create up to 50,000 jobs in
the CECs.

94

European water policies

Improvements in water quality are likely to require a
large part of the EUR 260 billion estimated to be
needed over a 20-year period for the EU15 to comply
with the 10 directives on environment. There is, there-
fore, the potential for a significant effect on cohesion.

One feature of water management conditions this ef-
fect; the role of public authorities in this means,
among other things, that historically polluters have of-
ten not paid for the damage they cause. As the ‘pol-
luter-pays principle’ is applied more systematically,
there is likely to be a marked redistribution of costs
between both social groups and regions.

According to a study for the Commission,7 there are,
in particular, four elements of EU water legislation
which could have effects on cohesion:

•

•

•

•

the Water Framework Directive

the Drinking Water Directive

the Urban Waste Water Treatment Directive

the Nitrate Directive

These are considered in turn below.

The Water Framework Directive

Adopted in 2000 and incorporating many previous di-
rectives, the Water Framework Directive improves the
coordination of standards and shifts planning from
administrative entities (such as municipalities) to ‘nat-
ural’ entities (such as those responsible for river bas-
ins). A key point
is the
requirement, in line with the polluter-pays principle,
for increasing the extent to which the costs of water
services are recovered from users.

for cohesion, however,

At present, cost recovery is low, especially in the co-
hesion countries and especially as regards agricul-
tural producers. Eliminating the cross-subsidy which
now exists might have a negative effect on cohesion.
Although the present pattern of cross-subsidy be-
tween households, industry and agriculture is compli-
cated and varies from region to region, some general
conclusions can be drawn.

II.6  Environment policy

Full-cost recovery from households would reduce
their income by an estimated 1.7% in the cohesion
countries as opposed to only 0.2% on average in
other Member States. But this is a maximum estimate
since the Directive only mandates an increase in cost
recovery, not full cost recovery. The Cohesion Fund
will cover a large part of the cost of investment in im-
proving water supply main drainage. The shift in
costs from taxpayers to householders will mean that
certain user groups will pay more than they do at
present in taxes, including those on low incomes,
those with large families and those who are living in
smaller or remote communities.

The recovery of the cost of supply from industry is gen-
erally higher than for households already and, in most
Member States, costs are recovered in full. The cohe-
sion countries, however, are exceptions and none of
them impose the full cost of supply on industry con-
nected to the network. A move to full cost recovery,
therefore, is likely to increase the costs of water use by
industry in these countries, especially in sectors which
are heavy users, though not enough to affect their com-
petitiveness significantly.

The recovery of supply costs is at present lowest for
agricultural users, and very few countries impose the
full cost on these, especially in respect of public irri-
gation schemes. As a result, the impact on rural areas
is likely to be substantial, particularly where crops re-
quiring a lot of water are grown. The use of the Cohe-
sion Fund can reduce some of these adverse effects,
but in deploying this, it is important to maintain incen-
tives to increase the efficiency of water use.

The Drinking Water Directive

The main effect of the revision of the Drinking Water
Directive is to reduce the permissible levels of lead. It
is generally impossible to meet the new standard if
water is delivered through lead pipes. These, how-
ever, are not common in the three least prosperous
Member States, so the implementation costs are
lower there than elsewhere.

Within Member States, on the other hand, lead pollu-
tion seems to be relatively high in less favoured re-
gions. If improvements are paid for at national level,
there is, therefore, a positive effect on regional cohe-
sion. Moreover, there is also a positive effect on social
cohesion, since health problems from lead dispro-
portionately affect poorer people, partly because

95

II.6  Environment policy

they are more sensitive (old people and children are
most at risk) or simply because they live in poor qual-
ity, older housing close to sources of lead pollution
and seldom drink bottled or filtered water.

small scale of their waste water and eco-industries,
so much of the benefit is likely to accrue to firms in the
more prosperous Member States.

Meeting the requirements of the Drinking Water Di-
rective is a major challenge for most of the candidate
countries. In many – Estonia, Latvia, Lithuania, Roma-
nia, and Slovakia, in particular – over 20% of the pop-
ulation is not connected to drinking water supply
systems. Significant investment is also required to im-
prove the quality of drinking water – nearly 25% of
people in Hungary, for example, are supplied with
drinking water that does not meet Community stan-
dards. It is estimated that expenditure of between
EUR 13 and 17 billion in the candidate countries is
needed to meet these standards.

The Urban Waste Water Treatment Directive

This is by far the most expensive of the directives to
implement, accounting for some EUR 150 billion of
the estimated EUR 260 billion of total expenditure for
the EU15 implied by the ten key environment direc-
tives. This directive also requires the highest level of
investment in the candidate countries – of EUR 27-33
billion, according to national studies. The main effect
on cohesion results from the substantial investment
required in construction and maintenance of
the
waste water treatment system.

There are substantial differences in the estimated
cost of implementation between Member States, re-
flecting their initial positions – some being much more
advanced in the treatment of sewage – and the state
of their natural environment. The first factor tends to
push up the costs in the cohesion countries because
the requirements are higher, while the second tends
the relatively high
to reduce costs because of
assimilative capacity of the environment.

Since, however, around a quarter of the necessary in-
vestment in these countries is being financed by the
Cohesion Fund (and the Structural Funds are making
a similar contribution in Eastern Germany), the cost
burden on cohesion countries will be limited. The
large-scale investment required is likely to boost em-
ployment, particularly in construction, where the di-
rect effect8 is to add 2% to output, implying increased
employment of up to 200,000. For most of the cohe-
sion countries, however, there is likely to be substan-
tial ‘leakage’ of such benefits abroad because of the

96

In sum, the effect of expenditure on cohesion is likely
to be positive, but it would be larger if eco-industries
were to expand in the cohesion countries.

The Nitrate Directive

This directive was adopted in 1991, but is only now
being implemented, illustrating the often long delay
involved in water legislation. It lays down standards
for the use of nitrogen in farming and, therefore, has
clear implications for the agricultural sector and for
rural communities.

The key point is that there are various forms of nitro-
gen put into the soil, through chemical fertilisers, ani-
mal manure and natural deposition, which comes out
in crops and livestock, but it also leaks into water bod-
ies or is emitted into the atmosphere. Problems arise
when the loading of nitrogen exceeds the ‘absorptive
capacity.’

The Nitrate Directive affects cohesion in at least two
major ways. First, the imposition of application stan-
dards, notably for nitrogen from animal manure, af-
fects livestock producers, particularly high-intensity
ones. In Ireland and Greece, where nitrogen is close
to the EU average, the increased cost implied by the
directive is likely to be modest. In Spain and Portugal,
where farming is less intensive, the effects could even
be positive, with anecdotal evidence of such activi-
ties as pig farming being transferred there from the
most
the
Netherlands.

intensive-producing

countries,

like

At the same time, there is evidence that the codes of
good agricultural practice which are part of the direc-
tive can lead to substantial cost savings through
better nitrogen management. Although the efficiency
of nitrogen use could be improved throughout the EU,
the largest potential gains appear to be in the Medi-
terranean, where there are wide variations in nitrogen
use between farms even of similar types.

Overall policy effects

In sum, environmental legislation is on balance more
likely to have positive than negative effects on

II.6  Environment policy

regional cohesion. The same, however, may not be
the case for social cohesion, which might, therefore,
justify accompanying measures being taken:

Environmental protection measures, however, tend to
benefit employment. The gains are significant, even if
they are modest in relation to the overall need for jobs
in the EU. For example:

•

•

•

•

1

2
3

4
5
6
7
8

implementing EU waste legislation is likely to
boost employment in the cohesion countries by
up to 35,000 in the next five years and by 50,000
in applicant countries when they fully implement
the acquis;

the Urban and Waste Water Treatment Directive
may create up to 200,000 jobs in construction
and some in manufacturing, though to the extent
that more prosperous regions tend to have bigger
eco-industries, they are likely to gain most.

The above conclusions are somewhat tentative be-
cause of the limited data available at present. The in-
tention is to rectify this in time for the next Cohesion
Report.

at the national level, the cohesion countries are
likely to share significantly in the benefits of envi-
ronmental improvements (including the quality of
life which might attract business investment) and,
though the costs of
implementing legislation
might in a number of cases be higher than else-
where, these will be met to a large extent by the
Cohesion Fund;

•

•

at the regional level, some less prosperous areas
benefit most from environmental improvements,
for example those in inner cities from wastewater
treatment, and often have the cost of these paid
by central government or the Cohesion Fund;

at sectoral level, there will be cost increases for
some sectors, though in most cases limited in re-
lation to production costs. In a few cases, these
will fall disproportionately on the less prosperous
regions, rural areas being a notable example.
These will bear the cost of the Nitrate directive, re-
flecting the true cost of the activities carried out
there. The main effects, however, will be on agri-
cultural areas in the more prosperous Member
States and rural areas in Spain and Portugal are
actually likely to benefit. A move towards full re-
covery of costs of water supply is likely to fall
heavily on agricultural users and on households
in remote communities, although again because
they will start to pay the true cost of their activities;

at the social level, costs in a number of cases
may, initially at least, fall disproportionately on
poorer people and those living in remote areas,
the shift from taxpayers to households in respect
of the Water Framework Directive being a notable
instance.

European Commission (2000) “Bringing our needs and responsibilities together – integrating environmental issues with economic
policy”.
European Environmental Agency (1998) ‘Europe’s environment: the second assessment’.
Ecofys, National Technical University of Athens, AEA Technologies (2001 forthcoming), ‘Economic evaluation of sector objectives
for climate change’.
European Commission (2000) op. cit.
This hierarchy was already established in Directive 75/442/EEC on waste management, as amended by directive 91/156/EEC.
Club Español de los residuos (2000), ‘The Impact of Community Environmental-Waste Policies on Economic and Social Cohesion’.
WRc (2000) ‘The Impact of Community Environment-Water Policies on Economic and Social Cohesion’.
The final effect is likely to be less than this because of displacement effects.

97

II.6  Environment policy

98

II.7  Research and Development policy

The European Union is increasingly becoming a
knowledge-based economy and society. The devel-
opment of knowledge has a direct effect on competi-
tiveness and employment, as well as on the way
society functions in general.

Although the importance of knowledge was explicitly
recognised at the European Summit in Lisbon in Feb-
ruary 2000, research in Europe displays contrasting
features. There are unquestionable strengths, but
also evident weaknesses, as reflected in a trade defi-
cit in high tech-products of over EUR 20 billion. This,
in turn, reflects a number of underlying factors – a
lower level of expenditure on R&D in the EU (1.8% of
GDP) than in the US (2.8%) and Japan (2.9%), a less
dynamic environment for innovation and a relatively
fragmented research system (divided between 15
Member States).

Accordingly, the European Commission has con-
cluded that a genuine ‘European Research Area’
needs to be created to improve the situation.1

The regional dimension of
the European Research Area

According to the Commission, to establish a Euro-
pean Research Area, Member States need to con-
the
sider policies on finance, human resources,
relationship between the public and private sectors,
the creation of a common reference framework and
values, and regional aspects. On the last issue, the
Commission pointed to the importance of studying
and putting in place the conditions for a ‘real
territorialisation’ of research policies or adapting
these ‘to the geographical socio-economic context.’2
It has, therefore, invited policy-makers at all levels to
consider both the challenge posed to regions by the

European Research Area and how they can contrib-
ute to its achievement.

Action at the regional level

Regional and local authorities already support re-
search, technological development and innovation. It
is estimated that the finance they provide amounts
annually to almost 1½ times the total appropriation of
the EU Framework Programme (EUR 4.5 billion com-
pared with EUR 3 billion), over 90% of which is allo-
cated on a regional basis.3

The authorities concerned are best placed to form the
links with companies necessary for innovation and,
therefore, the generation of economic wealth and em-
ployment. Creating networks of knowledge, clusters
of companies, linking the scientific system to the
needs of industry and services are all easier to organ-
ise at local and regional level.

Regional authorities are also well-placed to review
best practice and to identify other regions with which
they can fruitfully cooperate, which may be relatively
distant ones, such as those which form the network of
regional engines for growth’, Baden
the ‘four
Württemberg,
the Rhone-Alps, Lombardia and
Cataluña, or neighbouring areas, such as Brussels,
Flanders, Kent, Wallonia and Nord-Pas-de-Calais.
Such cooperation can help strengthen regional
capacity for research and innovation by facilitating
specialisation and complementary action and en-
couraging the rapid dissemination of knowledge.

By pursuing their own interests, therefore, regional
authorities can increase the momentum towards the
establishment of a European Research Area as well
as ensuring its effectiveness and consistency.

99

II.7  Research and Development policy

The establishment of a European Research Area,
however, is not confined to the most central and com-
petitive regions. The instruments available – the
Framework Programme, the Structural Funds and ac-
tion at national and regional level – should be used to-
gether in a more coherent way, each according to its
objectives, in order to enable all regions to participate
fully in the area.

Networking and encouraging
regional specialisation

The Commission Communication on Guidelines for
EU Research Activities (2002-2006), adopted in Oc-
tober 2000, indicates how regions are intended to be
involved in the European Research Area and sets out
a number of Community objectives in five major ar-
eas: research activities, innovation and SMEs, infra-
structure, human resources and the relationship
between science, society and citizens.4 It indicates
three horizontal aspects which need to be taken into
account in this regard: the overall coherence of Euro-
pean cooperation over science and technology, the
international dimension of projects and the regional
aspect. It also emphasises the importance of carrying
out measures which encourage the full use of re-
gional potential, through networking and exploiting
geographical
features or areas of economic
specialisation.

Member States indicated their perception of the re-
gional dimension of European Research Policy in the
resolution of the Research Council in November:

‘The Council of the European Union:... emphasises
theimportanceofpromotingthescientificandtech-
nologicalperformanceofalltheregionsoftheMem-
berStatesandparticipatingcountries,includingthe
cross-border dimension, both within the European
ResearchArea,infutureframeworkprogrammesand
in other relevant community initiatives.’

In this regard, the following aspects, which are con-
sidered in turn below, are of some importance:

the learning effects of being part of European
RTD consortia and networks;

the mobility of researchers as a mechanism for
the tacit exchange of knowledge;

•

•

100

•

the policy learning effect of RTD activities.

Shared-cost RTD projects in the
Fourth Framework Programme

The most important mechanism for EU funding of RTD
in the Framework
is the ‘shared-cost actions’
Programmes, which are project-based contracts be-
tween the Commission and the participants. Since
the latter generally consist of organisations from a
number of Member States, this enables knowledge
and ideas to be shared and new know-how and tech-
nology to be developed jointly. The participation of
representatives from cohesion countries and Objec-
tive 1 regions, therefore, is a way of improving the
knowledge flow into these areas.

A detailed analysis of the regional impact of RTD pol-
icy has not been possible because data on the geo-
graphical distribution of expenditure from the Fourth
Framework Programme (FP4) are not published.
Some national data exist, but not for all countries and
regions, and they are not based on official European
statistics but on national surveys. The following analy-
sis concentrates on numbers participating and other
available indicators.

Relating participation figures to indicators of national
RTD capability, such as the number of RTD personnel
in a country, indicates that the cohesion countries are
performing well, with Greece, Ireland and Portugal in
leading positions. Closer examination, however,
shows participation being heavily concentrated in the
capital city areas. On the other hand, this concentra-
tion seems to be diminishing, with other regions in
these countries accounting for a growing share of
participation.

Participation and the number of projects from Objec-
tive 1 regions and cohesion countries increased over
the second half of the 1990s. The number of projects
with at least one partner from an Objective 1 region
rose from 27% in 1994 to 41% in 1998. The total num-
ber of participations (ie the number of occurrences of
participation in projects) from Objective 1 regions in
FP4 has gone up from 1,705 in 1995 to 4,067 in 1998,
although in relation to the overall number of
participations, it declined slightly from 16% in 1995 to
just over 15% in 1998. Examination of the evidence
shows that there is a positive relationship between the
extent to which organisations from a particular region

II.7  Research and Development policy

participated in the Framework Programme and RTD
capability indicators, such as R&D expenditure and
number of R&D personnel.

Table 8  Links created by FP4 between
the cohesion countries and other EU
Member States, 1995-1998

Encouragement of SMEs to participate in the Frame-
work Programme was successful in increasing their
share of total participation in FP4. However, a lack of
official statistics on the type of participants at NUTS2I
regional level means that it is not possible to verify
whether this had a positive impact on Objective 1 re-
gions. Nevertheless, the user survey, carried out as
part of the Five-Year Assessment of European RTD
programmes (1995-1999), suggests that in Ireland
and Spain, representation of SMEs was higher than
the EU average.

Since 1994, the Central European Countries (CECs),
Russia and the Newly Independent States have been
covered by the INCO-COPERNICUS programme.
(INCO’s contribution to the CECs countries in FP4
amounted to a total of ECU 78.3 million.) The need to
strengthen links with the established RTD sector in
the candidate countries is important for safeguarding
and strengthening their scientific and technological
potential and INCO has provided a sound foundation,
support and guidance for them, though industry par-
ticipation was low.

Participation in FP4 was important in increasing co-
operation between EU Member States. In the 8 years,
1987 to 1995, there were 150,000 instances of coop-
eration between large companies, SMEs, universities
and public or private research centres as a result of
EU RTD activities. After 1995, under FP4, the number
of instances of cooperation increased significantly, to
113,990 in 1996 and 78,300 in 1998, the variation re-
flecting the implementation cycle.

Such collaboration in RTD is one of the most direct
ways in which knowledge, both tacit and codified, is
transferred between organisations in different Euro-
pean countries. Accordingly, any increase in instances
of cooperation involving organisations in the cohesion
countries helps to reduce disparities across the EU in
access to know-how. Over the course of the Fourth
Framework Programme, cooperation links have varied
from one year to the next without showing any distinct
trend. Overall, links between the four cohesion coun-
tries and the other 11 Member States accounted on av-
erage for 22.2% of the total created annually, which is a
good indication of the stimulative effect of the Frame-
work Programme on disadvantaged regions (Table 8).

Greece

Spain

Ireland

Portugal

1995

4.5

6.1

2.2

2.5

1996

6.6

12.1

3.3

3.9

1997

5.5

11.5

2.8

4.0

% total

1998

6.2

10.2

3.2

4.0

At the same time, it appears that organisations from
cohesion countries participating in projects tend, in
general, to gain more from this than those from else-
where. The user survey of participants in FP4 indi-
cates that participants from Greece, Spain and
Portugal were more positive than average, or about
the same as the average, as regards the impact on
their scientific and technological standing, competi-
tive position, productivity and employment. On the
other hand, participants from Ireland were, in gen-
eral, less satisfied than average with the impact on
them, including in relation to their scientific and tech-
nological standing.

Mobility underpinning RTD capability

The European Commission Programme, ‘Improving
the human potential and the socio-economic knowl-
edge base,’ is aimed at increasing the mobility of re-
searchers throughout the EU. According to several
studies, the cohesion countries are well represented
in programmes, such as the Training and Mobility of
Researchers (TMR) under FP4, and have a relatively
large proportion of their researchers receiving fellow-
ships to work in ‘centres of excellence’ in other Mem-
ber States. The UK is by far the most popular host
country, followed by France, and the opportunity for
young researchers to gain experience in research or-
ganisations best suited to developing their careers is
an important aspect of policy.

In any assessment of the effect of mobility and cohe-
sion,
two considerations need to be taken into
account:

•

the possibility of increasing the mobility of re-
searchers in the EU should not reinforce the ‘brain
drain’ from less developed to core RTD regions.
Given a general shortage of skills in many parts of

101

II.7  Research and Development policy

Europe and the increased competition for highly
qualified researchers, this problem is likely to be-
come more acute. The Return Grants scheme
which helps researchers from less favoured re-
gions return home is a response to this problem,
although only some 6% of TMR fellows from less
favoured regions are eligible for the scheme and
make use of it. The effect on the movement of re-
searchers between EU regions of programmes
like TMR has, however, yet to be studied;

•

studies of RTD expenditure from the Structural
Funds indicate that there is not necessarily a link
between an increase in RTD resources and per-
sonnel in Objective 1 regions and the innovative
capacity of businesses situated there. The gap
between public RTD activities and the needs of
firms is particularly wide in these regions. Im-
proving the international career prospects of
young researchers is unlikely in itself to increase
the ‘absorptive capacity’ of a region in the
short-term.

As noted above, there is a positive association be-
tween the rate of participation in EU RTD projects and
the RTD capacity of a region, as measured, for exam-
ple, by the number of R&D personnel in the popula-
tion. This suggests that a long-term strategy of
investing in people will increase the capacity to col-
laborate in international research and technology
projects. Efforts should, therefore, be made in cohe-
sion countries and lagging regions to develop good
career possibilities for researchers as a means of
combating the brain drain.

Recent shifts in RTD policy

The Fifth Framework Programme (FP5), represents
the continuation of a shift in focus from a policy ori-
ented exclusively towards technology to one that in-
cludes innovation as a key concept. In essence,
previous Framework Programmes prioritised areas of
science and technology where Europe needed to
strengthen its capability, whereas FP5 started from a
statement of the most pressing societal problems
which science and technology could help solve. Nev-
ertheless, the Five-Year Assessment Panel that eval-
uated the first phase of FP5 concluded that more
attention could be paid to social and economic
aspects.

102

In principle, the way that the goals of FP5 are formu-
lated allows more consideration to be given to the dis-
tribution of knowledge,
to building ‘absorption
capacity’ and not just to knowledge creation.

A horizontal programme for ‘Promotion of Innovation
and Encouragement of SME participation’ has wid-
ened the target group to include not only high-tech
performers, but also companies for which initial entry
into the Framework Programme is difficult. The aim is
to reduce obstacles to innovation for companies in
less favoured regions and in more traditional sectors.
At the same time, the provision of information to po-
tential applicants, through Innovation Relay Centres,
National Contact Points, more transparent Info Packs
and so on, has been improved to reach a larger audi-
ence. While excellence in science and technology is
still the main criterion for participation in FP5, there
are parts of the programme which enable partici-
pants to achieve such a level over time.

The candidate countries in Central Europe have
been granted full access to FP5, which should enable
them to continue their links with the science and tech-
nology community in the EU and which should help
overcome the technology gap that exists between
them and the leading European countries.

Policy learning effects
from EU RTD Initiatives

The EU has played a major role in disseminating
good practice in RTD policy by helping to create a
‘European Research, Technology, Development and
Innovation Community,‘ where decision-makers, re-
searchers, and other interested parties can commu-
nicate and work together, in both formal and informal
ways, in official advisory committees, specific RTD
programmes and policy exchange initiatives. By as-
sisting in this, and through its influence on policy for-
mulation and implementation, EU policy has
indirectly contributed to closing the RTD and innova-
tion gap between Member States and regions, and,
by changing the culture, it has, in some respects, im-
proved the policy planning process.

Moreover, initiatives such as, in particular, the Re-
gional Technology Plans (RTP), the Regional Innova-
tion Strategies (RIS), the Regional Innovation and
Technology Transfer Strategies and Infrastructures
Innovation Projects,
(RITTS) and Trans-Regional

II.7  Research and Development policy

jointly set up by DG Regional Policy and DG Enter-
prise, have helped put innovation high on the policy
agenda in over 100 regions. These projects have
stimulated the establishment of ongoing and
long-lasting processes in these regions and have,
therefore, prepared the ground for further decentrali-
sation of RTD policies to the regional level. Fine-tun-
ing of the planning of RTD policy and the deployment
of the Structural Funds for this purpose has been inte-
gral to the success.

Overall, EU RTD policy has adopted an approach ori-
ented more towards innovation than technological
excellence as such, better addressing the deficien-
cies of less favoured regions as a result. The regional
dimension of RTD policy has come to be featured ex-
plicitly in the Initiative ‘Towards a European Research
Area’. An improvement in the interaction between the
deployment of the Structural Funds and RTD policy is
important to accelerating the ‘catching up’ of lagging
regions.

in

on

terms

equal

The Structural Funds can provide the necessary sup-
port for firms and research institutes in the latter to
participate
future RTD
programmes. Moreover, the conditions for a genuine
‘territorialisation’ of research policies (ie adapting
these better to the geographical, social and eco-
nomic context) need to be studied and put in place.
This could open up new opportunities for policies at
all levels to be better integrated into regional or inter-
regional development programmes and for the syner-
gies between them to be strengthened.

Conclusion: progress in increasing
the contribution of EU RTD policy
to social and economic cohesion

EU RTD policy has increased its support for those in-
volved in research and technology in the cohesion
countries, less favoured regions and candidate coun-
tries. The absence of statistics on funding prevents
quantification of the extent to which funding has been
directed towards the latter. The increased number of
projects with participation from Objective 1 regions,
however, and the relatively favourable position of re-
search fellows from cohesion countries in the Euro-
pean Human Mobility schemes point
towards a
positive contribution towards reducing regional dis-
parities. Moreover, various measures have helped
improve the effectiveness of policies relating to inno-
vation in a number of disadvantaged regions.

The candidate countries have gained from the experi-
ence under the INCO programme of developing and
managing RTD consortia and establishing partner-
ships with EU organisations as well as from being in-
troduced to the art of writing EU RTD proposals. They
are likely to gain further from full membership of FP5,
although most countries lack the overall capability to
participate extensively. Up until now, it has been
mainly scientific institutes which have taken part in
RTD projects and higher levels of business sector
participation remains to be achieved. Positive effects
on competitiveness and economic cohesion will,
therefore, take longer to emerge than in the present
Objective 1 regions.

1
2

3

4

‘Towards a European Research Area’, COM(2000)6, 18 January 2000.
Such a study was launched in December 2000: ‘Involving the regions in the European Research Area:
conditions to optimise the creation and the transfer of knowledge in Europe’ Price Waterhouse Coopers.
‘Role of the local and regional authorities in the field of research, technological development and innovation’, October 2000,
Bannock Consulting Ltd.
‘Making the European Research Area a reality: guidelines for European Union Research activities (2002-2006)’ , COM(2000)612, 4
October 2000.

refining the territorial

103

II.7  Research and Development policy

104

II.8  Transport policy

Transport Policy in the context
of regional development

and lowered their cost. The main areas in which prog-
ress was made were:

The Common Transport Policy has made a positive
contribution to the success of the Union in the past
decade. The provision of high quality transport ser-
vices and infrastructure is an essential pre-requisite
for ensuring that all regions share in the prosperity
that the Single Market is creating. The opening up of
markets has reduced prices and made distances
shrink to the benefit of peripheral areas. It has also,
however, led to a greater volume of traffic, which is
now recognised as having negative consequences
for congestion, dependency on oil and the
environment.

funds’

Traffic growth has been greater in the cohesion coun-
tries than in the rest of the Union, due mainly to road
passenger transport increasing at twice the rate else-
where as car use catches up. The Community has
invested substantially in infrastructure, where ‘trans-
(the Trans-European Network-TEN –
port
transport budget line) have been used in conjunction
with the Structural Funds, to give a major boost to the
provision of infrastructure in the regions. The revision
of the Common Transport Policy now underway seeks
to improve the quality of transport as much as the ser-
vices provided.

The Common Transport Policy
through the 1990s

There were many achievements between 1992 and
2000. The supply of transport services, notably by
road and air, increased significantly as prices fell in
real terms. In road transport, outmoded restrictions
were removed completely in 1998. The opening up of
air transport markets increased the number of flights

•

•

•

the interconnection of national networks, particu-
larly through the development of the trans-Euro-
pean transport network, which has substantially
improved links within the cohesion countries and
between these and the Union. The completion of
the high-speed rail network will improve links be-
tween many regions. In addition, the new ISPA
fund has been set up to finance infrastructure
projects in the candidate countries;

the removal of bureaucratic controls and the
technical harmonisation of transport equipment,
which has reduced costs through economies of
scale and removed technical barriers to interna-
tional operations;

‘interoperability’ of rail networks, developed first
for high-speed trains in 1996, which is about to be
extended generally.

However, there have also been negative aspects. In
particular, congestion in urban areas and along main
international routes has increased dramatically over
the past decade as road traffic has grown.

Sustainable transport

During the 1990s,
the issue of sustainability has
gained importance. Under Article 6 of the Treaty, en-
vironmental considerations have to be integrated into
the definition and implementation of Community poli-
cies and activities to ensure development is sustain-
able. The concept of sustainability includes not only
environmental concerns but also economic and so-
cial considerations. While environmental issues are

105

II.8  Transport policy

important they have to be balanced against competi-
tiveness and social welfare.

sections of
completed.

the Pathe motorway, have been

In sea transport, the dominance of the northern ports
has been challenged by large growth in container
traffic in the Mediterranean, as a result of the new port
of Gioia Tauro and investment
in Algeciras and
elsewhere.

Public private partnerships have brought stricter con-
trol of the risks taken and of the work carried out.
Spata airport in Greece and the Vasco da Gama
bridge in Portugal are good examples. The creation
of special project authorities in the public sector has
also served to improve accountability and efficiency.

Above all, transport should be safe. Road safety lev-
els remain unacceptable, with 42,000 killed on the
EU’s roads every year. It is of particular concern that
the situation in the cohesion countries is worse than
elsewhere. While they have 17% of EU population,
they account for 26% of fatal road accidents, sug-
gesting that
road improvements have not been
matched by gains in safety. Maritime safety is also ca-
pable of improvement.

Progress has been made in environmental protec-
tion, notably in air quality. Community directives will
reduce air pollution by 70% by 2010 thanks to techni-
cal improvements in fuels and vehicles, though some
emissions remain a problem. Technical measures at
European level are not a complete answer and local
measures need to be taken to reduce urban emis-
sions. New infrastructure can also help, as in the case
of the Athens metro, which is expected to reduce car
use substantially. Transport accounted for 28% of
CO2 emissions in 1998. The EU Kyoto objective of re-
ducing greenhouse gas emissions by 8% by
2008-2012 is far from being met and requires, among
other changes, a shift from road to other modes of
transport.

To achieve such a shift was one of the aims of the
1992 White Paper. Despite significant growth in short
sea shipping, however, the potential of environmen-
tally-friendly modes of freight transport, such as in-
land waterways and rail, has yet to be realised.

There is a clear need to update Community policy
and to propose new measures and priorities to im-
prove the overall efficiency of the transport system.
The 1992 White Paper identified an inherent risk of the
transport system becoming unbalanced and unsus-
tainable and this in effect has happened. The revised
policy has to tackle the challenge.

The trans-European transport network

There were major efforts in the 1990s to upgrade
transport systems in the assisted regions and cohe-
sion countries to levels more similar to those else-
where in the EU. Since the mid-1990s, investment has
increased and projects started in the early 1990s,
such as the Madrid-Seville high-speed train or large

106

II.9  Energy policy

Access to reasonably priced
energy essential for cohesion

In addition to liberalisation of markets, the major as-
pect of EU policy is support for improvements in the
distribution network, to increase the availability of
supply in peripheral regions, in particular. EU finance
has,
therefore, contributed to the construction of
high-tension electricity lines and of gas pipelines as
part of the trans-European Networks, to increase the
possibility of trade in energy between Member States
and to provide access to natural gas to regions where
this energy source does not exist. Accordingly, as-
sistance has been provided under the REGEN and
INTERREG II programmes to help improve infrastruc-
ture in Greece, Spain, Portugal and southern Italy in
order to increase the chances of consumers there
benefiting from a single market.

These measures are aimed at reducing regional dis-
parities in access to energy and prices. The estab-
lishment of a single market in energy should further
help in this respect, by stimulating more trade and
competition, especially in peripheral regions where
monopoly suppliers tend to be more prevalent, and
so pushing down prices.

The reduction in prices brought about could benefit
the cohesion countries disproportionately, since their
energy use in relation to GDP, though it has fallen in
recent years, remains above that in the rest of the Un-
ion. This is specifically the case for Greece and Portu-
gal, where consumption relative to GDP is some 40%
above the EU average, reflecting the composition of
economic activity, though to a major extent inefficien-
cies in the use of energy. Nevertheless, the economic
development of these countries in particular, involv-
ing, as it is likely to, increased industrialisation, will al-
increased energy
most

necessitate

certainly

consumption and, therefore, stands to be assisted by
lower prices. At the same time, it is important for envi-
ronmental reasons, in particular, that any reductions
in price which occur do not lessen efforts to improve
energy efficiency.

The scale of the effect of moving to a single energy
market on the energy price differences, which at
present exist across the Union is, however, hard to
predict, especially since taxes of one kind or another
(excise duties, value-added tax) represent a signifi-
cant, but highly variable, component of the price of
fuel in all countries.

The net reduction in energy prices from the establish-
ment of a single market should benefit most consum-
ers, including many poor households. There is no
certainty, however, that prices will come down for ev-
eryone. In particular, those living in more remote com-
munities,
especially islands, where the cost of
providing supply is relatively high, will not necessarily
benefit from lower prices and might even see prices
increase as these come to reflect more closely the
true costs of provision. Increased competition, in it-
self, is unlikely to help much in this respect. Accord-
the case for the incorporation of universal
ingly,
service provision guarantees in legislation, to ensure
that everyone has access to affordable fuel, is a com-
pelling one. Without such provision, there is a danger
that a single market could lead to a widening of dis-
parities in society and damage social cohesion.

Increasing security of supply

The EU’s dependence on imports of energy is set to
increase in future years as North Sea reserves begin
to run down. Dependence on imports varies greatly
between Member States, as do the measures

107

Environmental considerations

The pursuit of a path of economic development which
is environmentally sustainable in the long-term is a
central objective of policy and one which conditions
the structural measures taken in the EU to assist re-
gional convergence. This gives rise to a potential
conflict between the pursuit of cost competitiveness –
ie ensuring that production costs are not out of line
with those elsewhere in the Union – and following a
path best suited to achieving sustainable economic
development. Accordingly, it suggests that there are
mutual gains to be made, particularly in the
long-term, from the adoption of a common policy on
tackling the ecological damage caused by energy
use, including in respect of fiscal measures.

At the same time, the EU continues to assist Member
States in the pursuit of environmental objectives,
through the ALTENER programme to encourage the
development of renewable energy sources, SAVE, to
promote more efficient use of energy, and PCCE, to
support the co-generation of electricity. Moreover,
the European programme for diversification and en-
ergy saving, which is aimed at stimulating interna-
the 5th Framework
tional cooperation,
is part of
Programme for science and technology.

II.9  Energy policy

adopted (mainly regulatory ones) to minimise the
risks involved in this. Such dependence does not
have any direct implications for cohesion as such, so
long as supplies are maintained and prices are rela-
tively stable. However, the differential vulnerability to
external shocks, such as an increase in world oil
prices or the suspension of supply, is a potentially im-
portant source of disadvantage and, therefore, a pos-
sible factor in the decisions of businesses of where to
locate, especially during periods of global instability.

In general, each Member State is responsible for
safeguarding its own supplies (a common feature is
that all member countries of the International Energy
Agency continue to respect the norm of maintaining
emergency stocks at a level equivalent to 90 days of
net imports of petroleum). This may mean, to some
extent, trading off lower prices for increased security
and, therefore, overriding the market or imposing a
fiscal and regulatory framework, which explicitly in-
corporates security considerations as well as those
relating to the long-term availability of supply, within
which the market can operate. Accordingly, the main
long-term guarantee of security is to have access to
multiple sources of supply, which can be achieved by
diversifying both the sources of energy used and their
origin.

For coal, supply is already extremely diversified.
Apart from domestic mining (which is heavily subsi-
dised), there are many exporting countries, in Central
Europe, North and South America, South Africa and
so on. For petroleum, although there is an efficient,
well-established world market, there is a high degree
of dependence on countries in the Middle East, and
this is likely to increase further in future years. For nat-
ural gas, there are two major sources apart from the
North Sea – Russia and North Africa.

Indeed, securing access to supplies is particularly
strategic in respect of natural gas, which is likely to
become an increasingly important source of energy
in future years, not only in the generation of electricity
– almost all investment in generating plants world-
wide in recent years has been in gas-fired stations –
but also as a possible replacement fuel for petrol in
vehicles.

Accordingly, Structural Funds support for investment
in natural gas networks in the cohesion countries is vi-
tal not just for increasing their diversity of supply, but
also in preparing them for the future.

108

II.10  Enterprise policy

Building on the Commission’s existing policies for
SMEs, innovation and industrial competitiveness, en-
terprise policy has recently undergone a process of
refocusing and reformulation in response to the chal-
lenges posed by the knowledge-based economy and
the need to adapt to global economic developments.

The starting-point for this new policy was set by the
Lisbon Economic Council in March, 2000, which fixed
the goal for the EU ‘tobecomethemostcompetitive
and dynamic knowledge-driven economy in the
world,capableofsustainableeconomicgrowthwith
more and better jobs and greater social cohesion’
and identified enterprise and entrepreneurship as
key to achieving this.

•

Enterprise policy in the Union is founded on three
main aims,1 each of which gives rise to a set of spe-
cific measures as described below:

•

•

the mea-
encouraging entrepreneurial activity:
sures under this head, which are especially impor-
tant for lagging regions, are aimed, in particular, at
improving the access of SMEs to finance, in coop-
eration with the European Investment Bank and
the European Investment Fund. They also focus on
developing a range of business support services,
creating a regulatory and administrative environ-
ment favourable to enterprise development, offer-
ing entrepreneurial advice and encouraging the
development of skills and motivation, which ac-
cordingly increase the attractiveness of regions to
investors. These elements have been developed
under the Multiannual Programme for Enterprise
and Entrepreneurship (2001-2005);2

creating an environment which is supportive to in-
novation and change: measures under this head
seek, in particular, to encourage benchmarking

and the exchange of good practice between
countries, regions and businesses across the Un-
ion. They also help to remove obstacles to innova-
tion and growth, provide support to innovation
projects and promote the development of the ser-
vice sector. They are being implemented through
the recently adopted Communication ‘Innovation
in a knowledge-based economy’ and the First Ac-
tion Plan for Innovation in Europe;3

to ensure that businesses have access to mar-
kets: measures under this head are being pur-
sued through continued efforts to consolidate the
Internal Market, ensuring access to global mar-
kets, the dissemination of voluntary standards
and the promotion of e-commerce and new distri-
bution networks. The reduction in the problems
created by distance will, of course, be of particu-
lar importance to firms in peripheral regions.

The new enterprise policy has no specific spatial di-
mension but, nevertheless, addresses some of the
most relevant obstacles to cohesion and regional de-
velopment. Many of the new enterprises policy priorities
have parallels in the regional policies implemented
through the Structural Funds. In this respect, it can work
in parallel with regional policy to create synergy to ad-
vance economic and social cohesion. In particular, it is
aimed at removing the whole range of barriers to market
entry, which are often particularly prevalent in lagging
regions. In the short-term, at least, it is expected that
their removal will release latent enterprise potential and
so help to reduce regional disparities. In addition, the
establishment of an enterprise and innovation ‘score-
board’ will accelerate the diffusion of business best
practice between both Member States and regions.
While the precise impact of the new enterprise policy on
economic and social cohesion (and, in particular, its ef-
fect on the development of the lagging regions) is

109

II.10  Enterprise policy

difficult to quantify, it can potentially play a significant
role in reducing regional disparities.

programme for SMEs was therefore aimed at the de-
velopment of SMEs in assisted regions.

In addition, the wide range of measures which are
planned can have a positive effect on the ability of firms in
lagging regions to compete in the global market place:

• measures such as benchmarking, peer reviews
and joint action with Member States will enable
policy makers and businesses across the EU to
identify best practices and, in turn, to implement
them. Programmes for encouraging the dissemi-
nation of innovation and best practice are likely to
benefit lagging regions, in particular, and to-
gether with the development of business centres
and technology parks, help them to exploit the
opportunities offered in the new economy;

•

policies designed specifically for SMEs, which are
important for employment creation and regional de-
velopment, to help them compete on a more equal
footing with larger firms; the establishment of infor-
mation and advice centres, such as the EuroInfo
Centres (EICs) and the European Business and In-
novation Centres, to offer support to enterprises
across the EU. The EICs, by virtue of their close as-
sociation with local businesses, their understand-
ing of the local institutional environment and their
links throughout the Union, play an important role in
building relationships between firms in different re-
gions and help them solve practical problems. In
addition, the Europartenariat programme encour-
ages SMEs in lagging regions to form business
links with companies elsewhere, so enabling them
to import technological and business know-how.

Many of the new enterprise policies have parallels in
the regional policies implemented through the Struc-
tural Funds, and a core chapter of the Guidelines for
Structural Funds programmes4 was devoted to estab-
lishing priorities for enterprise support similar to the
new enterprise policy.

SMEs

Enterprise policy is particularly focused on SMEs,
which are an important part of the European econ-
omy. SMEs are the predominant type of firm in the EU
and they are particularly important in lagging regions,
where the small family business is prevalent, particu-
larly in traditional sectors. The first multiannual

In 1998, SMEs accounted for 99.8% of the 19.4 million
non-primary sector private enterprises in the EU. Their
average turnover was around EUR 500,000. In the two
years, 1996 to 1998, the total number of SMEs in the EU
is estimated to have increased by 4% and the number
of people employed by 2% (from 73.2 million to 74.6
million), the same as in the economy as a whole.

Access to finance

Initiatives have also been undertaken to improve the
availability of finance to SMEs through risk capital
funds, the SME guarantee facility and small business
loans for ICT projects. Most of these are implemented
through the European Investment Funds. Since 1998,
Spain, for example, has received 15% of the total
amount allocated under the SME guarantee facility,
which has gone to 672 firms. Other programmes, like
the Joint European Venture (JEV), have also helped
create new businesses in lagging regions, particularly
in areas of new technology, almost 20% of the projects
financed under the programme being implemented in
Spain, Portugal and Greece.

Policy on tourism

Europe is the main tourist destination in the world. In a
number of regions, particularly assisted ones in the
south and in mountainous areas, tourism is a major
source of employment and has a substantial effect on
economic development. It is also an activity domi-
nated by SMEs, some 6.5% of the total turnover of
firms of this size being generated in this sector.

In the EU as a whole, it accounts for 5.5% of GDP and
6% of jobs. In many parts of the EU, the figures are
much higher. In Spain, for example, tourism accounts
for 10.5% of GDP and 9.5% of employment.

Tourism is likely to be a major source of job creation
over the coming years, particularly in lagging and pe-
ripheral regions, and measures to support the sector
could have an important effect on the development of
these. According to the report of a High Level Group on
Tourism and Employment set up by the Commission,
there is an opportunity for creating around 3 million new
jobs in tourism in the EU over the next decade, but cer-
tain conditions have to be met to realise this.

110

II.10  Enterprise policy

Regional aspects of Innovation Policy

Two action lines which foster the regional dimension of
RTD and innovation policies have been developed un-
der the Innovation programme: the Regional Innovation
Measures and the network of Innovation Relay Centres.

The Regional Innovation Measures action line has sup-
ported three generations of projects since 1994. RITTS
(Regional Innovation and Technology Transfer Strat-
egies) projects were launched in 70 regions in parallel
with Regional Innovation Strategies (RIS), under the for-
mer Article 10 of the ERDF, in 30 regions. The aim of the
projects is to help regions develop a strategy which en-
courages firms, mainly SMEs,
to be more technol-
ogy-oriented and innovative. The approach is a new
one, which moves away from the promotion of individ-
ual, mainly supply-led RTD measures, the concern be-
ing not so much to enlarge the scientific and
technological capacity of regions perse,but to improve
the institutional, RTD and innovation environment in
which firms operate. The scheme is based on a bot-
tom-up approach, starting from the needs of enter-
prises in regions in terms of
innovation support,
technologies and business advice, and is aimed at es-
tablishing long-lasting regional structures and pro-
cesses. As such,
is designed to strengthen
cooperation among all relevant parties (including en-
couraging public-private partnership), create consen-
identify strategic regional priorities and direct
sus,
resources towards these.

it

The positive effects of the RITTS programme include:

(cid:127) the development for the first time in many regions in
cohesion countries of an innovation policy as a result
of the scheme and the strengthening of the innovation
system in others;

(cid:127) the creation of an awareness of the importance of in-

novation to economic growth;

(cid:127) the mobilisation of institutions, businesses and indi-

viduals at the regional level;

(cid:127) the introduction of a much-needed move towards
strategic thinking for innovation-oriented regional de-
velopment;

(cid:127) helping to develop a broader concept for innovation,
different from mere technology transfer, and to put
this higher on the policy agenda;

(cid:127) a greater focus of public expenditure at regional level
on business needs and an increase in public funding
for innovation in many regions;

(cid:127) providing the means and incentives to create a dia-
logue in fragmented regions (in a geographical, insti-
tutional and cultural sense);

(cid:127) the creation of ‘innovation communities’ of different
organisations and individuals in regions whose aim is
to develop innovation as a driving force for regional
growth;

(cid:127) helping regions clarify the scope of infrastructure to
support innovation and develop measures to rational-
ise and better define it, as well as to increase its visi-
bility.

The Innovation Relay Centre network consists of 67
main nodes (and a large number of sub-nodes) in 30
European countries (including the EEA, CECs, Cyprus,
Switzerland and Israel), organised on a regional basis.
The main aim of the centres is to help local industries
specify their new technology needs and identify which
of their technologies are suitable for transfer to other re-
gions or sectors.

Both networks focus specifically on the needs of less
advanced regions, which are not only fully integrated
into all the activities but also receive specific support in
terms of advice, exchange of experience and access to
good practice in other parts of Europe, especially in the
most advanced areas.

1

2

3
4

Commission of the European Communities (2000) ‘Towards Enterprise Europe’. Work Programme for Enterprise Policy 2000-2005.
Enterprise DG. SEC (2000) 771.
Commission of the European Communities (2000) ‘Challenges for enterprise policy in the knowledge-driven economy’. Proposal for
a Council decision on a Multiannual Programme for Enterprise and Entrepreneurship (2001-2005). COM (2000) 256. Office for
Official Publications of the European Communities: Luxembourg.
COM (2000) 567 of 20 September 2000.
The Structural Funds and their coordination with the Cohesion Fund: Guidelines for programmes in the period 2000-2006 –
COM (1999) 344 of 1 July 1999.

111

II.10  Enterprise policy

112

II.11  The Common Fisheries Policy

A geographically concentrated sector

The Common Fisheries Policy (CFP), initiated in 1970,
has four main elements: conservation of stocks,
structural measures, organisation of markets and in-
ternational agreements with third countries. Overall,
fishing remains an important sector in the EU econ-
omy, accounting for around 0.20% of GDP in 1997 (as
against 0.25% in 1990) and 0.4% of employment (the
same as in 1990).

Fishing is concentrated in coastal and peripheral
areas, which are often disadvantaged. In 1997, 70%
of fishermen and 60% of those employed in the fisher-
ies sector as a whole lived in Objective 1 regions. In
Greece, Spain and Portugal, the sector accounted for
just over 1% of employment.

Because of this concentration, any CFP measure
which strengthens the competitiveness of the sector
tends to contribute to social and economic cohesion.

Areas dependent on fishing
and changes in the scale of dependency

Given the concentration of the industry, the Edin-
burgh European Council (December 1992) officially
recognised the existence of Areas Dependent on
Fishing (ADFs) and the need to give them special at-
tention.1 In terms of NUTS 3 regions, 34 ADFs (13 of
which were in Greece and 11 in Spain) had, in 1997, a
rate of dependency on the sector of between 3% and
15% (see Table A.30 in Annex). At more detailed
level, dependency is
NUTS 4 or NUTS 5 regional
higher, with around 30 ADFs (excluding Greece)
having a rate of between 20% and 60%.

The overall dependency of the Union on fishing, in
terms of catches, declined only slightly between 1990
and 1997, the reduction being compensated by an in-
creased dependency on fish farming. On the other
hand, the map of areas dependent on fishing has
changed considerably, with Spain (Galicia and the
southern Atlantic regions, in particular) showing the
most marked reduction. Dependency also declined
in Italy (north-east) and France (Bretagne), while it in-
creased, most especially, in Greece, as well as in
Scotland (Peterhead, Western Isles, Shetlands), Por-
tugal (Madeira, Algarve) and Ireland (Galway). Ac-
cordingly, the regions in which dependency has risen
are those where development is lagging behind.

The social and economic effects of the CFP

Conservation of stocks

In line with the principle of relative stability, fishing
quotas are divided equally among Member States
and have, therefore, no effect on cohesion. Conser-
vation measures, however, are accompanied by spe-
cial provisions in favour of fishing communities in
ADFs: local fishermen who have traditionally fished in
coastal waters of another country can continue to fish
within the 12-mile limit, usually accessible only to
local vessels.

Fishing effort

Between 1990 and 1997, employment in fishing de-
clined by 19% in the EU (from 313,000 to 252,000).
The fall was the result of measures taken to conserve
stock and reduce the extent of over-fishing which fol-
lowed the multiannual guidance programmes
(MAGP) and the action taken under the FIFG – Finan-
for Fisheries Guidance (structural
cial

Instrument

113

II.11  The Common Fisheries Policy

In the
section) – to modernise the fishing fleet.
long-term, however, the adjustment of the fishing ef-
fort to available reserves and the restructuring of the
sector are likely to arrest the decline.

any form of unfair competition between Member
States. It includes three components which are fa-
vourable to social and economic cohesion:

a) production aids enable producers to become
more competitive as regards processing and dis-
tribution, which are much more concentrated and
organised, and have a positive effect on social
cohesion;

b)

the principle of ‘regional adjustment coefficients’
enables Community withdrawal prices in any
given region to be varied according to market
conditions or distance from major marketing cen-
tres, which is therefore favourable to regional co-
hesion;

c) as part of

the POSEI programme for ultra-
peripheral areas, a scheme has been established
(under Council Regulation 1587/98) to compen-
sate for the extra costs of selling certain products,
arising from their remoteness, in Açores, Madeira
and Canarias and the French Departments of
Guyane and Réunion.

International fishing agreements
with third countries

Evaluation undertaken in 1999 of the effects of inter-
national agreements with countries outside the EU in-
dicates that they are important for the Union because
they generate value-added (direct and indirect) of
EUR 944 million and 40,000 jobs (half of which for
seamen). Agreements with countries in the south
the
(mainly Africa), which represent 75% of
value-added resulting from agreements, mostly ben-
efit Spain (80%) and Portugal (7%), especially the
ADFs in the Canarias, Andalusia, Pays basco,
Galicia, Sesimbra and Olhão, and accordingly have a
positive effect on cohesion.

Processing

Jobs in the processing sector declined by 10% over
the period (from 107,000 to 96,000). This reflects both
the decline in fishing and the concentration of busi-
nesses worldwide (only 50% of processing involves
fish caught in the EU). It conceals, however, consid-
erable differences between regions. In Greece, em-
ployment in processing increased by 200% and in
Italy overall, by 21%, while it fell by almost 5% in Spain
and the southern part of Italy. Support from the FIFG
for the modernisation of businesses and the growth in
fish farming have, therefore, enabled the number of
jobs in Objective 1 regions to be maintained or
increased.

Fish farming

The significant growth in fish farming, supported by
the FIFG (and locally by the PESCA Initiative), has
been translated into a substantial increase in both
output and employment. Between 1990 and 1997,
production in the EU (excluding Austria, Finland and
Sweden) rose by 54% in cash terms (being valued at
EUR 2 billion in 1997) and by 23% in volume terms
(from 880,000 to 1,080,000 tons), some 85% of this
rise taking place in Objective 1 regions (70% in
Greece, southern Italy and Scotland alone). Employ-
in-
ment
creased by 20% (from 47,000 to 57,000), the only part
of the fisheries sector in which there has been net job
creation. Some 70% of job growth in the Union has oc-
curred in Spain, Greece and Portugal. Fish farming
has, therefore, developed largely in disadvantaged
Objective 1 ADFs and, accordingly, has had a posi-
tive effect on social and economic cohesion.

in fish farming (excluding processing)

Common organisation of markets

The COM, a means of regulation through supporting
prices and direct intervention, is aimed at preventing

1

An ADFis an area (a region or local area of employment) where the contribution of the fisheries sector to the economy, in terms of
employment or value-added, is so important that problems in the sector or the decline of fishing have serious social and economic
consequences both directly and indirectly. Dependence is analysed in the text in terms of employment, though the same
conclusions would be reached if it were measured in terms of value-added, since this has changed in a similar way over time.

114

Part III — The EU Budget and the contribution of structural
policies to economic and social cohesion

III.1

III.2

The EU Budget and economic and social cohesion .  .  .  .  .  .  .  .  . 117

The contribution of structural policies to economic and social
cohesion: results and prospects .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 121

115

Part III — The EU Budget and the contribution of structural policies to economic and social cohesion

116

III.1  The EU Budget and economic and social cohesion

The objective of strengthening economic and social
cohesion is mentioned explicitly in Article 2 of the
Treaty and as the first objective of the Union. More
specifically, Article 158 states that cohesion is a pre-
condition for harmonious development in the EU: ‘in
ordertopromoteitsoverallharmoniousdevelopment,
theCommunityshalldevelopandpursueitsactions
leadingtothestrengtheningofitseconomicandso-
cial cohesion.’ This article, moreover, goes on to
stress that fostering cohesion requires that ‘theCom-
munityshallaimatreducingdisparitiesbetweenthe
levelsofdevelopmentofthevariousregionsandthe
backwardness of the least favoured regions or is-
lands, including rural areas.’

The Treaty, by making explicit the aim of reducing
disparities in economic development, implicitly re-
quires that EU policies, and cohesion measures in
particular, should influence factor endowment and
resource allocation and, in turn, promote economic
growth. More specifically, cohesion policies are
aimed at increasing investment to achieve higher
growth and are not specifically concerned either with
expanding consumption directly or with redistribution
of income. This differs fundamentally from national
cohesion policies which are in part aimed at transfer-
ring income to the poorest areas.1

The EU Budget is a key instrument for enhancing eco-
nomic and social cohesion. First, even though part of
expenditure is not directed explicitly towards this ob-
jective, most of it is.

Secondly, it is recognised in the Treaty that contribu-
tions to the Budget must take account of the differen-
tial ability to pay and that measures need to be taken
to ameliorate the adverse situation of the less wealthy
Member States.

Member States which are less well off, therefore, tend
to emerge as net recipients from the Budget2 (Graph
21).Such an aggregate measure may, however, be
misleading since only part of overall EU expenditure
(included in the data plotted in graph), is explicitly of a
cohesion nature. Although the cohesion countries are
net beneficiaries from the Budget, there is not neces-
sarily a negative relationship between budgetary po-
sitions and levels of GNP across Member States,
since expenditure includes that devoted to purposes
other than cohesion.

Types of EU expenditure and cohesion

The EU Budget contains no stabilisation function as
such. Nevertheless, according to 1999 data, 23.3%
of expenditure was on to allocative objectives, 71.4%
on redistributive ones and the remainder on
administration.

21 GNP and operating budgetary balances, 1999

Operating budget balances (EUR per head)

 IRL

EL

 P

 E

 I

 F

 FIN

 B

 UK

 NL

 A

 D

 S

600

500

400

300

200

100

0

-100

-200

600

500

400

300

200

100

0

-100

-200

 DK

40

50

60

70

80

90

100

110

120

130

140

150

GNP per head (EUR, EU15=100)

117

 
III.1  The EU Budget and economic and social cohesion

22 GNP and Internal Market expenditure, 1999

Internal Market expenditure (EUR per head)

 B

 DK

 NL

 P

EL

 IRL

 FIN

 S

 E

 I

 F

 UK

 A

 D

45

40

35

30

25

20

15

10

5

0

Allocative expenditure is intended to alter the market
allocation of goods and/or services, either to correct
market failure or to improve the market outcome. Ex-
amples of the former are expenditure on research,
trans-European networks and the environment, while
expenditure on the CAP is an example of the latter.

Expenditure for correcting market failure is not re-
lated to the prosperity of the countries in which it is
made and, therefore, does not directly impinge on co-
hesion (see Graph 22, which shows the absence of
any correlation between GNP and Internal Market
expenditure).

45

40

35

30

25

20

15

10

5

0

70

80

90

100

110

120

GNP per head  (PPS, EU15=100 )

23 GNP and total CAP expenditure, 1999

CAP expenditure (EUR per head)

 IRL

 EL

 E

 P

 DK

 F

 FIN

 S

 I

 A

 B

 UK

 D

 NL

500

450

400

350

300

250

200

150

100

50

0

500

450

400

350

300

250

200

150

100

50

0

70

80

90

100

110

120

GNP per head (PPS, EU15=100)

24 GNP and CAP income support, 1999

Income support (EUR per head)

250

200

 DK

150

100

 IRL

 F

 I

 FIN

 S

 UK

 D

 A

50

 E

 P

80

90

100

110

GNP per head (PPS, EU15=100)

 B

 NL

0

120

 EL

250

200

150

100

50

0

70

118

Allocative expenditure aimed at improving the free
market outcome poses more difficulties. In the case
of the CAP, for example, it is intended to support
prices at a level which gives a fair income to farmers.
The cost of this depends on the gap between market
prices and support prices, while farmers’ income de-
pends only on the level of the latter.

However, an important part of the CAP takes the form
of direct income support to farmers and is, therefore,
redistributive in nature. CAP support in total is, ac-
cordingly, mildly negatively correlated with income
(Graph 23) mainly because of the income support
component (Graph 24).

EU redistributive expenditure

Redistributive expenditure is the main instrument of
cohesion policy. This was boosted by the Delors I and
II packages, which first institutionalised structural
spending and its programming and then expanded
the amount and established the Cohesion Fund. The
Financial Perspectives 2000 to 2006 put structural ex-
penditure at the centre of the enlargement strategy,
allocating around 80% of the total funds for the new
Member States to this.

As noted above, the key objective of EU redistributive
policy is to reduce regional differences in the level of
development through fostering investment. The aim,
therefore, is to improve the structural endowment of
less prosperous regions or where development
needs are greatest. This is pursued through the
Structural Funds and many other EU policies which
are directed at improving the level of infrastructure,
education and scientific research in the regions in
question.

 
 
 
III.1  The EU Budget and economic and social cohesion

The emphasis on growth and invest-
ment explains the importance at-
tached to the principle of additionality,
under which Community transfers may
not lead to a reduction in the structural
expenditure financed by Member
States themselves. In other words, EU
structural aid must be additional to and
supplement national investment.

The present system of structural ex-
penditure can then be thought of as a
rules-based system in which spending
for convergence is tied to specific pro-
jects and to explicit financial and other
parameters.

25

40

35

30

25

20

15

10

5

0

Structural expenditure (commited appropriations), 
1988-2006

% of total expenditure 

Structural expenditure: EU15
Structural expenditure: New M.S.

Delors 1

Delors 2

Financial Perspective 2000-06

40

35

30

25

20

15

10

5

0

88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06

An important aspect of EU structural
expenditure is multilateral monitoring
under which both recipient Member
States and the EU, through the Commission, agree on
the Community Support Framework (CSF) and its im-
plementation. One rationale for this is to ensure that
convergence aid is used as intended, so providing
reassurance to EU taxpayers. The involvement of re-
cipient Member States is for reasons of subsidiarity,
in that they are acknowledged to be in the best posi-
tion to propose projects and to judge the appropriate-
ness of expenditure.

Structural expenditure increased over the two pro-
gramming periods, 1988 to 1993 and 1994 to 1999,
but is due to decline in the period 2000 to 2006
(Graph 25, in which funds going to the acceding
Member States are shown separately).3 There is a
clear inverse relationship between structural expen-
diture and the relative prosperity of Member States,
but it is not entirely systematic (Graph 26).

funds, while in Sweden, only a small proportion of the
population is similarly covered (under 6%).

As noted above, however, direct income support to
farmers under the CAP is different from other EU
redistributive expenditure, in that it is aimed at redis-
tributing income between people rather than at fos-
tering investment in particular regions. Indeed, the
more the CAP moves away from price support to-
wards income support, the more it becomes a means
of interpersonal redistribution, with no direct intention
of reducing regional disparities in growth potential.
The European Commission has suggested that at
least part of this income support could be co-fi-
(see European
nanced by Member States

26 GNP and structural expenditure, 1999

Whilst the largest part of the Structural Funds is allo-
cated on a regional basis, the Guidance section of the
European Agricultural Guidance and Guarantee
Fund (EAGGF) and the Cohesion Fund are allocated
to Member States. The limited importance of the latter
in relation to the former (the EAGGF-Guidance and
Cohesion Fund account for about 23% of total struc-
tural expenditure) can mean that Member States with
similar GDP per head have different access to funds,
as in the case of Sweden and Italy, for example. In It-
aly, therefore, there are six regions (accounting for
some 33% of the population) eligible for Objective 1

350

300

250

200

150

100

50

0

Structural expenditure (EUR per head)

 P

EL

 E

 IRL

 FIN

 I
 F

 S

 UK

 D

 A

 B

 DK

 NL

350

300

250

200

150

100

50

0

70

80

90

100

110

120

GNP per head (PPS, EU15=100)

119

 
 
III.1  The EU Budget and economic and social cohesion

Commission 1998), but
unanimous support.

this so far has failed to gain

EU Budget revenue

The EU Budget is financed by the EU’s own re-
sources, ie custom duties, agricultural and sugar lev-
ies, VAT resources and those related to GNP. In
recent years, GNP resources have increased in im-
portance, while VAT resources and the other sources
have declined (Graph 27). With the new Own Re-
sources Decision, which will come into force on 1 Jan-
uary, 2002, this trend will be further reinforced.

Unlike in the case of national budgets, where pro-
gressive taxation plays an important redistributive
role, in the EU budget, contributions are proportional
to the capacity to pay measured by nominal GNP at
current exchange rates. Redistributive objectives, as
noted above, are, therefore, pursued through expen-
diture alone.

The importance of VAT resources to revenue, how-
ever, is liable to produce regressive effects. To cor-
rect
the 1988 Own Resources Decision
capped the VAT base of all Member States to 55% of

for this,

27 Composition of EU own resources, 1985-2006

EUR billion

GNP
VAT
Traditionally own resources

120

110

100

90

80

70

60

50

40

30

20

10

0

85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06

120

110

100

90

80

70

60

50

40

30

20

10

0

GNP, while the 1994 Decision limited it for Member
States with GNP per head below 90% of the EU aver-
age (the cohesion countries) to 50% and reduced it
progressively for others to 50% by 1999. The 1994
Decision also progressively reduced the maximum
call rate of VAT from 1.4% in 1995 to 1% by 1999. The
March 1999 Berlin European Council and the new
Own Resources Decision further reduced the maxi-
mum VAT call rate to 0.75% in 2002 and 2003 and to
0.5% from 2004 on.

The increased importance given to GNP resources in
future years will reduce the regressive nature of the
system substantially, so effectively nullifying an issue
which could have become potentially contentious
with enlargement and the very low levels of GNP per
head in many of the acceding countries.

Cohesion and budgetary balances

The balance between contributions to the EU Budget
and receipts from it is not a policy objective in itself.
Nevertheless, with contributions to the Budget being
largely proportional to GNP, expenditure is crucial to
determining the configuration of balances. Indeed,
whatever their limitations, the latter largely mirror the
policy priorities of the Union. The data are consistent
with cohesion expenditure being inversely related to
regional GDP per head and with the cohesion coun-
tries being net beneficiaries of the EU Budget. How-
ever, a proper analysis of the contribution of the EU
budget to fostering economic and social cohesion
needs to take account of the diverse and heteroge-
neous nature of EU expenditure.

1

2

3

Economic literature is nearly unanimous on the positive and direct relationship between income inequality and social policy. For the
most recent findings in Europe see, for example, K. Caminada and K. Goudswaard (2000).
This can be measured in a number of ways none of which is superior to others, see FinancingtheEuropeanUnion,Reportonthe
Operation of the Own Resources System, Bulletin of the European Union, Supplement 2/98, especially Annex 3.
The data on EU–15 and enlargement-related structural expenditure are from the ‘Interinstitutional Agreement between the European
Parliament, the Council and the Commission of 6 May 1999 on Budgetary Discipline and Improvement of the Budgetary Procedure’,
Annex I and Annex II.

120

 
III.2 The contribution of structural policies to economic and
social cohesion: results and prospects

Since their creation, the Structural Funds and the Co-
hesion Fund have represented the main instruments of
social and economic cohesion policy, which is a prior-
ity objective of the Union. These are aimed at strength-
ening the structural
factors which determine
competitiveness, and therefore the growth potential of
less advantaged regions.

Over 10 years have passed since the reform of the
Structural Funds in 1988. A first evaluation of the results
was presented in the First Report on Economic and So-
cial Cohesion. This showed the progress made in
terms of convergence and cohesion and the contribu-
tion of structural policies to the attainment of these ob-
jectives. The report had also suggested possible ways
of improving the effectiveness of structural policies and
these were integrated into the new regulatory frame-
work.

The Berlin Council (March 1999) confirmed the will to
continue pursuing this political priority, made even
more necessary by future enlargement, because of the
substantial differences in the level of development.
Given the scale of the financial transfers involved, it is
important to assess the effectiveness of the policies
pursued in reducing regional disparities and increas-
ing economic convergence.

At the same time, the system for managing the Struc-
tural Funds has become more decentralised, with a
clearer division of responsibilities and, as a result, the
creation of stronger instruments for monitoring, control
and evaluation.

This chapter is divided into four sections. The first exam-
ines the scale of the effort made to improve economic
and social cohesion; the second assesses the results
achieved over the period 1994 to 1999; the third at-

tempts to draw lessons from the establishment of the
new method of programming for the period 2000 to
2006; the fourth section considers the different financial
instruments created to assist the enlargement process.

The financial effort
to improve cohesion

The macroeconomic aspect
of structural support

Community intervention in support of cohesion involves
a significant financial dimension. The Structural and
Cohesion Funds together account for over a third of the
budget for Community policies (Graph 28).

This financial effort is significant in macroeconomic
terms, especially in Objective 1 regions (Table 9). Over

28 Change in the scale of the Structural Funds, 

1988-2006

EUR million (bars)

% EU GDP (line)

40000

35000

30000

25000

20000

15000

10000

5000

0

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

0.50

0.45

0.40

0.35

0.30

0.25

0.20

0.15

0.10

0.05

0.00

121

 
III.2  The contribution of structural policies to economic and social cohesion: results and prospects

Table 9  Economic effects of the Structural and Cohesion Funds

Greece

Ireland

Spain

Portugal

EUR4

% GDP

1989-93

1994-99

2000-06

2.6

3.0

2.8

% Gross fixed capital formation

1989-93

1994-99

2000-06

11.8

14.6

12.3

2.5

1.9

0.6

15.0

9.6

2.6

0.7

1.5

1.3

2.9

6.7

5.5

3.0

3.3

2.9

12.4

14.2

11.4

1.4

2.0

1.6

5.5

8.9

6.9

Structural and Cohesion Funds: commitment data up to 1999; forecasts for 2000-2006
Source: European Commission, estimates based on Eurostat data and projections for 2000-2006

the period 1994 to 1999, Community funding in Portu-
gal amounted to 3.3% of GDP, in Greece, 3.5% and in
Ireland, 2.4%, all three countries consisting entirely of
Objective 1 regions. In the other countries with Objec-
tive 1 regions, the figure varied between 0.2% of GDP
(Germany) and 1.5% (Spain). Community support of in-
vestment was even greater, accounting for almost 15%
of total investment in Greece, around 14% in Portugal,
10% in Ireland and 6% in Spain. The implication is that,
without Community transfers, economic growth,
to
which investment is a major contributor, would have
been less in the cohesion countries. Transfers will,
however, decline in scale over the period 2000 to 2006,
particularly in Ireland.

Consolidation of financial concentration
in Objective 1 areas

Community structural policies have the effect of
transferring budgetary resources towards regions
where development is lagging. The scale of interven-
tion in the cohesion countries is therefore consider-
ably larger than in the rest of the Union. Almost 70% of
total allocations for the Structural Funds for the period

2000-2006 (around EUR 136 billion) will go to
Objective 1 regions compared to 68% in 1994-1999
(including Community Initiatives). This financial con-
centration will enable the average intensity of aid per
inhabitant each year in Objective 1 regions to be
maintained at the same level as in 1999 (Table 10).
These regions will also receive funding from the Com-
munity Initiatives.

The use of an objective method for distributing over
97% of the Structural Fund allocations between Mem-
ber States has made it possible to maintain the con-
centration of finance in the less prosperous countries
and regions. Accordingly, the less prosperous coun-
tries receive more aid per head (Graphs 29 and 30)
and 60% of the Funds go to regions which, together,
account for 20% of EU GDP (Graphs 31 and 32).

Increased geographical concentration

One of the priorities of Agenda 2000 was to increase
the geographical concentration of support in the most
disadvantaged areas of the Union, as well as provid-
ing temporary support for regions where Community

Table 10  Expenditure by Objective in successive periods, excluding phasing-out
(average EUR per head per year at 1999 prices)

1989-93

123

(IRL) 253

(D) 62

21

1994-99

187

(IRL) 262

(B) 95

46

10

41

2000-06

220

(P) 348

(S) 104

41

12

40

Objective 1

– highest

– lowest

Objective 2

Objective 3

Cohesion Fund

122

III.2  The contribution of structural policies to economic and social cohesion: results and prospects

29 Structural and Cohesion Funds, 1994-99, and 

30 Structural and Cohesion Funds, 2000-06, and 

GDP per head by Member State

GDP per head by Member State

)

R
U
E

(

r
a
e
y

r
e
p

d
a
e
h

r
e
p
F
C
d
n
a
F
S

400

350

300

250

200

150

100

50

0

P
EL

E

IRL

I

400

350

300

250

200

150

100

50

0

EL

P

E

)

R
U
E

(

r
a
e
y

r
e
p

d
a
e
h

r
e
p
F
C
d
n
a
F
S

400

350

300

250

200

150

100

50

0

DK

L

400

350

300

250

200

150

100

50

0

IRL

I

DK

L

7000

12000

17000

22000

27000

32000

37000

GDP per head (EUR), 1995

10000

15000

20000

25000

30000

35000

40000

45000

GDP per head (EUR), 2000

aid is set to come to an end. In 2006, Objectives 1 and
2 will cover 41% of EU population, a proportion close
to the Commission’s proposal in Agenda 2000, which
was for a maximum figure of between 35% and 40%.
This is the highest degree of geographical concentra-
tion achieved since the reform of the Structural Funds
in 1988 (Table 11).

The increased geographical concentration is the re-
sult of the strict application of the eligibility criterion
for Objective 1 and the introduction of ceilings on eli-
gible population, decided by the Commission, for
each Member State as regards Objective 2.

Objective 1

For Objective 1 regions, the strict application of the
75% of average EU GDP threshold, except for north-
ern regions in Sweden and Finland which were

eligible for Objective 6 in the period 1995 to 1999, led
to a coverage rate of 22.2% of EU population (as
against 24.6% in 1999). There is some continuity with
the earlier period, except for the regions eligible for
transitory support and the UK, for which the coverage
rate has been increased by almost half (see Table
A.31 for the support provided by country in the two
programming periods).

Objective 2

For Objective 2 areas, the coverage rate was re-
duced to 18% of EU population (from 25% in 1999 for
Objectives 2 and 5b together). Within the population
ceilings decided by the Commission,1 Member
States had considerable room for manoeuvre in
drawing up the list of eligible regions, while comply-
ing with the obligation to ensure that at least 50% of
the population concerned fulfilled the so-called

31 Allocations of Structural Funds and GDP by 

32 Allocations of Structural Funds and GDP by 

Member State, 1994-99

Member State, 2000-06

100

80

60

40

20

5
9
9
1

,
)

R
U
E

(

P
D
G
U
E

f
o
%
e
v
i
t
a
u
m
u
C

l

0

0

100

100

80

60

40

20

0

100

0
0
0
2

,
)

R
U
E

(

P
D
G
U
E

f
o
%
e
v
i
t
a
u
m
u
C

l

80

60

40

20

0

0

20

40

60

80

Annual average allocations (cumulative %)

20

40

60

80

Annual average allocations (cumulative %)

100

80

60

40

20

0

100

123

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
III.2  The contribution of structural policies to economic and social cohesion: results and prospects

Table 11  Coverage rate of Structural
Funds, 1993-2006

and Spain. In Finland, the distribution is similar to the
EU average pattern.

% total population

Territorial continuity and fragmentation

Objective 1

Objective 2

Objective 5b

Total

1993

21.7

16.8

5.0

43.5

1999

24.6

16.4

8.8

49.8

2006

22.2

18.2

–

41.3

‘Community’ criteria. The areas adopted by the Com-
mission, on the basis of Member State proposals,
cover 47% of the total population eligible for Objec-
tive 2 and consists of the priority areas defined ac-
cording to the Community criteria.2 (See Table A.32
for the support provided by country in the two pro-
gramming periods.)

Predominance of industrial and urban areas

Following the Commission decisions in 1999 and
2000, the distribution between the four types of area
will be very similar to that indicatively agreed by the
Council: industrial areas eligible for Objective 2 will
account for 8.5% EU population, rural areas, for 5.2%,
urban areas, for 1.9%, areas dependent on fishing,
for 0.3% and mixed areas, for 2.1%.

At the EU level, the share of rural areas in Objective 2
will therefore be slightly higher than indicated in the
regulations. In addition to the measures implemented
under the rural development policy supported by the
EAGGF-Guarantee section, Member States have
judged it useful and necessary to make the more vul-
nerable rural regions eligible for a wider range of sup-
port measures from the ERDF and the ESF.

Although urban areas in decline appear to be un-
der-represented, this is not the case, since they are
also included among industrial areas. The same is
true of the areas dependent on fishing, since in order
to be able to implement policies for restructuring in ar-
eas of sufficient size, a number of Member States
have included some ports in areas eligible for assis-
tance under rural or industrial criteria.

The distribution between different types of area varies
markedly between Member States. Urban areas are
relatively important in Belgium, the Netherlands, Lux-
embourg and the UK, while higher priority is given to
rural areas in Denmark, Sweden, France, Italy and
Austria, and industrial areas predominate in Germany

124

Few areas not covered by either Objective 2 or Ob-
jective 5b during the period 1994 to 1999 were pro-
posed by Member States for eligibility under any of
the Objectives, these being estimated to have a pop-
ulation of around 9.4 million, only 16% of that eligible
for Objective 2 for the period 2000 to 2006. This conti-
nuity of eligible areas suggests that Member States
considered the results achieved up until then were
not sufficient to justify ending EU support, even if ac-
companied by transitional assistance.

The general statement needs, however, to be quali-
fied. Four Member States (Germany, Belgium, Fin-
land and the Netherlands) have in fact modified the
choice of areas for support significantly as compared
with the 1994 to 1999 period, mainly to take advan-
tage of the urban dimension of the new Objective 2.

The intervention of the Structural Funds in urban ar-
eas in difficulty should create the economic condi-
tions for a reduction in crime and complement
specific policies for combating and preventing crime.

In addition, a considerable degree of fragmentation
of eligible areas is evident, reflecting Member States’
attempts to maximise the overall coverage of Objec-
tive 2. This could make it more difficult to implement a
policy of restructuring, given that it multiplies prob-
lems of distinguishing between different areas and so
complicates the management of programmes. Such
a fragmentation gives rise to the risk of diluting the ef-
fects of Community intervention.

Limited coherence with the maps
of State regional aids

In the Commission’s view, both Community and na-
tional intervention should be concentrated in areas
most in difficulty so as to provide the means for their
restructuring. Accordingly, it had recommended im-
proving the coherence between the map of State re-
gional aids and that of areas eligible for Objective 1
and 2 support.

In 1997, the Commission also adopted a ‘Communi-
cation on the links between regional and competition
policy’,3 in which it proposed a number of measures

•

•

III.2  The contribution of structural policies to economic and social cohesion: results and prospects

Table 12   Coherence between areas eligible for Structural Funds and eligible for
regional State aid

Regions eligible for
Structural Funds

Regions not eligible for
Structural Funds

% EU population

Total

1994-99

2000-06

1994-99

2000-06

1994-99

2000-06

Areas eligible for
regional State aid

Areas not eligible for
regional State aid

Total

44.0

6.6

50.6

35.6

5.8

41.4

2.7

46.7

49.4

6.7

51.9

58.6

46.7

53.3

100

42.3

57.7

100

Period 2000-2006: estimates based on a geographical comparison at NUTS5 level
Sources: Eurostat, DG Comp, calculations DG REGIO

to improve the consistency between the list of areas
eligible for national regional aid and the list of Objec-
tive 1 and 2 regions. Many of the proposals formu-
lated in this Communication have been implemented:

•

The Commission aligned the duration of the re-
gional aid maps on that of the Objective 1 and 2
maps. Both lists now cover the same period,
namely 2000 to 2006.

The 1997 Guidelines on national regional aid and
the new Structural Funds regulation gave Mem-
ber States greater flexibility in proposing Article
87(3)(c) and Objective 2 regions. In its Communi-
cation on the links between regional and competi-
tion policy,
the Commission invited Member
States to use this flexibility to ensure greater con-
sistency between the two lists. In order to facili-
tate this process, the Guidelines provided that
areas eligible under the Structural Funds may
qualify for the Article 87(3)(c) derogation.

The criteria for eligibility under Objective 1 and
Article 87(3)(a) of the Treaty (aid to promote the
economic development of lagging regions) were
harmonised, except for the former Objective 6 re-
gions in Finland and Sweden. Some of these low
population density areas were granted Objective
1 status in spite of the fact that they did have a per
capita GDP which was higher than 75% of the EU
average. In order to ensure full consistency be-
tween the Objective 1 map and the regional aid
map, all low population density areas with a GDP
per head exceeding 75% of the EU average have
been granted Article 87(3)(c) status (aid to facili-
tate the development of certain economic activi-
ties or areas).

In effect, in relation to Objective 2, the new Structural
Funds regulation adopted by the Council did not in-
clude this requirement for greater coherence with the
areas which benefit from derogations under Article
87(3)(c).

A comparison between the Objective 1 and 2 maps
and the regional aid maps for the period 2000 to 2006
shows that the geographical coherence between the
two has improved slightly compared to the situation in
the period 1994 to 1999 in all Member States, except
for Belgium (where there was perfect coherence in
the earlier period) and the UK (where, together with
Finland, France, the Netherlands, Sweden and Italy,
the lack of coherence remains marked) (Tables 12,

Table 13  Population in regions eligible for Structural Funds but not for regional
State aid

1994-99

2000-06

B

0.0

3.4

DK

0.0

0.1

D

5.3

2.3

EL

0.0

0.0

E

8.9

4.3

F

9.6

8.8

IRL

0.0

0.0

I

7.5

7.0

L

6.4

0.3

NL

10.4

8.2

A

5.9

3.9

P

0.0

0.0

FIN

12.6

12.0

S

8.7

7.4

UK

9.0

9.8

EU15

6.6

5.8

% total population in each country

Period 2000-2006: estimates based on a geographical comparison at NUTS5 level
Sources: Eurostat, DG Comp, calculations DG REGIO

125

III.2  The contribution of structural policies to economic and social cohesion: results and prospects

13 and, in Annex, Table A.33). The responsibility for
this rests with the Member States. This could threaten
the restructuring of problem areas eligible for Objec-
tive 2, since they might not enjoy a significantly higher
level of support than those areas not covered by the
Structural Funds but entitled to State aids.

While the share of expenditure allocated to invest-
ment in human resources (around 24%) is due to de-
cline slightly, higher priority is given to active labour
market policies and to strengthening education sys-
tems (especially in Italy and Portugal).

Thematic concentration:
the preponderance of
spending on infrastructure

Concentration of expenditure on particular policy ar-
eas is aimed at ensuring that the priorities defined in
the programmes reflect both the factors underlying
economic growth and the EU’s political priorities.4
There is almost universal consensus among econo-
mists on the types of action which are likely to initiate a
process of endogenous and sustainable growth.
Community structural measures, however, are selec-
tive, complementary to those of Member States and
not claimed to be solutions which are generally
applicable.

For Objective 1 regions, the priority areas from a co-
hesion perspective, there have been some changes
in the distribution of the funds between the three ma-
jor areas of intervention – infrastructure, human re-
sources and productive investment (Table 14).

The share of spending on infrastructure has been in-
creased for the period 2000-2006, to around 34% of
the total (as against under 30% between 1994 and
1999), half of which is for transport networks, with
high concentration of investment in the cohesion
countries because of existing needs. If the Cohesion
Fund is also taken into account, infrastructure repre-
sents more than 40% of total investment allocated to
Objective 1 regions.

Table 14   Structural Funds by broad
area of intervention under Objective 1

1989-1993

1994-1999

2000-2006

% total

Infrastructure

Human
resources

Productive
environment

Other

35.2

29.6

33.6

1.6

Source: European Commission

29.8

24.5

41.0

4.7

34.3

23.9

34.8

7.0

126

The share of expenditure on productive investment
(around 35%) has been reduced markedly, particu-
larly in the cohesion countries and Italy, because of a
decline in direct aid to industry as stricter rules are
applied.

More specifically, Structural Funds play a major role
in supporting environmental protection, which ac-
counts for over 10% of the total allocated for Objec-
tive 1. They are also directed towards improving
access to peripheral regions and developing training
and research activities, which are essential to the In-
formation Society and which, because of national
budget constraints, could not be fully carried out with-
out Community support. In Greece, for example, in-
vestment in major transport networks in the 7 years of
the present programming period will be 1½ times
larger than in the preceding period.

In addition to the financial aspects, a number of quali-
tative changes are also evident in the new program-
ming period, such as increased support
for the
information society and for sustainable development,
two major components of present regional policy.
These issues are analysed in more detail below.

Additional support for national efforts

Over the period 1989 to 1993, overall public structural
expenditure in Objective 1 regions amounted to 1.3%
of EU GDP, or to an average of EUR 92 billion. The
Structural Funds accounted for around 15% of this.
Over the period 1994 to 1999, structural expenditure
in these regions declined to EUR 82 billion, a reduc-
tion of 12% compared with the previous period, de-
spite an increase in spending from the Structural
Funds of EUR 2 billion a year, or of 15%. The overall
reduction is explained, on the one hand, by the
privatisation of public enterprises in Italy and Portu-
gal, in particular, and, on the other, by a reduction of
almost half in German expenditure in the new Länder,
in order to bring it down to a level comparable to that
in other Member States.

III.2  The contribution of structural policies to economic and social cohesion: results and prospects

The scale of public expenditure in support of develop-
ment in Objective 1 regions varies considerably be-
tween Member States,
though data need to be
interpreted with caution. As well as Sweden, where
spending (EUR 6,000 per head) is well above that in
other Member States, Germany increased expenditure
substantially over the period 1989 to 1993 in the new
Länder to EUR 41 billion, or EUR 2,500 per head, 2½
times the average level in the Union. In Greece and
Portugal, spending was much higher in relation to their
economic potential than elsewhere, at 5-7% of GDP,
while in other Member States (Germany, Spain, Italy
and Ireland), the figure was 3% of GDP or less. By con-
trast, in France, expenditure on structural measures in
Objective 1 regions in the 1994 to 1999 period
amounted to only 0.2% of GDP (EUR 2.3 billion), which
still represented EUR 890 per head in the regions con-
cerned. The same total amount was spent in Ireland,
which meant expenditure per head over the country as
a whole of EUR 650.

Member State forecasts for the period 2000 to 2006,
show a rise in average structural expenditure a year
of 9%, to around EUR 90 billion. This increase is nec-
essary, if the level of public support for the catch-
ing-up process in lagging region is to be maintained,
though it appears to vary considerably between
Member States. In addition to Ireland, where a pro-
jected doubling of expenditure is explained by the
low level in the preceding period, an increase of 30%
is expected in Greece and a rise above the EU aver-
age in Italy. In Germany, the forecast is for a reduction
in structural expenditure of 9% in the new Länder, for
the same reason as in the previous period.

These forecasts, however, imply an overall reduction
in structural expenditure relative to GDP over the
present programming period, except in a few Mem-
ber States (Greece, Ireland and Italy), despite favour-
able economic prospects up to 2006.

eligibility should be re-examined halfway through the
period in the light of the outturn for GDP.

In terms of the distribution of funds between areas of
investment, it should be noted that a slightly larger
share of expenditure went to environment than to
transport over the period 1993 to 1999, even if in
Greece the transport share was a little higher (Table
15). Within environment, there was a significant in-
crease in investment in waste water facilities in order
to meet the obligations imposed by Community Di-
rectives, and within transport, increased importance
was given to investment in railways.5

Table 15  Cohesion Fund: resources
committed by area of intervention,
1993-1999

Transport
% total

Environment
% total

Total
EUR mn

Greece

Spain

Ireland

Portugal

Total

51.2

49.7

50.0

48.1

49.7

Source: European Commission

48.8

50.3

50.0

51.9

50.3

2998

9251

1495

3005

16761

The European Investment Bank:
active support for regional development

The main means by which the European Investment
Bank (EIB) assists regional development is through
loans for individual projects. These amounted to over
EUR 66 billion over the period 1994 to 1999, or 77% of
the total of such loans in the Union (Table A.34). Most
of them, 83%, went to the financing of infrastructure
projects, in transport, telecommunications and en-
ergy, which, in most cases, formed part of major net-
together
works
accounted for around 86% of all
loans for
infrastructure.

interest, which

of European

The Cohesion Fund: improved balance
between transport and the environment

A total amount of EUR 15 billion (at 1992 prices) were
allocated by the Edinburgh European Council to the
Cohesion Fund for the period 1993 to 1999 for the
Member States where GDP per head was below 90%
of the Community average. For the period 2000 to
2006, the Berlin European Council allocated EUR 18
billion (at 1999 prices) to the Fund and decided that

Loans for individual projects expanded by over 25%
between 1994 and 1999. The main growth, however,
occurred in global loans (loans to financial institutions
for small and medium-scale projects), which
amounted to EUR 20 billion over the period as whole,
accounting for around 30% of total EIB lending, and
which more than doubled in terms of the annual
amount between the two years. These went mainly to
in
financing productive activities,

in industry

127

III.2  The contribution of structural policies to economic and social cohesion: results and prospects

particular, though also to helping to fund smaller
scale infrastructure projects.

The complementarity between global
loans and
those for individual projects, which stems from the ca-
pacity to adapt to the specific characteristics of differ-
ent projects and managers in different sectors and
regions, has been a strong point in the EIB’s ability to
support regional development.

The EIB’s total lending for projects relating to regional
development was significantly higher in the period
1994 to 1999 than in the preceding programming pe-
riod, annual loans being almost 50% greater (Table
16). Although this increase was smaller than that re-
corded by the Structural and Cohesion Funds as a
whole, it still demonstrates a growing commitment by
the Bank to projects for strengthening cohesion and
regional development. The increase was most
marked for projects in Objective 2 and 5b areas
(lending rising by 71%), especially for those aimed at
offsetting
containing
unemployment.

industrial

decline

and

increasing accessibility and energy supply. In addi-
tion, growing attention will be focused on the
competitiveness of firms in the context of the ‘Innova-
tion 2000’ Initiative. Viewing regional development
more widely, the same orientation of policy will also
apply to the candidate countries.

Assessing the effects of
Community intervention (1994-99)

The aim here is to assess the results of structural poli-
cies over the last programming period. This, how-
ever, is inevitably still a preliminary exercise since
some of measures will not be completed before the
end of 2001 and the results of the ex-postevaluations
will not be available before this date. The analysis fo-
cuses on the extent to which appropriations for Com-
munity intervention have actually been spent, the
results achieved both in total and by Objective, the
value-added of Community initiatives and the effi-
ciency of the procedures.

The EIB plans to collaborate more closely with the
Commission over the period 2000 to 2006, in order to
make the most of the potential complementarity be-
tween its activities and Community structural aid. It
will, in particular, continue to support the creation and
development of productive activities in the more dis-
advantaged regions, not only by helping to finance
these directly, but also by supporting the services
necessary for their development, as well as improve-
ments in infrastructure, especially those aimed at

Budget implementation

Information on the implementation of the budget for
the period 1994 to 1999 gives an indication of the
progress achieved, even though a number of
programmes have not yet been completed, since
payment can be extended up to December 2001 (see
Table A.35). Up to the end of 1999, the results appear
to be satisfactory, in the sense that appropriations

Table 16  EIB lending, 1989-1993 and 1994-1999

1989-1993

1994-1999

EUR mn

Regional development

- total period

- annual average, of which

- Objectives 1 and 6

- Objectives 2 and 5b

Structural and Cohesion Funds

- total period

- annual average, of which

- Objectives 1 and 6

- Objectives 2 and 5b

47.1

9.4

5.0

3.4

70.0

14.0

8.8

1.7

85.4

14.2

6.4

5.8

166.7

27.8

15.8

3.7

Lending consists of signed individual loans and current global loans
Source: EIB and European Commission

128

Change

%

81.0

51.0

27.0

71.0

138.0

100.0

80.0

117.0

III.2  The contribution of structural policies to economic and social cohesion: results and prospects

amounted to 99% of total support available and pay-
ments to 75%. It is the latter, it should be noted, rather
than appropriations as such which provides a better
guide to the actual implementation of programmes on
the ground. Taking the Member States with Objective
1 regions together, with almost all appropriations
committed – as statutorily required – overall commit-
ments are in line with the growth of expenditure as
budgeted in 1994 in the Community Support Frame-
works (CSFs), Single Programming Documents
(SPDs) and related programmes. As regards the pay-
ment of appropriations, some Member States among
the main beneficiaries of the Funds (Spain, Portugal,
Ireland, Germany) were well above the EU average at
the end of 1999 (78%), while France, Italy, the Nether-
lands and the UK lagged most significantly behind (at
only 67%).

the unsatisfactory functioning of regional partnership
(Belgium).

For Objective 6, which relates to only two Member
States, the situation is very different. Although total
appropriations have been committed, payments
amounted to only 65% of the funds available in Fin-
land and 54% in Sweden, but this reflects the fact that
programmes were not adopted until 1995 when they
joined the Union.

The above levels of payment – and, therefore, as
noted above, the actual implementation of structural
measures – are, in general, satisfactory, especially
for Objective 1 and Objective 3 programmes, and are
broadly in line with the rates foreseen in the provisions
for the various types of assistance.

The monitoring systems established in Member
States have, however, enabled start-up problems
and implementation difficulties to be identified and
followed and the measures involved to be repro-
grammed in agreement with the Member States
concerned.

In the case of the Cohesion Fund, around 92% of ap-
propriations for the period 1993-99 were matched by
payments by the end of 1999. Nevertheless, the im-
plementation of projects in 1999 varied considerably
from Portugal (85%), at one extreme,
to Greece
(65%), at the other.

For the other Objectives, implementation is variable.
In the case of Objective 2, a number of programmes,
which were only adopted at the end of 1997 or in
1998, could not be satisfactorily implemented in 1999
and, as a result, overall payments were relatively low
(60% of the total funds available). Moreover, some
3% of total appropriations for the period (EUR 477.5
million) could not be carried out and, therefore, had to
be returned to the Community Budget.

For Objectives 3 and 4, cumulative appropriations
were committed in full. Payments amounted to 80% of
total funds available for Objective 3, but to only 69%
for Objective 4, because of delays in the UK and Italy
as well as the innovative nature of a number of
measures.

In the case of the agriculture part of Objective 5a, the
rate at which appropriations were actually imple-
mented, as reflected in payments, was below that for
other Objectives, while for the fishing part, it proved
possible to make good the delays experienced in ear-
lier years, so all appropriations were committed and
payments amounted to 73% of total funds available.
For Objective 5b, there have been persistent delays
in payments in a number of Member States, due to
complicated implementation procedures (Italy) and

Trends in eligible regions

Analysis of trends in eligible regions reveals an en-
couraging performance by Objective 1 regions as a
whole, but this is less marked for Objectives 2 and 5b
regions.

There was some convergence of GDP per head in
Objective 1 regions towards the EU average, the
level, in PPS terms, in these areas taken together in-
creasing from 63% of the average in 1988 to 70% in
1998, which means that the gap was reduced by a
sixth (Graph 33). This, however, conceals significant
differences between regions. Some regions have
caught up considerably, especially the new German
Länder (where GDP per head increased from 37% of
the EU average in 1991 to 68% in 1995) and Ireland
(where it rose from 64% to 102%), as well as Lisbon,
Northern Ireland, Burgenland and Flevoland, where
GDP increased from below to above the threshold of
75% of EU GDP over the period. Other regions have
experienced little growth or even a decline in GDP per
head: in Greece, Central Macedonia (from 63% of the
EU average to 60%), Ipeiros (unchanged at 43%),
Sterea Ellada (from 72% to 64%), Peloponnese (from
58% to 57%), in Italy, the Mezzogiorno as a whole

129

III.2  The contribution of structural policies to economic and social cohesion: results and prospects

(from 69% to 68%) and in the UK, Merseyside (from
80% to 75%) and Highlands and Islands (from 83% to
76%).

On the other hand, unemployment in Objective 1 re-
gions remains high (16.6% in 1999 as against 9.2%
for the EU as a whole), although along with the EU av-
erage rate, it has declined over the past three years
(Graph 34). In a number of regions, unemployment is
still well above the EU average, especially the Objec-
tive 1 regions in Spain (19.3% in 1999, though down
from 27% in 1994), the French DOMs (32%), Italy
(22.4%) and the new German Länder (16.7%).

These high levels of unemployment go hand in hand
with low rates of labour force participation, because
of scarce job opportunities and insufficient rates of
job creation, even in periods of economic recovery,
which means that the gap with the rest of the Union in
terms of employment rates (the proportion of work-
ing-age population in work) is even wider.

The level of productivity in Objective 1 regions has
changed comparatively little relative to that in the rest
of the EU, GDP per person employed increasing from
64% of the EU average in 1988 to 67% in 1998. Never-
theless, there were substantial increases in Ireland
and the new German Länder.

In general, the performance of regions is closely
bound up with the general economic context in which
they are developing. The example of Ireland demon-
strates what can be achieved with a favourable com-
bination of structural intervention and a sound and
stable macroeconomic policy.

For regions in receipt of assistance under Objectives
2 and 5b over the period 1994 to 1999, in which em-
ployment was relatively dependent on industry and
agriculture, unemployment remained relatively low
and stable in the latter, while in Objective 2 areas, it
declined by more than the EU average between 1995
and 1999 (by 2.2 percentage points as against 1.3
points). Even though the rate is still slightly higher
than EU average, the experience in both these and
Objective 5b regions suggests that Community assis-
tance has been beneficial.

Objective 1: Catching-up and modernisation

Structural support for Objective 1 regions lies at the
heart of cohesion policy in the Union. Accordingly, it is
essential to assess its effects as rigorously as possible.
There has been significant convergence of GDP per
head in Objective 1 regions over the past 10 years, but
this in itself does not necessarily signify that the policy
has been effective. Nevertheless, it is possible to dem-
onstrate that Community assistance has had positive
and long-lasting effects in both increasing economic
growth and strengthening underlying structural factors
which determine competitiveness and, therefore, fu-
ture potential growth.

Macroeconomic impact: significant
effects on growth, less on employment

Structural assistance has had significant effects in
boosting economic growth in the countries and re-
gions for which analysis is possible. Over the period
1994 to 1999, the gap in GDP per head has been
closed considerably in a number of countries. In

Objective 1 regions: GDP per head (PPS), 
1988-98

Index, EU15=100

1988-98

1994-98

33

75.0

72.5

70.0

67.5

65.0

62.5

60.0

34 Objective 1 regions: unemployment rates, 

1988-99

% labour force

Objective 1 1989-99
Objective 1 1994-99
EU15
EU15, excl. new Länder

75.0

72.5

70.0

67.5

65.0

62.5

60.0

20

18

16

14

12

10

8

6

4

2

0

20

18

16

14

12

10

8

6

4

2

0

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999

130

 
 
III.2  The contribution of structural policies to economic and social cohesion: results and prospects

Ireland, Portugal and Spain, annual GDP growth over
the these five years was well above the EU average
(almost 1 percentage point above in the latter two and
6½ points above in Ireland). Investment growth was
also higher, laying the basis for growth in the longer
term.

imbalances
infrastructure in weaker regions, but
persist in RTD, access to know-how, the Information
Society and continuing training, and the quality of the
environment. The Structural and Cohesion Funds
these
make a significant contribution to correct
disparities.

Transfers from the Structural Funds added directly to
demand and economic activity, but more importantly,
since they were concentrated on investment in both
physical and human capital, they were aimed at in-
in the medium and
creasing growth potential
long-term.

Recent evaluations of the Community Support Frame-
works (CSFs) in the last two programming periods indi-
cate that the estimated effect on growth was highest in
Greece and Portugal, where the level of GDP rose by
9.9% and 8.5%, respectively, over and above what
would have been expected in the absence of assis-
tance (Table 17). The estimates for Ireland (3.7%
higher) and Spain (3.1%) are lower, but still significant.
Increased growth resulted in lower unemployment,
particularly in Greece, though also in higher productiv-
ity growth in the manufacturing sector.

The estimates of the ‘supply-side’ effects on growth
are of the same order as the direct effects on demand
and become predominant in the longer-term as the
strengthening of productive potential boosts output.

Improvements in competitiveness

Although structural policies are ultimately judged in
terms of their effect in narrowing regional disparities
in GDP per head and employment, it is their impact on
the underlying factors which determine economic de-
velopment which is a prime consideration. Substan-
tial progress has been achieved in improving basic

Transport infrastructure – improving accessibility

An efficient transport system is essential to regional
development. Investment in improving the system,
however, needs to take account of the balance be-
tween different modes of transport (road versus rail)
and the potential effect on the environment.

Transport accounts for over half of total investment in
infrastructure. Investment in improving the transport
network in the cohesion countries and southern Italy
over the period 1994-99 amounted to over EUR 40 bil-
lion, a third of which went to Spain. This was largely
concentrated on roads (around 56%), while just un-
der a quarter of expenditure went on railways (around
23%). In Spain and Ireland, roads accounted for a
larger proportion of investment than elsewhere (73%
and 68%, respectively) (Graphs 35 and 36, where ex-
penditure includes financing from the Structural and
Cohesion Funds and EIB lending for regional devel-
opment, and Table A.36).

This investment served to reduce disparities in trans-
port between these countries and the rest of the EU
significantly, especially in respect of roads and the
standard of the rail network (high-speed trains, elec-
trification and double-track). As a result, accessibility
was improved through reductions in travel time, by
around 20% on average in Spain (largely through im-
proving the road network) and 70% in respect of rail
freight in Portugal (Table 18), and better links were
established between the least prosperous areas and

Table 17  Effect of Community structural intervention on GDP and unemployment,
1989-99

Greece

Ireland

Portugal

Spain

GDP

Unemp. rate

GDP

Unemp. rate

GDP

Unemp. rate

GDP

Unemp. rate

(% of non-intervention estimate)

1989

1993

1999

2006

2010

4.1

4.1

9.9

7.3

2.4

-3.2

-2.9

-6.2

-3.2

-0.4

2.2

3.2

3.7

2.8

2.0

-1.4

-1.0

-0.4

0.4

0.5

Source: ESRI, estimates based on the HERMIN model (2000)

5.8

7.4

8.5

7.8

3.1

-3.6

-4.1

-4.0

-2.8

-0.1

0.8

1.5

3.1

3.4

1.3

-0.5

-0.8

-1.6

-1.7

-0.4

131

III.2  The contribution of structural policies to economic and social cohesion: results and prospects

35 Breakdown of expenditure on transport 

36 Breakdown of expenditure on transport 

infrastructure (EUR 1994 million), 1994-1999

infrastructure (EUR 1994 million), 1994-99

Other/Mixed 
modes 2%

Ports
4%

Air
5%

Italy
7%

Ireland
11%

Road
57%

Metro
8%

Rail
24%

Spain
38%

Greece
21%

Portugal
23%

other parts of the country and, indeed, of Europe (eg
through motorways in Spain). In addition, access to
ultra-peripheral areas (French DOMs) was improved
through the construction or upgrading of airports.

In many cases, use of the Structural Funds gave rise
to private sector investment and the establishment of
public-private partnerships (as, for example, in the
construction and management of roads in Portugal,
the port of Gioia Tauro in Italy and Spata airport and
the Rion-Antirion bridge in Greece). In addition, the
construction of infrastructure financed partly with EU
assistance resulted in net job creation of around
900,000 persons a year (in full-time equivalent terms),
mainly in Objective 1 regions.

The Cohesion Funds have made a significant contri-
bution to transport improvements through financing
projects included in national and regional economic
development programmes, most of which involved a
specific assessment of the environmental impact. As

a result, they have reinforced beneficial effects of
ERDF intervention and helped to reduce regional dis-
parities further. According to a recent study (carried
out by the London School of Economics in 1997),6
they have increased employment and private invest-
ment significantly in recipient regions, with large
spillover effects in neighbouring ones. The estimated
effect of 9 projects in Spain, with a total investment of
EUR 2.5 billion, was to add around 0.6% to both GDP
and employment in the medium-term (equivalent to
some 75,000 jobs).

However, the need for investment in infrastructure re-
mains. Analysis carried out for the European Spatial
Development Perspective indicates that while invest-
ment in peripheral regions has improved accessibil-
ity, it has been accompanied by similar investment in
neighbouring regions and more central ones (in rail
networks, for example), which can counteract any rel-
ative gain. The overall effect of such investment,
moreover, depends on what other measures are

Table 18  Estimated saving in travel time due to Structural and Cohesion Fund
investment, 1994-99

Road

Rail

Other

Greece

20-30%

Spain

10-20%

Around 10%
(1hour 35mn
for Athens-
Thessaloniki)

50%
(Athens metro)

Ireland

10-15%
(190 mn for three
main routes)

-

Portugal

20%

Italy (Obj.1)

34%-87%
(for  5 main roads)

20-40% et 73%
(for freight
to Spain)

14%
(increase
in speed of 10kph)

10%
(with the UK)

-

Source: Oscar and Faber, Thematic evaluation on the impact of Structural and Cohesion Funds transport (2000)

132

 
 
III.2  The contribution of structural policies to economic and social cohesion: results and prospects

taken to stimulate economic activity in the regions
concerned.

Supporting SMEs: critical
to regional competitiveness

Supporting SMEs is a priority of EU policy since they
are a vital source of competitiveness and job cre-
ation, especially in Objective 1 regions. The Struc-
tural Funds provide support in a variety of ways,
including through services (information, training and
guidance, in particular) and help in financial engi-
neering as well as through financial assistance. Over
the period 1994 to 1999, an estimated EUR 14 billion
(14.5% of total funds for Objective 1) went to these
kinds of measure (see Tables A.38 and A.39). Over
500,000 firms (16% of the total in eligible regions)
were assisted through direct aids (over a third of total,
finance) and other measures.7

Evidence,
in the form of an EU-wide evaluation,
based on surveys and case-studies, suggests that
the Structural Funds had a significant effect on SMEs
over the last programming period. In the absence of
Community support, it is estimated that 70% of invest-
ment projects would have either not taken place at all,
or been smaller in scale or postponed and that assis-
tance contributed to creating more than 300,000
additional jobs, even after taking account of ‘dead-
weight’ and substitution effects. The evidence also
emphasises the potential of financial engineering
schemes as an intsrument of
intervention, even
though they might take a long time to be established
in regions where financial services are weak.

EU support of SMEs has demonstrated a specific
added-value in many respects. First, it has added to
the funds available at national level. Secondly, co-fi-
nanced measures have often addressed the struc-
tural problems SMEs face, in particular, by providing
business services (eg in respect of innovation and
technology) and introducing new practices (eg finan-
cial engineering). Thirdly, in a number of countries, it
has enabled SMEs to become an ‘instrument’ for re-
gional development and procedures for selecting
and implementing projects to be improved.

On the other hand, the evidence indicates that assis-
tance has been concentrated mainly on providing
grants rather than loans and risk capital, which might
improve the sustainability and cost-effectiveness of
schemes. It also indicates a need to improve the

targeting of assistance, in particular, through the cre-
ation of specialist intermediaries in the private sector,
preferably organised on a decentralised ‘one-stop
shop’ basis. Experience demonstrates that
these
tend to make schemes more accessible and provide
quicker appraisal and better delivery of SME projects
by integrating direct aid and services.

Research, Technological Development
and Innovation (RTDI): a strengthening
of regional capacity

As noted in Chapter 1, the gap in RTDI between the
most developed and the least developed regions is
much wider than in income per head. The concentra-
tion of these activities in the more dynamic regions is
a key aspect of the ‘virtuous circle’ as regards growth,
competitiveness and employment. By contrast, less
dynamic regions have a scientific and technological
system which is still afflicted by structural problems,
by low RTDI expenditure; excessive concentration on
Government research rather than on stimulating pri-
vate sector demand for innovation; inadequate re-
sources to maintain the existing infrastructure; strong
dependence on external (Community) sources of fi-
nance and excessive concentration of research ac-
tivities in and around capital cities (Lisbon, Athens
and Dublin).

According to an evaluation of 52 Objective 1 and 6 re-
gions for the period 1994 to 1999, structural interven-
tion seems to have had beneficial effects, especially
on infrastructure. In Greece, for example, the effect
was particularly significant in Crete, where universi-
ties and research centres were strengthened, and in
Central Macedonia, through closer cooperation be-
tween local
industry (chemicals and textiles) and
Government research centres.

In broader terms, when assessing the effect of the
Structural Funds, it is important to distinguish be-
tween different types of region, defined by their po-
tential for innovation, as measured by the extent of
cooperation between research institutions and busi-
nesses. In these terms, most Objective 1 regions are
below the highest level and around a third can be de-
scribed as ‘technological deserts.’ The performance
of regions, however, is affected by the national fea-
tures of the country in which they are located as well
as by the growth rate and other factors. The position
from which they start affects their development path,
especially as regards the weakest regions. Regional

133

III.2  The contribution of structural policies to economic and social cohesion: results and prospects

differences in performance indicate that the policies
implemented have been successful in some cases
(Lisbon and Ireland) and failed in others (Attiki), while
yet other regions seem to have developed independ-
ently of their innovative capacity (in particular, tourist
regions like the Canary islands) (Table 19).

At the same time, the effect in Objective 1 regions
cannot be limited to the expansion of the research
base, even if it is natural to focus on this because of
the scale of the technology gap. In a number of Mem-
ber States and regions, increased effort has been de-
voted to strengthening human capital by increasing
the number of qualified researchers and giving
greater importance to the establishment of networks
between industry and universities, technology trans-
fer and support for the demands of business.

Accordingly, in Ireland, after the mid-term review, in-
creased attention was focused on company research
and development as well as on the training of re-
searchers. Co-financed measures have served to in-
crease the amount of RTD in industry significantly,
more than 400 firms being assisted, many of which
had not undertaken RTD before, and 300 firms partic-
ipating in research training.
Increased industrial
awareness, therefore, has helped to strengthen the
relationship between public research and the private
sector.

A further example is the CDTI (Centre for Industrial
Technological Development), which was set up in
Spain to support technological development in firms
in Objective 1 regions by providing funds which are
reimbursable if projects are successful. The 243 pro-
jects approved have involved investment in RTD of
EUR 240 million and 1,622 full-time researchers.

From the 108 projects completed, around 74% of the
funds provided will be reimbursed.

Furthermore, effort still needs to be made to increase
the efficiency with which funds are used and man-
aged. The most innovative measures have frequently
been insufficiently exploited because of the relative
complexity of the procedures for implementing them,
as well as, on occasion, difficulties in finding projects
of sufficient quality to justify financing. This may have
contributed to reducing the efficiency and effect of
the Structural Funds. In addition, there is still inade-
quate follow-up and evaluation of projects. These
problems apart, the implementation of genuinely in-
novative measures can be useful for addressing the
difficulties noted above; but they need to be based on
active partnership between public and private sec-
tors and entail an appropriate division of responsibil-
ity between the Union, Member States and regions.8

RIS: a proactive innovation approach

The Commission has also helped to develop the inno-
vative capacity of regions through a number of pilot
actions. Since 1994, 32 regions have received funds
under Article 10 of the ERDF for developing RIS pro-
jects (regional innovation strategies).9 These involve
private-public partnership and are intended as a re-
sponse to the need of businesses, specifically SMEs,
to innovate. Over the past 5 years, over 5000 SMEs
have undergone technology audits and/or interviews.
Hundreds of RDTI organisations have been con-
sulted in the process of formulating strategies and im-
plementing action plans.

RIS has produced significant results in the form of the
creation of new regional partnerships and joint work-
the innovative
the strengthening of
ing methods,

Table 19  Objective 1 regions: relationship between technological potential and growth

Converging regions

High ‘institutional density’
regions

Ireland, Lisbon and Tago valley,
Norte, Crete

Intermediate regions

‘Technological deserts’

Centro (P), Murcia,
Castilla-La-Mancha, Cantabria,
Andalucia, Flevoland

Algarve, Alentejo, Canarias,
Extremadura

Intermediate regions

Central Macedonia, Hainaut,
Castilla Y Leon, Northern Ireland

Corsica, Galicia , Sardegna,
Puglia, Campania, Abruzzo

Southern Aegean, Calabria,
Basilicata

Diverging regions

Merseyside, Attiki

Eastern Macedonia and
Thrace,Epirus, Thessaly,
Western Greece, Asturias

Highlands and Islands, Western
Macedonia, Sterea Ellas,
Peloponese, Northern Aegean,
Ionian Islands,  Sicilia, Molise

Source:CIRCA,ThematicevaluationonResearch,technologicaldevelopmentandinnovationandStructuralFundsinObjectives1
and 6 regions, 1999

134

III.2  The contribution of structural policies to economic and social cohesion: results and prospects

process and the launching of new innovation projects
within firms. For example, in Castilla y Leon, almost
800 firms took part in a series of meetings to decide
the type of RIS to be implemented. A total amount of
EUR 447 million was committed for the first four years
of implementation (1997 to 2000), increasing techno-
logical expenditure in the region from 0.8% of GDP in
1997 to 1% in 2000.

These initiatives has been succeeded by a new gen-
eration of projects, RIS+. The Commission has also
developed a database (RINNO – Regional Innovation
Observatory) to list and describe all public incentives
for innovation in EU regions so as to encourage the
transfer of innovation.

The information society: focus on
telecommunication infrastructure

The potential of the Information Society for improving
regional competitiveness and social cohesion is re-
cognised by the Structural Funds. The rapid diffusion
of information and telecommunication technologies
opens up new development opportunities for the less
advantaged regions, in particular, by facilitating a
more efficient location of investment, given the differ-
ences in costs and access to markets. Regions can
also benefit from these technologies by exploiting
their own areas of specialisation and attracting new,
higher valued-added activities. Moreover, since
these can be located outside urban areas, they are a
means of helping to achieve more balanced develop-
ment across the EU.

The proportion of the Structural Funds devoted to in-
vestment in telecommunications is relatively small, at
only around 2% of the total spending, 1.5% on infra-
structure and 0.3% on stimulating the demand for ser-
vices and applications.10 The focus has, therefore,
been on improving the basic system and narrowing
disparities between peripheral regions and the rest of
the Union through the digitalisation of networks and
improving the quality of service.

Technological change and the liberalisation of tele-
communication markets are driving factors towards a
more coherent and integrated approach, aimed at
furthering the development of the Information Soci-
ety, especially as most investment in the sector is
highly profitable. The Structural Funds need, there-
fore, to be focused on stimulating demand, develop-
ing new skills, raising the awareness of all those

involved and implementing new high value-added
applications while giving strategic priority to regional
balance.11

RISI: a catalyst for regional development

Through its integrated approach, the RISI12 has had a
major effect in boosting the creation of specialised
know-how and jobs in the regions. In Nord-Pas-de-
Calais it has been a catalyst for the development of
new skills and know-how, new activities and an enter-
prise culture. This is recognised by virtually all those
involved in regional development and is reflected
in the integration of various information technology
measures (distance-learning and training, business
activities,
development,
cyber-centres, public services, websites and trans-
port) into the regional programmes.

cultural

health

care,

Human resources: helping people into work and
strengthening education and training systems

In the main countries with Objective 1 regions, struc-
tural policies have helped to strengthen active labour
market measures, education and training systems
and the links between training and job placement.
The focus has been on integrating training with other
types of action, giving increased importance to dis-
advantaged groups and targeting assistance on
these, adjusting training to the needs of the labour
market, adopting a ‘customer-oriented’ approach
and improving the quality of training. Examples of ac-
tions include support for qualification and accredita-
tion systems, developing technical teaching in upper
secondary and higher education, improving infra-
structure, providing continuing training to teachers
and trainers and trying to reduce the rate of school
drop-out.

Overall, the ESF has been a catalyst in modernising
education and labour market policies in different
countries. ESF co-funded activities, and the need to
comply with the administrative requirements for re-
ceipt of funds, have helped to encourage the devel-
opment of mechanisms for the better planning of
policies, better coordination and improved relations
between the institutions involved. As a result, a single,
standard reference framework emerged between the
fund-giving agencies and the regions, which facili-
tated the dissemination of techniques for implement-
ing social and economic policy. Best practices
identified by evaluators include greater transparency

135

III.2  The contribution of structural policies to economic and social cohesion: results and prospects

in policy implementation, a strengthening of the ca-
pacity to manage at local and regional
level and
closer links between public policy and labour market
needs.

In Spain, part of the added-value of the ESF was seen
as providing support for the reform of technical sec-
ondary education (by, for example, developing work
experience modules, introducing guidance and ad-
vice systems and taking responsibility for disadvan-
taged students). The rationale for ESF intervention
and the scope of this remain relevant, given that a mi-
nority of students undertake technical secondary ed-
ucation and the amount of expenditure allocated to it
is still relatively small.

In Portugal, the ESF helped improve the educational
system by widening the range of paths which stu-
dents could follow and by giving priority to quality.
The training of teachers and trainers, both in primary
and secondary education (49.3% of teachers) and at
university level (grants for postgraduate courses) ap-
pears to be one of the major contributions of the
programme. Widening the range of educational and
training paths seems to have strengthened links be-
tween secondary education and labour market needs
and improved career guidance arrangements in
schools. Indeed, the support given to the training of
‘medium level’ technicians created an alternative to
traditional general education and provided skills
which were directly applicable on the labour market.

In Italy, the ESF has enabled the quality of technical
streams to be improved, through the gradual intro-
duction of training for teachers (50% of all vocational
education teachers were covered), work experience
modules (30% of the total length of courses) and new
training methods and programmes.

Environment: a key role in developing
water supply infrastructure

In the case of environmental measures, the effects of
structural intervention in the cohesion countries and
the Mezzogiorno need to be distinguished from those
in other parts of the Union.

In the cohesion countries, the proportion of house-
holds connected to drinkable water supply and main
drainage is still much lower than elsewhere in the EU.
This not only reduces the quality of life of the people
concerned, but also has a damaging effect on the

potential for economic development, and on tourism,
in particular.

Many regions in the Mediterranean suffer from a
shortage of water, especially in the Mezzogiorno,
where only 26% of the population is connected to
drinkable water supply throughout the year. Main
drainage is also inadequate, while in urban areas, en-
vironmental conditions are usually very poor, and not
enough is done to make people more aware of the is-
sues involved and of the need to manage the environ-
ment effectively.

These problems have adverse effects on the econ-
omy, as well as society, and conflict with the aim of
pursuing a sustainable development path. Neverthe-
less, outside large cities, and except in a few areas of
Spain and Ireland, the low level of industrial develop-
ment means that toxic gas emissions tend to be less
of a problem than generally in northern European
countries.

In the north of the EU – in the new German Länder, in
particular – the main problems stem from industrialis-
ation, which has left a legacy of soil contamination,
pollution and urban degradation. This had a damag-
ing effect on the image of many regions with tradi-
tional industries and reduces their capacity to attract
investment from outside. In rural areas – in the Nether-
lands and Ireland, in particular – however, agriculture
is a major source of pollution.

During the period 1994 to 1999, environmental invest-
ment financed from the Structural Funds amounted to
over EUR 9 billion, around 9% of the total funds for
Objective 1. Over the same period, 20% of EIB loans
went to environmental projects, totalling EUR 1 billion
in the cohesion countries and almost EUR 3 billion
elsewhere in the Union (mainly in the UK on water
treatment projects).

In the cohesion countries,
the Structural Funds
played a major role in improving water supply and
distribution systems as well as those for waste water
treatment. In Greece, the number of urban areas con-
nected to main drainage almost doubled between
1993 and 1999, increasing the population covered to
over 70%. In Ireland, the proportion covered rose
from 44% in 1991 to 80% in 1999. In Portugal, the
population connected to drinkable water supply rose
from 61% in 1989 to 95% in 1999 and that connected
to main drainage from 55% in 1990 to 90% in 1999.

136

III.2  The contribution of structural policies to economic and social cohesion: results and prospects

The Funds also helped to increase water supply in re-
gions with a serious shortage. In Italy, for example,
supply was expanded by over a third over the pro-
gramming period.

In the case of the Cohesion Fund, ex-postevaluation
of a representative sample of environmental projects
generally indicated satisfactory results,
though a
number of problems were identified in respect of the
management of water reserves. In particular, it ap-
peared often to be difficult for small-scale projects to
improve supply and become self-financing. The most
significant environmental benefits were identified in
respect of water supply projects, in particular those
concerned with better management of reserves (pro-
jects in Sevilla and Lough Mask in Ireland, for exam-
ple).
In areas severely affected by drought,
moreover, water loss was considerably reduced in a
number of cases.

Beyond the immediate effects on the quality of life, es-
pecially of those living in the less developed parts of
the Union, the investment has also given rise to wider
benefits:

•

•

•

significant progress in the extent of compliance
with Community directives: for example, in 1999,
Ireland attained the standards imposed by the di-
rective on drinking water;

a reduction in potential constraints on the devel-
opment of agriculture, industry and tourism;

growing awareness of the need for integrated en-
vironmental policies (Greece).

The areas in which it was possible to verify that im-
provements had been made – and much remains to
be done – consist mainly of municipal waste treat-
ment, the designation and management of protected
natural areas, the implementation of specific means
for controlling air pollution (Greece) and the degrada-
tion of rivers, from intensification of agricultural activ-
ity (Ireland) and from a low level of water flow in
industrial areas (Portugal).

Objective 2: strategic progress, but a limited
leverage effect from Community support

For Objective 2 regions, quantitative evaluation is
more difficult, though it is possible, for specific mea-
sures, to identify the leverage effect of Community

intervention. It is evident that the authorities in Mem-
ber States responsible for structural policies regard
eligibility for assistance from the Structural Funds as
being much more important than simply the addi-
tional finance that it provides, since it opens the way
for them to give national support to activities in the re-
gions concerned and to obtain loans from the EIB.
The volume of State regional aids is, therefore, larger
than transfers from the Structural Funds, while the
scale of EIB loans is expanding significantly.

The increase in regional partnerships made it possi-
ble to redirect Community funds towards productive
investment and measures aimed directly at employ-
ment creation. Around half of structural assistance
was spent directly or indirectly on support of the pro-
ductive sector, and in particular SMEs (Graph 37).

During the last programming period (1997 to 1999),
employment became more visible as an objective
both in the formulation of policies and in the quantifi-
cation of results. However, despite progress made,
evaluation of the employment effects carried out in
the Member States is still not fully comparable be-
cause of differences in coverage and methods of cal-
culation as well as in the nature of the intervention
itself. For example, the number of jobs created or
maintained per million Euros invested varies approxi-
mately from 13 to 57 for the period 1994 to 1996 and
from 17 to 68 for 1997 to 1999 (see Table A.42).

A number of estimations carried out, particularly in
the UK SPDs,
the real effects of
programmes on employment are reduced signifi-
cantly if account is taken of ‘deadweight’ effects (ie

indicate that

37 Distribution of Structural Funds by broad 
target area in Objective 2 regions, 1989-93, 
1994-96 and 1997-99

% total

1989-93
1994-96
1997-99

50

45

40

35

30

25

20

15

10

5

0

Physical
regeneration &
environment

Human
resources

Productive
environment

Technical
assistance and
other

50

45

40

35

30

25

20

15

10

5

0

137

 
III.2  The contribution of structural policies to economic and social cohesion: results and prospects

the effects which would have taken place even in the
absence of intervention) and ‘substitution’ effects
(when jobs created are at the expense of existing
ones). This means, for example, that if these effects
amount to 30%, three out of every ten Euros spent
have no net effect on employment.

Less assistance went to infrastructure than in the
past, while programmes to create alternative activi-
ties and to strengthen the productive environment in
areas with serious problems of restructuring gave rise
to uneven results, even if in some cases a real recov-
ery in their economic potential seems to have
occurred.

Technology transfer centres, adapted to the needs of
local business, have been set up to disseminate
know-how to SMEs, as in some French areas under-
going restructuring, such as Aquitaine, where these
centres are likely to have long-term effects on their
behaviour and capacity to adjust to change.

The environment is an increasing cause for concern
in most regions, which has led to a wide range of pro-
tection and improvement measures, including clean-
ing up industrial wastelands but also, as in the case of
the most innovative programmes (in Berlin, South
Wales and East Midlands in the UK) changing pro-
duction methods, the transfer of know-how, training
and the adoption of clean technologies.

In addition to strategic advances in programming,
Community intervention has had beneficial effects
through the delivery system adopted, which, over the
decade, progressively improved.13 These include the
creation of active and diversified partnership, the
adoption of more rigorous means of selecting pro-
jects and the establishment of computerised monitor-
ing systems. The effectiveness of programmes,
however, was often limited, because, in particular, of
the relative dispersion of the funds over small and
fragmented areas.

Objective 3: improved targeting of
the young and the long-term unemployed

The influence of Community action in helping young
people, the long-term unemployed and those at risk
of social exclusion to enter the labour market is limited
by the relatively small scale of expenditure compared
with national spending on employment measures.
This means that national priorities have tended to

determine the focus of programmes. In addition, the
broad scope of activities covered by Objective 3 has
made it difficult to concentrate Community support
solely on targeted measures.

According to the evaluations carried out,14 ESF mea-
sures had two kinds of effect, according to whether
they were addressed to direct beneficiaries (ie peo-
ple) or systems (changes in public intervention).

In the case of transfers to direct beneficiaries, the ESF
helped to improve the employability of those in re-
ceipt, as measured by placement rates, or the pro-
portion who subsequently found a job. In the case of
other kinds of measure not directly targeted at em-
ployment, the indicators used include the proportion
of participants obtaining a qualification or having a
spell of work experience. Over the period 1994 to
1999, overall placement rates have increased, re-
flecting above all improved labour market conditions.
Placement rates ranging from 30% to 80% are re-
ported by evaluators, depending on the country, the
target group and the type of measure. Where there
was a causal link between participation in a co-fi-
nanced measure and finding a job, 25-50% of place-
ments seem to be directly attributable to the ESF.

The effectiveness of co-financed measures appears
to increase when they are concentrated on groups
with the greatest difficulty of finding employment. Par-
ticipation in active labour market measures, there-
fore, seems significantly to raise the chances of the
unemployed in older age groups (in the Netherlands
and the UK), the long-term unemployed (in Ireland)
and those with relatively few qualifications (in Italy) to
obtain a job, while it appears to have only a marginal
effect in respect of the young. The results also vali-
dated the programme guidelines on ‘pathways to in-
tegration’, which emphasise the importance of
following a ‘pathway’ approach to helping people find
employment. Measures combining training with ad-
vice, support and work experience, accordingly,
seem to have more effect on employment than those
not doing so. Support for employment appears to
have a particularly large effect. Increasing the in-
volvement of the most disadvantaged groups in ESF
measures, therefore, could potentially both help to
achieve greater social cohesion and improve the
overall effectiveness of the Structural Funds.

In the UK, evaluation showed that the most efficient
measures are employment subsidies and job-search

138

III.2  The contribution of structural policies to economic and social cohesion: results and prospects

assistance. Analysis of those completing integrated
programmes suggested that the largest net effect
was on older men, whose chances of finding a job
was increased by most. Although an integrated ap-
proach is more costly, it is justified by its greater
effectiveness.

Overall, the ESF continued mainly to finance training
measures over the period 1994 to 1999. The pro-
gramming, however, allowed for some diversification,
to include employment support, enterprise training,
counselling and job search guidance, and measures
within the education system to ease the transition
from education to employment.

In the Netherlands, placement rates were generally
high because of favourable labour market conditions.
The net effect of ESF measures, however was gener-
ally relatively small, except for the most disadvan-
taged participants, for whom placement rates were
highest. The net placement rate in respect of training
programmes was 33% for the least qualified and 25%
for those over 40, while for others it was virtually zero
on average.

In Italy, the placement rate of those who had com-
pleted a training programme was 51% as against
28% for a control group who had not followed such a
programme, a difference of 23 percentage points,
which, moreover, was increased to 43 percentage
points once the different characteristics of the two
groups were taken into account. Indeed, participa-
tion in a training programme seems to be the most im-
portant factor determining a person’s chances of
finding employment (according to regression analy-
sis), ahead of the sex of the person (men being more
likely to find a job than women) and the level of
education.

Targeting assistance on the most vulnerable groups
has generally remained relatively limited in respect of
Objective 3: beneficiary groups in ESF programmes
were characterised by a high proportion of young, the
relatively highly qualified and those unemployed for
less than a year, with disproportionately more men
than women.

Countries can be divided into two groups. The first
consists of those with large areas covered by Objec-
tive 1, where Objective 3 programmes aimed at com-
bating social exclusion accounted for less than 10%
of total ESF funding. The second group includes other
Member States, in which the figure was between 20%
and 30%. In the first group, measures tended to be
targeted on specific groups, such as people with dis-
abilities and ethnic minorities, in the second, exclu-
sion was more broadly defined and more general
integration policies were funded.

Evaluators stressed the qualitative improvement in
systems and the ESF contribution to innovative poli-
cies. Although small in financial terms, Objective 3
has helped diversify policies for tackling unemploy-
ment. In some Member States, innovation was an ex-
plicit objective of programmes, through developing
partnerships. The Objective 3 evaluation for Finland,
for example, found that the ESF helped develop the
capacity for local and regional cooperation, target the
groups who were hardest to reach and strengthen in-
dividualised approaches to the provision of support.
In other countries, the ‘ pathway to employment’ ap-
proach sought to generalise the principle of an inte-
grated approach across all employment policies.
Finally, it has been possible, by supporting specific
groups, to include people who are usually excluded
from the ambit of policy.

Objective 4: concentration
on the training needs of SMEs

During the period 1994 to 1999, Objective 4
programmes, which were aimed at helping workers
cope with industrial change, were altered signifi-
cantly, as the underlying principles were re-inter-
preted and co-financed policies were modified.

Absorption problems, which were evident between
1994 and 1996, were overcome in the subsequent
period, through a softening of the selection criteria
and the application of less stringent requirements for
co-financing in terms of the target group or type of
training.

There are two groups targeted by Objective 4 mea-
sures, SMEs and workers at risk of job loss. Substan-
tial efforts were made over the period to increase
concentration on SMEs, but within these, training was
mainly addressed to managers and highly-qualified
workers, rather than those with the highest risk of be-
coming unemployed.

139

III.2  The contribution of structural policies to economic and social cohesion: results and prospects

Evaluation of programmes has identified three types
of effect – on firms, on employees and on training
systems.

so as to identify both the weaknesses and potential
strengths of particular regions. Such an analysis is
essential to the formulation of a policy which builds
upon local potential.

In the case of firms, the main effect was on changing
attitudes towards continuing training and the kind of
schemes carried out, in terms of the amount of train-
ing given, its quality, nature and relevance to indus-
trial change as well as the number of employees
covered.

In the case of employees, the effects were examined
in terms of job improvement (or reduced risk of redun-
dancy) and employability, as reflected in more and/or
higher qualifications. At this stage, however, few eval-
uations have been completed because of the delay in
the launch of Objective 4 and, consequently, the sig-
nificant number of projects which are still ongoing.
Those available suggest, in some cases, that firms
benefited more than employees and, in others, that
benefits were divided between greater competitive-
ness of firms and improved qualifications of some
categories of employees.

The ESF also had an important effect in improving
training systems, through structuring the continuing
training offered, widening the provision of continuing
training in SMEs and encouraging the development
of better systems of labour market analysis

Although Objective 4 as such has not been included
in the 2000 to 2006 period, several of the underlying
principles have been incorporated as part of the pri-
ority given to lifelong learning in the new Objective 3,
such as the inclusion of preventative measures in
training programmes, the need to focus on employ-
ees at risk and mobilisation of SMEs.

Objective 5a and 5b: agricultural
structures and rural development

Community policy on rural development emerged in
the mid-1980s from two broad concerns – a desire, on
the one hand, to reduce regional disparities and im-
prove cohesion across the Union by supporting dis-
advantaged areas and, on the other, to limit the
negative effects on rural areas of the reform of the
CAP. The policy consisted mainly of an attempt to
support the economic activities carried out in the
weakest areas, which necessitated formulating a
prior analysis of the factors underlying development
and of the processes which need to be set in motion,

140

The factors determining the economic growth of rural
areas are both many and wide-ranging: the endow-
ment of factors of production and the comparative
advantage which these imply, the distance to main
markets, the potential for economies of scale and ag-
glomeration, the capacity for organisation and inno-
vation, and the availability of support services and
infrastructure. Both the measures adopted and the
network of actors involved in their implementation
need to be flexible enough to respond to local needs,
since there is no guarantee that measures carried out
according to a sectoral or individual
logic will be
coherent.

Unfortunately, regions sometimes opted for the easi-
est approach, pursuing measures which were insuffi-
ciently targeted or simply continuing with those
already in place, failing to strengthen the means of
coordinating the activities of the different entities in-
volved or tailor measures to local conditions. A num-
ber of French regions reduced the application of
certain measures on a territorial basis, and made
them components of overall programmes.

In Objective 5b areas, unemployment has risen mar-
ginally since 1995, but it is still much lower than the
EU average. There is some evidence of net employ-
ment growth in manufacturing industries dominated
by SMEs, especially – but not only – those linked to
the rural economy, as well as in other sectors. Signifi-
cant diversification of economic activity away from
agriculture is underway, which was the main objec-
tive of the policy.

Measures to improve infrastructure (eg sanitation,
electrification, drinking water) and services (living
conditions, above all) have generally been success-
ful, though the recipients of support have typically
been local authorities, for which the matching na-
tional contribution has not posed a difficulty. On the
other hand, involving the private sector and private fi-
nance has proved more difficult, possibly because of
the lack of a framework for potential investors, and, in
some regions, a weak structure of local organisation
(in terms of, for example, support networks or interac-
tion between groups) or uncertain economic pros-
pects. Rural areas, with sparse population and

III.2  The contribution of structural policies to economic and social cohesion: results and prospects

access difficulties, can find it more difficult than cities
to achieve a sufficient level of demand or offer the full
range of services needed to compete at the Euro-
pean level.

Under-performance is, in some cases, explained by
the measures adopted not being tailored to local
needs or by the availability of more favourable finan-
cial support under other public programmes.15 It is
also clear that existing firms benefited more from in-
tervention than newly-created ones.

Environmental considerations are included in re-
gional development strategies to varying degrees,
the scale of measures adopted being linked to the
richness of the natural and physical heritage to pro-
tect and the seriousness of any environmental degra-
dation suffered. Policies in this area, however, are
complicated by the involvement of a range of inter-
ested parties concerned with differing policy
priorities.

While there were few projects aimed at protecting
flora and fauna or exploiting the natural heritage for
tourism, there was a relatively large number of pro-
jects for managing household – and in come cases in-
dustrial – waste. In the case of tourism, financial
initiatives have been dispersed and the evaluations
suggest
in future they should be organised
around centres and networks of activity.

that

Similarly, the work involved in the renovation of vil-
lages, an item included in most programmes, could
be carried out in a more rational way, the heritage (in
terms of buildings, culture and architecture) better
exploited and the projects better integrated with tour-
ist activities.

FIFG: restructuring the fishing sector

Instrument

The Financial
for Fisheries Guidance
(FIFG), with a budget of EUR 2.6 billion over the pe-
riod 1994 to 1999, was responsible for funding the fol-
lowing types of activity: reduction in the fishing fleet
and its modernisation (50% of the budget), process-
ing and marketing of products (25%), the develop-
ment of
the development of
fishing ports (7%), product promotion (3%) and social
and economic measures (subsidies for ceasing ac-
tivity, support for early retirement) (5%). This expendi-
ture was carried out in part under Objective 5a, but for
the most part under Objective 1.

fish farming (10%),

With the inclusion of the FIFG in the Structural Funds
in 1994, economic and social cohesion became one
of the major concerns of fisheries policy. Over the
programming period, the cohesion countries were al-
located 56% of all FIFG funds, 42% going to Spain, by
far the largest recipient.

Substantial
reductions in the fishing fleet were
achieved, especially in Portugal and Spain (Table
20), Community support for these activities exceed-
ing that for construction and modernisation by 60%
and for construction alone by 2-2½ times (taking ac-
count of capacity as well as the number of ships).

The ‘mixed’ enterprises established with third coun-
tries enabled fishing capacity to be exported and
jobs to be maintained or created in areas dependent
on fishing (ADFs). By the end of 1998, 152 projects
had been undertaken and these were directly re-
sponsible for 2,400 jobs being maintained or created
and indirectly for another 3,000, mainly in Spain and
Portugal (which accounted for 55% and 22% of the
projects, respectively).

The processing of products was the driving force be-
hind this and is the second most important area of
FIFG intervention (accounting for a planned EUR 610
million). The modernisation of the industry has been
supported by substantial FIFG investment in techno-
logically innovative firms, improvement of sanitary
conditions and the development of certain products.
Moreover, there has been strong interest in measures
of this kind from potential recipients of support and by
the end of 1997, 12 of the 31 projects had been repro-
grammed in this direction. FIFG support has helped
to limit the employment losses associated with re-
structuring (see also section II.11 in the present re-
port). By the end of 1997, after only 3 years of FIFG
support, the projects financed had created 1,200
jobs in 6 Member States (Denmark, Germany, Spain,
Ireland, Finland and the UK), 350 of these in Ireland,

Table 20  Effects of FIFG measures,
1994-99

FIFG
payments

National
payments

No. of
ships

(EUR mn)

(EUR mn)

(projects)

Change in
power
of fleet
(kW)

Adjustment
(withdrawal)

Construction

Modernisation

481

191

103

267

4090

- 700,000

50

32

1820

6830

+ 270,000

-

141

III.2  The contribution of structural policies to economic and social cohesion: results and prospects

220 in Northern Ireland and 50 in Scotland, and pre-
vented another 360 from being lost (250 of these in
Spain). By end-1998, 2,870 projects had been
launched, 760 of them in Spain.

Although only 10% of the FIFG budget was allocated
to fish farming over the Union as a whole, the figure
was markedly higher in some countries (30% in Ire-
land, 24% in Greece). Initially, it proved difficult to in-
terest many of
the potential participants in such
programmes, because of low fish prices and the strict
environmental standards applied in project selection.
Nevertheless, FIFG support has helped to develop a
productive structure and to assist a recovery in em-
ployment in the sector, especially in the Objective 1
regions (see elsewhere in this report). By the end of
1998, 2,580 projects has been established, 550 of
them in Spain and 150 in Greece.

The Structural Funds other than the FIFG – the ERDF
and the ESF, in particular – financed port develop-
ment projects and fishery research, as well as voca-
tional training in Objective 1 regions.

Objective 6: improving accessibility
and job creation

The accession of Finland and Sweden to the EU in
1995 significantly enlarged the land area and intro-
duced a new type of sparsely populated region – the
new Objective 6 – with extremely low population den-
sity, peripheral location, a general tendency for popu-
lation to decline, small markets and long distances
between towns and villages.

Evaluations show that the strategic choices made in
the Objective 6 programmes strongly reflected Com-
munity priorities and that favourable results were
achieved in terms of employment creation in particu-
lar, where the targets set were met in the regions con-
cerned in both countries. These were to increase the
number of jobs in private services and manufacturing
by 17,500 in Finland and by 9,500 in Sweden.

Community Initiatives: institutional
rather than economic value-added

The rationale for Community Initiatives, in general, is
to tackle the problems or issues facing the EU as a
whole, which can best be addressed through coordi-
nated action between Member States. They are com-
plementary to other programmes co-financed by the

Structural Funds and negotiated on a regional or na-
tional basis. Between 1994 and 1999, there were 13
such Initiatives, with a Community contribution of
nearly EUR 14 billion, representing around 9% of the
entire Structural Funds allocation.

Community Initiatives cover a diverse range of
themes, but have certain features in common. Four
aspects, in particular, contribute to their added-value
as compared with other Structural Funds measures:

•

•

•

•

they encourage transnational, cross-border and
interregional cooperation;

they increase involvement of people on the
ground (because of their ‘bottom-up’ approach);

they stimulate innovation and the incorporation of
the lessons learnt into regional, national and Eu-
ropean policies;

they help to diversify economic activity in areas
affected by declining industries.

Transnational, cross-border and
interregional cooperation

Transnational cooperation has been a feature of
most Community Initiatives (Adapt, Employment,
INTERREG II, Leader, Peace, Pesca, Regis II, SMEs),
the aim being to promote the concept of national, re-
gional, local and sectoral partners working together
with their counterparts in other Member States. Under
the Employment and Adapt Initiatives, for example,
all projects involved participants from more than one
Member State, while INTERREG entailed cooperation
between regions in different countries.

While the benefits are difficult to quantify, those who
have participated in transnational exchanges tend to
acquire a greater appreciation of the European Union
and of other societies and cultures. In institutional
terms, added-value is evident in the sustainable Eu-
ropean networks which have been established and
which will continue the exchange of experience and
transfer of best practice in the future, a form of coop-
eration which would be unlikely to develop to the
same extent without Community support.

Leader, Pesca, Regis and SMEs emphasised the ex-
change of good practice and the establishment of

142

III.2  The contribution of structural policies to economic and social cohesion: results and prospects

networks between Member States. Leader promoted
networks and more formal transnational cooperation
through its European Observatory. The SMEs Initia-
tive had a fund of EUR 25 million to finance three
types of transnational activity: tourism and the in-
ternet, international buyers’ exhibitions and the ex-
change of experience and good practice under the
Reacte project.

Cross-border cooperation is concerned with the de-
velopment of local and regional economies which
share common borders. INTERREG II has promoted
economic and social cooperation between regions
particularly disadvantaged because of their border
location and has also helped the applicant countries
to prepare for accession through cooperation
programmes with EU regions, many of them involving
the transfer of know-how. Cross-border cooperation
was also a major feature of
the special Peace
programme, agreed in 1994 to support the peace
process in Northern Ireland, through assisting pro-
jects operating across the border with the South, as
well as those aimed at encouraging reconciliation be-
tween the two communities in the province.

The mid term evaluations of INTERREG II indicate
different levels of cooperation:

• At its most basic, cross-border cooperation in-
volves the enhancement of physical
links,
whether in the form of roads, rail, sea ports or air-
ports. Such projects have predominated in
INTERREG II programmes in the southern Mem-
ber States (Spain and Portugal, in particular), but
a lack of real involvement by local and regional
authorities was noted in the evaluations.

• More intensive cooperation is evident in the de-
velopment of networks and partnerships between
organisations and institutions situated relatively
close to each other, but which, since they are
separated by a border, focus on other parts of
their region or country instead. Mid-term evalua-
tions of
INTERREG II programmes between
France, Belgium, the Netherlands and Germany
show cooperation becoming more intensive be-
(1992 to 1995) and
tween INTERREG I
INTERREG II (1995 to 2001).

•

The Scandinavian countries have a long history of
cooperation and INTERREG II has built on this by
forging even stronger links in certain areas of

also

policy,

extending
while
regional
programmes to include the applicant countries.
The mid-term evaluation of INTERREG IIA be-
tween Denmark and Sweden (Öresund) identi-
the
fied the development of new networks,
promotion of new initiatives and improved part-
nership as major benefits from the programme. It
concluded that it had created a ‘neutral platform’
for the development of cooperation between Co-
penhagen and Malmö. According to the evalua-
tion of the INTERREG IIC Baltic Sea programme,
cooperation with the accession countries has
been hampered by the different funding mecha-
nisms and procedures involved in INTERREG,
PHARE and TACIS, and these issues need to be
addressed in the 2000 to 2006 period.

On the basis of these evaluations, a Commission Re-
port on INTERREG (January 2000) concluded that
border regions, particularly in southern Europe often
lack experience of cooperation. Centralised adminis-
trative bodies inadequate acquaintance with each
other and a lack of mutual trust make the creation of
lasting cross border institutions difficult, as in the
case of efforts at cooperation generally. As a result,
the involvement of local and regional entities and of
the social partners remains limited, and in some
genuinely
cases
cross-border.

projects

been

have

not

So far as human resource development is concerned,
the EU-wide evaluations of Employment and Adapt
found problems in the establishment of transnational
partnership between projects, especially in the early
phases. Problems identified included responding to
different selection criteria and time scales in different
Member States and the difficulty of finding partners
with projects which had a sufficiently common sub-
ject matter to make working together meaningful.
These findings, which are equally relevant
for
INTERREG and other Community Initiatives, under-
line the need for greater efforts to develop the basis
for transnational and cross-border cooperation in the
future.

Area-based or ‘bottom-up’ approach

Several of the Community Initiatives focus explicitly
on local areas, in recognition of the fact that national
or regional responses are sometimes too generalised
to tackle the particular needs of a locality and that
those who live and work there are often best placed to

143

III.2  The contribution of structural policies to economic and social cohesion: results and prospects

develop appropriate measures. INTERREG II, Leader
and Urban all followed this area-based approach,
which led to capacity building, greater local auton-
omy and enhanced targeting of action, as well as a
greater ability to concentrate on areas of particular
need. The latter is a particularly valuable aspect of the
Urban Initiative, which puts emphasis on involving
residents in decisions on the design and develop-
ment of programmes.

Both Urban and Leader also emphasise the need for
integrated responses to area-based problems. Ur-
ban covers a wide range of projects combining re-
newal of obsolete infrastructure with measures
designed to stimulate the economy and employment.
Leader, whose acronym refers to ‘links between ac-
tions for the development of the rural economy,’ ex-
plicitly attempts to ensure that measures and
projects, whether in the same sector or different sec-
tors, are properly coordinated and integrated. At its
most effective, this means adopting a comprehensive
view of intervention, involving all the relevant aspects
(economic, social, cultural and environmental) and
endeavouring to implement as many multi-sectoral
measures as possible.

Sometimes termed a ‘bottom-up approach,’ this is
one of the most important aspects of the added value
of the Community Initiatives and has been incorpo-
rated into mainstream programmes for the 2000 to
2006 period, in the increased emphasis on local de-
velopment in the Structural Funds regulations. It has
also been strengthened as a key feature of the four
new Community Initiatives.

future Initiatives
evaluations recommended that
should predefine areas and forms of innovation at the
outset.

is

to

the

concept

innovation

of
Linked
‘mainstreaming,’ or the notion that the lessons learnt
from the Community Initiatives should feed into re-
gional, national or European policies as appropriate.
This was a particular priority for the human resource
Initiatives, Employment and Adapt, as well as Leader
and some of the sectoral Community Initiatives. The
evaluation of Employment identified two forms of
mainstreaming:

•

•

dissemination, where the project itself communi-
cates the results through documentation, semi-
nars, meetings and websites, usually to other
projects;

transfer, where the project engages with pol-
icy-makers at different levels to provide a means
of feeding the results into regional, national and
European policies.

The evaluation of Adapt found more evidence of hori-
zontal than vertical mainstreaming, which is poten-
tially more important but also more difficult to achieve.
The strategies for bringing this about were generally
weak in Member States, reflecting the complexity of
the process of
transferring experience gained
through bottom-up action to national policy and un-
derlining the need to develop appropriate mecha-
nisms in the Initiatives and mainstream programmes
in the 2000 to 2006 period.

Innovation and mainstreaming

Diversification

of

(2000)

Initiatives

the Community

identified three different

The support of innovative approaches, often devel-
oped on a transnational basis, was at the heart of sev-
eral
(Adapt,
Employment, Leader, SMEs), which encouraged the
design of new approaches and the testing of their im-
plementation. The EU-wide evaluation of Employ-
ment
forms of
innovation, process-oriented, goal-oriented and con-
text-oriented, and found that all three were an aspect
of most projects, with a particular emphasis on pro-
cess-oriented innovation, while the development of
new ‘pathways to integration’ was a theme running
through many projects. The Adapt evaluation (2000)
concluded that most projects were innovative ‘to
some degree,’ but few were ‘highly innovative.’ Both

A group of Community Initiatives was aimed at sup-
porting diversification in areas with an over-reliance
on particular industries in decline, specifically, the
defence industry, fishing, coal mining, the steel in-
dustry and textiles in the case of Konver, Pesca,
Rechar II, Resider II and Retex, respectively, while
Leader and Regis II had a similar aim. The timeframe
for most of these Initiatives was limited in order to in-
duce timely responses to the particular problems
concerned.

More generally, many of the Community Initiatives
have led to those living in areas where projects have
been implemented developing a clearer understand-
ing of the concept of ‘Europe’, as they see tangible

144

III.2  The contribution of structural policies to economic and social cohesion: results and prospects

benefits from the projects supported and possibly
come into contact with people in other parts of the EU.
Through the Initiatives, they have, therefore, gained a
greater awareness of the Structural Funds and of the
meaning of economic and social cohesion. This con-
trasts with many mainstream measures supported by
the Structural Funds, for which, according to the eval-
uations carried out, people usually do not know that
the EU is a major source of finance.

While the Community Initiatives appear to have had
significant positive effects in the 1994 to 1999 period,
evaluations have highlighted a number of deficien-
cies. Chief among them is the large number of Initia-
tives with overlapping aims and separate systems of
administration. From the standpoint of local, regional
and national authorities, as well as the Commission, a
clearer and more streamlined approach would en-
hance effectiveness.

Added-value of Community regional policy

The value added of Community involvement in re-
gional development is not only related to the expendi-
ture incurred as such. Benefits also stem from the
method of implementation developed in the 1988 re-
form of the Structural Funds, which was revised in
each subsequent programming period. Some as-
pects of the method were discussed in the first Cohe-
sion Report and so the focus here is on key elements
of the 1994 to 1999 period.

Programming: a more strategic approach
but with over-complex procedures

Programming and management based on partner-
ship are cornerstones of the 1988 reform of the Struc-
to which administrative
tural Funds. The extent
authorities have adapted to this has varied markedly
between Objectives, countries and regions.

In Objective 1 regions, the programme-based ap-
proach adopted made it possible to learn from expe-
rience, which benefited those responsible for
implementing measures on the ground.

In Objective 2 and 5b areas, the methods were assim-
ilated more quickly, although some authorities ex-
pressed concern about
the burden imposed in
relation to the resources allocated. In the case of Ob-
jective 3 and 4 measures, according to some Mem-
ber States, these were more difficult to plan because
the need for them depended on labour market condi-
tions which were determined exogenously.

Finally, Objective 5a measures remained outside the
programming process, because transfers continued
to be based on reimbursing Member States for part of
the expenditure incurred under existing support sys-
tems (apart from measures for the processing and
marketing of agricultural,
forestry and fishery
products).

The multi-annual planning process encouraged par-
ticipants to adopt a ‘strategic’ approach, resulting in
better selection and greater coherence of co-fi-
nanced projects. This change, however, has not yet
produced all the results expected because there was
often a failure to quantify programme objectives suffi-
ciently and, therefore, some difficulty in evaluating
them with any precision.

During the mid-term review of Objective 1 and 6
programmes, the Commission called for greater sup-
port of measures for increasing employment and
there is concrete evidence of the willingness to ad-
dress this issue: in Spain, Greece and, most espe-
cially, Italy, territorial employment pacts, for example,
were integrated into general programmes.16

Nevertheless, it should also be noted that approval
procedures for Community Support Frameworks, for
programmes and their modification have often
proved excessively onerous in administrative terms,
particularly for smaller programmes, which is hard to
justify from an efficiency perspective.

The simplification that has already been put into prac-
tice and the application of the new regulations should
allow greater flexibility in implementing procedures.

Partnership: an important aspect
but still limited in practice

Given the broad range of measures involved and ad-
ministrative weaknesses – often a major factor behind
lagging economic development – in many cases, the
process proved to be difficult and failed to produce
the expected results.

Partnership is the key to the implementation of struc-
tural policies, the aim being to ensure that all those in-
volved in the preparation,
implementation and
evaluation of Community measures cooperate

145

III.2  The contribution of structural policies to economic and social cohesion: results and prospects

effectively. The application of the principle requires a
clear definition of the respective tasks of each partner
and the deployment of appropriate methods and in-
struments. The partnership approach has to balance
the limits of coordination, the adoption of a global vi-
sion and the potential economies of scale realisable
at a central level against the best understanding of lo-
cal needs and the synergy and complementarity that
can be achieved at a decentralised level.

The principle has been developed over the years in
different ways:

•

•

•

•

•

a range of vertical partnerships involving local
and regional participants has been established to
implement regional programmes;

the social partners have been involved in human
resource programmes and measures;

cross-border cooperation programmes have en-
abled new structures of partnership to be estab-
lished to the benefit of peripheral regions in the
Union;

innovative policies for local and rural develop-
ment, the territorial employment pacts, in particu-
lar, have given rise to ‘micro-partnerships’,
according a major role to those involved at the lo-
cal level;

other forms, such as informal, horizontal and
transnational partnerships for exchanging expe-
rience between cities, regions and rural areas, of-
ten in different countries, have recently begun to
be created.

These different forms of partnership have become a
permanent means of exchanging information and
experience.

The implementation of the Structural Funds, more-
over, has pushed regions to define objectives and to
use their financial resources effectively. According to
a recent evaluation,17 the introduction of the partner-
ship approach has encouraged the priorities of all the
participants as a whole to be considered and recon-
ciled, so resulting in more coherent policies, as well
as the identification of a set of objectives which is
shared by all those involved.

The monitoring committees have proved to be effec-
tive means of agreeing on how to tackle problems
and how best to modify programmes in this regard,
even in Member States where decentralisation is
least developed, because a pragmatic approach has
enabled regional actors to be involved in the monitor-
ing process.

The decentralisation of responsibility for implementa-
tion, however, has highlighted the technical and man-
agerial limitations of regional and local authorities. In
some Member States, there were serious delays in
undertaking programmes managed at the regional
level as compared with those managed centrally, ne-
cessitating significant budget reallocations. In this re-
gard, Member States have not made sufficient use of
the technical assistance, which should have accom-
panied decentralisation and enabled some of the
problems encountered to be resolved.

In spite of Commission efforts, the participation of the
social partners in the planning and monitoring of
programmes was often unsatisfactory. They were not
well represented on monitoring committees (except
in respect of Objectives 3 and 4) and were not kept
fully informed of developments.

Finally, experience indicates that there has been
some confusion of roles and responsibilities in the or-
ganisation of tasks in cases where programmes were
jointly managed, which suggests that responsibility
needs to be defined in a more efficient and transpar-
ent way.

Management and financial flows: complex
and often poorly transparent systems

Financial management systems were tried out during
the first programming period and were then reformed
with the aim of increasing flexibility.

Because of the cooperation between the Member
States and the Commission and the vigilence of the
Court of Auditors, there were relatively few cases of
irregularity and fraud.

Nevertheless, the financial system governing the dis-
bursement of Community funds in the Member States
is often complex and varies between the different
sources of funding. As a result, there were often
lengthy delays in making payments in respect of
many programmes, creating uncertainty among

146

III.2  The contribution of structural policies to economic and social cohesion: results and prospects

recipients and so reducing their economic impact. In-
deed, even though delays may not actually have
occured, the possibility was enough to make it diffi-
cult for those concerned to plan ahead.

The mid-term evaluations emphasised that the finan-
cial system in place made it difficult to apply the co-fi-
nancing principle in a transparent way and that most
Member States regarded Community support as re-
imbursement of expenditure already incurred.

The improvement of financial arrangements is one of
the keys to improving the effectiveness of Community
action.

Monitoring and evaluation: significant
advances need to be consolidated

Two main factors stimulated the development of mon-
itoring and evaluation from 1988 on. On the one hand,
the new regulations encouraged Member States to
do more in this respect, while, on the other, because
of budgetary constraints, they became increasingly
concerned to ensure the efficient implementation of
programmes.

Since 1994, a series of measures has been intro-
duced by the Commission to improve monitoring and
evaluation procedures. In the first place, data on so-
cial and economic disparities between regions have
been improved to make it easier to analyse progress
in reducing them. Secondly, specialised evaluation
units were established in the Commission to coordi-
nate evaluation activities. Thirdly,
the MEANS
programme (Methods for evaluating action of a struc-
tural nature) was launched with the aim of creating a
‘culture of evaluation’ across the Union and facilitat-
ing exchange of experience between Member
States.

For their part, Member States – in the south of the Un-
ion as well as the north – have progressively devel-
oped more effective monitoring systems, which, in
the best cases, were based on quantified objectives,
well-defined indicators and better information. Na-
tional authorities, therefore, have increasingly estab-
lished a more effective structure of evaluation with
coherent guidelines, while regional authorities have
in many cases set up their own evaluation systems in
response.

While the benefits of an effective monitoring and eval-
uation system are widely recognised – for improving
policy-making and transparency as well as for their
own sake – the systems in place are not used in prac-
tice as fully and effectively as they might be. They are
often not comprehensive and, in many cases, they
are limited to financial indicators, which means that
the evaluations carried out cannot be fully integrated
into the decision-making process.

Leverage effects: an unbalanced
mix of loans and subsidies

Support from the Structural Funds has been crucial to
economic development
in Member States with
relatively limited budgets. It increased the level of
investment possible and so gave an added impetus
to growth, which in turn enabled private capital to
be mobilised. Over the 1994 to 1999 period, this
leverage effect was reinforced through a strengthen-
ing of the link between structural transfers and loans.
In Greece, for example, around 29% of the finance
investment undertaken came from
for the overall
in
though the figure was lower
private capital,
many other parts of the Union. To maximise the in-
vestment achieved in the future will require loans and
transfers to be combined in a way which is both judi-
resources
cious and manages public financial
effectively.

Outlook for the new programming
period, 2000-2006

The new programming period opens up new chal-
lenges. It should be possible to achieve renewed
progress towards convergence and higher rates of
growth in the less prosperous parts of the Union be-
cause of a more favourable outlook for the EU econ-
omy as a whole and a more efficient combination of
Member State and Community structural policies.
This will not happen to the fullest extent possible un-
less investment is allocated to priority areas where
the impact is greatest. Moreover, the effectiveness of
intervention is heavily dependent on respecting the
implementation and management conditions which
have been jointly established with the Member
States.

The two main conclusions to be drawn from model
simulations of economic developments over the new

147

III.2  The contribution of structural policies to economic and social cohesion: results and prospects

Convergence, cohesion and growth: impact of CSFs in 2000-2006

As for the preceding period, the macroeconomic ef-
fects of the Community Support Frameworks have been
assessed using several different econometric models
(Table A.43). The simulations18 were carried out for total
(public) expenditure (Structural Funds plus national
co-financing), which are assumed to cease after 2006 in
order to identify the supply-side effects on the recipient
economies .

In general, the QUEST II model suggests that the effects
will be more modest in Spain, Ireland, Portugal and
Greece, especially on GDP, than estimated by other
models, largely because of the inclusion of ‘agents’ ex-
pectations’, or the effect of anticipatory behaviour,
which tends to lead to interest rates and the exchange
rate adjusting to offset some of
the expansion in
investment.

Using the Hermin model, the estimated effect is to in-
crease real GDP in 2006 by around 6% in Greece and
Portugal and by 2.4% in Spain as compared with the sit-
uation without intervention. The effect is relatively mod-
est in Ireland (1.8%), where the Structural Funds only
account for under 10% of total public expenditure.

The CSF will increase investment by much more, espe-
cially in Portugal (by 23%) and Greece (14%), which will
add to effective demand via multiplier effects and, over
time, also tend to increase productivity, through im-
proved infrastructure and human capital as well as the
use of more modern, and therefore efficient, plant and
equipment. The effect on employment is likely to be sig-
nificant, but will tend to decline after 2006, because of
higher productivity.

Inflation is likely to be increased to varying extents. In
Greece, average prices are estimated to be pushed up
by most (4%), though the inflation rate will then decline.
In Ireland, the investment foreseen in the National De-
velopment Plan could raise inflation at the beginning of
the period because of very tight labour market condi-
tions and pressure on the construction industry. The
CSF, however, adds very little to the pressure on prices
and any effects are unlikely to extend beyond 2006.

The principal effect is higher growth, which is estimated
to continue beyond the programming period as a result
of investment strengthening the supply-side, or the pro-
ductive potential of the economy. The added growth in
GDP averages between 1-1.5% a year for Greece and
Portugal, 0.8% for Spain and 0.5% for Ireland. The rela-
tively small multiplier in Ireland and Portugal reflects the
openness of the two economies, which means that a
large part of the increased demand goes to imports, as
well as the assumed ‘crowding-out’ effects on the pri-
vate sector of higher public investment.

Significant effects are also estimated for other large
Member States which are major recipients of structural
assistance. The first analysis of the macroeconomic ef-
fects in the new German Länder, using the Hermin
model, suggests an increase in GDP of 4% during the
programming period, and 1.5% after, and added in-
vestment of around 6%. In addition, productivity is likely
to be boosted in manufacturing.

In the Mezzogiorno, the second largest recipient of
Structural Funds assistance, models developed by the
Italian authorities suggest growth above the EU aver-
age by 2004, while other models estimate that this is
likely only by the end of the programming period, and
then only if there were radical changes in economic be-
haviour and the efficiency of public investment.

programming period are, first, that structural policies
can create the conditions for higher economic growth
without increased inflation and, second, that through
this, they can increase employment and, therefore,
reduce structural unemployment (see Box).

Coherence of national and
Community priorities

Strategic guidelines19 for the 2000 to 2006 period
have been adopted to achieve an optimal and more
targeted use of Community resources. Priorities and

148

strategic objectives have been established by the
Member
the
Commission.

consultation with

States

after

Ex-ante evaluations initiated by Member States
helped, in most cases, improve the coherence and
quality of plans, notably by relating priorities and ob-
jectives more closely to the analysis of social and
economic problems. The Commission, moreover, en-
couraged Member States to concentrate more re-
sources on priorities and high-impact measures,
making Community intervention more visible and
efficient.

III.2  The contribution of structural policies to economic and social cohesion: results and prospects

Under Objective 1, the Community guidelines imply a
significant adaptation of regional development strat-
egies over the programming period.

strategic objectives, such as limiting cross-city traffic,
the extension of public transport and the construction
of high-speed rail links.

Transport: towards a better balance

Reduction in direct support for firms

Transport is a major priority in the new programming
period (accounting for around 19% of the Structural
Funds allocation – Table A.36 in Annex). The balance
between different modes of
transport has been
shifted towards rail from road. For example, under the
CSF in Portugal, the number of passengers travelling
by rail is planned to increase by 600,000 in 7 years
(from 3.8 to 4.4 million a year), as well as the metro link
between Lisbon and the airport being completed.
The plan envisages a doubling of investment in rail in
terms of Euros per head (from EUR 193.6 in 1996 to
EUR 373 in 2006), while spending on road improve-
ments will remain unchanged.

Under the CSF in Greece, at least 650 km of double-
track railway lines are planned to be electrified in or-
der to complete the trans-European Network by 2006
and new metro lines will be constructed in
Thessaloniki and Athens, signalling a shift towards
more environmentally friendly forms of transport. In
due course, 26% of journeys in Athens will be made
by metro.

In Objective 1 regions in Spain, new high-speed train
routes are planned, doubling the length of track from
623 km to 1140 km in 2006.

In Germany, very few infrastructure projects were fi-
nanced in the previous period, other than those
aimed at supporting productive activity, such as
roads linking industrial sites or ports. Over the 2000 to
2006 period, in contrast, investment of EUR 1.5 billion
is planned for German Objective 1 regions, around a
third on rail projects.

Upgrading road and motorway networks, neverthe-
less, remains a priority in the cohesion countries,
given their present state and the need to make up de-
ficiencies in respect of the trans-European networks.

The need to ensure sustainable development was al-
ready a priority during the previous programming pe-
riod, all infrastructure and transport projects being
subject to environmental assessment. The orientation
of the CSF for the present period makes clear that this
will be continued, as reflected in the choice of

A marked reduction is planned in the share of trans-
fers going to direct support of firms, particularly in the
cohesion countries and Italy, as a result of stricter
regulation of state aids and the recognition of the sig-
nificance of deadweight losses from these. Ireland is
the most extreme case, with the Structural Funds pro-
viding no direct aid to industry (except for research
and innovation programmes). In Italy, the national aid
scheme to support industry (Law 488) has been re-
vised to tailor assistance better to the specific sec-
toral and territorial
firms in the
Mezzogiorno.

features of

Increased efforts to promote
innovation and human capital

Total funds allocated to research, technological de-
velopment and innovation (RTDI) are planned to re-
main unchanged, at around 3.5% of total Structural
Funds expenditure, except in Italy and Ireland, where
the shares have risen to 8% and 10%, respectively.
This, however, conceals a relative decline in invest-
ment in infrastructure and research projects and a
shift towards a more open approach to innovation
and collaboration between research institutes and
industry.

is
In the Member States where the RTDI shortfall
greatest, a shift in the orientation of policy is most evi-
dent, in the form of:

•

•

•

improved links between RTD and the needs of
firms, through measures to transfer innovation
and technology; this could lead, for example, to
an increase in private RTD in Spain (to 45% of the
total in 2006 as against 35% in 2000);

an increase of employment in the RTD sectors, of
40% in Greece, and to 0.5% of the total in Portugal
and Objective 1 regions in Spain;

increased involvement in international networks
(a 50% increase in scientific publications with
Portuguese involvement, for example).

149

III.2  The contribution of structural policies to economic and social cohesion: results and prospects

The Information Society: a strategic
reorientation towards demand

supporting the EES, but the ESF is the main financial
means at the EU level of pursuing the strategy.

Investment in telecommunications will be substan-
tially reduced in the new programming period, due to
privatisation and competition between providers.
Most effort is aimed at services and applications in
support of SMEs (e-commerce) and the public sector
(health and education), which represents a signifi-
cant change in regional policy. Accordingly,
the
Structural Funds are making a major contribution to
the development of an e-Europe. Support of telecom-
munication infrastructure is generally limited to the
most isolated areas, where the return does not justify
private investment. Member States have set relatively
ambitious targets under their CSFs, including:

•

•

providing Internet access for schools (the propor-
tion of schools in Greece connected to the
Internet increasing from 5% in 2000 to 100% in
2006) and the population at large (the proportion
connected in Spain being planned to rise from
5% in 1998 to 25% in 2006);

a wider spread of electronic commerce in SMEs
(to 15% of SMEs in Greece in 2006 from 1% in
2000).

Human resources: link to the
European Employment Strategy

Investment in human resources plays a strategic role
in Community policies for economic and social cohe-
sion, accounting for 30% of the Structural Funds in the
new programming period, the same as in the previ-
ous one. The objectives are twofold: to help realise
the human resource potential of the Union and so
contribute to economic development
in Member
States and regions and to allow everyone equal ac-
cess to the labour market. The European Employment
Strategy has encouraged policies on employment,
the labour market and the fight against social exclu-
sion to be integrated and the new programmes have
a similar aim together with that of promoting policy
convergence across the EU.

Over the next 6 years, the ESF will provide around
EUR 60 billion to support the European Employment
Strategy (EES), in addition to Member States’ own fi-
nancing of labour market policies, a contribution of
some 9% to total expenditure in this area. Other Struc-
role in
tural Funds will also play an important

The programmes for 2000 to 2006 reveal a strong link
between the ESF and the EES, most obviously in the
greater focus on the preventive action, in the form of
support for those most at risk of becoming long-term
unemployed. In addition, future ESF programmes will
have a firmer commitment to gender equality, social
inclusion and wider access to information and com-
munication technologies to combat what might be
termed ‘the digital divide’. In most Member States, the
ESF has been extended beyond a narrow focus on
training to wider support of measures designed to im-
prove the effectiveness and responsiveness of labour
market policy. For some countries, the ESF ‘policy
frame of reference’20 has also provided a useful basis
for securing a coherent approach to the various poli-
cies under the three Objectives of the Structural
Funds and to the various groups involved.

A preliminary review of the ESF support for Objectives
1 and 321 under the 4 pillars of the EES indicates that
between 2000 and 2006:

•

•

•

•

around 60% of funds will go towards improving
the employability of the work force, to co-financ-
ing active labour market policies and measures to
promote social
lifelong
learning. Objective 1 regions, in particular, will
use ESF support to modernise their public em-
ployment services to improve the functioning of
labour markets;

inclusion and support

some 12% of funds will go to support the develop-
ment of entrepreneurial skills, helping business
start-ups and establishing networks of entrepre-
neurs to help maximise the benefits of support;

around 20% of funds will go to supporting adapt-
ability in the workplace, much of it to promoting
continuing training of the work force. There will
also be a sharper focus on the specific needs of
SMEs than previously;

around 6% of funds will go to supporting equal
opportunities for women, the fourth pillar of the
EES, much of it to helping the development of ef-
for
fective child-care measures. ESF support
equal opportunities, however, will far exceed this
figure.

150

III.2  The contribution of structural policies to economic and social cohesion: results and prospects

Greater integration of environmental aspects

The environment is increasingly recognised as a key
aspect of cohesion policy. In line with the Amsterdam
Treaty, the Commission guidelines emphasise the im-
portance of incorporating the concept of sustainable
development in the new structural programmes. The
new regulation explicitly includes a requirement to
carry out an environmental evaluation, which in-
cludes an environmental impact assessment, compli-
ance with Community legislation on the environment
and the involvement of environmental authorities in
the preparation and implementation of programmes.

of

environmental

Member States and regions are becoming increas-
ingly proactive in both the conception and implemen-
aspects
tation
regional
in
development programmes,
including carrying out
ex-anteevaluations of the situation in eligible regions
and of the impact of proposed measures and estab-
lishing appropriate criteria for follow-up.

More generally, the Structural Funds seem increas-
ingly to provide a favourable means of implementing
EU environmental policy. For example, respect of the
HABITAT directives, concerning the protection of nat-
ural sites, was set as an essential condition for ac-
cepting plans and programmes.

Taking account of equal opportunities

Securing equality of opportunity between men and
women has been given new emphasis by its inclusion
as one of the Community tasks set out in the Treaty of
Amsterdam. The regulations for the Structural Funds
for 2000 to 2006 reflect this by stipulating that there
should be a greater consideration of equal opportuni-
ties in all policies and at all stages.

addressed through pilot projects

In the 1994 to 1999 period, equal opportunities were
mostly
or
ring-fenced allocations for positive action and, in
general, they were viewed as an issue for the ESF
alone.

The 1999 regulation explicitly requires ex-anteevalu-
ation of this dimension in all plans and Single Pro-
gramming Documents (SPDs). While the appraisals
carried out by Member States were variable in quality,
the fact that they were carried out at all represents an
important first step. The evaluations undertaken in
Finland, Germany and Wales are examples of good

practice, while Italy has developed an innovative ap-
proach to examining direct and indirect benefits on
men and women.

Contribution of EAGGF Guarantee to
rural development policy

Twenty-seven different measures were co-financed
by the EAGGF Guarantee as part of its contribution to
rural development policy. On the basis of
the
programmes approved up to now by the Commis-
sion, the allocation from this fund go, in the main, to
measures which are directly linked to the agricultural
sector (see Table A.44). Less than 7% of allocations
go on measures for economic diversification outside
agriculture.

Improving efficiency and
the evolution of instruments

The new regulations impose a programming system
organised by Objective as before, but in a simplified
and more flexible form, with stricter controls on
additionality, more inclusive and responsible partner-
ship and greater focus upon results.

Simplified and decentralised programming

In the new programming period, negotiations have al-
ready taken place and, in most cases, agreement
reached on the CSF, SPDs and Operational
Programmes (OPs) for Objectives 1, 2 and 3, the
guidelines have been adopted and the Community
Initiatives (INTERREG III, Urban II, Equal, Leader II)
and the new generation of innovative measures have
been launched.22

In line with the new rules, the number of programmes
has been greatly reduced, to around 400, from 1134
in the previous period (including 524 Community Ini-
tiatives). In the few cases – mainly in Spain – where
programmes were separated by Fund, the authorities
established an integrated multi-fund OP or SPD, al-
lowing positive synergy between the measures
envisaged.

Once the operational programmes have been ap-
proved by the Commission, Member States will pre-
pare complementary information, containing details
of the measures, while leaving scope for more flexible
management without infringing the regulations laid

151

III.2  The contribution of structural policies to economic and social cohesion: results and prospects

down, notably in terms of quantifiable objectives and
indicators for monitoring.

Additionality: a means of increasing effectiveness

Since 1989, the application of the additionality princi-
ple commits Member States to maintaining at least
the same level of public expenditure on structural
measures – excluding the EU contribution (Table
A.45). The principle was defined in 1993 and the 1999
reform simplified the procedures for verification.
There are, however, exceptions, such as economic
circumstances or exceptionally high expenditure in
the past, which allow Member State to reduce
expenditure.

Additionality is assessed in respect of expenditure
under each Objective. For the 2000 to 2006 period,
the procedure has been simplified in two ways:

•

•

for Objectives 2 and 3, additionality is jointly veri-
fied on the basis of active labour market expendi-
ture across each Member States as a whole;

verification is carried out only three times, before
adoption of programmes (ex-ante), at
the
mid-point, and towards the end of the program-
ming period.

Towards inclusive and responsible partnership

Partnership has progressively been widened in suc-
cessive programming periods, from the inclusion of
regional and local authorities in 1989 to 1993, and of
the social partners in 1994 to 1999, to the planned in-
clusion of representatives from various groups (such
as non-governmental organisation, or the equal op-
portunities movement) in 2000 to 2006.

This widening reflects the efficiency gains achieved
in the last two programming periods (Table 21).

In Italy,

The preparation of the new CSF highlighted the in-
creased awareness of the roles of the various partici-
pants in the programming phase.
the
authorities set up a broad consultative framework,
bringing together local representatives (regional,
provincial, communal), central Government Ministers
(for employment, agriculture, environment and equal
opportunities) and representatives from employers’
organisations, trade unions and non-governmental
organisations. This led to the production of interim re-
ports, which formed the basis of the development
plan for the Mezzogiorno. Such a broad structure of
partnership and the need to consult with all members
can, however, give rise to delays in the decision-mak-
ing process.

In the 2000 to 2006 period, responsibility for manage-
ment has been determined according to the princi-
ples of decentralisation and subsidiarity. The
counterpart to this is the need to improve transpar-
ency, especially for financial management, control of
specific measures and project selection procedures.
It is important to establish new procedures for sharing
information to ensure that each participant can oper-
ate effectively and exercise their responsibility. In
particular:

•

•

•

responsibilities need to be defined and divided
between those involved in the programming,
those managing the measures and those paying
for them;

information networks need to be set up to collect
and transmit data for monitoring;

the responsibility of all those involved needs to be
increased to improve transparency of financial
flows;

Table 21  Programming of Structural Funds: the experience

Process

Preparation of plans

Strategic guidance

Management

Partnership

Phase 1 (1989-93)

Phase 2 (1994-99)

Phase 3 (2000-06)

Exclusive

Passive

Split by Fund and
organisation

Exclusive

Reactive

Embryonic

Integration/
fragmentation

Semi-exclusive

Systematic

Interactive

More active

Responsabilities/
transparency

Inclusive

Integral

Monitoring and evaluation

Non-systematic

152

III.2  The contribution of structural policies to economic and social cohesion: results and prospects

•

scope for initiative needs to be widened to im-
prove
and simplify
procedures.

operational

efficiency

Partnership and decentralisation (the corollary of the
former) are the basic principles underlying a new ap-
proach to structural policy, which is more in line with
the need for a new form of governance, in place of tra-
ditional management, to conceive and implement the
programmes in question.

Management focusing on results

The new regulations emphasise the importance of
monitoring and evaluation to increase the effective-
ness of structural policies.

The aim of the Commission and the Member States
is to ensure effective monitoring by defining quan-
titative objectives and appropriate indicators in re-
spect of approved programmes. The indicators are
intended to measure the impact of the programme,
both directly (the infrastructure constructed, the
amount of training provided and so on) and indi-
rectly (the gains in efficiency, for example) as well
as the wider economic and social effects (such as
on employment).23 Electronic information systems
for the collection and processing of the relevant
data are increasingly being established in Member
States.

The new regulations provide for financial manage-
ment procedures which are simpler, but more rig-
taking primary
orous, with Member States
responsibility for controlling expenditure, a task
they will need to perform more strictly than before.
In particular, a provision has been introduced for
suspending a project automatically if the funds al-
located are not absorbed within two years.

Regular and reliable evaluation of intervention can
be regarded as evidence of transparency and effi-
ciency. Substantial progress has been made in this
regard, especially in Member States where there
was not much of an evaluation culture. On the one
hand, the managing authorities have an essential
responsibility for organising intermediate evalua-
tions and the (proactive) use of the results. On the
other, the Commission is responsible for ex-post
evaluations, identifying the results achieved and
drawing lessons for the future.

The introduction of the ‘performance reserve’ adds
a new dimension to evaluation by giving an incen-
tive to achieve the objectives set beforehand for
each measure. Even though the Commission’s
more demanding proposal was not accepted (to al-
locate 10% of funds to the reserve), Member States
will, nevertheless, have to assign 4% of total Com-
munity funds (around EUR 5 billion) to programmes
according to certain criteria,
linked to the effi-
ciency of financial management and their effec-
tiveness. In implementing this provision, however,
account will need to be taken of administrative and
institutional features of Member States.

The Commission has played an important role in
establishing these new arrangements, through dis-
cussions and by defining the methodological
guidelines. Though demanding and difficult to im-
plement, a system of management by results has
become necessary to improve the transparency
and effectiveness of policy.

Preparing for enlargement:
pre-accession support

Up until 1999, Community intervention in candidate
countries was financed by the PHARE programme, in
the case of the ten countries in Central Europe, and
by the funds allocated to southern and eastern Medi-
terranean countries, in the case of Cyprus and Malta.
Since the beginning of 2000, the funds for the former
group have been increased through the creation of
two new instruments, the Instrument for Structural
Policies for Pre-Accession (ISPA), in preparation for
the Cohesion Fund, and the Special Accession
Programme for Agriculture and Rural Development
(SAPARD).

In 2000-2006, PHARE is providing some EUR 11 bil-
lion of co-financing support for institution-building,
through ‘twinning’ and technical assistance, as well
as for investment to help applicant countries in their
efforts:

•

to strengthen their public administration and insti-
tutions so that they can function effectively inside
the Union;

153

III.2  The contribution of structural policies to economic and social cohesion: results and prospects

•

•

to promote convergence with the European Com-
munity’s extensive legislation and reduce the
need for transition periods;

to further economic and social cohesion.

The ‘PHARE 2000 Review-Strengthening prepara-
tions for Membership’, approved by the Commis-
sion in October, 2000,24 assessed whether
PHARE’s guidelines, as introduced in 1997, and
updated in 1999, still meet candidate countries’
needs and whether any further refinements are re-
quired.

It takes into account the new context arising from
the adoption of Agenda 2000 at the Berlin Euro-
pean Council, including the increase in the PHARE
budget, and the progress achieved in the acces-
sion negotiations with the ten countries which are
eligible for PHARE assistance from 2000.

The review concluded that PHARE’s current guide-
lines continue to address the main needs of the ap-
plicant countries. Accession-led programming of
PHARE should continue, based on Accession Part-
nerships, National programmes for the adoption of
the acquis, regular reports and the negotiations
process. PHARE’s primary objective must remain
institution building and promoting convergence
with the Community’s acquis communautaire, di-
rectly helping the countries to comply with the po-
litical, economic and acquis communautaire
criteria set by the Copenhagen Council in 1993.

But the review identified two challenges for PHARE
in the period 2000-2006:

1) Delivering on the past reforms.There should be a
period of relative stability to consolidate the past
reforms and to ensure their full benefit is ob-
tained. In addition, some of the 1997 reforms
must be refined to respond to the constructive
criticisms of the Court of Auditors and European
Parliament. Moreover, efforts to increase the ab-
sorption capacity in the applicant countries must
be further emphasised.

2) Moving to the Structural Funds. The aim is to de-
vote about half the investment element of PHARE
within national programmes to this objective,
which is to:

154

PHARE’s history – 1989 to 2000

The PHARE programme is one of the three pre-ac-
cession instruments financed by the European
Communities to assist the applicant countries of
Central Europe in their preparation for joining the
European Union.

The PHARE programme has been providing sup-
port to the countries of Central Europe since 1989,
helping them through a period of massive economic
restructuring and political change. Following the
1993 Copenhagen Council’s invitation to Central
European countries to apply for membership,
PHARE support was reoriented and support for in-
frastructure investment was expanded markedly.

However, PHARE’s ‘pre-accession’ focus was put in
place only in 1997 in response to the Luxembourg
European Council’s launching of the present en-
largement process. PHARE funds now focus en-
tirely on the pre-accession priorities highlighted in
each country’s Accession Partnership. Civil ser-
vants from Member States are now seconded
through ‘twinning’ to assist their counterparts in pre-
paring for accession. In addition, PHARE’s manage-
ment was
integrated into the structure of
government in applicant countries through the cre-
ation of the National Fund and a small number of im-
plementing agencies.

These basic orientations were adjusted in 1999 to
reflect the launch of SAPARD for agriculture and ru-
ral development and of ISPA for transport and envi-
ronment
infrastructure. The principal adjustment
was to redirect PHARE’s funds to adressing the
problem of economic and social cohesion.

a) prepare for the implementation of Structural
Funds in candidate countries by putting in
place the necessary administrative and bud-
getary structures;

b) allow these countries to benefit from a first
generation of integrated regional develop-
ment programmes of an Objective 1 type, so
contributing to their economic and social co-
hesion.

The PHARE-INTERREG programme

Since 1995, following a European Parliament initia-
jointly with INTERREG, has also
tive, PHARE,

III.2  The contribution of structural policies to economic and social cohesion: results and prospects

financed cooperation programmes between border
regions of the EU and the candidate countries, and
between the candidate countries themselves, after
the revision of the PHARE-CBC regulation in 1998.

Fund activities and to other areas of Community pol-
icy. It should, however, be emphasised that SAPARD
can only make a limited contribution to meeting the
challenges in rural areas.

On the basis of the new PHARE CBC Regulation and
the new INTERREG guidelines, a Single Program-
ming Document, covering regions on both sides of
the border and including joint cooperation priorities
for the 2000-2006 period has been prepared for each
eligible border.

improvements

Further
towards better aligning
PHARE-CBC and INTERREG were included in the
above mentioned Communication, notably to allow
PHARE-CBC to support projects similar in size to
those under
INTERREG (through a new ‘mea-
sure-by-measure’ approach to finance projects be-
tween EUR 50,000 and EUR 2 million from 2001).

ISPA

ISPA, with a budget of EUR 1,040 million a year, is
aimed at enabling the candidate countries to meet
Community environmental standards and at the con-
struction of trans-European transport networks. Prior-
ity has been given, in the case of the environment, to
drinking water supply, waste water treatment, waste
management and reducing air pollution, in the case
to projects which are environmen-
of
tally-friendly and of wider Community interest, which
accord with the priorities established by the Ministers’
Conferences in Helsinki and Crete.

transport,

SAPARD

Budgetary impact on cohesion

SAPARD, with an annual budget of EUR 520 million,
finances structural measures for agriculture, the pro-
cessing and marketing of products and rural devel-
opment (Table A.46).

By decentralising management, this programme will
give the future Members States an opportunity to gain
valuable experience in applying procedures for man-
aging rural development programmes. On a broader
front, the investment made at present will build skills
which will be readily transferable to other Structural

The area of intervention of these three pre-accession
instruments is similar to that of the Structural and Co-
hesion Funds. In particular, the funds allocated under
PHARE to ‘institution-building’ go to a special
programme for preparing countries for managing the
Structural Funds, while ISPA and SAPARD perform
the same task in respect of the Cohesion Fund and
the structural part of the EAGGF. The projects fi-
nanced are similar to those eligible for support from
the Structural and Cohesion Funds in Member States.

Table 22  Annual breakdown of pre-accession funding, 2000-2006

PHARE

SAPARD

ISPA

Total

Minimum

Maximum

Minimum

Maximum

EUR mn at 1999 prices

Bulgaria

Czech Rep.

Estonia

Hungary

Latvia

Lithuania

Poland

Romania

Slovakia

Slovenia

Total

100.0

79.0

24.0

96.0

30.0

42.0

398.0

242.0

49.0

25.0

1085.0

52.1

22.1

12.1

38.1

21.8

29.8

168.7

150.6

18.3

6.3

520.0

PHARE total annual budget is EUR 1,577 million
Source: European Commission

83.2

57.2

20.8

72.8

36.4

41.6

312.0

208.0

36.4

10.4

124.8

83.2

36.4

104.0

57.2

62.4

384.8

270.4

57.2

20.8

235.3

158.3

56.9

206.9

88.2

113.4

878.7

600.6

103.7

41.7

1040.0

2645.0

276.9

184.3

72.5

238.1

109.0

134.2

951.5

663.0

124.5

52.1

155

III.2  The contribution of structural policies to economic and social cohesion: results and prospects

The amounts committed represent a significant pro-
portion of the current investment by public authorities
in the countries concerned (Table 22).

Cyprus and Malta

Cyprus and Malta have been associated with the Un-
ion since 1972-73 and have been in receipt of Com-
munity assistance under four successive financial
agreements. These were replaced in December 1999
by a single pre-accession instrument with a budget of
EUR 95 million for the period 2000 to 2004.

In the current phase of pre-accession, more aid has
been made available than on previous such occa-
sions, with the aim of accelerating the adoption of the
acquis communautaire. Despite being small,
the
funds committed are a means of helping countries
prepare for the implementation of cohesion policies,
required to reduce the significant regional disparities
which exist.

Commission Decision of 1st July 1999.
Eligibility criteria defined by Article 4 of the General Regulation 1260/99.
Commission Communication to the Member States on regional policy and competition policy: strengthening their concentration and
their coherence, OJEC C90 26.03.98.
European Commission, ‘Structural and Cohesion Funds, Guidelines for programmes in the period 2000-2006’, COM (1999) 344 final
European Commission, Report on the Cohesion Fund (1999).
London School of Economics, The socio-economic impact of projects financed by the Cohesion Fund, 1999.
Over a third of SMEs in the Union (around 18 million) are located in areas eligible for Structural Funds assistance, of which 3 million
are in Objective 1 regions.
COM (1998)275, ‘Renforcer la cohésion et la compétitivité par la recherche, le développement technologique et l’innovation’,
Communication of the Commission 12.06.1998.
RITTS (Regional strategies for innovation and technology transfer) have been financed under the Innovation Programme of the 4th
Framework Programme.
COM (97) 7, ‘Economic and social cohesion and the information society’, Commission Communication.
European Commission, ‘From telecommunications to the information society: evaluation criteria for the 2000-2006 programmes’,
Technical Document n°2, 1999.
RISI (Regional information Society Initiatives) were financed under Article 10 of the ERDF and Article 6 of the ESF.
European Policies Research Centre (EPRC), ‘Objective 2: Experiences, lessons and policy implications’, July 1999.
European Commission, ‘Conclusions of ESF final evaluations, 1999’.
ENESAD, ‘Synthesis of intermediate evaluations of Objective 5b in France’, April 1998.
European Commission, ‘Mid-term review of Objective 1 and 6 programmes – Better management through evaluation’, 1997.
Tavistock Institute, ‘Thematic evaluation of the partnership principle’, 1999.
For Quest II: Röger, W. (1996) ‘Macroeconomic evaluation of the effects of CSF with Quest II’ (paper presented at the European
Conference on evaluation methods for Structural Funds intervention, Berlin 2-3 Dec. 1996). For Hermin: Bradley, J. (2000) ‘The
impact of CSF on objective 1 countries – 1989-2006’ (study for the Regional Policy DG of the European Commission). The detailed
results are presented in the Annex.
European Commission, ‘The Structural Funds and their coordination with the Cohesion Funds – Guidelines for the 2000-2006
programmes’, COM (1999) 344 Final.
A document which sets out the context for support for employment and human resources development in each Member State.
At the time of drafting full details on Objective 2 programmes were not available.
The Commission has announced priorities for the four Initiatives and has decided the allocation of the overall amount (EUR 10.44
billion or 5.3% of the total Structural Funds) between Member States.
European Commission, ‘Indicators for monitoring and evaluation’, Working Document n°3, 1999.
C(2000)3103.

1
2
3

4
5
6
7

8

9

10
11

12
13
14
15
16
17
18

19

20
21
22

23
24

156

Regional features in Turkey

Regional features in Turkey

Since the Helsinki summit, Turkey has become the 13th
candidate country for accession to the EU.

age, or only 7% to 16% of the EU average, lower than
in any other regions in the candidate countries.

Regional disparities

According to OECD data, GDP per head in terms of PPS
is only 33.4% of the EU average. Indeed, the difference
in relation to the EU seems to have persisted for many
years at around this level, going back at least to the be-
ginning of the 1950s, higher GDP growth than in the EU
being offset by high population growth. Regional dis-
parities are associated with significant differences in
geographical features and climatic conditions, though
they also have their roots in the substantial migration
flows which occurred during the troubled times at the
end of the 19th century and first half of the 20th.

The data available on GDP per head by province, of
which there are 80 and which have been aggregated
into 19 regions of approximately NUTS 2 size, illustrate
the scale of disparities in 1997:

Social disparities

Employment

In 1998, the official unemployment rate was estimated
at 6.3% of the labour force, but this does not reflect the
true situation given the absence of an unemployment
benefit system and substantial under-employment. Of
the 20.5 million in civilian employment, 5.5 million were
unpaid family workers, mostly women. While the activity
rate of men was much the same as the EU average
(79%), for women, it was considerably lower (29% as
against 59%), particularly in urban areas (15%). Data on
occupations suggest that women face considerable dif-
ficulties, or even discrimination, in finding a job in manu-
facturing or services.

Education

(cid:127) between east and west: two-thirds of the population
were concentrated in the west of the country in half
the land area, accounting for 82% of national GDP,
and with GDP per head 23% above the national aver-
age (41% of the EU average). In the east, GDP per
head was 53% of the national average, much the
same as 10 years earlier;

The rate of illiteracy is still significant (18% as against
3% in Greece), even among young people in the work
force and especially among women (24%). Participa-
tion in compulsory schooling is below 90% of the age
group concerned, largely due to children working, 1 mil-
lion of those between 6 and 14 being in work, a third of
them under 12.

(cid:127) between coastal and inland regions: GDP per head in
the four coastal regions as a whole accounting for
55% of the population is 26% above the national aver-
age;

Structural policies

Regional policy

(cid:127) in two regions (Istanbul and Izmit), GDP per head was
substantially above the national average (53% and
70% higher, respectively), or around half the EU aver-
age;

In contrast to the other candidate countries, Turkey in-
troduced a regional policy during the 1970s with an aid
scheme for business. The provinces assisted ac-
counted for a third of the population and had an average
level of GDP per head of 56% of the national average.

(cid:127) in 7 regions (Aegean Sea, the southern coastal areas,
Ankara), GDP per head was up to 50% above the na-
tional average, or between a third and a half of the EU
average;

(cid:127) in 7 regions (around Anatolia, the Black Sea coastal
areas), the level was between half and 100% of the
national average, between 20% and 33% of the EU
average;

(cid:127) in the remaining three regions, in eastern Anatolia, the
level was between 20% and 50% of the national aver-

The policy, however, has not produced significant re-
sults. Because of security problems during the 1990s,
financial aid did not attract many firms to eastern re-
gions. Moreover, problems of lagging development
in the coal
were compounded by difficulties
(Zonguldak) and the iron and steel
(Karabük)
industries.

Data on public investment, which is still substantial be-
cause of a large nationalised industry sector, indicate
that support of disadvantaged areas was small. In 1997,
total spending on investment amounted to around EUR

157

Regional features in Turkey

194 per head, of which some 40% went on regional
measures.

Health

Social policy

The macroeconomic adjustment underway will have
lasting effects only if it is accompanied by a broad
range of social reforms. Much needs to be done in re-
spect of employment legislation, equal opportunities,
social protection, health care, education and humans
rights.

Social expenditures accounts for only 7% of GDP as
compared with 25% in the European OECD countries,
leaving a large part of the population without adequate
protection.

Employment

There is no general unemployment compensation sys-
tem in Turkey. Under employment regulations and col-
lective agreements, dismissals give entitlement to a
fixed payment proportional to the time spent in a job.
However, 50% of employment is not declared and col-
lective agreements cover only 35% of those in officially
declared jobs. There is no provision in employment leg-
islation against sex discrimination and, according to the
1998 UNDP report on human development, discrimina-
tion is institutionalised and a structural feature of the la-
bour market.

In 1998,

The current health care system is costly and not particu-
the deficit on expenditure
larly effective.
amounted to 2.7% of GDP and accounted for a third of
the total budget deficit. Access to health care is un-
equal, with rural areas being especially disadvantaged,
expenditure on public health centres, mainly located in
rural areas, declining from 7% to 3% of the total health
budget between 1992 and 1996.

Education

Despite a relatively large number of children of school
age, spending on primary and secondary education
amounts to only 2.1% of GDP, against an OECD aver-
age of 3.4%. Expenditure per pupil in primary schools is
only just over 20% of the OECD average, while in sec-
ondary schools it is only around 12%. For the poorest
families, children are a significant source of income and
there is no Government policy to encourage parents to
send them to school.

Conclusions

In the context of preparing for accession, it is essential
that Turkey develops regional and social policies capa-
ble of responding to needs and enabling it to participate
in EU programmes for strengthening economic and so-
cial cohesion.

158

Statistical annex

A.1 Disparities in unemployment,  EU15 1970-99; 

A.2 Regional disparities in employment rates, 

EU27 1998-99

% labour force

Unemployment rate

12

10

8

6

4

2

0

EU27

EU27

EU27

Standard deviation of 
unemployment rate (by region)

Standard deviation of unemployment 
rate (by Member State)

12

10

8

6

4

2

0

80

70

60

50

40

30

20

10

0

EU12, 1988-99

% population 15-64

Employment rate 

Coefficient of variation (%)

Coefficient of variation 

Excluding A, FIN, S and new German Länder

NUTS2 level, except for Ireland (national level) and UK (4 countries)

40

30

20

10

0

1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999

A.3 Earnings by level of educational attainment, 

A.4 Poverty and social protection transfers, 1995

1995

Ratio to earnings of those with low education

Earnings of those with high education
Earnings of those with medium education

3.0

2.5

2.0

1.5

1.0

0.5

0.0

P I

IRL E L EL UK F A B NL

FIN D DK

EU15

Population with income below poverty line
Social protection transfers as % GDP
Unemployment rate

3.0

2.5

2.0

1.5

1.0

0.5

0.0

%

40

35

30

25

20

15

10

5

0

B DK D EL E

F IRL

I

L NL A

P FIN S UK

EU

A.5 Distribution of GDP by region,  EU15, 1998

A.6 Distribution of GDP by State, US, 1998

% EU GDP (EUR)

100

100

100

% US GDP (US$)

20% of population in regions with lowest GDP account for 11% of EU GDP

20% of population in regions with lowest GDP account for 16% of US GDP

20% of population in regions with highest GDP account for 30% of EU GDP

Ratio of GDP between highest and lowest 20% = 2.62

20% of population in regions with highest GDP account for 24% of US GDP

Ratio of GDP between highest and lowest 20% = 1.51

90

80

70

60

50

40

30

20

10

0

90

80

70

60

50

40

30

20

10

0

0

20

40

60

80

100

0

20

40

60

80

100

% EU population

% US population

40

35

30

25

20

15

10

5

0

100

90

80

70

60

50

40

30

20

10

0

90

80

70

60

50

40

30

20

10

0

66

 
 
 
 
 
 
A.7 Distribution of population in rural areas in 

EU15, 1997

% EU land area

100

EL

S

A

F
E

DK

P
EU15

90

80

70

60

50

40

30

20

10

0

UK

I

D

B

L, NL

IRL

FIN

100

90

80

70

60

50

40

30

20

10

0

0

10

20

30
% EU population

40

50

60

70

80

A.8 Annual change in rural and total population 

in EU15, 1993-97

Annual average % change

Rural population
Total population

1.5

1.0

0.5

0.0

-0.5

1.5

1.0

0.5

0.0

-0.5

B

DK

D

EL

E

F

IRL

I

L

NL

A

P

FIN

S

UK EU15

A.9 Features of regions with population decline 

in EU15, 1993-98

-40

-30

-20

-10

0

10

20

30

Population, 1998

Population 65+ (%)

Population 15-64 (%)

Population <15 (%)

Service employment (%)

Industrial employment (%)

Employment and 
unemployment, 1999

Agricultural employment (%)

Unemployment rate (%)

GDP per head (PPS)

GDP, 1997

Population density

-40

-30

-20

-10

0

10

20

30

% difference from EU15 average

Statistical annex

67

 
 
 
Statistical annex

A.10 Gross fixed capital formation, 1999

% GDP

35

30

25

20

15

10

5

0

BG 1998

P E A

IRL EL L NL D B DK F I

FIN UK S SK HU CZ SI PL LV EE LTRO CY BG 
Applicants

EU15

A.11 GDP and gross fixed capital formation per head, 1999

EUR (000)

Capital formation

GDP

BG 1998

L DK S D A NL

FIN F B UK

IRL I E EL P CY SI CZ HU PL SK EE LT LVRO BG

Applicants

EU15

45

40

35

30

25

20

15

10

5

0

68

35

30

25

20

15

10

5

0

45

40

35

30

25

20

15

10

5

0

 
 
A.12 Net capital stock per head in EU15, 1989 and 

A.13 Gross capital stock per head in EU15, 1989 

Statistical annex

1999

EUR (000)

1989

1999

EU3 = EL, E, P

90

80

70

60

50

40

30

20

10

0

and 1999

EUR (000)

1989

1999

EU3 = EL, E, P

90

80

70

60

50

40

30

20

10

0

160

140

120

100

80

60

40

20

0

EL P IRL E

B NL

F UK

I

S FIN D DK A

L

EU3

EU

P EL IRL E

B UK

I NL

F

S FIN D

A DK L

EU3

EU

A.14 Composite index of railway lines in EU15, 

A.15 Electrified railway lines in EU15, 1988 and 

1988 and 1998

Index EU all regions=100

1988 all regions
1988 Objective 1 regions
1998 all regions
1998 Objective 1 regions

400

350

300

250

200

150

100

50

0

1998

% total

100

1988 all regions
1988 Objective 1 regions
1998 all regions
1998 Objective 1 regions

90

80

70

60

50

40

30

20

10

0

400

350

300

250

200

150

100

50

0

B DK D EL E F IRL I

L NL A P FIN S UK EU

B DK D EL E F IRL I

L NL A P FIN S UK EU

A.16 Double-track railway lines in EU15, 1988 and 

A.17 Index of roads in candidate countries and 

1998

% total

100

EU15, 1996

100

300

Index EU25=100

1988 all regions
1988 Objective 1 regions
1998 all regions
1998 Objective 1 regions

90

80

70

60

50

40

30

20

10

0

B DK D EL E F IRL I

L NL A P FIN S UK EU

Roads

Motorways

EU4 = E, EL, IRL, P

90

80

70

60

50

40

30

20

10

0

250

200

150

100

50

0

BG CZ

EE

HU

LT

LV

PL

RO

SI

SK

E

EL

IRL

P

EU4 EU15

160

140

120

100

80

60

40

20

0

100

90

80

70

60

50

40

30

20

10

0

300

250

200

150

100

50

0

69

 
 
 
 
 
 
Statistical annex

A.18 Final energy consumption per head in EU15, 

A.19 Total freshwater reserves in EU15

1998

Index EU15=100

350

300

250

200

150

100

50

0

Index EU15=100

350

300

250

200

150

100

50

0

600

500

400

300

200

100

0

P EL E

I

IRL F UK D A NL DK B

S FIN L

DK B D UK* E
* estimated

F

I*

L* EL NL* P

A IRL* S FIN

A.20 Total water abstraction and consumption

% total renewable reserves

Abstraction

Consumption

45

40

35

30

25

20

15

10

5

0
B/L DK D EL E F

IRL I NL A P

FIN S UK BG CZ EE HU LT PL SI

SK

EU15

70

600

500

400

300

200

100

0

45

40

35

30

25

20

15

10

5

0

 
 
 
Statistical annex

A.21 Population connected to waste water 

A.22 Municipal waste, 1996/97

treatment plants, 1995/96

% sewage treated

100

90

80

70

60

50

40

30

20

10

0

P 1994

Kg per head

100

90

80

70

60

50

40

30

20

10

0

700

600

500

400

300

200

100

0

P

B

E

EL IRL

A DK UK

L

D

S

NL

S EL E FIN P L

I UK B D IRL NL F DK A EU

A.23 Value of ICT markets, 1998

A.24 Expected cost savings from e-commerce 

% GDP

8

7

6

5

4

3

2

1

0

adoption, 1999

%

Average % reduction in operating costs expected

Average % reduction in cost of sales expected

8

7

6

5

4

3

2

1

0

30

25

20

15

10

5

0

700

600

500

400

300

200

100

0

30

25

20

15

10

5

0

B DK D EL E F IRL I NL A P FIN S UK EU US J

Utilities

Finance

Business 
services

Transport/
travel

Other 
services

Retail/
wholesale

Manufacturing

A.25 Growth of mobile phone penetration, 1998-99

A.26 Nominal long-term interest rates (10-year 

government bond yields) in the EU, 1991-2000

250

200

150

100

50

0

% increase

237

113

108

108

80

56

52

45

35

SI

BG RO PL

CEC CZ LV EE HU

250

200

150

100

50

0

%

20

18

16

14

12

10

8

6

4

2

0

    B  

    E  

    I  

    A  

    D  

    F  

    L  

    P  

EL

   IRL 

    NL 

   FIN 

 EU12

 EU15 

Interest rate 2000 = September

20

18

16

14

12

10

8

6

4

2

0

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

71

 
 
 
 
 
 
Statistical annex

A.27 Intra-EU trade of Member States, 1991 and 

A.28 Extra-EU trade of Member States, 1991 and 

1999

% GDP

50

45

40

35

30

25

20

15

10

5

0

1999

% GDP

Extra-EU trade 1991
Extra-EU trade 1999

Intra-EU trade 1991
Intra-EU trade 1999

50

45

40

35

30

25

20

15

10

5

0

30

25

20

15

10

5

0

30

25

20

15

10

5

0

B/L  DK  D   EL E   F  

IRL 

I   NL  A   P   FIN  S   UK 

B/L  DK  D   EL E   F  

IRL 

I   NL  A   P   FIN  S   UK 

A.29 Intra-EU trade as % of total trade of Member 

A.30 Intra-industry trade of EU12 Member States, 

States, 1991 and 1999

% total trade

1991

1999

90

80

70

60

50

40

30

20

10

0

1988 and 1998

Index

1988

1998

90

80

70

60

50

40

30

20

10

0

0.7

0.6

0.5

0.4

0.3

0.2

0.1

0.0

B/L  DK  D   EL E   F  

IRL 

I   NL  A   P   FIN  S   UK 

B/L

D 

DK

E

EL

F

I 

IRL NL

P

UK

Grubel-Lloyd-index computed with CN 8 digit data of harmonised statistics from COMEXT for intra-EU trade

A.31 Exports to CECs as share of extra-EU exports 

of Member States, 1995 and 1999

A.32 Imports from CECs as share of extra-EU 
imports of Member States, 1995 and 1999

% extra-EU exports

1995

1999

% extra-EU imports

1995

1999

45

40

35

30

25

20

15

10

5

0

40

35

30

25

20

15

10

5

0

B/L DK D EL E

F IRL I NL A

P FIN S UK EU

B/L DK D EL E

F IRL I NL A

P FIN S UK EU

45

40

35

30

25

20

15

10

5

0

72

0.7

0.6

0.5

0.4

0.3

0.2

0.1

0.0

40

35

30

25

20

15

10

5

0

 
 
 
 
 
 
A.33 Total FDI in Member States, average 1998 

A.34 FDI from other EU Member States, average 

Statistical annex

and 1999

% GDP

18

16

14

12

10

8

6

4

2

0

1998 and 1999

% total FDI 

100

90

80

70

60

50

40

30

20

10

0

18

16

14

12

10

8

6

4

2

0

B/L DK D
EL: no data; Provisional and partial data; F: 1998

IRL

E

F

I

NL

A

P FIN S UK

B/L DK D

E

F IRL

I

NL A

P FIN S UK

EL: no data

A.35 Number of cross-border mergers and 

A.36 Foreign direct investment in CECs, 1991-98

acquisitions, 1991-99

Number

2500

Intra-EU

EU target

EU bidder

2000

1500

1000

500

0

% GDP

2500

2000

1500

1000

500

0

4.5

4.0

3.5

3.0

2.5

2.0

1.5

1.0

0.5

0.0

1991 1992 1993 1994 1995 1996 1997 1998 1999

1991

1992

1993

1994

1995

1996

1997

1998

100

90

80

70

60

50

40

30

20

10

0

4.5

4

3.5

3

2.5

2

1.5

1

0.5

0

A.37 Agricultural expenditure by measure, 

1992-99

%

100

Restitutions

Direct aid

Market support

Rural development

90

80

70

60

50

40

30

20

10

0

1992

1993

1994

1995

1996

1997

1998

1999

100

90

80

70

60

50

40

30

20

10

0

A.38 Relationship between value-added and total 
CAP support (price and direct) for EU 
regions, 1996
Support (EUR) per annual work unit

20000

20000

18000

16000

14000

12000

10000

8000

6000

4000

2000

0

0

5000

10000
Gross value-added (EUR)

15000

20000

18000

16000

14000

12000

10000

8000

6000

4000

2000

0

25000

30000

73

 
 
 
 
 
 
Statistical annex

A.39 Distribution of CAP support by level of 

A.40 Market price support per hectare or livestock 

regional development, 1996

unit,  average 1997-99

EUR

EU15 at EU prices
CECs at national prices
CECs at EU prices

1200

1000

800

600

400

200

0

-200

Sunflower

Soybeans

Rapeseed

Wheat

Corn Rye

Barley

Sugar (white) Milk
Oats

Eggs

1200

1000

800

600

400

200

0

-200

Beef

Pork

Poultry

100

90

80

70

60

50

40

30

20

10

0

90

100

% total CAP support

100

10

20

50
%  EU population, regions ordered by GDP per head (PPS)

80

60

70

30

40

90

80

70

60

50

40

30

20

10

0

0

74

 
 
Canarias (E)

Guadeloupe

Martinique

Réunion

(F)

(F)

(F)

Guyane (F)

Açores (P)

Madeira

(P)

SIG16
SIG16

0

100

500 km

© MEGRIN for the administrative boundaries

1

A.1  Change in GDP per head (PPS), 1987-1997

Change in index  (Eu15 = 100)

< - 6

- 6 -  - 1

- 1 -  4

4 -  9

> 9

no data

IRL: NUTS0

Source: Eurostat

Canarias (E)

Guadeloupe

Martinique

Réunion

(F)

(F)

(F)

Guyane (F)

Açores (P)

Madeira

(P)

Kypros

SIG16
SIG16

Source: Eurostat

0

100

500 km

© MEGRIN for the administrative boundaries

A.2  GDP per head by region (Euro), 1998

Index, EUR27 = 100

< 15

15 - 30

30 - 50

50 - 75

75 - 100

100 - 125
≥ 125

2

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a
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3

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Canarias (E)

Guadeloupe

Martinique

Réunion

(F)

(F)

(F)

Guyane (F)

Açores (P)

Madeira

(P)

Kypros

SIG16
SIG16

According to the peripherality index
to GDP in Euro by lorry (NUTS2)

Source: IRPUD - DGREGIO

0

100

500 km

© MEGRIN for the administrative boundaries

A.4  Central and peripheral regions

Central regions

Peripheral regions

Other regions

4

#

Canarias (E)

Guadeloupe

Martinique

Réunion

(F)

(F)

(F)

Guyane (F)

Açores (P)

Madeira

(P)

#

#

#

#

##

#

#

#

#

#
#

#

#

#

Kypros

SIG16
SIG16

##

#

#

#
# #
###

##
##
#

#

#

#

#

####

#

#

#

###

##

# ###
#
##

####

A.5 Trans-European Transport Network Outline Plan (2010 horizon)

Rail bottlenecks

0

100

500 km

5

Canarias (E)

Guadeloupe

Martinique

Réunion

(F)

(F)

(F)

Guyane (F)

Açores (P)

Madeira

(P)

#
#

#

#

#

#
#
##
# ## # #
#
#

#

#

##

#####

##

##

#

#

#

#

#
#

#

#

A.6 Trans-European Transport Network Outline Plan (2010 horizon)

Road bottlenecks

Kypros

SIG16
SIG16

0

100

500 km

6

Canarias (E)

Guadeloupe

Martinique

Réunion

(F)

(F)

(F)

Guyane (F)

Açores (P)

Madeira

(P)

Kypros

SIG16
SIG16

A.7  Emissions of acidifying gases, 1998

Index, average EUR27 = 100

< 60
60 - 80
80 - 120
120 - 160
160 - 250
250 - 400
≥ 400
no data

Average of indices of regional
emission estimates per km² for
SO , NO  and NH .

2

2

3

Source: EMEP/MSC-W - DG REGIO

0

100

500 km

© MEGRIN for the administrative boundaries

7

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9
-
5
8

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8
<

0
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8

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Canarias (E)

Guadeloupe

Martinique

Réunion

(F)

(F)

(F)

Guyane (F)

Açores (P)

Madeira

(P)

Kypros

SIG16
SIG16

A.9  Spacing between European urban areas

Euclidian distance between centres of urban areas

less than 100 km

100 km to 150 km

Source: GEOPOLIS, F.Moriconi-Ebrard, 1993

@GIP R.E.C.L.U.S. Equipe P.A.R.I.S., C. Rozenblat, 1995

0

100

500 km

9

Canarias (E)

Guadeloupe

Martinique

Réunion

(F)

(F)

(F)

Guyane (F)

Açores (P)

Madeira

(P)

Kypros

SIG16
SIG16

A.10  Border regions

Categories

Non-border regions

Internal EU15 borders

Borders between accession candidates

Borders between EU members and accession candidates

Borders with external countries

EU15: Interreg 3A regions
Candidates: level 3 regions
PL: old level 3 regions

0

100

500 km

© MEGRIN for the administrative boundaries

10

Canarias (E)

Guadeloupe

Martinique

Réunion

(F)

(F)

(F)

Guyane (F)

Açores (P)

Madeira

(P)

Kypros

SIG16
SIG16

A.11  Crude rate of total population change, average 1995-1997

< -3

-3 - 0

0 - 3

3 - 6

> 6

no data

Sachsen, Wales, Scotland: NUTS1
IRL: NUTS0

Source: Eurostat

0

100

500 km

© MEGRIN for the administrative boundaries

11

Canarias (E)

Guadeloupe

Martinique

Réunion

(F)

(F)

(F)

Guyane (F)

Açores (P)

Madeira

(P)

A.12  Crude rate of net migration, average 1995-1997

Kypros

SIG16
SIG16

< -2.5

-2.5 - 0.0

0.0 - 2.5

2.5 - 5.0

> 5.0

no data

12

Sachsen, Wales, Scotland: NUTS1
IRL: NUTS0

Source: Eurostat

0

100

500 km

© MEGRIN for the administrative boundaries

Canarias (E)

Guadeloupe

Martinique

Réunion

(F)

(F)

(F)

Guyane (F)

Açores (P)

Madeira

(P)

A.13  Business enterprise expenditure on RDT, 1997

% of total GDP

< 0.15

0.15 - 0.40

0.40 - 0.70

0.70 - 1.10

1.10 - 2.00
≥ 2.00

no data

average = 1.17
Standard deviation = 0.92
F, NL: 1996
B, D, IRL, LT: 1995
EL, A: 1993
UK: estimates
Source: Eurostat

Kypros

SIG16
SIG16

BE, UK: NUTS1
IRL, NL, SE: NUTS0

0

100

500 km

© MEGRIN for the administrative boundaries

13

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Annual average % change in GDP

Annual average % change in population

HVWLPDWHV

HVWLPDWHV

GDP per head (PPS), EU15=100

HVWLPDWHV

Period

EL

E

IRL

P

EU3 (1)

EU12 (2)

EU15 (2)

88-98
88-93
93-98
(cid:28)(cid:27)(cid:16)(cid:19)(cid:19)

88-98
88-93
93-98
(cid:28)(cid:27)(cid:16)(cid:19)(cid:19)

1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
(cid:21)(cid:19)(cid:19)(cid:19)

1,9
1,2
2,6
(cid:22)(cid:15)(cid:25)

0,5
0,7
0,3
(cid:19)(cid:15)(cid:25)

58,3
59,1
57,4
60,1
61,9
64,2
65,2
66,1
66,9
66,0
66,0
66,8
(cid:25)(cid:26)(cid:15)(cid:22)

2,6
2,0
3,1
(cid:22)(cid:15)(cid:28)

0,1
0,1
0,1
(cid:19)(cid:15)(cid:20)

72,5
73,1
74,1
78,7
77,0
78,1
78,1
78,4
79,5
80,0
81,1
82,5
(cid:27)(cid:22)(cid:15)(cid:20)

6,4
4,4
8,5
(cid:27)(cid:15)(cid:26)

0,5
0,2
0,7
(cid:20)(cid:15)(cid:19)

63,8
66,3
71,1
74,7
78,4
82,5
90,7
93,3
94,1
103,8
108,2
114,0
(cid:20)(cid:20)(cid:27)(cid:15)(cid:28)

3,0
2,6
3,4
(cid:22)(cid:15)(cid:22)

0,0
-0,2
0,2
(cid:19)(cid:15)(cid:21)

59,2
59,4
58,5
63,8
64,8
67,7
69,5
70,9
71,1
74,3
75,3
76,1
(cid:26)(cid:24)(cid:15)(cid:22)

2,5
2,0
3,1
(cid:22)(cid:15)(cid:27)

0,2
0,2
0,2
(cid:19)(cid:15)(cid:21)

67,8
68,4
68,6
73,0
72,3
74,0
74,4
75,0
75,9
76,6
77,5
78,7
(cid:26)(cid:28)(cid:15)(cid:19)

1,9
1,7
2,3
(cid:21)(cid:15)(cid:27)

0,4
0,6
0,3
(cid:19)(cid:15)(cid:22)

106,6
106,4
106,4
105,2
105,3
105,0
104,9
104,8
104,6
104,5
104,3
104,1
(cid:20)(cid:19)(cid:23)(cid:15)(cid:19)

2,0
1,7
2,4
(cid:21)(cid:15)(cid:28)

0,4
0,5
0,3
(cid:19)(cid:15)(cid:22)

100,0
100,0
100,0
100,0
100,0
100,0
100,0
100,0
100,0
100,0
100,0
100,0
(cid:20)(cid:19)(cid:19)(cid:15)(cid:19)

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6RXUFH(cid:29)(cid:3)(XURVWDW(cid:3)(cid:11)QDWLRQDO(cid:3)DFFRXQWV(cid:12)(cid:3)DQG(cid:3)FDOFXODWLRQV(cid:3)’*(cid:3)5(*,2

7DEOH(cid:3)$(cid:17)(cid:21)(cid:3)(cid:3)’LVSDULWLHV(cid:3)LQ(cid:3)*’3(cid:3)SHU(cid:3)KHDG(cid:3)LQ(cid:3)336(cid:3)E\(cid:3)UHJLRQ(cid:3)ZLWKLQ(cid:3)0HPEHU(cid:3)6WDWHV(cid:15)(cid:3)(cid:20)(cid:28)(cid:27)(cid:27)(cid:16)(cid:20)(cid:28)(cid:28)(cid:27)

(cid:11)VWDQGDUG(cid:3)GHYLDWLRQ(cid:3)RI(cid:3)LQGH[(cid:3)(8(cid:20)(cid:24) (cid:20)(cid:19)(cid:19)(cid:12)

Member State

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

B

D

D excl. new Länder

EL

E

F

IRL

I

NL

A

P

FIN

S

UK

EU15 (by region)
(cid:3)(cid:3)(cid:3)(cid:16)(cid:3)H[FO(cid:17)(cid:3)QHZ(cid:3)/lQGHU

EU15 (by Member State)
(cid:3)(cid:3)(cid:3)(cid:16)(cid:3)H[FO(cid:17)(cid:3)QHZ(cid:3)/lQGHU

EU15 (within Member States)
(cid:3)(cid:3)(cid:3)(cid:16)(cid:3)H[FO(cid:17)(cid:3)QHZ(cid:3)/lQGHU

24,5

:

21,0

6,1

13,9

28,6

:

25,7

11,5

27,5

17,2

18,1

10,7

21,2

:

26,7

:

15,9

:

20,7

24,7

:

21,0

6,5

14,9

28,6

:

25,8

10,6

27,0

17,7

17,7

10,9

20,7

:

26,4

:

15,3

:

20,7

25,1

:

21,8

6,3

14,9

28,9

:

24,8

10,6

27,5

13,5

17,9

10,8

20,2

:

26,5

:

15,4

:

20,6

25,1

38,6
(cid:21)(cid:21)(cid:15)(cid:26)

6,1

16,0

29,9

:

24,7

11,8

28,6

15,0

17,7

12,0

19,2

29,4
(cid:21)(cid:25)(cid:15)(cid:23)

13,1
(cid:20)(cid:24)(cid:15)(cid:24)

24,5
(cid:21)(cid:20)(cid:15)(cid:19)

26,0

35,8
(cid:21)(cid:22)(cid:15)(cid:19)

6,6

15,9

28,9

:

24,9

11,3

28,7

13,6

15,4

10,9

19,6

28,6
(cid:21)(cid:25)(cid:15)(cid:24)

13,2
(cid:20)(cid:24)(cid:15)(cid:25)

23,8
(cid:21)(cid:19)(cid:15)(cid:28)

27,1

32,4
(cid:21)(cid:21)(cid:15)(cid:27)

7,6

15,2

29,9

:

24,7

11,5

30,3

14,3

17,0

12,8

20,6

27,7
(cid:21)(cid:25)(cid:15)(cid:22)

12,5
(cid:20)(cid:23)(cid:15)(cid:25)

23,4
(cid:21)(cid:20)(cid:15)(cid:22)

25,9

31,3
(cid:21)(cid:22)(cid:15)(cid:23)

7,8

15,9

30,8

:

25,5

10,8

28,1

13,8

17,1

11,0

18,3

27,5
(cid:21)(cid:25)(cid:15)(cid:24)

12,7
(cid:20)(cid:23)(cid:15)(cid:25)

23,0
(cid:21)(cid:20)(cid:15)(cid:21)

25,3

26,7
(cid:21)(cid:20)(cid:15)(cid:25)

10,4

17,1

28,2

13,9

28,6

13,4

30,8

13,5

18,3

13,1

31,4

28,5
(cid:21)(cid:27)(cid:15)(cid:20)

12,5
(cid:20)(cid:23)(cid:15)(cid:20)

24,5
(cid:21)(cid:22)(cid:15)(cid:24)

25,7

26,7
(cid:21)(cid:21)(cid:15)(cid:22)

10,2

17,7

28,2

14,0

28,7

14,3

30,2

13,3

21,2

14,0

31,7

28,4
(cid:21)(cid:27)(cid:15)(cid:20)

11,9
(cid:20)(cid:22)(cid:15)(cid:24)

24,7
(cid:21)(cid:22)(cid:15)(cid:27)

25,7

26,5
(cid:21)(cid:21)(cid:15)(cid:21)

10,1

18,4

27,0

16,8

27,8

15,4

29,2

14,0

22,0

16,2

33,4

28,3
(cid:21)(cid:26)(cid:15)(cid:28)

11,5
(cid:20)(cid:22)(cid:15)(cid:19)

24,8
(cid:21)(cid:23)(cid:15)(cid:19)

25,7

26,8
(cid:21)(cid:21)(cid:15)(cid:22)

10,2

19,1

26,5

17,3

27,6

15,8

27,8

14,2

24,6

17,1

33,9

28,3
(cid:21)(cid:26)(cid:15)(cid:27)

11,2
(cid:20)(cid:21)(cid:15)(cid:26)

25,0
(cid:21)(cid:23)(cid:15)(cid:20)

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GDP per head

Unemployment

Member State

PPS (EUR15=100)

Regional disparity 
(standard deviation)

% labour force

Regional disparity  (standard deviation)

Employment 
(average 
annual % 
change)

B

DK

D

D excl. new Länder

EL

E

F

IRL

I

L

NL 

A

P

FIN

S

UK

EU15 

1988

1998

1988 **

1998

1989

1999

1989 **

1994 **

1999

1989-99

103,2

105,3

:

114,8

58,1

74,0

108,4

65,9

100,2

139,1

97,7

102,2

58,9

101,6

109,7

98,7

100,0

111,3

118,9

107,7

116,3

66,0

81,1

98,6

108,1

101,1

175,8

113,2

111,7

75,3

101,6

102,4

102,2

100,0

24,5

:

:

21,0

6,1

13,9

28,6

:

25,7

:

11,5

27,5

17,2

18,1

10,7

21,2

26,7

25,7

:

26,8

22,3

10,2

19,1

26,5

17,3

27,6

:

15,8

27,8

14,2

24,6

17,1

33,9

28,3

7,2

7,6

:

5,7

6,7

17,4

9,3

14,9

10,0

1,7

8,5

3,1 *

4,8

3,8

1,7

7,4

8,4

8,8

5,6

8,9

6,9

11,7

16,1

11,4

5,9

11,7

2,4

3,3

4,0

4,7

11,5

7,6

6,1

9,4

2,7

:

:

2,0

1,7

5,4

1,8

:

6,6

:

1,0

1,2 *

2,5

2,0

0,7 *

3,6

5,2

3,3

:

4,0

1,7

2,4

5,4

2,0

:

6,2

:

0,7

0,9

1,8

2,5

1,1

2,4

6,0

4,3

:

4,3

1,8

2,0

5,7

2,5

0,7

7,9

:

0,8

1,1

1,4

3,2

1,6

2,6

5,5

0,3

0,3

:

0,6

0,8

1,3

0,4

3,3

0,2

2,6

1,6

0,5

0,7

-1,1

-0,9

0,2

0,5

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(cid:21)(cid:25)(cid:15)(cid:26)

(cid:21)(cid:27)(cid:15)(cid:22)

(cid:25)(cid:21)(cid:15)(cid:20)

(cid:24)(cid:23)(cid:15)(cid:19)

(cid:24)(cid:27)(cid:15)(cid:25)

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L
DK
S
D
A
NL
FIN
F
B
UK
IRL
I
E
EL
P
CY
SI
CZ
HU
PL
SK
EE
LT
LV
RO
BG
Applicants

EU15

27,1
24,1
22,4
22,8
21,5
22,2
21,0
20,8
20,9
20,0
18,5
18,5
17,8
17,9
16,0
36,6
29,1
27,5
25,3
24,4
23,6
21,6
20,1
19,4
17,7
11,5
24,5

19,7

36557
29424
23746
23513
23443
22511
22285
22094
21890
20958
20552
18392
13203
10268
9581
12183
8796
4869
4133
3627
3365
3196
2586
2334
1639
1327
3639

20234

7320
6130
3790
4940
5640
4840
4130
3950
4570
3730
4600
3410
3010
2280
2600
2154
1903
1341
977
919
1231
930
630
468
318
153
893

3990

(cid:13)(cid:3)*URVV(cid:3)IL[HG(cid:3)FDSLWDO(cid:3)IRUPDWLRQ

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Economic status
Employed
Unemployed
Retired 
Inactive

Type of household
Single <65
Single>=65
Couple <65 with no no children 
Couple >=65 with no no children 
Single parent
Couple with 1 dependent child
Couple with 2 dependent children
Couple with 3 or more dep. children
Couple with dep. and non dep. children
Other

Education level *
High
Middle
Low

B

36
406
153
464

82
196
67
192
136
35
84
84
102
49

36
88
174

DK

40
47
307
255

152
465
39
225
-
28
-
78
99
80

31
90
254

D

88
191
92
439

109
136
53
64
188
37
136
121
110
126

81
104
110

EL

66
144
244
126

69
270
76
265
105
24
38
40
90
119

10
25
185

E

F

IRL

80
232
129
136

75
66
63
190
86
43
97
218
107
74

17
55
136

66
477
121
319

126
155
50
86
161
46
49
162
126
107

20
63
201

44
439
67
372

154
99
47
54
234
38
50
180
69
65

4
68
163

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EU12
% total

EU12

UK

NL

P

L

I

92
339
57
210

47
109
21
31
95
70
77
225
140
89

13
46
138

86
-
149
354

90
215
40
193
63
116
57
177
69
125

32
94
141

81
434
25
343

234
50
27
27
189
21
81
185
124
180

33
117
144

75
137
243
295

153
312
84
252
126
32
88
194
62
79

4
21
120

51
373
154
294

75
203
26
137
288
45
60
146
30
68

21
82
192

74
320
116
285

93
150
42
108
180
46
82
150
111
98

36
73
163

5
23
8
21

7
11
3
8
13
3
6
11
8
7

3
5
12

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,QGLFDWRU

Total population

Land area

Population density

Population growth, 1991-98

Population by age group

(cid:31)(cid:20)(cid:24)(cid:3)
(cid:20)(cid:24)(cid:3)(cid:16)(cid:3)(cid:25)(cid:23)
(cid:25)(cid:24)(cid:14)

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Unemployment rate(1)

(% labour force

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Long-term unemployment 

% unemployed

GDP per head(2)

GDP per head(2)

GDP (EUR)

GDP per person employed(4)

Employment rate

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Employment by sector(2)

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Education level 25-59 age group(6)

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R&D expenditure by firms(7)
R&D expenditure by firms
Length of motorways and dual 
carriageways(2),(3) 
Length of railway line

Electrified railway line

Double track railway line

Emissions of sulphur dioxide (SO2)
Emissions of nitrogen dioxides (NO2)
Emissions of ammonia (NH3)
Emissions of SO2, NO2 and NH3 (average)

Pressure from urbanisation, transport and 
intensive agriculture(8)

(cid:8)(cid:3)*’3
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159619
33,2

593315
14,0

198583
41,3

2750344
64,9

122295
25,5

896537
21,1

480497
100,0

4240196
100,0

269

0,4

18,1
66,7
15,2

7,1
7,4
11,5

45,3

22422
128,1

23465
142,0

47,2

52052
132,2

67,1
59,0
75,2

2,2
29,1
68,7

25,6
50,0
24,3

1,9
69,8

214,8

133,4

49,5

54,0

121

239

172

177

292

72

0,0

18,2
67,7
14,1

11,6
13,4
25,5

46,0

11735
67,0

8419
51,0

21,1

21255
54,0

58,7
49,2
68,1

16,3
30,4
53,4

38,1
46,0
15,9

1,0
54,3

48,5

91,8

38,2

22,0

104

62

68

78

39

136

0,3

15,9
67,1
17,0

9,7
11,7
18,1

45,2

20442
116,8

20623
124,8

31,8

48990
124,5

61,8
52,6
71,1

4,4
30,2
65,4

35,1
46,8
18,2

1,5
62,4

140,5

118,1

48,7

41,0

74

125

150

116

143

113

0,2

17,6
67,2
15,2

9,6
10,9
19,0

45,6

17506
100,0

16523
100,0

100,0

39359
100,0

62,3
53,4
71,3

8,4
29,9
61,8

33,0
47,6
19,4

1,6
65,8

100,0

100,0

44,1

35,8

100

100

100

100

100

’DWD(cid:3)IRU(cid:3)WKH(cid:3)HPSOR\PHQW(cid:15)(cid:3)XQHPSOR\PHQW(cid:3)DQG(cid:3)HGXFDWLRQ(cid:3)OHYHOV(cid:3)DUH(cid:3)IRU(cid:3)(cid:20)(cid:28)(cid:28)(cid:28)(cid:17)(cid:3)$OO(cid:3)RWKHU(cid:3)GDWD(cid:3)DUH(cid:3)IRU(cid:3)(cid:20)(cid:28)(cid:28)(cid:27)(cid:3)(cid:11)HDUOLHU(cid:3)\HDUV(cid:3)IRU(cid:3)VRPH(cid:3)FRXQWULHV(cid:12)
$OO(cid:3)GDWD(cid:3)H[FOXGH(cid:3)WKH(cid:3))UHQFK(cid:3)’20V(cid:30)(cid:3)SHULSKHUDO(cid:3)UHJLRQV(cid:3)LQFOXGH(cid:3)&]HFK(cid:3)5HSXEOLF
(cid:11)(cid:20)(cid:12)(cid:3)’DWD(cid:3)IRU(cid:3)ZRPHQ(cid:3)DQG(cid:3)\RXQJ(cid:3)SHRSOH(cid:3)H[FOXGH(cid:3)&\SUXV(cid:3)DQG(cid:3)0DOWD(cid:30)(cid:3)GDWD(cid:3)RQ(cid:3)ORQJ(cid:16)WHUP(cid:3)XQHPSOR\PHQW(cid:3)H[FOXGH(cid:3)&\SUXV(cid:15)(cid:3)0DOWD(cid:3)DQG(cid:3)/LWKXDQLD
(cid:11)(cid:21)(cid:12)(cid:3)([FO(cid:17)(cid:3)07
(cid:11)(cid:22)(cid:12)(cid:3)([FO(cid:17)(cid:3)&<
(cid:11)(cid:23)(cid:12)(cid:3)([FO(cid:17)(cid:3)6,
(cid:11)(cid:24)(cid:12)(cid:3)([FO(cid:17)(cid:3)%*(cid:15)(cid:3)&<(cid:3)DQG(cid:3)07
(cid:11)(cid:25)(cid:12)(cid:3)([FO(cid:17)(cid:3)%*(cid:15)(cid:3)&<(cid:15)(cid:3)/7(cid:15)(cid:3)07(cid:15)(cid:3)6.
(cid:11)(cid:26)(cid:12)(cid:3)([FO(cid:17)(cid:3)&RUVH(cid:3)(cid:11))(cid:12)(cid:15)(cid:3)/(cid:15)(cid:3)6(cid:15)(cid:3)%*(cid:15)(cid:3)&<(cid:15)(cid:3)(((cid:15)(cid:3)07(cid:15)(cid:3)3/(cid:3)HW(cid:3)52
(cid:11)(cid:27)(cid:12)(cid:12)(cid:3)([FO(cid:17)(cid:3)%DOWLF(cid:3)6WDWHV(cid:15)(cid:3)6ORYHQLD(cid:15)(cid:3)&\SUXV(cid:3)DQG(cid:3)0DOWD
6RXUFH(cid:29)(cid:3)(XURVWDW(cid:15)(cid:3)QDWLRQDO(cid:3)VWDWLVWLFDO(cid:3)LQVWLWXWHV(cid:30)(cid:3)IRU(cid:3)WKH(cid:3)HQYLURPHQWDO(cid:3)LQGLFDWRUV(cid:29)(cid:3)(0(3(cid:18)06&(cid:16):(cid:15)(cid:3),1’8527(cid:3)(cid:16)(cid:3)(6’3(cid:3)VWXG\(cid:3)SURJUDPPH(cid:30)(cid:3)FDOFXODWLRQV(cid:3)’*5(*,2

7DEOH(cid:3)$(cid:17)(cid:26)(cid:3)(cid:3)&HQWUHV(cid:3)RI(cid:3)GHYHORSPHQW(cid:3)LQ(cid:3)WKH(cid:3)86(cid:15)(cid:3)(cid:20)(cid:28)(cid:28)(cid:27)

GDP per head

Surface area

Population

GDP

Index, US=100

% US total

East Coast

South of the Great Lakes

South (Texas)

West Coast

7RWDO(cid:3)DERYH

2WKHU(cid:3)6WDWHV

7RWDO(cid:3)86

116,0

108,2

102,8

105,5

(cid:20)(cid:19)(cid:28)(cid:15)(cid:25)

(cid:28)(cid:19)(cid:15)(cid:28)

(cid:20)(cid:19)(cid:19)(cid:15)(cid:19)

5,0

4,0

7,3

11,8

(cid:21)(cid:27)(cid:15)(cid:20)

(cid:26)(cid:20)(cid:15)(cid:28)

19,3

6,2

7,3

16,1

(cid:23)(cid:27)(cid:15)(cid:27)

(cid:24)(cid:20)(cid:15)(cid:21)

22,3

6,7

7,5

16,9

(cid:24)(cid:22)(cid:15)(cid:24)

(cid:23)(cid:25)(cid:15)(cid:24)

(cid:20)(cid:19)(cid:19)(cid:15)(cid:19)

(cid:20)(cid:19)(cid:19)(cid:15)(cid:19)

(cid:20)(cid:19)(cid:19)(cid:15)(cid:19)

6RXUFH(cid:29)(cid:3)86(cid:3)’R&(cid:16)%($(cid:3)DQG(cid:3)FDOFXODWLRQV(cid:3)’*(cid:3)5(*,2(cid:3)

7DEOH(cid:3)$(cid:17)(cid:27)(cid:3)(cid:3),QGLFDWRUV(cid:3)E\(cid:3)GHJUHH(cid:3)RI(cid:3)XUEDQLVDWLRQ(cid:3)DQG(cid:3)0HPEHU(cid:3)6WDWH(cid:15)(cid:3)(cid:20)(cid:28)(cid:28)(cid:28)

8UEDQ(cid:3)DUHDV

,QWHUPHGLDWH(cid:3)
DUHDV

5XUDO(cid:3)DUHDV

7RWDO

8UEDQ(cid:3)DUHDV

,QWHUPHGLDWH(cid:3)
DUHDV

5XUDO(cid:3)DUHDV

7RWDO

8QHPSOR\PHQW(cid:3)UDWH(cid:3)(cid:11)(cid:8)(cid:3)ODERXU(cid:3)IRUFH(cid:12)
B
DK
D
EL
E
F
IRL
I
L
NL
A
P
FIN
S
UK
(8(cid:20)(cid:21)
(8(cid:20)(cid:24)

11,0
5,5
9,7
13,5
15,6
13,3
5,5
12,9
3,4
3,6
5,9
6,1
8,9
6,2
6,9
(cid:20)(cid:19)(cid:15)(cid:22)
(cid:20)(cid:19)(cid:15)(cid:20)

6,0
4,5
7,0
9,9
16,2
11,6
:
10,1
2,0
3,7
3,8
3,1
13,1
6,3
4,7
(cid:26)(cid:15)(cid:28)
(cid:26)(cid:15)(cid:27)

6,6
5,3
10,0
7,3
15,5
10,9
5,8
12,0
1,8
4,2
4,1
4,4
12,9
8,3
5,5
(cid:20)(cid:19)(cid:15)(cid:20)
(cid:28)(cid:15)(cid:28)

/RQJ(cid:16)WHUP(cid:3)XQHPSOR\PHQW(cid:3)(cid:11)(cid:8)(cid:3)WRWDO(cid:3)XQHPSOR\HG(cid:12)
63,5
B
19,6
DK
52,2
D
56,1
EL
51,2
E
42,0
F
IRL
:
67,1
I
28,9
L
38,2
NL
39,9
A
41,8
P
21,8
FIN
22,5
S
30,9
UK
(cid:23)(cid:28)(cid:15)(cid:20)
(8(cid:20)(cid:21)
(cid:23)(cid:27)(cid:15)(cid:26)
(8(cid:20)(cid:24)

53,6
18,1
49,0
51,4
47,4
40,0
:
57,1
41,5
36,9
29,2
39,5
23,5
34,4
24,1
(cid:23)(cid:25)(cid:15)(cid:21)
(cid:23)(cid:24)(cid:15)(cid:26)

61,9
22,3
49,8
53,3
36,1
33,2
:
48,5
18,2
36,5
20,5
40,2
21,9
29,8
32,2
(cid:22)(cid:28)(cid:15)(cid:23)
(cid:22)(cid:26)(cid:15)(cid:26)

<RXWK(cid:3)XQHPSOR\PHQW(cid:3)UDWH(cid:3)(cid:11)(cid:8)(cid:3)ODERXU(cid:3)IRUFH(cid:3)(cid:20)(cid:24)(cid:16)(cid:21)(cid:23)(cid:12)
B
DK
D
EL
E
F
IRL
I
L
NL
A
P
FIN
S
UK
(8(cid:20)(cid:21)
(8(cid:20)(cid:24)

17,1
8,2
7,3
28,4
29,6
27,1
:
28,2
6,4
8,4
5,1
5,9
30,0
12,6
10,4
(cid:20)(cid:25)(cid:15)(cid:20)
(cid:20)(cid:25)(cid:15)(cid:19)

27,2
10,8
10,3
34,5
31,1
26,8
8,2
38,2
8,6
6,8
8,3
11,4
20,7
16,2
13,6
(cid:20)(cid:28)(cid:15)(cid:24)
(cid:20)(cid:28)(cid:15)(cid:23)

23,6
10,5
8,4
24,8
26,5
25,9
8,5
31,5
3,5
7,5
4,8
11,1
32,7
16,9
11,3
(cid:20)(cid:27)(cid:15)(cid:27)
(cid:20)(cid:27)(cid:15)(cid:26)

6RXUFH(cid:29)(cid:3)(XURVWDW(cid:15)(cid:3)/DERXU(cid:3))RUFH(cid:3)6XUYH\

8,6
5,1
8,9
11,7
15,7
12,1
5,7
11,7
2,4
3,6
4,7
4,6
11,7
7,6
6,1
(cid:28)(cid:15)(cid:25)
(cid:28)(cid:15)(cid:23)

60,5
20,3
50,8
55,3
46,3
38,7
:
60,6
32,3
37,7
31,2
40,9
22,3
29,1
29,6
(cid:23)(cid:25)(cid:15)(cid:22)
(cid:23)(cid:24)(cid:15)(cid:22)

22,6
10,0
8,9
31,7
29,5
26,5
8,4
32,9
6,8
7,4
5,9
9,1
28,6
16,3
12,5
(cid:20)(cid:27)(cid:15)(cid:23)
(cid:20)(cid:27)(cid:15)(cid:22)

8QHPSOR\PHQW(cid:3)UDWH(cid:3)RI(cid:3)ZRPHQ(cid:3)(cid:11)(cid:8)(cid:3)IHPDOH(cid:3)ODERXU(cid:3)IRUFH(cid:12)
B
DK
D
EL
E
F
IRL
I
L
NL
A
P
FIN
S
UK
(8(cid:20)(cid:21)
(8(cid:20)(cid:24)

9,9
6,7
11,7
12,0
24,1
13,9
6,2
18,0
3,3
6,3
4,2
6,3
14,4
7,7
4,7
(cid:20)(cid:22)(cid:15)(cid:21)
(cid:20)(cid:21)(cid:15)(cid:23)

7,8
5,3
7,9
16,9
24,9
13,9
:
15,1
2,8
5,6
4,7
4,2
13,8
5,5
4,3
(cid:20)(cid:19)(cid:15)(cid:19)
(cid:28)(cid:15)(cid:28)

12,2
5,5
9,3
20,3
22,0
14,2
4,6
16,9
4,2
4,4
5,5
6,1
8,6
5,3
5,8
(cid:20)(cid:20)(cid:15)(cid:23)
(cid:20)(cid:20)(cid:15)(cid:21)

10,3
5,9
9,3
18,2
23,1
14,0
5,5
16,4
3,3
4,9
4,8
5,4
12,5
6,9
5,2
(cid:20)(cid:20)(cid:15)(cid:23)
(cid:20)(cid:20)(cid:15)(cid:20)

3DUWLFLSDWLRQ(cid:3)UDWH(cid:3)(cid:11)(cid:8)(cid:3)SRSXODWLRQ(cid:3)(cid:20)(cid:24)(cid:16)(cid:25)(cid:23)(cid:12)
64,1
B
81,9
DK
70,2
D
61,5
EL
63,0
E
68,3
F
68,2
IRL
59,3
I
64,8
L
74,0
NL
73,0
A
70,7
P
79,6
FIN
77,8
S
74,0
UK
(cid:25)(cid:27)(cid:15)(cid:19)
(8(cid:20)(cid:21)
(cid:25)(cid:27)(cid:15)(cid:22)
(8(cid:20)(cid:24)

65,1
80,1
71,2
63,7
61,4
68,3
:
59,7
61,5
73,2
70,5
71,8
77,2
79,2
77,9
(cid:25)(cid:27)(cid:15)(cid:24)
(cid:25)(cid:27)(cid:15)(cid:26)

(PSOR\PHQW(cid:3)LQ(cid:3)VHUYLFHV(cid:3)(cid:11)(cid:8)(cid:3)WRWDO(cid:12)
B
66,4
67,7
DK
58,8
D
53,8
EL
60,3
E
68,9
F
:
IRL
56,4
I
77,1
L
67,5
NL
61,8
A
44,1
P
71,9
FIN
75,8
S
70,2
UK
(cid:25)(cid:20)(cid:15)(cid:28)
(8(cid:20)(cid:21)
(cid:25)(cid:21)(cid:15)(cid:21)
(8(cid:20)(cid:24)

76,6
81,1
68,8
72,9
69,9
78,5
75,4
69,7
78,5
79,0
74,5
64,2
78,7
83,8
74,3
(cid:26)(cid:21)(cid:15)(cid:26)
(cid:26)(cid:21)(cid:15)(cid:28)

64,7
79,9
73,5
67,7
61,1
69,5
65,3
60,0
64,3
71,5
70,9
69,6
74,7
77,6
75,0
(cid:25)(cid:27)(cid:15)(cid:24)
(cid:25)(cid:28)(cid:15)(cid:23)

70,8
61,5
57,3
28,4
48,0
59,5
55,6
56,1
70,0
65,3
56,1
50,0
58,5
68,0
67,6
(cid:24)(cid:25)(cid:15)(cid:28)
(cid:24)(cid:26)(cid:15)(cid:26)

64,6
80,6
71,2
62,9
62,1
68,8
66,4
59,6
63,1
73,6
71,6
70,9
76,4
76,4
75,2
(cid:25)(cid:27)(cid:15)(cid:22)
(cid:25)(cid:27)(cid:15)(cid:25)

71,8
69,8
63,3
60,9
62,0
69,4
63,4
62,2
76,0
74,5
64,2
53,6
66,0
72,3
72,3
(cid:25)(cid:25)(cid:15)(cid:21)
(cid:25)(cid:25)(cid:15)(cid:22)

7DEOH(cid:3)$(cid:17)(cid:28)(cid:3)(cid:3),QGLFDWRUV(cid:3)E\(cid:3)GHJUHH(cid:3)RI(cid:3)XUEDQLVDWLRQ(cid:3)DQG(cid:3)*’3(cid:3)SHU(cid:3)KHDG(cid:15)(cid:3)(cid:20)(cid:28)(cid:28)(cid:28)

8UEDQ(cid:3)DUHDV

,QWHUPHGLDWH(cid:3)
DUHDV

5XUDO(cid:3)DUHDV

7RWDO

Unemployment rate (% labour force)

GDP per head (PPS), 
EU15=100

<75
75-100
>=100
EU15

17,1
10,3
8,0
10,1

Unemployment rate of women (% female labour force)

GDP per head (PPS), 
EU15=100

<75
75-100
>=100
EU15

Youth unemployment rate (% labour force 15-24)

<75
75-100
>=100
EU15

Long-term unemployment (% total unemployed)

GDP per head (PPS), 
EU15=100

<75
75-100
>=100
EU15

Participation  rate (% population 15-64)

<75
75-100
>=100
EU15

Part-time employment (% total employed)
<75
75-100
>=100
EU15

GDP per head (PPS), 
EU15=100

*’3(cid:3)SHU(cid:3)KHDG(cid:3)GDWD(cid:3)DUH(cid:3)IRU(cid:3)(cid:20)(cid:28)(cid:28)(cid:27)
6RXUFH(cid:29)(cid:3)(XURVWDW(cid:15)(cid:3)/)6

20,8
11,1
8,7
11,2

33,4
19,5
14,6
19,4

60,7
40,8
46,5
48,7

62,7
68,9
69,7
68,3

10,2
20,2
18,2
17,6

15,2
7,7
5,3
7,8

21,0
9,2
6,7
9,9

28,7
16,0
10,6
16,0

54,6
42,0
40,5
45,7

62,3
70,2
70,1
68,7

9,8
20,9
17,7
17,6

15,6
9,5
5,7
9,9

21,0
11,4
7,5
12,4

24,2
20,5
10,5
18,7

44,3
34,1
33,0
37,7

65,8
70,2
71,0
69,4

9,6
18,6
16,9
16,2

16,2
9,4
6,9
9,4

20,9
10,7
8,0
11,1

29,3
18,9
12,8
18,3

54,4
38,8
43,7
45,3

63,5
69,7
70,0
68,6

9,9
19,8
17,9
17,3

7DEOH(cid:3)$(cid:17)(cid:20)(cid:19)(cid:3)(cid:3)&KDQJHV(cid:3)LQ(cid:3)WKH(cid:3)QXPEHU(cid:3)XQHPSOR\HG(cid:3)DQG(cid:3)HPSOR\PHQW(cid:3)E\(cid:3)
VHFWRU(cid:3)LQ(cid:3)XUEDQ(cid:3)DUHDV(cid:15)(cid:3)(cid:20)(cid:28)(cid:28)(cid:24)(cid:16)(cid:20)(cid:28)(cid:28)(cid:28)

Unemployed

DYHUDJH(cid:3)DQQXDO(cid:3)(cid:8)(cid:3)FKDQJH

Employment

Agriculture

Industry

Services

Total

B
DK
D
EL
E
F
IRL
I
L
NL
A
P
FIN
S
UK
EU15

0,5
-4,3
1,8
7,7
-8,3
0,8
-18,1
-0,6
:
-16,4
3,4
-13,6
-8,6
-5,2
-8,2
-3,1

-8,9
-3,1
-3,4
-4,7
0,4
-4,4
1,0
-16,4
:
-2,6
4,9
-8,0
1,6
2,3
0,0
-6,4

-2,7
-1,3
-2,4
0,1
3,8
-0,5
4,6
-0,9
:
1,9
-3,2
-3,7
4,2
-5,9
-0,8
-0,8

1,7
1,7
0,4
2,3
3,4
1,2
6,4
1,1
:
3,1
0,4
-6,5
3,6
-0,9
1,8
1,3

0,5
1,1
-0,5
1,6
3,5
0,8
5,9
0,1
:
2,8
-0,5
-5,6
3,7
-1,8
1,1
0,6

6RXUFH(cid:29)(cid:3)(XURVWDW(cid:15)(cid:3)/)6

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Objective 1
3KDVLQJ(cid:16)RXW(cid:3)RI(cid:3)2EM(cid:17)(cid:3)(cid:20)(cid:3)RU(cid:3)VSHFLDO(cid:3)SURJUDPPH

Objective 2
3KDVLQJ(cid:16)RXW(cid:3)RI(cid:3)2EM(cid:17)(cid:3)(cid:21)

Non-eligible

Total mountain areas
Mountain areas as % total EU15 land area

6RXUFHV(cid:29)(cid:3)’*(cid:3)$*5,(cid:16)6,*(cid:15)(cid:3)’*(cid:3)5(*,2(cid:16)*,6

% total 
moutain 
areas

61,5
(cid:22)(cid:15)(cid:20)

24,7
(cid:24)(cid:15)(cid:27)

4,9

100,0
38,8

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GDP/head (PPS) 1998, index, EU15=100
<50
50-75
75-100
100-125
>=125
WRWDO

Unemployment (%), 1999
<4.7
4.7-9.4 (EU15 average)
9.4-14.1
14.1-18.8
>=18.8
WRWDO

Population 1998

1000s

% total

1970
18679
13198
15355
4835
(cid:24)(cid:23)(cid:19)(cid:22)(cid:27)

9278
14097
15306
8259
7098
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28,4
8,9
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26,1
28,3
15,3
13,1
(cid:20)(cid:19)(cid:19)(cid:15)(cid:19)

(cid:11)(cid:13)(cid:12) 1876 (cid:22) UHJLRQV ZKHUH RYHU (cid:24)(cid:19)(cid:8) RI WKH VXUIDFH DUHD LV PRXQWDLQRXV
(cid:11)GHILQLWLRQ(cid:3)RI(cid:3)GLVDGYDQWDJHG(cid:3)UHJLRQV(cid:3)(cid:16)(cid:3)’*(cid:3)$*5,(cid:12)

6RXUFH(cid:29)(cid:3)’*(cid:3)$*5,(cid:15)(cid:3)(XURVWDW(cid:15)(cid:3)’*(cid:3)5(*,2(cid:16)*,6

7DEOH(cid:3)$(cid:17)(cid:20)(cid:24)(cid:3)(cid:3)&RDVWDO(cid:3)DUHDV(cid:3)LQ(cid:3)WKH(cid:3)(XURSHDQ(cid:3)8QLRQ

Land area of coastal 
regions

Square kms

% total MS 
land area

3140
34944
24888
24420
26546
45379
21007
44899
0
17386
0
10845
28794
50672
69629
402549

10
81
7
19
5
8
30
15
0
51
0
12
9
12
29
13

B
DK
D
EL
E
F
IRL
I
L
NL
A
P
FIN
S
UK
EU15

’HILQLWLRQ(cid:3)RI(cid:3)FRDVWDO(cid:3)DUHDV(cid:29)(cid:3)’*(cid:3)(19
(cid:11)GHILQLWLRQ(cid:3)EDVHG(cid:3)RQ(cid:3)SUR[LPLW\(cid:3)WR(cid:3)WKH(cid:3)VHD(cid:3)DQG(cid:3)DOWLWXGH(cid:12)
6RXUFH(cid:29)(cid:3)’*(cid:3)(19(cid:15)(cid:3)(XURVWDW(cid:15)(cid:3)’*(cid:3)5(*,2

7DEOH(cid:3)$(cid:17)(cid:20)(cid:25)(cid:3)(cid:3)3RSXODWLRQ(cid:3)DQG(cid:3)HOLJLELOLW\(cid:3)RI(cid:3)LVODQGV(cid:3)IRU(cid:3)2EMHFWLYHV(cid:3)(cid:20)(cid:3)DQG(cid:3)(cid:3)(cid:21)(cid:15)(cid:3)(cid:21)(cid:19)(cid:19)(cid:19)(cid:16)(cid:21)(cid:19)(cid:19)(cid:25)(cid:3)(cid:11)(cid:20)(cid:12)

Total population in islands

Island population eligible under Structural Funds

000s

% total MS 
population

% total island population

Obj. 1

Phasing-out 
of Obj. 1 (2)

Obj. 2

Total Obj. 
1+2 (3)

B
DK
D
EL
E
F
IRL
I
L
NL
A
P
FIN
S
UK

0
66
188
1265
2257
1653
3
7008
0
23
0
489
105
113
307

UE15

13478

0,0
1,3
0,2
12,3
5,8
2,8
0,1
12,3
0,0
0,1
0,0
5,0
2,1
1,3
0,5

3,7

:
0,0
64,9
100,0
66,0
81,3
80,8
99,5
:
0,0
:
100,0
16,0
0,0
23,4

87,4

:
0,0
0,0
0,0
0,0
15,1
19,2
0,0
:
0,0
:
0,0
0,0
0,3
33,2

2,6

:
95,1
35,1
0,0
12,5
1,6
0,0
0,5
:
0,0
:
0,0
58,8
95,7
0,1

4,7

:
95,1
100,0
100,0
78,5
98,0
100,0
99,9
:
0,0
:
100,0
74,8
96,0
56,8

94,7

(cid:11)(cid:20)(cid:12)/LVW(cid:3)RI(cid:3)LVODQGV(cid:3)(cid:11)IRU(cid:3)(8(cid:20)(cid:21)(cid:12)(cid:3)EDVHG(cid:3)RQ(cid:3)(XURVWDW(cid:3)(cid:10)3RUWUDLW(cid:3)RI(cid:3)WKH(cid:3)LVODQGV(cid:17)(cid:10)(cid:3))RU(cid:3)6ZHGHQ(cid:3)DQG(cid:3)
)LQODQG(cid:29)(cid:3)HVWLPDWHV(cid:3)EDVHG(cid:3)RQ(cid:3)OLVWV(cid:3)RI(cid:3)LQKDELWHG(cid:3)LVODQGV(cid:3)ZLWK(cid:3)QR(cid:3)ODQG(cid:3)OLQN(cid:3)DQG(cid:3)LVODQG(cid:3)
PXQLFLSDOLWLHV (cid:17)
(cid:11)(cid:21)(cid:12)(cid:3)7UDQVLWLRQDO(cid:3)VXSSRUW(cid:3)DW(cid:3)OHDVW(cid:3)XQWLO(cid:3)(cid:21)(cid:19)(cid:19)(cid:24)(cid:3)DQG(cid:3)VSHFLDO(cid:3)SURJUDPPH(cid:3)IRU(cid:3)WKH(cid:3)QRUWKHUQ(cid:3)FRDVW(cid:3)RI(cid:3)6ZHGHQ(cid:17)
(cid:11)(cid:22)(cid:12)(cid:3),QFOXGLQJ(cid:3)WUDQVLWLRQDO(cid:3)VXSSRUW(cid:3)IURP(cid:3)2EMHFWLYH(cid:3)(cid:20)(cid:3)DQG(cid:3)VSHFLDO(cid:3)SURJUDPPH
6RXUFH(cid:29)(cid:3)(XURVWDW(cid:15)(cid:3)’*(cid:3)5(*,2

7DEOH(cid:3)$(cid:17)(cid:20)(cid:26)(cid:3)(cid:3),QGLFDWRUV(cid:3)IRU(cid:3)LVODQG(cid:3)UHJLRQV

Population 

Land area

Population 
density

Population 
change

GDP per 
head (PPS)

Unemployment rate (1999)

Region

1998

1998

1991-98

1998

Total

Female

Youth

Accessibility 
(by lorry 
weighted by 
GDP)

1000s

km²

inh./km²

% change 
p.a.

EU15=100

%

%

%

EU15=100

BORNHOLMS AMT
IONIA NISIA
VOREIO AIGAIO
NOTIO AIGAIO
KRITI
ISLAS BALEARES
CANARIAS
CORSE
GUADELOUPE
MARTINIQUE
RÉUNION
SICILIA
SARDEGNA
AÇORES
MADEIRA
ÅLAND
GOTLANDS LÄN
ISLE OF WIGHT
ISLE OF ANGLESEY
COMHAIRLE NAN EILAN (WESTERN ISLES)
ORKNEY ISLANDS
SHETLAND ISLANDS

44,7
202,8
183,5
270,8
563,0
736,9
1589,9
259,8
437,7
401,4
689,5
5103,2
1658,0
244,4
259,9
25,5
57,7
127,0
65,4
27,9
19,6
22,9

588
2307
3836
5286
8336
5014
7242
8680
1705
1128
2520
25707
24090
2330
779
1527
3140
395
715
3134
992
1438

76,0
87,9
47,8
51,2
67,5
147,0
219,5
29,9
256,7
355,9
273,6
198,5
68,8
104,9
333,7
16,7
18,4
321,6
91,5
8,9
19,8
15,9

(8(cid:20)(cid:24)

(cid:22)(cid:20)(cid:28)(cid:20)(cid:20)(cid:21)(cid:19)

(cid:20)(cid:20)(cid:26)(cid:15)(cid:23)

,VODQGV(cid:3)FRUUHVSRQGLQJ(cid:3)WR(cid:3)D(cid:3)1876(cid:22)(cid:15)(cid:3)1876(cid:21)(cid:3)RU(cid:3)1876(cid:20)(cid:3)UHJLRQ
6RXUFH(cid:29)(cid:3)(XURVWDW(cid:15)(cid:3),538’

-0,3
0,9
-0,6
0,9
0,6
1,1
0,9
0,5
1,2
1,3
1,7
0,4
0,1
0,4
0,4
0,5
0,1
0,1
:
-0,7
0,0
0,3

(cid:19)(cid:15)(cid:22)

88,7
55,7
60,8
76,9
66,8
99,5
77,1
77,0
52,4
59,8
50,0
65,2
76,3
52,0
57,5
122,2
91,9
76,7
67,9
77,1
82,0
114,0

(cid:20)(cid:19)(cid:19)(cid:15)(cid:19)

8,6
5,5
11,3
7,3
7,3
7,2
14,4
14,3
:
:
:
24,8
21,9
3,7
3,4
2,1
7,3
7,8
9,5
8,9
3,6
3,3

(cid:28)(cid:15)(cid:23)

10,7
8,1
15,6
11,6
11,5
10,5
20,5
18,8
:
:
:
36,2
31,7
6,5
4,4
2,4
6,7
6,6
9,1
5,9
3,7
3,0

16,7
20,7
30,1
15,7
19,9
14,9
29,8
24,8
:
:
:
60,2
56,7
7,6
7,0
:
15,2
17,4
17,8
12,2
6,4
6,7

9,9
2,0
1,2
2,1
2,0
7,1
:
19,3
:
:
:
9,9
7,0
:
:
7,0
5,5
86,9
57,6
1,9
1,0
0,7

(cid:20)(cid:20)(cid:15)(cid:19)

(cid:20)(cid:26)(cid:15)(cid:27)

(cid:20)(cid:19)(cid:19)(cid:15)(cid:19)

7DEOH(cid:3)(cid:3)$(cid:17)(cid:20)(cid:27)(cid:3)(cid:3)3URGXFWLYLW\(cid:3)E\(cid:3)VHFWRU(cid:3)DQG(cid:3)FRXQWU\(cid:15)(cid:3)(cid:20)(cid:28)(cid:28)(cid:27)

Agriculture

Manufacturing, 
construction

Distribution, 
HORECA (1),
Transport

Business, 
financial 
services

Communal 
services (2)

Total

*’3(cid:3)SHU(cid:3)SHUVRQ(cid:3)HPSOR\HG(cid:3)(cid:11)(85(cid:12)

EU15

B

DK

D

EL

E

F

IRL

I

L

NL

A

P

FIN

S

UK

BG

CY

CZ

EE

HU

LT

LV

MT

PL

RO

SI

SK

(cid:29)

40927

41285

23103

11724

19093

36423

31143

26632

34215

36123

7560

6359

29303

35578

:

:

5279

:

4892

:

2769

1281

:

1739

1909

:

4513

(cid:29)

65739

59975

51150

25613

36257

58110

69437

45736

79076

58102

57613

19419

61829

61467

:

:

(cid:29)

50507

50759

35329

28053

35022

46012

36617

47235

73425

39484

41551

21220

49644

46181

:

:

(cid:29)

107187

118310

113750

88782

76999

105037

101614

102357

157682

61516

106994

47250

110720

114004

:

:

29204

28962

77707

:

6015

10879

6923

6423

:

11310

5321

:

7103

:

9040

10939

7193

6724

:

12308

7081

:

:

16620

32554

15380

9811

:

17652

9023

:

12324

28179

(cid:29)

37967

43226

38956

23715

26924

40143

37195

33559

74700

32596

42834

21096

34818

34352

:

:

35853

:

5616

:

4513

4064

:

9308

3195

:

4375

47717

57980

57329

51278

27662

35725

55549

51825

48375

94136

45207

47711

20918

52831

52636

43993

3426

28237

10176

7271

11340

5789

5213

22861

9201

4185

:

8374

*’3(cid:3)DOORFDWHG(cid:3)EHWZHHQ(cid:3)VHFWRUV(cid:3)DFFRUGLQJ(cid:3)WR(cid:3)YDOXH(cid:16)DGGHG
(cid:11)(cid:20)(cid:12)(cid:3)+RWHOV(cid:15)(cid:3)UHVWDXUDQWV(cid:15)(cid:3)FDWHULQJ
(cid:11)(cid:21)(cid:12)(cid:3)3XEOLF(cid:15)(cid:3)DGPLQLVWUDWLRQ(cid:15)(cid:3)KHDOWK(cid:15)(cid:3)HGXFDWLRQ(cid:15)(cid:3)RWKHU(cid:3)VHUYLFHV
6RXUFH(cid:29)(cid:3)(XURVWDW(cid:3)DQG(cid:3)FDOFXODWLRQV(cid:3)’*(cid:3)5(*,2

7DEOH(cid:3)$(cid:17)(cid:20)(cid:28)(cid:3)(cid:3)&DSLWDO(cid:3)VWRFN(cid:15)(cid:3)(cid:20)(cid:28)(cid:27)(cid:28)(cid:3)DQG(cid:3)(cid:20)(cid:28)(cid:28)(cid:28)

Net 
Capital 
Stock
303306
316797
4017994
165950
1000548
2226545
86874
2532457
19006
575791
409796
152803
410202
534153
2351218

Gross 
Capital 
Stock
536137
549552
6341880
324108
1678093
3862083
144589
4115837
33579
1012171
621443
227353
687623
909778
3879999
15103440 24924224

1989

Population 
(000)

NCS per 
head

NCS per 
employed

9928
5130
78390
10058
38757
56270
3515
56649
375
14805
7628
9955
4954
8459
57258
362130

30552
61756
51257
16499
25816
39569
24715
44704
50697
38891
53722
15349
82796
63147
41064
41707

84583
120441
146615
45207
82050
102388
79301
121699
123819
95483
115699
33447
168792
117523
88539
97287

B
DK
D
EL
E
F
IRL
I
L
NL
A
P
FIN
S
UK
EU

6RXUFH(cid:29)(cid:3)(XURSHDQ(cid:3)&RPPLVVLRQ(cid:3)VHUYLFHV

GCS per 
head

Gross 
Capital 
Stock
771029
54005
742244
107130
9368420
80902
457886
32224
2253212
43298
5173348
68635
201753
41134
4873882
72655
62189
89567
1360567
68366
974717
81468
402395
22838
580807
138791
911030
107553
67763
4776047
68827 20409663 32909524

Net 
Capital 
Stock
452389
417763
6000812
259856
1438887
2972445
124679
3111910
36431
783393
652446
264081
342045
552566
2999960

(85(cid:3)(cid:3)PLOOLRQ(cid:3)(cid:11)(cid:20)(cid:28)(cid:28)(cid:28)(cid:3)SULFHV(cid:12)

1999

Population 
(000)

NCS per 
head

NCS per 
employed

GCS per 
head

10214
5314
82037
10522
39394
58973
3735
57613
429
15760
8083
9979
5160
8854
59280
375346

44292
78622
73148
24697
36525
50403
33382
54014
84880
49707
80720
26462
66292
62406
50607
54376

113455
154270
166277
65958
104472
130631
78276
150935
206874
103016
177406
54674
146630
136301
110670
131468

75489
139688
114197
43518
57196
87724
54018
84597
144894
86329
120591
40322
112567
102891
80568
87678

7DEOH(cid:3)$(cid:17)(cid:21)(cid:19)(cid:3)(cid:11)D(cid:12)(cid:3)(cid:3))UHLJKW(cid:3)WUDQVSRUW

3RUW(cid:3)WUDIILF(cid:3)(cid:11)PDMRU(cid:3)VHDSRUWV(cid:12)

(cid:20)(cid:28)(cid:26)(cid:19)

(cid:20)(cid:28)(cid:27)(cid:19)

(cid:20)(cid:28)(cid:28)(cid:19)

(cid:20)(cid:28)(cid:28)(cid:26)

PLOOLRQ(cid:3)WRQQHV
(cid:20)(cid:28)(cid:28)(cid:27)

(cid:8)(cid:3)FKDQJH(cid:3)
(cid:20)(cid:28)(cid:28)(cid:26)(cid:16)(cid:28)(cid:27)

Rotterdam, NL
Antwerpen, B
Marseille, F
Hamburg, D
Le Havre, F
London, UK
Amsterdam, NL
Tees & Hartelp., UK
Trieste, I
Genoa, I
Forth ports, UK
Wilhemshaven, D
Algeciras, E
Dunkerque, F
Bremen B’haven, D
Southampton, UK
Zeebrugge, B
Gothenburg, S
Liverpool, UK
Milford Haven, UK
Bilbao, E
Tarragona, E
Dublin, IRL
Thessaloniki, EL
Kobenhavn, DK
Lisbon, P
Helsinki, FIN
Sum of above ports
Singapore

226
78
74
47
58
64
21
23
27
53
25
22
8
25
23
28
8
20
31
41
11
4
7
8
6
9
4
951

276
82
103
63
77
48
34
38
38
51
29
32
22
41
25
25
12
22
13
39
21
19,8
7
9
7
14
5
1153

228
102
90
61
54
58
47
40
34
44
25
16
25
37
28
29
30
26
23
33
25
24
8
14
9
14
8
1192

303
112
94
77
60
56
57
51
46
46
43
36
37
37
34
33
32
30
31
35
22
31
17
13
11
12
11
1367
328

307
120
93
76
66
56
56
52
47
46
44
44
42
39
35
34
33
31
30
29
26
26
19
14
12
11
11
1399
312

1,1
7,1
-0,9
-0,3
11,3
1,2
-1,4
0,4
1,7
0,0
3,0
20,5
12,9
7,3
1,5
3,6
2,7
1,2
-1,6
-16,6
18,0
-17,1
10,1
2,4
10,4
-2,5
-4,8
2,3
-4,6

1RWH(cid:29)(cid:3)3LUDHXV(cid:15)(cid:3)(/(cid:29)(cid:3)Q(cid:17)D
6RXUFH(cid:29)(cid:3),QVWLWXWH(cid:3)RI(cid:3)6KLSSLQJ(cid:3)(FRQRPLFV(cid:3)DQG(cid:3)/RJLVWLFV(cid:15)(cid:3)%UHPHQ

7DEOH(cid:3)(cid:21)(cid:19)(cid:3)(cid:11)E(cid:12)(cid:3)(cid:3)&RQWDLQHU(cid:3)SRUW(cid:3)WUDIILF

Rotterdam, NL
Hambourg, D
Antwerpen, B
Felixstowe, UK
Gioia Tauro, I
Bremen B’haven, D
Algeciras, E
Le Havre, F
Genoa, I
Barcelona, E
Valencia, E
Zeebrugge, B
La Spezia, I
Southampton, UK
Piraeus, EL
Marseille, F
Gothenburg, S
Liverpool, UK
Helsinki, FIN
Copenhagen, DK
Sum of top 10 ports
Singapore
Hong Kong

(cid:20)(cid:28)(cid:28)(cid:19)

(cid:20)(cid:28)(cid:28)(cid:24)

(cid:20)(cid:28)(cid:28)(cid:26)

(cid:20)(cid:28)(cid:28)(cid:27)

(cid:19)(cid:19)(cid:19)(cid:3)7(8(cid:3)(cid:11)(cid:20)(cid:12)

(cid:8)(cid:3)FKDQJH(cid:3)
(cid:20)(cid:28)(cid:28)(cid:26)(cid:16)(cid:28)(cid:27)

3667
1969
1549
1436
0
1198
553
858
310
448
387
342
450
345
426
482
352
239
246
165
11987
5224
5101

4787
2890
2329
1924
16
1524
1155
970
615
689
672
528
965
681
600
498
458
406
296
178
16899
11846
12550

5495
3337
2969
2237
1449
1538
1703
1185
1180
972
832
648
616
806
684
622
531
461
330
160
22065
14100
14385

6011
3547
3266
2500
2126
1826
1812
1319
1266
1095
1005
776
732
891
933
660
520
487
343
171
24768
15100
14900

9,4
6,3
10
11,8
46,7
18,7
6,4
11,3
7,3
12,7
20,8
19,8
18,8
10,5
36,4
6,2
-2,1
5,6
3,8
6,8
12,3
7,1
3,6

(cid:11)(cid:20)(cid:12)(cid:3)7(8(cid:3) (cid:3)VWDQGDUG(cid:3)FRQWDLQHU(cid:3)XQLW(cid:3)(cid:11)(cid:21)(cid:19)(cid:3)IW(cid:17)(cid:3)FRQWDLQHU(cid:12)

7DEOH(cid:3)(cid:21)(cid:19)(cid:3)(cid:11)F(cid:12)(cid:3)(cid:3)&RQWDLQHU(cid:3)VHUYLFH(cid:3)PDULWLPH(cid:3)RSHUDWRUV(cid:15)(cid:3)(cid:20)(cid:28)(cid:28)(cid:27)

&DUULHU

&RXQWU\ 7(8(cid:3)(cid:11)(cid:20)(cid:12)(cid:3)LQ(cid:3)

Maersk
Evergreen
P&O Nedlloyd
Mediterranean Shipping
Hanjin Shipping Co.
Sea-Land
Cosco
APL

NYK
MOL

VHUYLFH

346123
280237
250858
220745
213081
211358
202094
201075

163930
133681

DK
Taïwan
UK/NL
CH/I
Korea
USA
China
Singapore
/USA
Japan
Japan

,Q(cid:3)(cid:20)(cid:28)(cid:28)(cid:28)(cid:3)0DHUVN(cid:3)DQG(cid:3)6HD(cid:16)/DQG(cid:3)PHUJHG
(cid:11)(cid:20)(cid:12)(cid:3)7(8(cid:3) (cid:3)VWDQGDUG(cid:3)FRQWDLQHU(cid:3)XQLW(cid:3)(cid:11)(cid:21)(cid:19)(cid:3)IW(cid:17)(cid:3)FRQWDLQHU(cid:12)
6RXUFH(cid:29)(cid:3)&RQWDLQHULVDWLRQ(cid:3),QWHUQDWLRQDO(cid:3)<HDUERRN(cid:15)(cid:3)3RUW(cid:3)RI(cid:3)5RWWHUGDP

7DEOH(cid:3)(cid:21)(cid:19)(cid:3)(cid:11)G(cid:12)(cid:3)(cid:3))UHLJKW(cid:3)FDUULHG(cid:3)E\(cid:3)PRGH(cid:3)RI(cid:3)WUDQVSRUW(cid:15)(cid:3)(cid:20)(cid:28)(cid:26)(cid:19)(cid:16)(cid:28)(cid:27)

Road
Rail
Inland water-ways
Pipelines
Sea (intra EU)
Total

(cid:20)(cid:28)(cid:26)(cid:19)
416
283
103
66
472
1340

(cid:20)(cid:28)(cid:27)(cid:19)
628
287
107
91
780
1893

(cid:20)(cid:28)(cid:28)(cid:19)
932
255
108
75
922
2293

(cid:20)(cid:28)(cid:28)(cid:24)
1146
221
114
83
1071
2635

(cid:19)(cid:19)(cid:19)(cid:3)PQ(cid:3)WRQQHV(cid:3)SHU(cid:3)NP(cid:17)

(cid:20)(cid:28)(cid:28)(cid:25)
1152
220
112
85
1073
2641

(cid:20)(cid:28)(cid:28)(cid:26)
1205
238
118
85
1124
2770

(cid:20)(cid:28)(cid:28)(cid:27)
1255
241
121
87
1167
2870

(cid:8)(cid:3)FKDQJH(cid:3)S(cid:17)D(cid:17)(cid:3)
(cid:20)(cid:28)(cid:28)(cid:19)(cid:16)(cid:28)(cid:27)

3,8
-0,7
1,4
1,9
3,0
2,8

6RXUFH(cid:29)(cid:3)(85267$7(cid:15)(cid:3)(&07(cid:15)(cid:3)8,&(cid:15)(cid:3)QDWLRQDO(cid:3)VWDWLVWLFV

7DEOH(cid:3)$(cid:17)(cid:21)(cid:20)(cid:3)(cid:3)57’(cid:3)LQGLFDWRUV(cid:3)IRU(cid:3)WKH(cid:3)(8

Indicator

B

DK

D

EL

E

F

IRL

I

L

NL

A

P

FIN

S

UK

EU15

Cohesion 
countries

Other MS

GDP per head, PPS, EU=100, 1998

111

119

108

66

81

99

108

101

176

113

112

75

102

102

102

100

79

104

Gross RTD expenditure (% GDP) (1)

(8(cid:20)(cid:24) (cid:20)(cid:19)(cid:19)

Business RTD expenditure (% GDP) (1)

(8(cid:20)(cid:24) (cid:20)(cid:19)(cid:19)

1,84

(cid:28)(cid:28)

1,31

(cid:20)(cid:20)(cid:20)

1,93

(cid:20)(cid:19)(cid:23)

1,21

(cid:20)(cid:19)(cid:22)

2,29

(cid:20)(cid:21)(cid:22)

1,55

(cid:20)(cid:22)(cid:20)

0,51

(cid:21)(cid:26)

0,13

(cid:20)(cid:20)

0,90

(cid:23)(cid:27)

0,47

(cid:23)(cid:19)

2,19

(cid:20)(cid:20)(cid:27)

1,36

(cid:20)(cid:20)(cid:24)

1,40

(cid:26)(cid:24)

1,03

(cid:27)(cid:26)

1,02

(cid:24)(cid:24)

0,55

(cid:23)(cid:26)

Business as % gross expenditure

71,4

62,6

67,8

25,6

52,1

62,0

73,7

53,7

Total RTD personnel as % total (2)

(8(cid:20)(cid:24) (cid:20)(cid:19)(cid:19)

Private RTD personnel as % total (2)

(8(cid:20)(cid:24) (cid:20)(cid:19)(cid:19)

European patent applications per million 
people, average 1997-98-99

1,22

(cid:28)(cid:25)

0,63

(cid:20)(cid:19)(cid:26)

1,99

(cid:20)(cid:24)(cid:26)

1,00

(cid:20)(cid:25)(cid:28)

1,48

(cid:20)(cid:20)(cid:26)

0,84

(cid:20)(cid:23)(cid:21)

0,75

(cid:24)(cid:28)

0,11

(cid:20)(cid:28)

1,02

(cid:27)(cid:19)

0,26

(cid:23)(cid:23)

1,46

(cid:20)(cid:20)(cid:24)

0,71

(cid:20)(cid:21)(cid:19)

1,17

(cid:28)(cid:21)

0,50

(cid:27)(cid:24)

0,81

(cid:25)(cid:23)

0,30

(cid:24)(cid:20)

:
:

:
:

:

:
:

:
:

2,04

(cid:20)(cid:20)(cid:19)

1,11

(cid:28)(cid:23)

1,49

(cid:27)(cid:19)

0,84

(cid:26)(cid:20)

0,63

(cid:22)(cid:23)

0,14

(cid:20)(cid:21)

2,89

(cid:20)(cid:24)(cid:24)

1,94

(cid:20)(cid:25)(cid:23)

3,77

(cid:21)(cid:19)(cid:22)

2,87

(cid:21)(cid:23)(cid:22)

1,82

(cid:28)(cid:27)

1,2

(cid:20)(cid:19)(cid:21)

1,86

(cid:20)(cid:19)(cid:19)

1,18

(cid:20)(cid:19)(cid:19)

0,85

(cid:23)(cid:25)

0,43

(cid:22)(cid:26)

1,98

(cid:20)(cid:19)(cid:25)

1,27

(cid:20)(cid:19)(cid:27)

54,1

55,9

22,5

67,2

76,2

65,8

63,7

50,5

64,3

1,45

(cid:20)(cid:20)(cid:23)

0,61

(cid:20)(cid:19)(cid:22)

1,16

(cid:28)(cid:20)

0,47

(cid:27)(cid:19)

0,61

(cid:23)(cid:27)

0,08

(cid:20)(cid:23)

2,43

(cid:20)(cid:28)(cid:20)

1,29

(cid:21)(cid:20)(cid:28)

2,35

(cid:20)(cid:27)(cid:24)

1,21

(cid:21)(cid:19)(cid:24)

1,28

(cid:20)(cid:19)(cid:20)

0,60

(cid:20)(cid:19)(cid:21)

1,27

(cid:20)(cid:19)(cid:19)

0,59

(cid:20)(cid:19)(cid:19)

0,91

(cid:26)(cid:21)

0,22

(cid:22)(cid:26)

1,34

(cid:20)(cid:19)(cid:24)

0,66

(cid:20)(cid:20)(cid:21)

123

139

227

6

18

116

52

60

145

166

125

3

222

269

95

119

16

140

(cid:11)(cid:20)(cid:12)(cid:3)(cid:20)(cid:28)(cid:28)(cid:27)(cid:15)(cid:3)H[FHSW(cid:3)%(cid:15)(cid:3)(/(cid:15)(cid:3),5/(cid:15)(cid:3)1/(cid:15)(cid:3)3(cid:29)(cid:3)(cid:20)(cid:28)(cid:28)(cid:26)(cid:30)(cid:3)$(cid:29)(cid:3)(cid:20)(cid:28)(cid:28)(cid:22)
(cid:11)(cid:21)(cid:12)(cid:3)(cid:20)(cid:28)(cid:28)(cid:27)(cid:15)(cid:3)H[FHSW(cid:3)3(cid:29)(cid:3)(cid:20)(cid:28)(cid:28)(cid:26)(cid:30)(cid:3))(cid:15)(cid:3),(cid:15)(cid:3)1/(cid:29)(cid:3)(cid:20)(cid:28)(cid:28)(cid:25)(cid:30)(cid:3)%(cid:15)(cid:3),5/(cid:29)(cid:3)(cid:20)(cid:28)(cid:28)(cid:24)(cid:30)(cid:3)(/(cid:15)(cid:3)$(cid:15)(cid:3)8.(cid:29)(cid:3)(cid:20)(cid:28)(cid:28)(cid:22)
6RXUFH(cid:29)(cid:3)(XURVWDW

7DEOH(cid:3)$(cid:17)(cid:21)(cid:21)(cid:3)(cid:3)3ULFH(cid:3)GLVSHUVLRQ(cid:3)LQ(cid:3)WKH(cid:3)(8(cid:3)(cid:11)EURDG(cid:3)VHFWRUV(cid:12)

6HFWRU
Aggregate price level
Manufacturing
Electricity, gas and water
Construction
Services

Wholesale and retail trade

      Hotels and restaurants

Transport, storage and communications

6RXUFH(cid:29)(cid:3)&RPPLVVLRQ(cid:3)VHUYLFHV

&RHIILFLHQW(cid:3)RI(cid:3)YDULDWLRQ(cid:3)(cid:11)(cid:8)(cid:12)

(cid:20)(cid:28)(cid:28)(cid:22)

(cid:20)(cid:28)(cid:28)(cid:26)

16
15
24
26
26
33
21
26

15
9
26
23
19
30
18
18

7DEOH(cid:3)$(cid:17)(cid:21)(cid:22)(cid:3)(cid:29)(cid:3),QGXVWULHV(cid:3)JURXSHG(cid:3)E\(cid:3)OHYHOV(cid:3)DQG(cid:3)FKDQJHV(cid:3)LQ(cid:3)FRQFHQWUDWLRQ(cid:3)(cid:11)DYHUDJH(cid:3)
(cid:20)(cid:28)(cid:28)(cid:23)(cid:16)(cid:28)(cid:26)(cid:3)FRPSDUHG(cid:3)WR(cid:3)DYHUDJH(cid:3)(cid:20)(cid:28)(cid:26)(cid:19)(cid:16)(cid:26)(cid:22)(cid:12)

&RQFHQWUDWHG(cid:3)LQGXVWULHV(cid:3)WKDW(cid:3)KDYH(cid:3)
UHPDLQHG(cid:3)FRQFHQWUDWHG(cid:3)

&RQFHQWUDWHG(cid:3)LQGXVWULHV(cid:3)WKDW(cid:3)KDYH(cid:3)EHFRPH(cid:3)
OHVV(cid:3)FRQFHQWUDWHG

Motor Vehicles
Motor Cycles
Aircraft
Electrical engineering
Chemical products, NEC
Petroleum & Coal Products
’LVSHUVHG(cid:3)LQGXVWULHV(cid:3)WKDW(cid:3)KDYH(cid:3)EHFRPH(cid:3)
PRUH(cid:3)FRQFHQWUDWHG(cid:3)

Drink
Tobacco
Office & Computing Machinery
Mechanical engineering
Radio-TV & Communications
Instrument engineering

’LVSHUVHG(cid:3)LQGXVWULHV(cid:3)WKDW(cid:3)KDYH(cid:3)
VWD\HG(cid:3)GLVSHUVHG

Textiles
Clothing
Leather & leather goods
Furniture
Transport equipment, NEC

Footwear
Industrial chemicals
Pharmaceuticals
Petroleum refineries
Rubber products
Plastic products

Food
Wood Products
Paper & Paper products
Printing & Publishing
Metal Products
Non-Metallic minerals, NEC
Shipbuilding

5HVLGXDO(cid:3)JURXS

Pottery & China
Glass & Glass products
Iron & Steel
Non-Ferrous Metals
Railway equipment
Other Manufacturing

Source: Midelfart-Knarvik, H-K, Overman, H, Redding, S, Venables, A.J,  7KH(cid:3)ORFDWLRQ(cid:3)RI(cid:3)(XURSHDQ(cid:3)LQGXVWU\ ,  
5HSRUW(cid:3)SUHSDUHG(cid:3)IRU(cid:3)’*(cid:3)(&),1(cid:15)(cid:3)(FRQRPLF(cid:3)3DSHU(cid:3)1R(cid:17)(cid:3)(cid:20)(cid:23)(cid:21)(cid:15)(cid:3)%UXVVHOV(cid:15)(cid:3)(cid:21)(cid:19)(cid:19)(cid:19)

7DEOH(cid:3)$(cid:17)(cid:21)(cid:23)(cid:3)(cid:3)($**)(cid:16)*XDUDQWHH(cid:3)H[SHQGLWXUH(cid:3)E\(cid:3)0HPEHU(cid:3)6WDWH(cid:3)(cid:11)LQ(cid:3)DVFHQGLQJ(cid:3)RUGHU(cid:12)(cid:15)(cid:3)(cid:20)(cid:28)(cid:27)(cid:27)(cid:16)(cid:28)(cid:27)

(cid:20)(cid:28)(cid:27)(cid:27)

EUR mn
3
(cid:20)(cid:24)(cid:25)(cid:15)(cid:26)
721,4
1 080.3

%

0 L
(cid:19)(cid:15)(cid:25) 3
2,7 B
4,1 DK

EUR mn %
3 831.6
4 346.9
4 903.9
6 191.5

14,5 (
16,5 I
18,6 D
23,5 F

(cid:20)(cid:28)(cid:28)(cid:22)
/RZHVW
EUR mn %

7,3
(cid:23)(cid:26)(cid:27)(cid:15)(cid:20)
1 298.7
1 334.7

+LJKHVW
EUR mn %
(cid:23)(cid:3)(cid:20)(cid:26)(cid:24)(cid:17)(cid:26)
4 765.4
4 976.2
8 184.8

0 L
(cid:20)(cid:15)(cid:23) FIN
3,7 3
3,8 S

(cid:20)(cid:21) I
13,7 (
14,3 D
23,6 F

(cid:20)(cid:28)(cid:28)(cid:27)

EUR mn %
17,4
575,7
(cid:25)(cid:22)(cid:26)(cid:15)(cid:23)
770,1

EUR mn %
4 129.2
(cid:24)(cid:3)(cid:21)(cid:28)(cid:22)(cid:17)(cid:24)
5 553.0
9 007.2

L
3
B
IRL

NL
I
D
F

EU 12

26 400.2

100 EU 12

(XURSHDQ(cid:3)8QLRQ
34 748.2

100 EU 15

38 747.9

6RXUFH(cid:3)(cid:29)(cid:3)(cid:21)(cid:27)WK(cid:3)ILQDQFLDO(cid:3)UHSRUW(cid:3)RI(cid:3)WKH(cid:3)($**)(cid:16)*XDUDQWHH

0
1,5
(cid:20)(cid:15)(cid:25)
2

10,7
(cid:20)(cid:22)(cid:15)(cid:26)
14,3
23,2

100

7DEOH(cid:3)$(cid:17)(cid:21)(cid:24)(cid:3)(cid:3)($**)(cid:16)*XDUDQWH(cid:3)H[SHQGLWXUH(cid:3)UHODWLYH(cid:3)WR(cid:3)QXPEHU(cid:3)
HPSOR\HG(cid:3)LQ(cid:3)DJULFXOWXUH(cid:3)E\(cid:3)0HPEHU(cid:3)6WDWH(cid:3)(cid:11)LQ(cid:3)DVFHQGLQJ(cid:3)RUGHU(cid:12)(cid:15)(cid:3)
(cid:20)(cid:28)(cid:27)(cid:27)(cid:16)(cid:28)(cid:27)

P
L
EL
E

D
B
DK
NL

(cid:20)(cid:28)(cid:27)(cid:27)

(cid:20)(cid:28)(cid:28)(cid:22)
/RZHVW

(cid:20)(cid:28)(cid:28)(cid:27)

EUR th

EUR th

EUR th

0,2 P
0,5 L
1,5 I
1,6 E

0,8 P
1,5 I
2,5 L
3,8 EL

1,3
2,5
3,5
4,4

+LJKHVW

EUR th

EUR th

EUR th

5,9 F
7,4 NL
11,5 DK
16,2 B

7,3 F
9,9 S
14,4 B
14,8 DK

EU 12

3 EU 12

4,7 EU 15

(XURSHDQ(cid:3)8QLRQ

6RXUFH(cid:29)(cid:3)(cid:21)(cid:27)WK(cid:3)ILQDQFLDO(cid:3)UHSRUW(cid:3)RI(cid:3)WKH(cid:3)($**)(cid:16)*XDUDQWHH
DQG(cid:3)(FRQRPLF(cid:3)DFFRXQWV(cid:3)RI(cid:3)DJULFXOWXUH

9,2
9,6
11,1
14,6

5,7

7DEOH(cid:3)$(cid:17)(cid:21)(cid:25)(cid:3)(cid:3)&$3(cid:3)QHW(cid:3)WUDQVIHUV(cid:15)(cid:3)(cid:20)(cid:28)(cid:28)(cid:22)(cid:3)DQG(cid:3)(cid:20)(cid:28)(cid:28)(cid:27)

EUR mn

EUR per head

EUR per AWU*

(85(cid:3)PLOOLRQ(cid:3)DW(cid:3)(cid:20)(cid:28)(cid:27)(cid:24)(cid:3)SULFHV

1993
-789,6
-5912,1
-3036,7
-42,6
:
-246,4
:
:
-2370,6
548,4
1190,6
196,2
282,6
944,2

B-L
D
I
NL
A
P
FIN
S
UK
DK
EL
E
F
IRL
(cid:3)
(cid:13)(cid:3)$:8 DQQXDO(cid:3)ZRUN(cid:3)XQLW(cid:3)(cid:11)LH(cid:3)KRXUV(cid:3)RI(cid:3)ZRUN(cid:3)RI(cid:3)D(cid:3)IXOO(cid:16)WLPH(cid:3)ZRUNHU(cid:3)LQ(cid:3)D(cid:3)IXOO(cid:3)\HDU(cid:12)
6RXUFH(cid:29)(cid:3)6WXG\(cid:3)’*(cid:3)5(*,2(cid:3)

1993
-8490,1
-7362,5
-1597,4
-180,5
:
-404,6
:
:
-5712,4
5896,7
1693,5
176,5
252,1
3885,8

1998
-743,5
-4031,7
-1969,8
-323,2
-82,4
-107,2
-41,6
-323,1
-1812,2
395,7
892,2
1311,1
1133,8
1041

1993
-104,9
-101,5
-74,1
-3,9
:
-34,7
:
:
-56,7
147,1
159,9
7
6,8
367,7

1998
-110,6
-77,6
-54
-32,6
-16,1
-17
-12,8
-57,7
-48,4
118
134
52,6
30,5
445

1998
-9066,9
-6349,1
-1201,9
-1423,9
-624,5
-211
-338,6
-4038,7
-4731,7
5009,4
1535,6
1179
1155,7
5205

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(XURSHDQ(cid:3)VL]H(cid:3)XQLW(cid:13)

(cid:20)(cid:28)(cid:28)(cid:26)

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(cid:20)(cid:28)(cid:28)(cid:26)

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Attiki (EL)
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$VWXULDV(cid:3)(cid:11)((cid:12)
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Lazio (I)
1RUWH(cid:3)(cid:11)3(cid:12)
&DODEULD(cid:3)(cid:11),(cid:12)
Baleares (E)
EU 15

3,7
3,7
3,8
4
4,1
4,1
4,2
4,2
4,4
4,5
4,5
4,6
4,7
4,8
4,8
5
5,1
5,2
5,3
5,3
16,7

-8,0
11,0
-23,0
22,0
-12,0
114,0
12,0
-21,0
-28,0
-29,0
3,0
4,0
-10,0
-10,0
-11,0
-7,0
-16,0
37,0
22,0
6,0
17,0

24,2 West Midlands (UK)
31,9 &HQWUH(cid:3)(cid:11))(cid:12)

1,0 Nord-Pas-de-Calais (F)

23,4 Danmark (DK)
30,3 Yorkshire and Humberside (UK)
12,5 South East (UK)

6,6 Oost-Nederland (NL)

22,2 &KDPSDJQH(cid:16)$UGHQQH(cid:3)(cid:11))(cid:12)
26,7 East Midlands (UK)
11,1 3LFDUGLH(cid:3)(cid:11))(cid:12)
10,2 Noord-Nederland (NL)
15,5 Zuid-Nederland (NL)
37,8 Sachsen (D)

8,9 Ile-de-France (F)
31,8 %UDQGHQEXUJ(cid:3)(cid:11)’(cid:12)
41,5 West-Nederland (NL)

4,6 Thüringen (D)
11,6 East Anglia (UK)
13,1 0HFNOHQEXUJ(cid:16)9RUSRPPHUQ(cid:3)(cid:11)’(cid:12)

2,3 Sachsen-Anhalt (D)
5,0

48,6
49,2
50,8
57,2
62,6
65,5
68,6
71,1
75,9
78,6
84,2
86,1
87,3
89,3
95,1
100,4
103,7
107,2
159,5
165,6

29,0
26,0
29,0
18,0
29,0
45,0
25,0
15,0
36,0
24,0
21,0
25,0
28,0
27,0
-6,0
18,0
-9,0
45,0
16,0
5,0

1,9
6,5
2,9
3,7
1,5
1,7
4,2
7,6
1,8
5,3
4,9
3,7
2,9
0,4
5,3
2,8
3,9
3,5
6,5
4,4

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4 000
4 060
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2 578
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637
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833
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222
1 509
1 447
451
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1 615
4 206
7 138
2 773
6 532
3 140
5 186
9 443
5 001
470

735
:
7 779
:
340
620
3 056
521
3 657
371

:
449
204
372
309
333
1 191
690
:
:

0,4
0,2
0,3
0,5
0,4
6,6
0,3
5,0
0,5
3,2

1,4
19,8
3,0
7,6
23,6
7,0
7,7
34,0
2,7
4,8

Bulgaria
Estonia
Hungary
Lithuania
Latvia
Poland
Slovak Republic
Czech Republic
Romania
Slovénia

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Long-term unemployment
Statistical system
Participation in employment
Tax and benefit system
Early retirement
Lifelong learning
Skills gap
Participation in education
Administrative burden
Fiscal pressure on labour
Partnership approach
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Work and family
Policy mix
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E
EL
E
EL
EL
P
EL
E
EL
E
E
P
EL
E
I
EL
UK
D
F
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Pontevedra
Lesvos
Huelva
Lefkada
Samos
Algarve
Cyclades
A Coruña
Chios
Taragona
Cadiz
Açores
Cephalonia
Girona
Trapani
Chalkidiki
Highlands and Islands
Cuxhaven
Finistère
Dodecanèse 

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3,9
0,1
0,2
0,3
0,1
0,1
0
2,8
0,8
0,4
0,2
0
0,8
0,1
0,1
0
1,3
0
0,2
2,2

1,6
0,1
1,7
0
0,1
0,5
0
1
0
0,1
0,5
1,2
0
0,3
0,2
0
1
3,4
1,2
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6,8
9,6
7
8,5
8,2
4,8
7,9
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6,3
5,4
4,2
4,4
4,6
4,7
3,3
5
1,9
0,5
1,6
3,6

7RWDO(cid:13)
15,1
9,8
9,8
8,8
8,3
8,3
8
7,3
7,1
6,1
5,8
5,6
5,4
5,3
5,2
5
4,2
4,1
3,9
3,9

17.070
3.060
4.270
660
1.140
7.600
2.640
6.760
920
2.230
4.370
3.900
570
2.120
4.030
1.660
2.880
280
4.770
2.210

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(cid:21)(cid:19)(cid:19)(cid:19)(cid:16)(cid:21)(cid:19)(cid:19)(cid:25)

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B
DK
D
EL
E
F
IRL
I
L
NL
A
P
FIN
S
UK
EU15

1285
0
15452
10476
23746
2758
3626
19634
0
277
275
9928
838
450
3467
92212

103
0
160
242
201
144
282
137
0
98
133
256
121
124
124
187

0
0
14153
10476
23219
1644
965
19302
0
0
275
6616
1076
452
5079
83258

0
0
194
286
232
283
195
162
0
0
135
348
121
104
143
220

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B
DK
D
EL
E
F
IRL
I
L
NL
A
P
FIN
S
UK
EU15

1903
807
15445
0
9768
24771
0
11103
177
3499
2992
0
1876
1729
20755
94826

43
49
40
0
55
46
0
43
19
44
35
0
53
37
47
46

1269
538
10296
0
8809
18768
0
7402
118
2333
1995
0
1582
1223
13836
68170

41
41
41
0
41
41
0
41
41
41
41
0
41
41
41
41

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(cid:22)(cid:22)(cid:27)(cid:27)(cid:21)
17857
1767
2568
8524
1878
(cid:21)(cid:26)(cid:27)(cid:23)(cid:23)
7871
19805

(cid:22)(cid:28)
20
19
0
0
0
(cid:28)(cid:26)
58
40

(cid:21)(cid:20)(cid:20)
97
14
73
28
(cid:21)(cid:19)

(cid:23)(cid:25)(cid:24)(cid:26)(cid:22)
22644
3954
17230
2746
(cid:24)(cid:21)(cid:23)(cid:20)
(cid:22)(cid:25)(cid:26) (cid:20)(cid:20)(cid:22)(cid:24)(cid:23)(cid:19)

(85(cid:20)(cid:22)
(cid:23)(cid:23)(cid:23)(cid:19)(cid:20)
24495
2076
1735
13682
2406
(cid:22)(cid:19)(cid:28)(cid:25)(cid:19)
10670
20292

(cid:26)(cid:25)
33
43
:
:
:
(cid:20)(cid:24)(cid:19)
48
102

(cid:23)(cid:23)(cid:22)
170
82
133
58
(cid:24)(cid:21)

(cid:23)(cid:24)(cid:19)(cid:19)(cid:28)
20029
4467
17546
2968
(cid:27)(cid:28)(cid:21)(cid:19)
(cid:26)(cid:21)(cid:20) (cid:20)(cid:21)(cid:28)(cid:21)(cid:27)(cid:21)

(cid:8)
(cid:21)(cid:28)(cid:15)(cid:27)
(cid:20)(cid:24)(cid:15)(cid:26)
(cid:20)(cid:15)(cid:25)
(cid:21)(cid:15)(cid:22)
(cid:26)(cid:15)(cid:24)
(cid:20)(cid:15)(cid:26)
(cid:21)(cid:23)(cid:15)(cid:24)
(cid:25)(cid:15)(cid:28)
(cid:20)(cid:26)(cid:15)(cid:23)
(cid:19)(cid:15)(cid:19)
(cid:23)(cid:20)(cid:15)(cid:19)
(cid:20)(cid:28)(cid:15)(cid:28)
(cid:22)(cid:15)(cid:24)
(cid:20)(cid:24)(cid:15)(cid:21)
(cid:21)(cid:15)(cid:23)
(cid:23)(cid:15)(cid:25)
(cid:20)(cid:19)(cid:19)(cid:15)(cid:19)

(cid:8)
(cid:22)(cid:23)(cid:15)(cid:22)
(cid:20)(cid:27)(cid:15)(cid:28)
(cid:20)(cid:15)(cid:25)
(cid:20)(cid:15)(cid:22)
(cid:20)(cid:19)(cid:15)(cid:25)
(cid:20)(cid:15)(cid:28)
(cid:21)(cid:22)(cid:15)(cid:28)
(cid:27)(cid:15)(cid:22)
(cid:20)(cid:24)(cid:15)(cid:26)
(cid:19)(cid:15)(cid:19)
(cid:22)(cid:23)(cid:15)(cid:27)
(cid:20)(cid:24)(cid:15)(cid:24)
(cid:22)(cid:15)(cid:24)
(cid:20)(cid:22)(cid:15)(cid:25)
(cid:21)(cid:15)(cid:22)
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426
2000

375
:

7

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:

392
1694

375
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92%
85%

100%
:

87%

91%

:

1150
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9

3

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544

:

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94%

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1661
2908

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:

1329
2326

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80%
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75%

49%

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5
150

159
1100

1

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2,5
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80
550

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1676
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709
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(cid:20)(cid:28)(cid:27)(cid:28)(cid:16)(cid:28)(cid:22)

(cid:20)(cid:28)(cid:28)(cid:23)(cid:16)(cid:28)(cid:28)

60((cid:3)VXSSRUW
(cid:11)(85(cid:3)EQ(cid:12)

(cid:8)(cid:3)DLG(cid:13)

60((cid:3)VXSSRUW
(cid:11)(85(cid:3)EQ(cid:12)

(cid:8)(cid:3)DLG(cid:13)

2EMHFWLYH(cid:3)(cid:20)
2EMHFWLYH(cid:3)(cid:21)
2EMHFWLYH(cid:3)(cid:24)E
2EMHFWLYH(cid:3)(cid:25)
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5,74
2.5-3.6
1.4-1.8
0
9.6-10.2

15
35-50
50-60
0
20-21

13,6
5,4
2,2
0,2
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14
35
31
25
18

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7DEOH(cid:3)$(cid:17)(cid:22)(cid:28)(cid:3)([SHQGLWXUH(cid:3)RQ(cid:3)VXSSRUW(cid:3)RI(cid:3)60(V(cid:3)E\(cid:3)W\SH(cid:3)RI(cid:3)PHDVXUH(cid:15)(cid:3)(cid:20)(cid:28)(cid:28)(cid:23)(cid:16)(cid:28)(cid:28)

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(85(cid:3)PQ

Financial support (direct)
Financial engineering
Business services
Innovation, technology transfer
Support infrastructure
Training
Sectoral measures
Other
Total

6RXUFH(cid:29)(cid:3)60((cid:3)WKHPDWLF(cid:3)HYDOXDWLRQ(cid:3)(cid:11)(cid:20)(cid:28)(cid:28)(cid:28)(cid:12)

6820
570
2684
2499
2126
3607
1196
1850
21352

(cid:8)

31,9
2,7
12,6
11,7
10
16,9
5,6
8,7
100

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2EMHFWLYHV(cid:3)(cid:20)(cid:3)DQG(cid:3)(cid:25)
(85(cid:3)PQ
-
-
545,6
694,5
789
65,7
337,2
891,6
-
-
13
978,6
22,5
24,7
142,6

2EMHFWLYH(cid:3)(cid:21)
(85(cid:3)PQ
38
15
134
-
258
322
-
61
-
-
20
-
35
28
322

B
DK
D
EL
E
F
IRL
I
L
NL
A
P
FIN
S
UK

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2EMHFWLYH(cid:3)(cid:21)(cid:3)(cid:11)(cid:20)(cid:28)(cid:28)(cid:28)(cid:12)

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Water treatment and distribution
Industrial and urban environment, protection of natural environment
Waste collection and treatment
Research, training and other

(85(cid:3)PQ(cid:15)(cid:3)(cid:20)(cid:28)(cid:28)(cid:23)(cid:3)SULFHV
6970,5
1057,6
224,9
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Reclamation, waste treatment and clean technologies
Clean up of industrial sites and urban areas
Training and other

Total Objective 2 

Management of natural environment, countryside, biodiversity
Reclamation/treatment (clean technologies, industrial waste)
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210,8
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(cid:21)(cid:19)(cid:19)(cid:19)

(cid:21)(cid:19)(cid:19)(cid:25)

(cid:21)(cid:19)(cid:20)(cid:19)

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3,1

27,0

4,7

1,7

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6,2

6,7

23,2

3,9

4,4

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1,4

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0,7

0,0

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1,5

0,8

4,4

1,2

0,5

0,1

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2,4

2,5

4,4

1,6

1,1

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0,7

0,6

0,3

0,2

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0,1

1,2

0,8

5,8

1,0

0,5

0,3

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(cid:21)(cid:19)(cid:19)(cid:25)

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(cid:21)(cid:19)(cid:19)(cid:25)

(cid:21)(cid:19)(cid:20)(cid:19)

(cid:21)(cid:19)(cid:19)(cid:19)

1,8

1,2

2,7

0,5

0,0

0,0

0,1

1,2

0,5

0,6

0,1

-0,4

0,0

0,3

6,4

6,2

20,2

4,7

0,6

0,2

-2,4

6,0

5,8

14,0

2,9

0,4

0,2

-1,2

(cid:21)(cid:19)(cid:20)(cid:19)

1,8

1,6

0,6

0,0

-0,4

0,2

0,2

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(cid:21)(cid:19)(cid:19)(cid:25)

(cid:21)(cid:19)(cid:19)(cid:28)

1,2

1,2

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0,3

0,8

1,1

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1,9

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0,1

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0,9

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0,4

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0,0

0,6

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0,5

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0,8

1,1

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0,2

0,5

1,5

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2,0

1,4

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0,3

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0,2

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2,2

1,3

0,7

0,3

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Investment in holdings
Young Farmers
Training
Early retirement Obj 1
Early retirement non-Obj 1
LFA/AER* Obj 1
LFA/AER non-Obj 1
Agri-environmental Obj 1
Agri-environmental non-Obj 1
Process, marketing of agri products 
Afforestation of agri land Obj 1
Afforestation of agri land non-Obj 1
Other forestry measures Obj 1
Other forestry measures non-Obj 1
Land improvement
Reparcelling
Farm relief, farm management
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(cid:26)(cid:23)
67
63
50
77
59
71
66
72
(cid:25)(cid:24)
76
37
52
54
47
(cid:24)(cid:19)
(cid:26)(cid:21)
89
76
68
72
63
59
69
76
(cid:26)(cid:19)
(cid:26)(cid:23)

(cid:25)(cid:24)

53
49
82
51
65
44
45
(cid:25)(cid:21)
(cid:26)(cid:19)
(cid:27)(cid:20)
75
(cid:26)(cid:24)
(cid:20)(cid:19)(cid:19)
(cid:25)(cid:24)

(cid:26)(cid:27)

58
48
45
44
45
43
(cid:23)(cid:25)
55
61
59
56
41
55
51
64
56
66
45
68
64
(cid:25)(cid:19)
57
69
(cid:26)(cid:23)
66
62
50
76
57
69
63
73
(cid:25)(cid:22)
76
39
52
52
48
(cid:24)(cid:20)
(cid:26)(cid:25)
90
76
68
71
64
58
69
77
(cid:26)(cid:19)
(cid:26)(cid:21)

(cid:25)(cid:24)

56
52
81
50
69
46
47
(cid:25)(cid:22)
(cid:26)(cid:20)
(cid:27)(cid:19)
76
(cid:26)(cid:25)
(cid:20)(cid:19)(cid:19)
(cid:25)(cid:24)

(cid:27)(cid:21)

72
57
52
53
54
52
(cid:24)(cid:24)
56
63
58
57
42
58
53
64
56
70
47
71
67
(cid:25)(cid:22)
60
72
(cid:26)(cid:24)
72
65
55
75
57
68
67
74
(cid:25)(cid:24)
82
40
53
50
46
(cid:24)(cid:20)
(cid:27)(cid:20)
87
74
66
69
64
59
68
76
(cid:25)(cid:27)
(cid:26)(cid:22)

(cid:26)(cid:19)

58
54
85
53
69
48
49
(cid:25)(cid:25)
(cid:26)(cid:23)
(cid:26)(cid:28)
78
(cid:26)(cid:27)
(cid:20)(cid:19)(cid:19)
(cid:25)(cid:26)

84
(cid:27)(cid:23)
73
59
53
54
55
53
(cid:24)(cid:25)
57
64
60
58
43
59
55
66
57
72
48
73
68
(cid:25)(cid:23)
62
74
76
74
67
56
76
58
70
69
76
(cid:25)(cid:25)
84
41
54
51
47
(cid:24)(cid:21)
(cid:27)(cid:22)
87
75
68
70
66
60
69
78
(cid:26)(cid:19)
75
(cid:26)(cid:24)
72
(cid:26)(cid:21)
60
55
87
54
71
49
51
(cid:25)(cid:27)
75
81
80
(cid:27)(cid:19)
(cid:20)(cid:19)(cid:19)
(cid:25)(cid:27)
(cid:25)(cid:25)

82
(cid:27)(cid:21)
80
66
60
61
61
60
(cid:25)(cid:22)
59
65
60
60
43
60
56
65
58
73
49
74
71
(cid:25)(cid:24)
61
73
76
73
66
56
75
58
69
68
75
(cid:25)(cid:25)
82
40
54
48
46
(cid:24)(cid:21)
(cid:28)(cid:20)
89
77
67
72
67
59
67
76
(cid:25)(cid:27)
78
(cid:26)(cid:27)
72
(cid:26)(cid:21)
62
58
89
56
70
50
52
(cid:26)(cid:19)
74
81
80
(cid:26)(cid:27)
(cid:20)(cid:19)(cid:19)
(cid:25)(cid:28)
(cid:25)(cid:27)

81
(cid:27)(cid:20)
77
73
72
74
68
68
(cid:26)(cid:21)
56
65
60
57
43
56
53
83
53
76
59
74
65
(cid:25)(cid:25)
63
71
73
75
65
50
75
58
65
65
73
(cid:25)(cid:25)
78
56
63
59
53
(cid:25)(cid:19)
(cid:28)(cid:22)
88
78
65
67
71
61
66
76
(cid:25)(cid:27)
83
(cid:27)(cid:22)
68
(cid:25)(cid:27)
63
61
89
59
71
50
55
(cid:26)(cid:20)
69
76
75
(cid:26)(cid:22)
(cid:20)(cid:19)(cid:19)
(cid:25)(cid:27)
(cid:25)(cid:28)

80
(cid:27)(cid:19)
74
74
73
75
70
70
(cid:26)(cid:22)
56
69
61
58
43
57
53
85
53
75
61
78
68
(cid:25)(cid:26)
64
71
74
75
67
51
76
58
66
66
74
(cid:25)(cid:25)
76
54
61
55
51
(cid:24)(cid:26)
(cid:28)(cid:23)
88
79
65
67
73
61
66
76
(cid:25)(cid:27)
78
(cid:26)(cid:27)
70
(cid:26)(cid:19)
63
61
89
62
72
50
55
(cid:26)(cid:20)
70
76
75
(cid:26)(cid:22)
(cid:20)(cid:19)(cid:19)
(cid:25)(cid:27)
(cid:26)(cid:19)

79
(cid:26)(cid:28)
71
72
72
73
69
70
(cid:26)(cid:20)
55
68
60
57
42
56
53
84
52
74
61
77
67
(cid:25)(cid:25)
64
72
74
74
66
50
76
58
67
66
75
(cid:25)(cid:25)
74
52
59
53
50
(cid:24)(cid:25)
(cid:20)(cid:19)(cid:23)
(cid:27)(cid:25)
81
65
66
72
61
66
76
(cid:25)(cid:27)
82
(cid:27)(cid:21)
69
(cid:25)(cid:28)
65
64
94
65
75
51
57
(cid:26)(cid:23)
72
77
78
(cid:26)(cid:25)
(cid:20)(cid:19)(cid:19)
(cid:25)(cid:28)
(cid:26)(cid:19)

79
(cid:26)(cid:28)
70
71
71
71
68
70
(cid:26)(cid:19)
55
68
60
57
42
56
53
84
53
74
61
77
67
(cid:25)(cid:25)
64
72
76
74
67
50
77
58
67
67
77
(cid:25)(cid:26)
77
52
60
53
50
(cid:24)(cid:25)
(cid:20)(cid:19)(cid:27)
(cid:27)(cid:23)
79
64
65
72
61
65
76
(cid:25)(cid:26)
81
(cid:27)(cid:20)
69
(cid:25)(cid:28)
66
65
95
67
76
52
58
(cid:26)(cid:24)
73
77
77
(cid:26)(cid:24)
(cid:20)(cid:19)(cid:19)
(cid:26)(cid:19)
(cid:26)(cid:19)

7KH(cid:3)SHULRG(cid:3)LV(cid:3)VSOLW(cid:3)LQWR(cid:3)WZR(cid:3)VXESHULRGV(cid:3)WR(cid:3)FRUUHVSRQG(cid:3)ZLWK(cid:3)WKH(cid:3)WZR(cid:3)SURJUDPPLQJ(cid:3)SHULRGV(cid:15)(cid:3)(cid:20)(cid:28)(cid:27)(cid:28)(cid:16)(cid:28)(cid:22)(cid:3)DQG(cid:3)(cid:20)(cid:28)(cid:28)(cid:23)(cid:16)(cid:28)(cid:28)(cid:17)(cid:3)7KH(cid:3)\HDU(cid:3)LPPHGLDWHO\(cid:3)EHIRUH(cid:3)WKH(cid:3)SURJUDPPLQJ
SHULRG(cid:3)LV(cid:3)VKRZQ(cid:3)DV(cid:3)WKH(cid:3)EDVLV(cid:3)IRU(cid:3)DVVHVVLQJ(cid:3)FKDQJHV(cid:3)RYHU(cid:3)WKH(cid:3)SHULRG(cid:17)(cid:3))RU(cid:3)(cid:20)(cid:28)(cid:27)(cid:28)(cid:16)(cid:28)(cid:22)(cid:15)(cid:3)WKH(cid:3)ILJXUHV(cid:3)LQ(cid:3)LWDOLFV(cid:3)DUH(cid:3)UHJLRQV(cid:3)ZKLFK(cid:3)GLG(cid:3)QRW(cid:3)KDYH(cid:3)2EMHFWLYH(cid:3)(cid:20)(cid:3)VWDWXV(cid:3)GXULQJ(cid:3)WKH(cid:3)SHULRG(cid:17)
7KHVH(cid:3)DUH(cid:3)H[FOXGHG(cid:3)IURP(cid:3)WKH(cid:3)WRWDO(cid:3)IRU(cid:3)2EMHFWLYH(cid:3)(cid:20)(cid:3)UHJLRQV(cid:3)DQG(cid:3)IURP(cid:3)WKH(cid:3)FRXQWU\(cid:3)WRWDOV(cid:17)(cid:3))RU(cid:3)WKLV(cid:3)ILUVW(cid:3)SHULRG(cid:15)(cid:3)(8(cid:20)(cid:24)(cid:3)H[FOXGHV(cid:3)WKH(cid:3)QHZ(cid:3)*HUPDQ(cid:3)/lQGHU(cid:17)(cid:3)
)RU(cid:3)WKH(cid:3)VHFRQG(cid:3)SHULRG(cid:15)(cid:3)(8(cid:20)(cid:24)(cid:3)LQFOXGHV(cid:3)WKH(cid:3)QHZ(cid:3)/lQGHU(cid:17)(cid:3)

(cid:20)(cid:28)(cid:28)(cid:24)(cid:16)(cid:28)(cid:27)(cid:29)(cid:3)DFFRUGLQJ(cid:3)WR(cid:3)(6$(cid:28)(cid:24)
(cid:11)(cid:20)(cid:12)(cid:3)2QO\(cid:3)UHJLRQV(cid:3)ZKROO\(cid:3)HOLJLEOH(cid:3)IRU(cid:3)2EMHFWLYH(cid:3)(cid:20)(cid:3)(cid:11)(cid:20)(cid:28)(cid:27)(cid:28)(cid:16)(cid:28)(cid:22)(cid:3)DQG(cid:18)RU(cid:3)(cid:20)(cid:28)(cid:28)(cid:23)(cid:16)(cid:28)(cid:28)(cid:12)
(cid:11)(cid:21)(cid:12)(cid:3)2QO\(cid:3)UHJLRQV(cid:3)ZLWK(cid:3)2EMHFWLYH(cid:3)(cid:20)(cid:3)VWDWXV(cid:3)WKURXJKRXW(cid:3)WKH(cid:3)SHULRG
(cid:11)(cid:22)(cid:12)(cid:3)5HJLRQV(cid:3)ZLWK(cid:3)2EMHFWLYH(cid:3)(cid:20)(cid:3)VWDWXV(cid:3)IURP(cid:3)(cid:20)(cid:28)(cid:28)(cid:23)(cid:3)WR(cid:3)(cid:20)(cid:28)(cid:28)(cid:25)(cid:3)(cid:11)LH(cid:3)LQFOXGLQJ(cid:3)$EUX]]R(cid:12)
6RXUFH(cid:3)(cid:29)(cid:3)(XURVWDW(cid:3)

7DEOH(cid:3)$(cid:17)(cid:23)(cid:28)(cid:3)8QHPSOR\PHQW(cid:3)UDWHV(cid:3)LQ(cid:3)2EMHFWLYH(cid:3)(cid:20)(cid:3)UHJLRQV(cid:15)(cid:3)(cid:20)(cid:28)(cid:27)(cid:27)(cid:16)(cid:20)(cid:28)(cid:28)(cid:28)

Region (1)

1988

1989

1990

1991

1992

1993
1994
% Labour force

1995

1996

1997

1998

1999

1988-93 1993-99
% point change

+$,1$87
2EM(cid:17)(cid:3)(cid:20)(cid:3)%(/*,(cid:201)(cid:16)%(/*,48(
%(5/,1(cid:16)267(cid:15)(cid:3)67$’7
%5$1’(1%85*
0(&./(1%85*(cid:16)9253200(51
6$&+6(1
6$&+6(1(cid:16)$1+$/7
7+h5,1*(1
2EM(cid:17)(cid:3)(cid:20)(cid:3)’(876&+/$1’
$1$72/,.,(cid:3)0$.(’21,$(cid:15)(cid:3)7+5$.,
.(175,.,(cid:3)0$.(’21,$
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7+(66$/,$
,3(,526
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’<7,.,(cid:3)(//$’$
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925(,2(cid:3)$,*$,2
127,2(cid:3)$,*$,2
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2EM(cid:17)(cid:3)(cid:20)(cid:3)(//$’$
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35,1&,3$’2(cid:3)’((cid:3)$6785,$6
&$17$%5,$
&$67,//$(cid:3)<(cid:3)/(ˇ1
&$67,//$(cid:16)/$(cid:3)0$1&+$
(;75(0$’85$
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$1’$/8&¸$
5(*,ˇ1(cid:3)’((cid:3)085&,$
&(87$(cid:3)<(cid:3)0(/,//$
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2EM(cid:17)(cid:3)(cid:20)(cid:3)(63$f$(cid:3)(cid:11)(cid:20)(cid:28)(cid:27)(cid:28)(cid:16)(cid:28)(cid:22)(cid:12)
2EM(cid:17)(cid:3)(cid:20)(cid:3)(63$f$(cid:3)(cid:11)(cid:20)(cid:28)(cid:28)(cid:23)(cid:16)(cid:28)(cid:28)(cid:12)
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2EM(cid:17)(cid:3)(cid:20)(cid:3))5$1&((cid:3)(cid:11)H[FO(cid:17)(cid:3)’20(cid:12)
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0(56(<6,’(
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1257+(51(cid:3),5(/$1’
2EM(cid:17)(cid:3)(cid:20)(cid:3)8.(cid:3)(cid:11)(cid:20)(cid:28)(cid:27)(cid:28)(cid:16)(cid:28)(cid:22)(cid:12)
2EM(cid:17)(cid:3)(cid:20)(cid:3)8.(cid:3)(cid:11)(cid:20)(cid:28)(cid:28)(cid:23)(cid:16)(cid:28)(cid:28)(cid:12)
(8(cid:20)(cid:24)(cid:15)(cid:3)H[FO(cid:17)(cid:3)QHZ(cid:3)/lQGHU(cid:3)(3)
(8(cid:20)(cid:24)(cid:3)(3) 
7RWDO(cid:3)2EM(cid:17)(cid:3)(cid:20)(cid:3)(cid:11)(cid:20)(cid:28)(cid:27)(cid:28)(cid:16)(cid:28)(cid:28)(cid:12)(cid:3)(4)
7RWDO(cid:3)2EM(cid:17)(cid:3)(cid:20)(cid:3)(cid:11)(cid:20)(cid:28)(cid:28)(cid:23)(cid:16)(cid:28)(cid:28)(cid:12)(cid:3)(5)

(cid:20)(cid:24)(cid:15)(cid:23)

(cid:20)(cid:20)(cid:15)(cid:28)

(cid:20)(cid:19)(cid:15)(cid:28)

(cid:20)(cid:19)(cid:15)(cid:26)

(cid:20)(cid:20)(cid:15)(cid:27)

(cid:28)(cid:15)(cid:26)
(cid:28)(cid:15)(cid:20)
(cid:20)(cid:21)(cid:15)(cid:19)
(cid:27)(cid:15)(cid:25)
(cid:28)(cid:15)(cid:28)
(cid:28)(cid:15)(cid:28)
(cid:28)(cid:15)(cid:25)
4,8
5,5
7,2
6,2
8,8
3,5
7,8
6,3
5,0
8,9
7,9
3,2
3,6
(cid:25)(cid:15)(cid:28)
12,3
16,1
(cid:20)(cid:24)(cid:15)(cid:23)
14,5
13,6
24,2
15,9
24,7
16,5
29,7
24,4
(cid:20)(cid:27)(cid:15)(cid:26)

11,3
:
:
:
:
(cid:20)(cid:20)(cid:15)(cid:22)

(cid:20)(cid:23)(cid:15)(cid:25)
8,0
12,8
17,8
13,2
17,0
18,6
18,7
15,7
(cid:20)(cid:25)(cid:15)(cid:22)
(cid:24)(cid:15)(cid:26)

(cid:20)(cid:23)(cid:15)(cid:19)
(cid:20)(cid:22)(cid:15)(cid:28)
(cid:20)(cid:26)(cid:15)(cid:26)
(cid:20)(cid:22)(cid:15)(cid:28)
(cid:20)(cid:24)(cid:15)(cid:26)
(cid:20)(cid:24)(cid:15)(cid:23)
(cid:20)(cid:23)(cid:15)(cid:28)
6,9
6,4
7,4
7,3
7,4
2,5
8,6
10,8
7,3
9,7
4,8
3,5
3,3
(cid:26)(cid:15)(cid:27)
16,2
17,7
(cid:20)(cid:25)(cid:15)(cid:22)
17,3
15,3
26,3
18,7
27,0
19,4
25,5
24,7
(cid:21)(cid:20)(cid:15)(cid:20)

10,8
:
:
:
:
(cid:20)(cid:19)(cid:15)(cid:27)

(cid:20)(cid:24)(cid:15)(cid:22)
6,9
7,0
16,0
12,6
14,7
16,8
17,1
15,2
(cid:20)(cid:23)(cid:15)(cid:27)
(cid:25)(cid:15)(cid:21)

(cid:22)(cid:15)(cid:20)

(cid:21)(cid:15)(cid:23)

2,7
2,3
4,4
9,1
3,9
3,7
3,0
(cid:22)(cid:15)(cid:25)
(cid:20)(cid:23)(cid:15)(cid:28)
(cid:27)(cid:15)(cid:22)
16,0
(cid:20)(cid:25)(cid:15)(cid:19)

(cid:27)(cid:15)(cid:20)
(cid:27)(cid:15)(cid:21)
(cid:20)(cid:22)(cid:15)(cid:22)

3,1
2,5
4,8
7,5
2,8
3,4
3,0
(cid:22)(cid:15)(cid:27)
(cid:20)(cid:24)(cid:15)(cid:21)
(cid:27)(cid:15)(cid:24)
15,5
(cid:20)(cid:24)(cid:15)(cid:24)

(cid:28)(cid:15)(cid:21)
(cid:20)(cid:22)(cid:15)(cid:28)

9,0
6,8
6,0
6,9
5,0
3,4
7,2
6,9
5,8
10,0
5,4
5,2
3,5
(cid:26)(cid:15)(cid:26)
13,2
20,2
(cid:21)(cid:20)(cid:15)(cid:27)
17,8
16,6
27,1
18,3
29,2
17,6
35,4
22,5
(cid:21)(cid:20)(cid:15)(cid:22)

10,6
:
:
:
:
(cid:20)(cid:19)(cid:15)(cid:25)

(cid:20)(cid:25)(cid:15)(cid:22)
9,3
12,4
23,0
15,7
21,5
22,6
18,6
18,4
(cid:20)(cid:28)(cid:15)(cid:20)
(cid:26)(cid:15)(cid:28)

3,6
3,7
8,8
14,6
5,5
2,2
4,8
(cid:25)(cid:15)(cid:19)
(cid:20)(cid:24)(cid:15)(cid:26)
(cid:20)(cid:21)(cid:15)(cid:27)
17,1
(cid:20)(cid:26)(cid:15)(cid:20)

6,7
6,6
5,7
6,5
4,0
2,8
7,2
5,9
4,8
8,5
5,9
4,4
2,4
(cid:25)(cid:15)(cid:26)
12,5
17,4
(cid:20)(cid:26)(cid:15)(cid:25)
17,4
14,8
26,8
15,3
27,2
16,2
31,7
22,5
(cid:20)(cid:28)(cid:15)(cid:27)

9,4
:
:
:
:
(cid:28)(cid:15)(cid:23)

(cid:20)(cid:23)(cid:15)(cid:28)
9,5
12,1
20,8
13,8
18,9
23,2
20,0
17,6
(cid:20)(cid:27)(cid:15)(cid:23)
(cid:27)(cid:15)(cid:26)

2,9
2,9
6,9
11,6
3,1
2,5
5,5
(cid:23)(cid:15)(cid:27)
(cid:20)(cid:24)(cid:15)(cid:20)
(cid:20)(cid:19)(cid:15)(cid:28)
17,7
(cid:20)(cid:26)(cid:15)(cid:26)

5,1
5,7
9,0
7,0
2,8
3,1
6,9
5,8
5,2
7,9
4,2
4,3
2,2
(cid:25)(cid:15)(cid:22)
11,9
17,4
(cid:20)(cid:25)(cid:15)(cid:28)
15,5
13,3
25,4
14,1
25,9
15,8
29,8
23,1
(cid:20)(cid:27)(cid:15)(cid:26)

9,7
31,1
32,1
24,0
36,9
(cid:28)(cid:15)(cid:26)

(cid:20)(cid:22)(cid:15)(cid:20)
9,0
10,7
17,7
12,9
19,0
20,1
19,3
16,8
(cid:20)(cid:25)(cid:15)(cid:26)
(cid:27)(cid:15)(cid:21)

2,6
2,0
5,8
9,8
3,8
3,0
5,0
(cid:23)(cid:15)(cid:20)
(cid:20)(cid:23)(cid:15)(cid:23)
(cid:28)(cid:15)(cid:27)
17,3
(cid:20)(cid:26)(cid:15)(cid:22)

(cid:28)(cid:15)(cid:19)

(cid:27)(cid:15)(cid:22)

(cid:26)(cid:15)(cid:26)

(cid:20)(cid:24)(cid:15)(cid:25)

(cid:20)(cid:23)(cid:15)(cid:24)

(cid:20)(cid:22)(cid:15)(cid:24)

(cid:20)(cid:23)(cid:15)(cid:19)
(cid:20)(cid:23)(cid:15)(cid:19)
(cid:20)(cid:19)(cid:15)(cid:28)
(cid:20)(cid:23)(cid:15)(cid:28)
(cid:20)(cid:26)(cid:15)(cid:25)
(cid:20)(cid:23)(cid:15)(cid:27)
(cid:20)(cid:26)(cid:15)(cid:23)
(cid:20)(cid:24)(cid:15)(cid:28)
(cid:20)(cid:24)(cid:15)(cid:23)
6,6
7,9
9,8
7,2
7,6
3,8
9,4
9,5
5,8
11,1
4,3
4,5
3,5
(cid:27)(cid:15)(cid:25)
17,6
20,4
(cid:20)(cid:28)(cid:15)(cid:28)
20,0
19,5
30,3
23,9
32,4
24,5
22,9
27,9
(cid:21)(cid:24)(cid:15)(cid:21)
(cid:21)(cid:24)(cid:15)(cid:20)
11,9
:
:
:
:
(cid:20)(cid:20)(cid:15)(cid:28)
(cid:21)(cid:24)(cid:15)(cid:20)
(cid:20)(cid:24)(cid:15)(cid:26)
9,2
13,3
19,5
14,1
13,1
21,2
18,1
19,6
(cid:20)(cid:26)(cid:15)(cid:22)
(cid:24)(cid:15)(cid:28)
(cid:24)(cid:15)(cid:28)
(cid:21)(cid:15)(cid:27)
(cid:21)(cid:15)(cid:27)
4,5
3,6
6,5
8,8
5,1
5,3
3,7
(cid:24)(cid:15)(cid:22)
(cid:20)(cid:24)(cid:15)(cid:19)
(cid:20)(cid:21)(cid:15)(cid:23)
15,1
(cid:20)(cid:24)(cid:15)(cid:20)
(cid:20)(cid:23)(cid:15)(cid:27)

(cid:20)(cid:19)(cid:15)(cid:26)
(cid:20)(cid:25)(cid:15)(cid:22)
(cid:20)(cid:25)(cid:15)(cid:19)

15,5
(cid:20)(cid:24)(cid:15)(cid:24)
11,1
15,2
16,9
15,8
18,2
16,0
(cid:20)(cid:24)(cid:15)(cid:28)
7,4
8,2
9,1
6,9
8,0
3,4
10,5
10,6
6,3
11,1
7,0
3,5
3,8
(cid:27)(cid:15)(cid:27)
19,7
22,5
24,4
21,7
20,7
32,3
24,7
34,7
25,1
27,9
28,3
(cid:21)(cid:25)(cid:15)(cid:28)
(cid:21)(cid:25)(cid:15)(cid:28)
12,5
24,0
26,2
18,2
31,7
(cid:20)(cid:21)(cid:15)(cid:24)
(cid:21)(cid:24)(cid:15)(cid:21)
(cid:20)(cid:23)(cid:15)(cid:26)
9,4
17,2
22,7
14,7
16,2
21,8
21,6
20,0
(cid:20)(cid:28)(cid:15)(cid:23)
6,7
(cid:25)(cid:15)(cid:26)
2,8
(cid:21)(cid:15)(cid:27)
5,8
4,4
8,3
11,4
6,8
6,6
4,6
(cid:25)(cid:15)(cid:26)
14,4
12,1
14,5
(cid:20)(cid:23)(cid:15)(cid:24)
(cid:20)(cid:23)(cid:15)(cid:21)

(cid:20)(cid:20)(cid:15)(cid:21)
(cid:20)(cid:26)(cid:15)(cid:25)
(cid:20)(cid:26)(cid:15)(cid:21)

15,9
(cid:20)(cid:24)(cid:15)(cid:28)
9,4
14,3
15,5
14,1
16,3
15,1
(cid:20)(cid:23)(cid:15)(cid:23)
9,2
9,1
13,2
7,6
7,2
5,3
8,2
9,2
6,0
11,0
4,9
4,8
4,1
(cid:28)(cid:15)(cid:20)
17,4
21,2
21,7
20,6
20,7
30,9
22,6
33,8
22,6
33,5
24,0
(cid:21)(cid:24)(cid:15)(cid:23)
(cid:21)(cid:24)(cid:15)(cid:22)
11,0
26,1
26,0
23,0
34,3
(cid:20)(cid:20)(cid:15)(cid:19)
(cid:21)(cid:25)(cid:15)(cid:25)
(cid:20)(cid:21)(cid:15)(cid:21)
8,9
17,3
25,6
15,8
18,9
23,7
23,1
20,6
(cid:21)(cid:20)(cid:15)(cid:20)
8,5
(cid:27)(cid:15)(cid:24)
2,8
(cid:21)(cid:15)(cid:27)
6,5
4,0
9,4
11,8
6,6
8,1
4,8
(cid:26)(cid:15)(cid:22)
13,3
10,5
12,9
(cid:20)(cid:21)(cid:15)(cid:28)
(cid:20)(cid:21)(cid:15)(cid:27)

(cid:20)(cid:19)(cid:15)(cid:26)
(cid:20)(cid:26)(cid:15)(cid:24)
(cid:20)(cid:25)(cid:15)(cid:27)

15,8
(cid:20)(cid:24)(cid:15)(cid:27)
11,2
15,5
16,8
15,3
18,0
16,0
(cid:20)(cid:24)(cid:15)(cid:26)
9,6
8,9
16,3
7,6
11,2
5,5
8,6
10,3
6,4
11,9
7,1
4,9
3,4
(cid:28)(cid:15)(cid:26)
19,2
22,5
24,8
20,5
20,2
30,5
21,7
32,8
24,5
27,3
22,0
(cid:21)(cid:24)(cid:15)(cid:20)
(cid:21)(cid:24)(cid:15)(cid:20)
14,7
29,3
27,2
22,4
36,8
(cid:20)(cid:23)(cid:15)(cid:26)
(cid:21)(cid:28)(cid:15)(cid:19)
(cid:20)(cid:20)(cid:15)(cid:27)
9,9
17,8
25,5
17,9
19,4
25,0
24,0
21,8
(cid:21)(cid:20)(cid:15)(cid:28)
6,2
(cid:25)(cid:15)(cid:21)
3,7
(cid:22)(cid:15)(cid:26)
7,0
4,1
8,9
12,3
9,1
7,2
5,5
(cid:26)(cid:15)(cid:23)
11,6
8,1
11,4
(cid:20)(cid:20)(cid:15)(cid:23)
(cid:20)(cid:20)(cid:15)(cid:21)

(cid:20)(cid:19)(cid:15)(cid:27)
(cid:20)(cid:26)(cid:15)(cid:26)
(cid:20)(cid:26)(cid:15)(cid:22)

15,4
(cid:20)(cid:24)(cid:15)(cid:23)
14,7
17,0
18,6
17,0
20,4
17,4
(cid:20)(cid:26)(cid:15)(cid:25)
8,2
9,2
13,8
7,5
10,5
6,2
7,9
12,0
7,5
11,6
7,1
4,3
4,3
(cid:28)(cid:15)(cid:25)
19,2
21,2
21,1
19,9
19,1
29,5
21,5
31,9
18,3
26,4
20,9
(cid:21)(cid:23)(cid:15)(cid:21)
(cid:21)(cid:23)(cid:15)(cid:20)
15,0
:
:
:
:
(cid:20)(cid:24)(cid:15)(cid:19)
(cid:21)(cid:28)(cid:15)(cid:20)
(cid:20)(cid:19)(cid:15)(cid:20)
(cid:28)(cid:15)(cid:25)
16,6
25,6
19,3
19,4
24,5
24,7
20,8
(cid:21)(cid:21)(cid:15)(cid:21)
5,7
(cid:24)(cid:15)(cid:26)
3,8
(cid:22)(cid:15)(cid:27)
6,9
3,4
7,9
10,4
8,3
5,5
5,5
(cid:25)(cid:15)(cid:26)
10,3
8,4
8,6
(cid:27)(cid:15)(cid:25)
(cid:28)(cid:15)(cid:21)

(cid:20)(cid:19)(cid:15)(cid:26)
(cid:20)(cid:26)(cid:15)(cid:22)
(cid:20)(cid:26)(cid:15)(cid:19)

17,0
(cid:20)(cid:26)(cid:15)(cid:19)
18,6
18,1
20,0
18,1
21,4
18,4
(cid:20)(cid:28)(cid:15)(cid:19)
8,9
10,4
11,3
10,7
13,6
3,8
10,9
12,8
8,1
12,2
10,6
6,4
7,1
(cid:20)(cid:19)(cid:15)(cid:27)
17,2
20,5
18,6
18,9
16,9
28,8
17,4
29,9
17,4
24,8
19,8
(cid:21)(cid:21)(cid:15)(cid:21)
(cid:21)(cid:21)(cid:15)(cid:20)
14,0
30,1
28,1
23,2
37,9
(cid:20)(cid:23)(cid:15)(cid:19)
(cid:21)(cid:28)(cid:15)(cid:25)
(cid:26)(cid:15)(cid:28)
(cid:28)(cid:15)(cid:20)
16,8
24,5
19,6
18,4
27,1
24,1
20,3
(cid:21)(cid:21)(cid:15)(cid:19)
4,6
(cid:23)(cid:15)(cid:25)
4,2
(cid:23)(cid:15)(cid:21)
5,4
2,5
6,4
9,0
6,8
4,4
4,1
(cid:24)(cid:15)(cid:22)
11,8
6,1
10,3
(cid:20)(cid:19)(cid:15)(cid:22)
(cid:20)(cid:19)(cid:15)(cid:22)

(cid:20)(cid:19)(cid:15)(cid:20)
(cid:20)(cid:25)(cid:15)(cid:26)
(cid:20)(cid:25)(cid:15)(cid:28)

(cid:16)(cid:20)(cid:15)(cid:23)
(cid:16)(cid:20)(cid:15)(cid:23)

-2,4
1,1
3,8
0,3
2,6
0,4
2,2
2,6
0,0
1,1
-1,1
-0,7
0,0
(cid:19)(cid:15)(cid:28)
4,4
0,2
(cid:16)(cid:20)(cid:15)(cid:28)
2,2
2,9
3,2
5,6
3,2
6,9
-12,5
5,4
(cid:22)(cid:15)(cid:28)

1,3
:
:
:
:
(cid:20)(cid:15)(cid:22)
:
(cid:16)(cid:19)(cid:15)(cid:25)
-0,1
0,9
-3,5
-1,6
-8,4
-1,4
-0,5
1,2
(cid:16)(cid:20)(cid:15)(cid:27)
(cid:16)(cid:21)(cid:15)(cid:19)
(cid:16)(cid:21)(cid:15)(cid:19)

0,9
-0,1
-2,3
-5,8
-0,4
3,1
-1,1
(cid:16)(cid:19)(cid:15)(cid:26)
(cid:16)(cid:19)(cid:15)(cid:26)
(cid:16)(cid:19)(cid:15)(cid:23)
-2,0
(cid:16)(cid:21)(cid:15)(cid:19)

(cid:20)(cid:15)(cid:24)

(cid:19)(cid:15)(cid:26)

16,6
(cid:20)(cid:25)(cid:15)(cid:25)
17,3
16,0
17,5
16,2
19,9
14,3
(cid:20)(cid:25)(cid:15)(cid:26)
12,8
11,7
14,6
12,8
13,9
5,5
11,8
14,2
7,6
12,5
11,3
7,3
7,3
(cid:20)(cid:20)(cid:15)(cid:26)
16,8
18,2
15,7
15,6
15,6
25,5
14,3
26,8
14,4
25,5
14,4
(cid:20)(cid:28)(cid:15)(cid:23)
(cid:20)(cid:28)(cid:15)(cid:22)
14,3
32,0
32,0
32,0
32,0
(cid:20)(cid:23)(cid:15)(cid:22)
(cid:21)(cid:28)(cid:15)(cid:26)
(cid:24)(cid:15)(cid:28)
(cid:20)(cid:19)(cid:15)(cid:25)
16,6
23,7
19,8
17,3
28,7
24,8
21,9
(cid:21)(cid:21)(cid:15)(cid:23)
3,1
(cid:22)(cid:15)(cid:20)
3,3
(cid:22)(cid:15)(cid:22)
4,7
2,4
6,1
6,7
3,7
3,7
3,4
(cid:23)(cid:15)(cid:26)
11,7
6,0
9,4
(cid:28)(cid:15)(cid:23)
(cid:28)(cid:15)(cid:27)

(cid:28)(cid:15)(cid:23)
(cid:20)(cid:24)(cid:15)(cid:27)
(cid:20)(cid:24)(cid:15)(cid:26)

2,6
(cid:21)(cid:15)(cid:25)
6,4
1,1
-0,1
1,4
2,5
-1,6
(cid:20)(cid:15)(cid:22)
6,2
3,8
4,8
5,6
6,3
1,7
2,4
4,7
1,8
1,4
7,0
2,8
3,8
(cid:22)(cid:15)(cid:20)
-0,8
-2,2
-4,2
-4,4
-3,9
-4,8
-9,6
-5,6
-10,1
2,6
-13,5
(cid:16)(cid:24)(cid:15)(cid:27)
(cid:16)(cid:24)(cid:15)(cid:27)
2,4
5,3
1,0
4,2
5,1
(cid:21)(cid:15)(cid:23)
(cid:23)(cid:15)(cid:25)
(cid:16)(cid:28)(cid:15)(cid:27)
1,4
3,3
4,2
5,7
4,2
7,5
6,7
2,3
(cid:24)(cid:15)(cid:19)
-2,8
(cid:16)(cid:21)(cid:15)(cid:27)
0,5
(cid:19)(cid:15)(cid:24)
0,2
-1,2
-0,4
-2,1
-1,4
-1,6
-0,3
(cid:16)(cid:19)(cid:15)(cid:25)
-3,3
-6,4
-5,7
(cid:16)(cid:24)(cid:15)(cid:26)
(cid:16)(cid:24)(cid:15)(cid:19)

(cid:16)(cid:20)(cid:15)(cid:22)
(cid:16)(cid:19)(cid:15)(cid:24)
(cid:16)(cid:19)(cid:15)(cid:22)

6HH(cid:3)1RWH(cid:3)WR(cid:3)7DEOH(cid:3)$(cid:17)(cid:23)(cid:26)(cid:17)(cid:3))LJXUHV(cid:3)LQ(cid:3)LWDOLFV(cid:3)DUH(cid:3)IRU(cid:3)UHJLRQV(cid:3)ZKLFK(cid:3)GLG(cid:3)QRW(cid:3)KDYH(cid:3)2EMHFWLYH(cid:3)(cid:20)(cid:3)VWDWXV(cid:3)LQ(cid:3)WKH(cid:3)ILUVW(cid:3)SURJUDPPLQJ(cid:3)SHULRG(cid:17)(cid:3)$EUX]]R(cid:15)(cid:3)
LQ(cid:3),WDO\(cid:15)(cid:3)ZDV(cid:3)QR(cid:3)ORQJHU(cid:3)HOLJLEOH(cid:3)IRU(cid:3)2EMHFWLYH(cid:3)(cid:20)(cid:3)VWDWXV(cid:3)IURP(cid:3)(cid:20)(cid:28)(cid:28)(cid:26)(cid:3)RQ(cid:17)(cid:3),W(cid:3)LV(cid:3)LQFOXGHG(cid:3)LQ(cid:3)WKH(cid:3)WRWDO(cid:3)IRU(cid:3),WDO\(cid:3)DQG(cid:3)WKH(cid:3)(8(cid:3)IRU(cid:3)(cid:20)(cid:28)(cid:28)(cid:26)(cid:3)DQG(cid:3)(cid:20)(cid:28)(cid:28)(cid:27)(cid:3)IRU(cid:3)FRQWLQXLW\(cid:17)
(cid:11)(cid:20)(cid:12)(cid:3)2QO\(cid:3)UHJLRQV(cid:3)ZKROO\(cid:3)HOLJLEOH(cid:3)IRU(cid:3)2EMHFWLYH(cid:3)(cid:20)
(cid:11)(cid:21)(cid:12)(cid:3)1R(cid:3)GDWD(cid:3)IRU(cid:3)’20V(cid:3)LQ(cid:3)(cid:20)(cid:28)(cid:28)(cid:26)(cid:30)(cid:3)WRWDO(cid:3)IRU(cid:3)(cid:20)(cid:28)(cid:28)(cid:26)(cid:3)FDOFXODWHG(cid:3)RQ(cid:3)WKH(cid:3)EDVLV(cid:3)RI(cid:3)(cid:20)(cid:28)(cid:28)(cid:25)(cid:3)GDWD(cid:3)IRU(cid:3)WKHVH(cid:17)
(cid:11)(cid:22)(cid:12)(cid:3)(XURVWDW(cid:3)KDUPRQLVHG(cid:3)XQHPSOR\PHQW(cid:3)ILJXUHV
(cid:11)(cid:23)(cid:12)(cid:3)5HJLRQV(cid:3)ZLWK(cid:3)2EMHFWLYH(cid:3)(cid:20)(cid:3)VWDWXV(cid:3)WKURXJKRXW(cid:3)WKH(cid:3)SHULRG(cid:3)(cid:11)H[FHSW(cid:3)$EUX]]R(cid:3)ZKLFK(cid:3)EHFDPH(cid:3)QR(cid:3)ORQJHU(cid:3)HOLJLEOH(cid:3)IRU(cid:3)2EMHFWLYH(cid:3)(cid:20)(cid:3)LQ(cid:3)(cid:20)(cid:28)(cid:28)(cid:26)(cid:3)EXW(cid:3)ZKLFK(cid:3)LV(cid:3)LQFOXGHG(cid:3)LQ(cid:3)WKH(cid:3)(cid:20)(cid:28)(cid:28)(cid:26)DQG(cid:3)(cid:20)(cid:28)(cid:28)(cid:27)(cid:3)ILJXUHV(cid:17)
(cid:11)(cid:24)(cid:12)(cid:3)5HJLRQV(cid:3)ZLWK(cid:3)2EMHFWLYH(cid:3)(cid:20)(cid:3)VWDWXV(cid:3)GXULQJ(cid:3)WKH(cid:3)VHFRQG(cid:3)SURJUDPPLQJ(cid:3)SHULRG(cid:17)
6RXUFH(cid:3)(cid:29)(cid:3)(XURVWDW(cid:3)DQG(cid:3)HVWLPDWHV(cid:3)’*(cid:3)5(*,2

7DEOH(cid:3)$(cid:17)(cid:24)(cid:19)(cid:3)(cid:3)0DLQ(cid:3)UHJLRQDO(cid:3)LQGLFDWRUV

Region

(8(cid:20)(cid:24)

(8(cid:20)(cid:21)

%(/*,48((cid:16)%(/*,(cid:201)
  REG. BRUXELLES-CAP. / BRUSSELS HFDST. GEW.

  VLAAMS GEWEST

    ANTWERPEN

    LIMBURG (B)

    OOST-VLAANDEREN

    VLAAMS BRABANT

    WEST-VLAANDEREN

  RÉGION WALLONNE

    BRABANT WALLON

    HAINAUT

    LIÈGE

    LUXEMBOURG (B)

    NAMUR

’$10$5.

’(876&+/$1’
  BADEN-WÜRTTEMBERG

    STUTTGART

    KARLSRUHE

    FREIBURG

    TÜBINGEN

  BAYERN

    OBERBAYERN

    NIEDERBAYERN

    OBERPFALZ

    OBERFRANKEN

    MITTELFRANKEN

    UNTERFRANKEN

    SCHWABEN

  BERLIN

  BRANDENBURG

  BREMEN

  HAMBURG

  HESSEN

    DARMSTADT

    GIEßEN

    KASSEL

  MECKLENBURG-VORPOMMERN

  NIEDERSACHSEN

    BRAUNSCHWEIG

    HANNOVER

    LÜNEBURG

    WESER-EMS

  NORDRHEIN-WESTFALEN

    DÜSSELDORF

    KÖLN

    MÜNSTER

    DETMOLD

    ARNSBERG

  RHEINLAND-PFALZ

    KOBLENZ

    TRIER

    RHEINHESSEN-PFALZ

  SAARLAND

  SACHSEN

    CHEMNITZ
    DRESDEN

    LEIPZIG

  SACHSEN-ANHALT

    DESSAU

    HALLE

    MAGDEBURG

  SCHLESWIG-HOLSTEIN

GDP per head (PPS), 
EUR15=100

Employment by sector (% 
total), 1999

(FRQRP\

/DERXU(cid:3)PDUNHW

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8
9
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Unemployment rate (%)

9
8
9
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9
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8
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7
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(cid:20)(cid:19)(cid:19)(cid:15)(cid:19)

(cid:20)(cid:19)(cid:19)(cid:15)(cid:19)

(cid:20)(cid:19)(cid:19)(cid:15)(cid:19)

(cid:28)(cid:27)(cid:15)(cid:21)

(cid:20)(cid:19)(cid:22)(cid:15)(cid:21)
162,3

104,4

123,8

102,6

99,0

81,4

103,9

83,4

75,5

77,0

94,9

85,3

80,4

(cid:20)(cid:19)(cid:24)(cid:15)(cid:22)

(cid:20)(cid:20)(cid:23)(cid:15)(cid:27)
125,1

141,0

122,6

109,2

112,3

116,7

145,6

90,3

90,1

98,8

119,9

98,3

106,0

116,1

:

144,3

175,2

133,2

154,7

93,9

102,2

:

97,2

103,7

111,2

78,1

92,1

108,8

118,1

113,2

93,5

104,1

103,4

100,9

91,8

86,2

111,6

102,4

:

:
:

:

:

:

:

:

(cid:28)(cid:28)(cid:15)(cid:25)

(cid:20)(cid:20)(cid:20)(cid:15)(cid:22)
168,8

115,1

138,5

108,5

104,1

96,1

116,2

87,9

86,8

79,2

98,6

95,0

85,7

(cid:20)(cid:20)(cid:27)(cid:15)(cid:28)

(cid:20)(cid:19)(cid:26)(cid:15)(cid:26)
122,5

130,0

133,6

105,5

109,4

122,9

161,2

98,3

94,1

104,2

118,5

99,5

102,9

102,2

70,6

144,3

185,5

131,5

154,2

90,7

99,4

70,7

99,5

98,8

112,0

80,4

101,8

109,9

118,3

116,7

97,9

103,3

102,2

97,5

91,2

95,2

(cid:28)(cid:28)(cid:15)(cid:26)

(cid:20)(cid:20)(cid:20)(cid:15)(cid:21)
169,6

114,8

137,6

108,4

103,9

96,2

115,8

87,9

87,2

79,3

98,2

95,7

85,7

(cid:20)(cid:20)(cid:28)(cid:15)(cid:23)

(cid:20)(cid:19)(cid:27)(cid:15)(cid:25)
122,4

129,9

133,5

105,6

109,4

123,4

161,7

99,1

94,7

104,5

119,0

100,0

103,3

104,8

72,3

143,6

185,8

132,8

155,8

91,6

100,3

71,9

100,0

98,8

112,4

81,3

102,6

111,1

119,2

118,4

99,2

104,8

103,0

98,7

92,4

96,1

103,0

104,1

99,4

71,4

63,2
74,1

79,4

68,3

64,2

74,7

65,5

99,7

73,1

64,6
75,9

81,5

69,2

65,0

75,6

66,5

96,9

101,8

103,5

(cid:23)(cid:15)(cid:24)

(cid:23)(cid:15)(cid:23)

(cid:21)(cid:15)(cid:23)
0,2

2,5

2,2

2,1

2,7

1,5

3,8

2,8

2,0

2,6

2,4

6,8

3,0

(cid:22)(cid:15)(cid:22)

(cid:21)(cid:15)(cid:28)
2,5

1,9

1,5

3,4

4,3

4,1

3,0

6,8

6,5

3,0

4,9

2,8

4,6

0,8

5,4

1,3

0,5

1,7

1,1

2,3

3,0

6,8

4,0

2,3

2,1

4,7

6,2

1,8

1,5

1,5

2,9

2,1

1,7

2,5

2,2

4,2

2,2

0,9

3,0

:
:

:

4,2

3,7

3,9

4,7

3,3

(cid:21)(cid:28)(cid:15)(cid:21)

(cid:21)(cid:28)(cid:15)(cid:23)

(cid:21)(cid:24)(cid:15)(cid:27)
13,4

28,0

28,1

34,5

30,4

20,7

27,5

24,7

24,0

27,3

23,9

24,7

20,3

(cid:21)(cid:25)(cid:15)(cid:27)

(cid:22)(cid:22)(cid:15)(cid:27)
41,4

43,8

37,9

40,1

42,9

35,6

30,1

40,1

38,5

38,0

37,8

39,4

37,9

23,4

32,2

26,4

22,4

31,7

29,3

36,2

35,4

26,9

32,5

37,5

32,2

28,4

32,2

34,3

32,4

30,3

35,0

40,5

37,3

36,3

36,4

31,2

37,4

34,8

34,8

:
:

:

31,9

34,1

32,4

30,7

24,9

(cid:25)(cid:25)(cid:15)(cid:19)

(cid:25)(cid:24)(cid:15)(cid:28)

(cid:26)(cid:20)(cid:15)(cid:27)
86,4

69,5

69,8

63,4

66,9

77,8

68,7

72,5

74,1

70,2

73,7

68,5

76,7

(cid:25)(cid:28)(cid:15)(cid:24)

(cid:25)(cid:22)(cid:15)(cid:22)
56,1

54,4

60,6

56,5

52,8

60,3

66,9

53,1

55,0

59,0

57,3

57,8

57,5

75,8

62,3

72,3

77,1

66,7

69,6

61,5

61,6

66,3

63,6

60,2

65,7

66,9

61,6

64,0

66,1

68,2

62,1

57,4

60,9

61,3

61,4

64,6

60,4

64,3

62,3

:
:

:

63,9

62,2

63,8

64,6

71,9

(cid:20)(cid:20)(cid:28)(cid:15)(cid:23)

(cid:20)(cid:20)(cid:23)(cid:15)(cid:19)

(cid:20)(cid:21)(cid:22)(cid:15)(cid:20)
134,5

140,1

176,4

78,2

106,2

217,2

102,4

88,3

263,4

47,7

96,6

62,0

64,6

(cid:20)(cid:22)(cid:28)(cid:15)(cid:22)

(cid:21)(cid:21)(cid:26)(cid:15)(cid:22)
416,4

496,7

353,6

398,1

355,0

360,9

571,0

137,6

290,6

174,2

365,4

262,8

260,3

139,7

45,5

61,0

182,0

301,0

399,0

208,6

93,0

18,5

154,8

238,6

193,9

128,6

79,2

215,7

262,4

263,5

154,6

173,1

162,6

250,7

135,5

69,6

383,9

122,4

59,8

:
:

:

31,0

27,5

41,5

25,1

(cid:27)(cid:15)(cid:23)

(cid:27)(cid:15)(cid:27)

(cid:26)(cid:15)(cid:21)
9,2

5,5

6,4

8,5

5,3

4,0

3,9

9,9

5,8

11,9

10,1

6,1

9,2

(cid:26)(cid:15)(cid:25)

(cid:24)(cid:15)(cid:26)
3,3

2,9

4,1

3,2

2,9

3,7

3,5

3,6

4,9

4,0

4,2

3,8

3,0

7,1

:

11,0

8,8

4,4

4,0

4,8

5,6

:

7,3

7,8

7,4

6,1

7,6

7,6

8,2

7,4

7,9

6,0

7,9

4,9

4,6

5,6

4,9

8,4

:

:
:

:

:

:

:

:

101,7

6,6

(cid:28)(cid:15)(cid:23)

(cid:28)(cid:15)(cid:24)

(cid:27)(cid:15)(cid:27)
14,0

5,6

6,5

7,0

5,9

3,9

4,6

13,3

8,8

16,6

12,8

7,3

12,6

(cid:24)(cid:15)(cid:25)

(cid:27)(cid:15)(cid:28)
5,1

4,9

5,8

5,2

4,5

5,0

4,0

4,8

5,4

6,5

6,4

5,6

4,7

13,7

16,0

11,4

7,9

6,7

6,0

7,0

8,5

17,5

8,2

9,7

8,3

7,2

7,7

8,2

8,7

7,6

8,1

7,3

8,9

6,4

6,2

5,8

6,7

8,5

16,2

:
:

:

19,9

20,9

20,6

18,9

7,4

(cid:23)(cid:25)(cid:15)(cid:20)

(cid:23)(cid:26)(cid:15)(cid:19)

(cid:24)(cid:28)(cid:15)(cid:22)
62,0

51,1

53,2

53,7

52,9

47,0

44,5

65,1

55,0

68,5

63,7

50,1

66,6

(cid:20)(cid:27)(cid:15)(cid:25)

(cid:24)(cid:19)(cid:15)(cid:25)
53,9

55,5

53,6

52,9

51,7

47,6

47,2

36,0

48,4

48,8

52,6

48,2

48,1

46,5

39,8

61,7

57,7

56,2

57,8

51,5

56,2

39,6

58,8

68,3

56,8

54,7

54,9

61,2

63,6

60,4

59,4

53,7

63,0

52,3

47,6

46,8

56,6

64,3

42,9

41,4
44,7

42,2

42,5

41,7

45,6

40,5

52,9

(cid:20)(cid:20)(cid:15)(cid:19)

(cid:20)(cid:20)(cid:15)(cid:22)

(cid:20)(cid:19)(cid:15)(cid:23)
14,2

7,0

8,1

9,9

7,2

4,5

5,8

15,7

10,5

19,4

15,2

9,2

14,7

(cid:25)(cid:15)(cid:22)

(cid:28)(cid:15)(cid:22)
5,2

5,0

5,8

5,4

4,8

5,1

3,8

4,7

5,7

6,8

6,6

5,9

4,8

12,4

17,7

9,8

6,6

6,3

5,5

7,0

8,2

19,6

8,2

10,0

7,9

7,2

7,9

8,0

8,2

7,3

7,9

7,7

8,7

6,3

5,9

5,7

6,6

7,5

18,6

:
:

:

22,5

24,1

23,1

21,2

6,7

(cid:20)(cid:26)(cid:15)(cid:27)

(cid:20)(cid:26)(cid:15)(cid:28)

(cid:21)(cid:22)(cid:15)(cid:23)
35,1

14,6

17,7

16,6

14,2

12,0

11,8

37,4

25,1

47,8

33,1

21,6

40,2

(cid:20)(cid:20)(cid:15)(cid:19)

(cid:28)(cid:15)(cid:19)
5,8

5,1

6,9

6,7

5,1

5,4

3,9

5,6

5,5

7,2

6,8

6,5

5,4

14,4

10,9

13,0

10,1

8,2

7,1

9,0

10,2

12,7

10,1

10,3

10,9

10,1

9,3

9,7

11,0

8,6

8,8

8,6

10,7

8,5

7,7

7,2

9,5

10,8

10,9

:
:

:

13,4

13,6

15,1

12,2

10,2

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Employment rate (% popn 
15-64), 1999

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% population aged: (1998)

Educational attainment of 
those aged 25-59 (% total), 
1999

5
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4
6
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5
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5
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(cid:25)(cid:21)(cid:15)(cid:27)

(cid:25)(cid:21)(cid:15)(cid:23)

(cid:24)(cid:28)(cid:15)(cid:23)
54,3

62,3

60,1

58,1

63,0

66,2

64,2

55,6

60,3

51,3

57,2

61,1

57,9

(cid:26)(cid:25)(cid:15)(cid:28)

(cid:25)(cid:24)(cid:15)(cid:23)
69,5

70,7

68,1

68,5

70,1

71,2

72,9

71,1

70,6

69,7

69,4

68,1

72,2

60,7

63,0

60,4

66,5

66,4

67,5

64,7

64,3

61,3

64,6

62,6

65,0

66,1

64,7

62,4

61,9

63,0

61,5

65,7

61,3

65,6

64,4

64,3

66,8

61,4

64,0

:
:

:

59,7

58,8

57,7

61,6

66,8

(cid:24)(cid:22)(cid:15)(cid:20)

(cid:24)(cid:21)(cid:15)(cid:23)

(cid:24)(cid:19)(cid:15)(cid:24)
47,7

53,9

50,6

46,8

54,5

60,3

57,3

45,2

52,0

40,1

46,4

51,4

48,2

(cid:26)(cid:21)(cid:15)(cid:19)

(cid:24)(cid:26)(cid:15)(cid:24)
61,1

62,2

60,1

59,3

62,3

62,9

65,2

62,1

61,5

62,7

61,3

59,0

62,9

57,1

58,5

53,5

61,2

57,8

59,1

55,4

55,5

56,5

55,5

53,9

56,6

56,7

54,9

52,5

51,6

53,3

51,8

56,4

51,3

56,6

55,5

53,4

58,1

52,6

58,8

:
:

:

54,4

53,3

52,0

56,7

58,8

(cid:26)(cid:21)(cid:15)(cid:25)

(cid:26)(cid:21)(cid:15)(cid:24)

(cid:25)(cid:27)(cid:15)(cid:21)
61,0

70,5

69,3

68,9

71,3

72,1

70,9

66,1

69,0

62,5

68,0

70,4

67,5

(cid:27)(cid:20)(cid:15)(cid:26)

(cid:26)(cid:22)(cid:15)(cid:21)
77,7

78,9

75,7

77,9

77,7

79,4

80,8

80,0

79,6

76,7

77,3

76,7

81,3

64,1

67,4

67,4

71,7

74,9

75,9

73,7

73,1

66,0

73,5

71,2

73,3

75,3

74,2

72,1

72,3

72,4

70,9

74,7

71,1

74,4

73,1

74,9

75,1

69,9

69,2

:
:

:

64,8

64,1

63,3

66,2

74,6

(cid:22)(cid:26)(cid:23)(cid:24)(cid:22)(cid:26)

(cid:22)(cid:24)(cid:21)(cid:23)(cid:24)(cid:23)

(cid:20)(cid:19)(cid:21)(cid:19)(cid:23)
954

(cid:20)(cid:20)(cid:26)(cid:15)(cid:23)

(cid:20)(cid:23)(cid:28)(cid:15)(cid:24)

(cid:22)(cid:22)(cid:23)(cid:15)(cid:23)
5913,3

5920

1640

786

1358

1010

1126

3330

346

1282

1017

245

440

(cid:24)(cid:22)(cid:19)(cid:23)

(cid:27)(cid:21)(cid:19)(cid:21)(cid:28)
10411

3893

2663

2111

1744

12077

3994

1161

1067

1114

1678

1328

1735

3414

2582

438,1

571,8

324,3

455,5

479,4

359,3

197,7

317,1

338,6

263,4

55,1

120,1

(cid:20)(cid:21)(cid:22)(cid:15)(cid:20)

(cid:21)(cid:21)(cid:28)(cid:15)(cid:27)
291,2

368,8

384,9

225,6

195,6

171,2

227,8

112,4

110,1

154,0

231,6

155,7

173,6

3832,8

87,6

671

1659,8

1702

6033

3700

1061

1272

1803

7856

1672

2150

1638

2396

17975

5277

4243

2598

2039

3819

4021

1510

510

2001

1078

4506

1663
1742

1102

2690

562

890

1237

2761

2253,4

285,7

497,0

197,2

153,5

77,8

165,0

206,5

237,6

105,7

160,1

527,5

997,7

576,1

376,3

312,8

477,2

202,6

187,1

103,5

292,0

419,2

244,7

272,8
219,6

251,2

131,5

131,4

201,0

105,4

175,1

(cid:20)(cid:26)(cid:15)(cid:23)

(cid:20)(cid:26)(cid:15)(cid:23)

(cid:20)(cid:26)(cid:15)(cid:26)
17,6

17,3

17,4

17,8

16,7

17,2

17,3

18,6

19,8

18,1

18,2

20,5

19,1

(cid:20)(cid:27)(cid:15)(cid:19)

(cid:20)(cid:25)(cid:15)(cid:19)
16,9

16,8

16,0

17,2

18,1

16,5

15,6

17,3

17,3

16,3

16,1

17,4

17,5

14,4

15,4

13,9

13,5

15,6

15,1

16,6

16,2

16,0

16,6

15,5

15,2

17,0

18,3

16,3

15,5

16,1

17,6

17,6

16,2

16,5

16,9

16,7

16,2

15,2

14,1

13,8
14,6

13,9

14,7

14,4

14,3

15,1

15,9

(cid:25)(cid:26)(cid:15)(cid:19)

(cid:25)(cid:26)(cid:15)(cid:20)

(cid:25)(cid:24)(cid:15)(cid:27)
65,2

66,5

66,1

69,0

66,7

66,5

65,2

64,7

65,7

64,7

64,7

63,5

64,7

(cid:25)(cid:26)(cid:15)(cid:20)

(cid:25)(cid:27)(cid:15)(cid:21)
68,0

68,3

68,4

67,3

67,4

67,8

69,2

67,1

67,2

66,7

67,9

66,9

66,6

71,9

70,6

68,3

69,8

68,5

69,5

67,6

66,3

70,6

67,2

67,2

67,6

67,2

66,9

67,5

67,7

68,6

67,0

65,9

67,1

66,9

65,9

65,9

67,8

67,5

68,7

67,8
68,9

69,6

69,3

69,4

69,3

69,3

68,1

(cid:20)(cid:24)(cid:15)(cid:25)

(cid:20)(cid:24)(cid:15)(cid:25)

(cid:20)(cid:25)(cid:15)(cid:24)
17,2

16,2

16,5

13,1

16,6

16,4

17,4

16,7

14,5

17,2

17,1

16,1

16,2

(cid:20)(cid:23)(cid:15)(cid:28)

(cid:20)(cid:24)(cid:15)(cid:27)
15,1

14,9

15,6

15,5

14,5

15,7

15,1

15,5

15,5

17,0

16,0

15,7

15,8

13,7

14,0

17,7

16,8

15,9

15,4

15,8

17,5

13,3

16,2

17,4

17,2

15,8

14,8

16,2

16,7

15,3

15,4

16,5

16,7

16,6

17,2

17,4

16,0

17,3

17,2

18,4
16,6

16,5

16,0

16,2

16,4

15,6

16,0

(cid:22)(cid:25)

(cid:22)(cid:26)

(cid:23)(cid:19)
39

39

39

46

41

31

38

42

28

46

43

45

38

(cid:20)(cid:28)

(cid:20)(cid:27)
21

22

19

21

21

21

18

25

24

21

24

22

19

17

9

24

21

20

19

20

20

10

18

16

19

16

20

23

24

22

21

21

24

21

21

20

22

20

6

:
:

:

9

10

9

10

18

(cid:23)(cid:22)

(cid:23)(cid:21)

(cid:22)(cid:21)
25

33

32

33

33

34

36

32

33

32

31

30

33

(cid:24)(cid:23)

(cid:24)(cid:27)
54

53

53

56

55

57

53

60

59

59

54

59

60

49

60

57

56

56

54

58

60

62

62

64

60

64

63

58

57

55

61

62

59

58

60

60

56

62

63

:
:

:

64

63

66

62

60

(cid:21)(cid:20)

(cid:21)(cid:20)

(cid:21)(cid:27)
36

28

29

21

26

35

27

26

40

22

26

25

29

(cid:21)(cid:27)

(cid:21)(cid:23)
25

25

28

22

24

23

29

15

17

20

23

19

21

34

31

19

23

24

26

22

20

28

20

20

22

20

18

20

20

23

18

18

17

21

20

20

22

18

31

:
:

:

27

26

26

29

23

Region

(8(cid:20)(cid:24)

(8(cid:20)(cid:21)

%(/*,48((cid:16)%(/*,(cid:201)
  REG. BRUXELLES-CAP. / BRUSSELS HFDST. GEW.

  VLAAMS GEWEST

    ANTWERPEN

    LIMBURG (B)

    OOST-VLAANDEREN

    VLAAMS BRABANT

    WEST-VLAANDEREN

  RÉGION WALLONNE

    BRABANT WALLON

    HAINAUT

    LIÈGE

    LUXEMBOURG (B)

    NAMUR

’$10$5.

’(876&+/$1’
  BADEN-WÜRTTEMBERG

    STUTTGART

    KARLSRUHE

    FREIBURG

    TÜBINGEN

  BAYERN

    OBERBAYERN

    NIEDERBAYERN

    OBERPFALZ

    OBERFRANKEN

    MITTELFRANKEN

    UNTERFRANKEN

    SCHWABEN

  BERLIN

  BRANDENBURG

  BREMEN

  HAMBURG

  HESSEN

    DARMSTADT

    GIEßEN

    KASSEL

  MECKLENBURG-VORPOMMERN

  NIEDERSACHSEN

    BRAUNSCHWEIG

    HANNOVER

    LÜNEBURG

    WESER-EMS

  NORDRHEIN-WESTFALEN

    DÜSSELDORF

    KÖLN

    MÜNSTER

    DETMOLD

    ARNSBERG

  RHEINLAND-PFALZ

    KOBLENZ

    TRIER

    RHEINHESSEN-PFALZ

  SAARLAND

  SACHSEN

    CHEMNITZ
    DRESDEN

    LEIPZIG

  SACHSEN-ANHALT

    DESSAU

    HALLE

    MAGDEBURG

  SCHLESWIG-HOLSTEIN

 
 
 
 
 
 
(FRQRP\

/DERXU(cid:3)PDUNHW

GDP per head (PPS), 
EUR15=100

Employment by sector (% 
total), 1999

Region

8
8
9
1

8
9
9
1

e
r
u
t
l
u
c
i
r
g
A

y
r
t
s
u
d
n
I

i

s
e
c
v
r
e
S

r
e
p

s
n
o
i
t
a
c

i
l

p
p
a

t
n
e
t
a
p

.
r
u
E

9
9
-
8
9
-
7
9
9
1

v
a

,
h
n

i

n
o

i
l
l
i

m

Unemployment rate (%)

9
8
9
1

,
l
a
t
o
T

9
9
9
1

,
l
a
t
o
T

m
r
e
t

g
n
o
L

%

(

9
9
9
1

l

,
d
e
y
o
p
m
e
n
u

)
.
l
p
m
e
n
u

l

a
t
o
t

9
9
9
1

,
n
e
m
o
W

9
9
9
1

,
h
t
u
o
Y

8
9
-
7
9
-
6
9
9
1

e
g
a
r
e
v
a

70,1

(cid:25)(cid:25)(cid:15)(cid:22)
63,0

55,6

68,0

60,2

57,6

59,5

42,1

56,3

52,9

84,4

52,7

74,0

68,7

60,8

77,4

67,1

(cid:27)(cid:19)(cid:15)(cid:21)
67,3

64,1

71,8

74,8

94,7

96,1

69,9

(cid:25)(cid:25)(cid:15)(cid:19)
62,6

55,4

67,6

59,9

57,4

59,3

41,8

55,7

52,6

84,2

52,7

73,8

68,4

60,8

76,9

66,8

(cid:27)(cid:20)(cid:15)(cid:20)
67,7

64,2

72,4

76,3

96,4

99,1

106,2

105,4

93,2

88,1

91,6

88,1

110,2

107,5

67,0

74,2

67,0

50,2

91,9

100,4

77,2

99,5

59,2

57,9

67,2

67,0

77,1

67,0

74,4

66,6

50,4

90,9

99,6

76,2

97,8

59,1

57,8

66,8

66,0

75,4

:

(cid:24)(cid:27)(cid:15)(cid:20)
56,6

52,2

58,3

62,6

53,8

56,0

43,5

54,6

48,2

71,6

58,0

61,1

57,6

44,5

68,4

57,3

(cid:26)(cid:23)(cid:15)(cid:19)
63,3

57,9

71,9

73,8

87,1

88,7

91,4

83,7

83,1

91,0

62,1

68,1

61,1

49,8

84,1

89,2

73,8

95,5

57,6

55,9

67,9

65,5

74,9

(cid:20)(cid:19)(cid:27)(cid:15)(cid:23)
165,1

97,3

98,9

89,0

110,3

99,6

87,9

96,1

89,2

98,3

91,5

(cid:28)(cid:27)(cid:15)(cid:25)
151,7

(cid:28)(cid:28)(cid:15)(cid:25)
154,3

88,7

92,3

83,7

90,6

90,5

84,6

90,1

79,4

90,9

83,3

89,4

92,1

84,2

91,9

91,5

85,5

90,6

79,7

91,8

84,2

110,7

103,5

104,9

94,7

90,2

94,1

88,2

86,1

92,5

98,8

88,7

81,2

103,4

107,8

86,1

87,3

83,8

86,8

82,7

80,0

87,7

89,4

87,8

80,5

97,3

87,6

84,6

87,4

83,6

80,8

87,9

89,5

87,9

81,2

98,0

100,8

81,9

101,6

82,5

3,8

(cid:20)(cid:26)(cid:15)(cid:27)
26,0

38,4

19,1

24,5

32,7

32,5

24,7

25,1

35,0

27,9

40,2

1,0

24,6

17,9

8,3

33,0

(cid:26)(cid:15)(cid:23)
15,6

18,6

10,3

8,7

5,4

2,2

8,3

10,9

8,3

1,0

12,0

11,1

11,7

15,0

4,0

3,5

5,3

2,2

11,7

11,5

13,6

0,5

6,6

(cid:23)(cid:15)(cid:22)
0,5

5,9

8,6

4,0

2,4

6,0

9,7

6,7

1,7

3,0

3,0

1,9

4,7

7,6

6,6

7,9

8,9

7,7

7,7

7,2

9,9

4,4

3,6

8,1

34,1

(cid:21)(cid:22)(cid:15)(cid:19)
23,8

19,3

25,7

35,2

19,0

20,7

24,1

16,0

16,9

29,7

17,4

25,3

16,7

19,7

23,2

13,2

(cid:22)(cid:19)(cid:15)(cid:25)
30,3

29,2

30,8

35,6

37,2

38,5

38,7

42,7

33,0

25,8

30,3

29,2

34,6

25,6

35,4

37,1

34,8

24,6

25,3

25,1

28,2

10,4

19,8

(cid:21)(cid:25)(cid:15)(cid:22)
19,7

30,4

28,2

32,1

32,6

31,3

25,9

30,1

29,4

35,3

32,2

37,1

38,3

29,2

32,3

27,1

26,7

23,1

22,0

23,9

25,4

29,5

30,0

27,5

62,1

(cid:24)(cid:28)(cid:15)(cid:21)
50,2

42,3

55,1

40,3

48,3

46,8

51,2

58,9

48,1

42,4

42,5

73,7

58,7

62,4

68,5

53,8

(cid:25)(cid:21)(cid:15)(cid:19)
54,2

52,2

59,0

55,7

57,5

59,3

53,0

46,5

58,8

73,2

57,7

59,7

53,8

59,5

60,6

59,5

59,9

73,2

63,0

63,4

58,2

89,1

73,7

(cid:25)(cid:28)(cid:15)(cid:23)
79,8

63,7

63,1

63,9

65,0

62,8

64,4

63,3

68,9

61,7

64,8

61,0

57,0

63,2

61,1

65,0

64,4

69,2

70,3

68,9

64,7

66,1

66,5

64,4

49,0

(cid:25)(cid:15)(cid:21)
3,5

1,2

5,7

0,0

1,4

0,9

0,7

0,0

2,0

1,0

0,5

13,7

2,8

0,0

1,2

4,4

(cid:20)(cid:27)(cid:15)(cid:24)
6,8

6,8

7,4

5,3

29,9

30,5

44,1

7,7

27,4

30,3

7,0

8,2

7,4

3,9

31,1

41,9

18,4

10,6

5,3

5,0

7,7

:

5,6

(cid:20)(cid:20)(cid:25)(cid:15)(cid:24)
252,7

80,5

55,5

86,7

89,8

94,0

54,6

86,3

37,2

103,2

70,1

149,3

100,5

53,1

51,8

58,8

45,6

60,8

47,3

82,7

38,0

179,1

202,3

79,6

:

(cid:25)(cid:15)(cid:26)
6,5

6,7

6,6

5,7

6,5

5,5

4,0

2,8

7,2

5,9

4,8

8,5

3,5

5,9

4,4

2,4

(cid:20)(cid:26)(cid:15)(cid:23)
14,2

12,5

17,4

17,6

16,0

20,0

11,5

9,6

11,9

13,3

18,5

17,4

14,8

26,8

14,4

14,3

15,3

10,3

25,8

27,2

16,2

31,6

22,5

(cid:28)(cid:15)(cid:22)
7,7

9,6

10,3

10,9

10,6

8,6

8,6

8,9

12,6

7,5

9,1

5,3

8,0

9,3

9,3

8,6

10,5

10,0

11,3

9,1

8,2

8,2

7,9

9,2

14,3

(cid:20)(cid:20)(cid:15)(cid:26)
12,4

12,8

11,7

14,6

12,8

11,0

13,9

5,5

11,8

14,2

7,6

12,5

7,9

11,3

7,3

7,3

(cid:20)(cid:25)(cid:15)(cid:20)
17,0

16,8

18,2

15,7

12,0

14,7

8,5

7,1

9,5

13,3

17,6

15,6

15,6

25,5

11,8

10,8

14,3

7,2

25,1

26,8

14,4

25,5

14,4

(cid:20)(cid:20)(cid:15)(cid:23)
10,3

11,5

11,8

13,7

12,2

10,0

11,7

9,9

15,8

8,4

10,0

6,6

8,3

9,7

9,4

9,3

11,3

11,5

11,7

11,8

8,9

10,3

10,3

10,0

37,7

(cid:24)(cid:24)(cid:15)(cid:22)
51,5

50,9

47,1

54,6

61,1

60,5

64,6

33,9

61,3

64,4

55,3

57,8

44,0

57,5

25,3

47,5

(cid:23)(cid:24)(cid:15)(cid:19)
53,3

52,2

54,3

57,4

47,7

49,9

44,1

54,0

41,9

48,5

40,6

47,3

38,2

33,3

45,9

51,4

39,9

39,0

42,5

42,5

39,5

54,0

36,6

(cid:23)(cid:20)(cid:15)(cid:22)
41,3

42,2

37,6

44,4

45,9

39,4

42,5

41,6

44,9

36,2

41,3

26,9

36,1

41,0

40,2

40,3

43,6

42,7

44,5

42,1

34,9

37,9

37,9

37,8

16,5

(cid:20)(cid:26)(cid:15)(cid:28)
19,8

19,2

18,8

24,2

21,7

17,9

22,1

8,1

18,6

24,9

12,5

17,8

12,0

15,6

11,6

11,5

(cid:21)(cid:22)(cid:15)(cid:23)
24,4

23,8

25,9

24,9

18,8

21,7

14,6

13,0

16,1

18,8

28,2

25,9

26,1

37,3

17,2

15,5

21,3

10,5

35,6

37,5

23,2

38,0

20,5

(cid:20)(cid:22)(cid:15)(cid:22)
10,9

13,9

14,3

16,4

14,7

12,4

13,6

12,5

17,9

10,2

12,3

7,5

10,8

12,1

12,1

11,4

13,6

14,1

14,5

14,5

10,8

12,3

12,2

12,8

10,3

(cid:22)(cid:20)(cid:15)(cid:26)
32,3

31,5

30,2

47,0

33,5

34,4

42,6

20,7

36,9

38,0

27,2

33,2

19,8

30,1

15,7

19,9

(cid:22)(cid:19)(cid:15)(cid:23)
36,1

33,3

45,2

33,7

23,8

31,3

15,7

16,1

16,6

25,4

33,8

36,1

27,1

41,3

22,5

20,2

26,9

14,9

41,3

43,2

27,4

52,2

29,8

(cid:21)(cid:21)(cid:15)(cid:23)
15,8

25,1

26,9

29,2

26,7

20,1

26,8

22,7

36,3

17,7

23,4

12,2

17,7

21,0

19,1

21,9

23,8

23,9

24,8

23,4

21,7

20,2

19,5

23,6

  THÜRINGEN

(//$’$
  VOREIA ELLADA

    ANATOLIKI MAKEDONIA, THRAKI

    KENTRIKI MAKEDONIA

    DYTIKI MAKEDONIA

    THESSALIA

  KENTRIKI ELLADA

    IPEIROS

    IONIA NISIA

    DYTIKI ELLADA

    STEREA ELLADA

    PELOPONNISOS

  ATTIKI

  NISIA AIGAIOU, KRITI

    VOREIO AIGAIO

    NOTIO AIGAIO

    KRITI

(63$f$
  NOROESTE

    GALICIA

    PRINCIPADO DE ASTURIAS

    CANTABRIA

  NORESTE

    PAIS VASCO

    COMUNIDAD FORAL DE NAVARRA

    LA RIOJA

    ARAGÓN

  COMUNIDAD DE MADRID

  CENTRO (E)

    CASTILLA Y LEÓN

    CASTILLA-LA MANCHA

    EXTREMADURA

  ESTE

    CATALUÑA

    COMUNIDAD VALENCIANA

    ISLAS BALEARES

  SUR

    ANDALUCÍA

    REGIÓN DE MURCIA

    CEUTA Y MELILLA

  CANARIAS

)5$1&(
  ÎLE DE FRANCE

  BASSIN PARISIEN

    CHAMPAGNE-ARDENNE

    PICARDIE

    HAUTE-NORMANDIE

    CENTRE

    BASSE-NORMANDIE

    BOURGOGNE

  NORD - PAS-DE-CALAIS

  EST

    LORRAINE

    ALSACE

    FRANCHE-COMTÉ

  OUEST

    PAYS DE LA LOIRE

    BRETAGNE

    POITOU-CHARENTES

  SUD-OUEST

    AQUITAINE

    MIDI-PYRÉNÉES

    LIMOUSIN

  CENTRE-EST

    RHÔNE-ALPES

    AUVERGNE

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Employment rate (% popn 
15-64), 1999

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% population aged: (1998)

Educational attainment of 
those aged 25-59 (% total), 
1999

5
1

r
e
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U

4
6
-
5
1

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5
6

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65,1

(cid:24)(cid:25)(cid:15)(cid:28)
56,5

60,0

55,5

54,7

57,0

59,7

54,2

70,2

57,7

57,1

64,3

54,3

64,5

53,8

61,3

69,4

(cid:24)(cid:21)(cid:15)(cid:27)
50,6

53,0

45,5

48,5

56,1

54,5

59,4

56,8

57,6

55,1

51,1

52,2

52,7

46,2

58,6

60,5

55,0

62,6

44,4

43,3

52,0

44,3

52,7

(cid:25)(cid:19)(cid:15)(cid:26)
64,8

61,2

58,3

59,0

60,2

64,0

61,7

62,7

51,0

61,9

58,7

65,7

62,6

62,2

62,2

61,9

63,0

60,8

60,4

61,3

61,3

62,1

62,7

59,5

60,4

(cid:23)(cid:20)(cid:15)(cid:24)
39,7

45,7

38,6

36,2

38,9

43,2

39,1

55,1

41,8

38,0

48,4

40,5

49,3

34,5

43,9

56,9

(cid:22)(cid:26)(cid:15)(cid:25)
37,4

40,7

32,6

30,7

40,7

40,9

42,7

38,9

39,8

41,1

32,7

35,0

32,0

28,3

44,1

46,7

39,3

48,7

28,6

27,7

34,5

26,3

38,8

(cid:24)(cid:22)(cid:15)(cid:25)
59,9

53,8

51,1

51,1

52,4

56,8

56,1

54,4

41,6

54,1

50,0

58,9

54,7

55,4

54,6

55,5

56,8

54,5

53,5

55,3

56,0

54,3

54,8

52,0

69,6

(cid:26)(cid:22)(cid:15)(cid:21)
74,3

75,8

73,4

73,7

75,8

76,2

70,3

84,5

73,7

75,5

80,3

69,3

79,9

74,5

78,7

81,9

(cid:25)(cid:27)(cid:15)(cid:23)
64,1

65,7

58,5

67,1

71,9

68,9

76,1

74,2

75,1

69,8

69,7

69,7

73,0

64,1

73,8

74,8

71,7

76,8

60,8

59,4

69,6

63,2

66,9

(cid:25)(cid:26)(cid:15)(cid:28)
69,9

68,7

65,4

67,2

67,8

71,5

67,5

71,0

60,6

69,7

67,4

72,6

70,2

69,2

69,9

68,4

69,3

67,3

67,4

67,4

66,7

70,0

70,8

66,9

2470

152,7

(cid:20)(cid:19)(cid:24)(cid:20)(cid:25)
3404

562

1796

303

743

2646

373

203

737

663

670

3450

1017

184

271

563

(cid:22)(cid:28)(cid:22)(cid:26)(cid:20)
4303

2717

1060

526

4018

2054

529

260

1175

5028

5284

2496

1707

1081

10727

6059

3931

737

8422

7188

1098

(cid:26)(cid:28)(cid:15)(cid:28)
60,3

39,7

95,5

32,1

52,9

49,1

40,5

87,9

65,0

42,6

43,2

905,8

58,3

47,8

51,2

67,5

(cid:26)(cid:27)(cid:15)(cid:19)
95,0

92,3

100,4

99,4

57,1

282,9

50,8

51,5

24,7

628,9

24,6

26,5

21,5

26,0

178,0

189,7

168,7

147,0

85,4

82,4

97,0

136

4390,3

1590

(cid:24)(cid:27)(cid:22)(cid:28)(cid:27)
10929

10454

1345

1857

1780

2439

1420

1612

3997

5155

2312

1726

1117

7744

3210

2896

1637

6152

2898

2542

712

6934

5625

1310

219,5

(cid:20)(cid:19)(cid:26)(cid:15)(cid:23)
909,9

71,8

52,5

95,7

144,5

62,3

80,8

51,0

321,9

107,3

98,2

208,5

68,9

91,0

100,1

106,4

63,4

59,4

70,2

56,1

42,0

99,5

128,7

50,3

14,8

(cid:20)(cid:24)(cid:15)(cid:27)
16,0

16,5

15,8

16,6

16,0

15,0

14,2

15,6

16,6

14,4

14,1

15,6

17,5

16,0

18,1

17,6

(cid:20)(cid:24)(cid:15)(cid:25)
13,1

13,4

11,9

13,7

13,0

12,6

13,8

13,6

13,2

15,1

15,3

13,2

16,9

17,7

15,0

14,3

15,8

17,1

18,9

18,8

18,8

22,4

18,1

(cid:20)(cid:28)(cid:15)(cid:20)
20,1

19,6

19,5

21,2

20,9

18,7

19,3

17,7

21,7

19,4

19,3

19,6

19,2

18,4

19,3

18,2

16,9

16,5

16,8

16,7

14,5

19,1

19,7

16,1

69,7

(cid:25)(cid:26)(cid:15)(cid:26)
68,0

66,6

69,1

66,6

66,7

66,5

67,2

64,3

66,7

67,7

65,4

69,2

65,8

61,3

67,2

65,8

(cid:25)(cid:27)(cid:15)(cid:22)
68,0

67,8

68,3

68,5

69,2

71,3

68,9

67,5

66,1

70,3

65,3

66,0

64,3

64,9

68,7

68,9

68,7

67,7

67,6

67,7

67,5

66,1

70,7

(cid:25)(cid:24)(cid:15)(cid:23)
68,5

64,7

65,4

65,3

65,3

64,2

64,2

63,9

64,8

66,1

65,8

67,0

65,3

64,3

64,7

64,3

63,4

64,4

64,7

64,5

62,7

65,8

66,0

64,9

15,5

(cid:20)(cid:25)(cid:15)(cid:24)
16,0

16,9

15,1

16,7

17,3

18,5

18,6

20,1

16,7

17,9

20,5

15,2

16,7

22,7

14,7

16,6

(cid:20)(cid:25)(cid:15)(cid:20)
19,0

18,8

19,9

17,8

17,8

16,1

17,3

18,9

20,7

14,6

19,4

20,8

18,7

17,3

16,2

16,8

15,5

15,3

13,5

13,5

13,6

11,5

11,3

(cid:20)(cid:24)(cid:15)(cid:24)
11,5

15,8

15,1

13,5

13,8

17,1

16,5

18,4

13,5

14,6

14,9

13,5

15,5

17,4

16,0

17,5

19,7

19,1

18,5

18,8

22,8

15,1

14,3

19,0

7

(cid:23)(cid:28)
54

61

49

57

60

61

62

60

58

67

58

36

60

58

67

58

(cid:25)(cid:21)
65

67

63

62

56

52

56

64

61

50

67

60

73

73

62

59

66

67

68

69

65

59

67

(cid:22)(cid:26)
33

42

46

45

43

39

42

37

45

37

38

33

41

34

36

32

37

32

33

31

35

34

33

36

62

(cid:22)(cid:22)
28

25

31

28

24

27

25

27

29

24

29

41

27

27

25

28

(cid:20)(cid:25)
15

14

15

17

17

18

15

15

16

19

14

16

12

11

17

19

15

17

13

13

15

21

15

(cid:23)(cid:20)
35

42

39

40

41

44

41

46

40

45

44

48

41

47

47

48

46

46

46

45

49

43

43

44

31

(cid:20)(cid:27)
17

14

19

15

16

12

14

13

13

9

13

23

13

15

8

15

(cid:21)(cid:21)
20

19

23

22

27

30

29

21

23

30

20

24

15

16

21

22

19

16

19

19

20

21

18

(cid:21)(cid:21)
32

17

15

15

16

18

17

17

16

19

18

19

18

19

18

21

17

22

22

25

16

23

24

20

Region

  THÜRINGEN

(//$’$
  VOREIA ELLADA

    ANATOLIKI MAKEDONIA, THRAKI

    KENTRIKI MAKEDONIA

    DYTIKI MAKEDONIA

    THESSALIA

  KENTRIKI ELLADA

    IPEIROS

    IONIA NISIA

    DYTIKI ELLADA

    STEREA ELLADA

    PELOPONNISOS

  ATTIKI

  NISIA AIGAIOU, KRITI

    VOREIO AIGAIO

    NOTIO AIGAIO

    KRITI

(63$f$
  NOROESTE

    GALICIA

    PRINCIPADO DE ASTURIAS

    CANTABRIA

  NORESTE

    PAIS VASCO

    COMUNIDAD FORAL DE NAVARRA

    LA RIOJA

    ARAGÓN

  COMUNIDAD DE MADRID

  CENTRO (E)

    CASTILLA Y LEÓN

    CASTILLA-LA MANCHA

    EXTREMADURA

  ESTE

    CATALUÑA

    COMUNIDAD VALENCIANA

    ISLAS BALEARES

  SUR

    ANDALUCÍA

    REGIÓN DE MURCIA

    CEUTA Y MELILLA

  CANARIAS

)5$1&(
  ÎLE DE FRANCE

  BASSIN PARISIEN

    CHAMPAGNE-ARDENNE

    PICARDIE

    HAUTE-NORMANDIE

    CENTRE

    BASSE-NORMANDIE

    BOURGOGNE

  NORD - PAS-DE-CALAIS

  EST

    LORRAINE

    ALSACE

    FRANCHE-COMTÉ

  OUEST

    PAYS DE LA LOIRE

    BRETAGNE

    POITOU-CHARENTES

  SUD-OUEST

    AQUITAINE

    MIDI-PYRÉNÉES

    LIMOUSIN

  CENTRE-EST

    RHÔNE-ALPES

    AUVERGNE

 
 
 
 
 
 
(FRQRP\

/DERXU(cid:3)PDUNHW

GDP per head (PPS), 
EUR15=100

Employment by sector (% 
total), 1999

Region

8
8
9
1

8
9
9
1

e
r
u
t
l
u
c
i
r
g
A

y
r
t
s
u
d
n
I

i

s
e
c
v
r
e
S

r
e
p

s
n
o
i
t
a
c

i
l

p
p
a

t
n
e
t
a
p

.
r
u
E

9
9
-
8
9
-
7
9
9
1

v
a

,
h
n

i

n
o

i
l
l
i

m

Unemployment rate (%)

9
8
9
1

,
l
a
t
o
T

9
9
9
1

,
l
a
t
o
T

m
r
e
t

g
n
o
L

%

(

9
9
9
1

l

,
d
e
y
o
p
m
e
n
u

)
.
l
p
m
e
n
u

l

a
t
o
t

9
9
9
1

,
n
e
m
o
W

9
9
9
1

,
h
t
u
o
Y

8
9
-
7
9
-
6
9
9
1

e
g
a
r
e
v
a

85,9

76,6

91,2

75,7

53,6

52,7

60,2

53,9

50,2

(cid:20)(cid:19)(cid:21)(cid:15)(cid:19)
75,3

111,6

(cid:20)(cid:19)(cid:21)(cid:15)(cid:21)
116,0

119,0

133,6

106,7

136,2
122,1

137,3

120,6

115,9

131,0

107,4

111,4

99,0

102,7

114,7

84,4

85,6

79,6

64,5

65,0

66,0

72,3

61,0

65,7

76,1

(cid:20)(cid:26)(cid:22)(cid:15)(cid:21)

(cid:20)(cid:20)(cid:20)(cid:15)(cid:19)
106,1

135,5

91,6

90,0

94,9

95,3

96,9

80,1

122,1

137,1

128,6

115,0

99,9

104,8

109,5

95,4

(cid:20)(cid:20)(cid:20)(cid:15)(cid:25)
123,6

69,5

89,7

95,2

83,7

101,6

85,7

43,9

37,0

51,0

49,4

43,0

(cid:25)(cid:24)(cid:15)(cid:28)
:

:

(cid:20)(cid:19)(cid:19)(cid:15)(cid:21)
116,5

118,0

127,8

112,1

131,9
115,2

117,8

114,7

114,8

126,3

105,1

108,2

95,8

102,6

111,0

84,5

86,4

77,5

67,4

66,5

72,2

63,4

56,5

65,8

72,8

(cid:20)(cid:22)(cid:28)(cid:15)(cid:20)

(cid:28)(cid:26)(cid:15)(cid:26)
94,2

119,1

79,7

82,4

83,9

86,2

83,9

72,7

107,0

103,4

111,7

104,7

107,0

92,1

93,5

89,5

(cid:20)(cid:19)(cid:21)(cid:15)(cid:21)
114,0

61,1

84,4

85,0

75,7

90,2

77,0

53,3

52,4

59,8

53,4

50,0

(cid:20)(cid:19)(cid:27)(cid:15)(cid:20)
79,3

118,5

(cid:20)(cid:19)(cid:20)(cid:15)(cid:20)
114,5

117,2

129,8

106,1

134,7
120,3

136,1

118,9

113,5

129,5

106,1

110,4

97,5

100,5

113,3

82,5

83,5

78,6

64,0

64,4

65,1

72,0

60,7

65,2

76,3

(cid:20)(cid:26)(cid:24)(cid:15)(cid:27)

(cid:20)(cid:20)(cid:22)(cid:15)(cid:21)
104,9

130,8

93,3

89,4

96,4

96,9

98,6

80,8

125,3

142,4

131,9

117,7

100,6

107,1

111,9

97,1

(cid:20)(cid:20)(cid:20)(cid:15)(cid:26)
123,1

68,8

91,4

152,0

162,8

165,4

79,3

80,9

78,6

102,7

97,8

115,7

90,6

91,6

90,1

111,2

104,9

124,8

90,4

91,2

90,1

110,4

104,1

124,8

4,0

6,9

2,4

8,2

4,8

3,6

6,5

3,2

5,0

(cid:27)(cid:15)(cid:24)
:

:

(cid:24)(cid:15)(cid:23)
3,8

3,8

5,4

3,6

2,1
5,3

8,6

4,7

4,8

6,7

3,9

3,3

5,0

4,5

2,9

7,7

6,5

12,5

7,5

12,0

11,8

12,8

12,1

9,1

8,1

(cid:20)(cid:15)(cid:28)

(cid:22)(cid:15)(cid:19)
3,9

2,4

3,8

5,9

3,6

4,0

3,5

3,1

2,3

1,1

2,3

2,6

4,0

3,7

3,6

3,8

(cid:25)(cid:15)(cid:21)
5,3

6,3

10,1

0,8

8,3

7,8

8,5

6,1

8,3

4,9

19,3

18,7

19,8

14,3

14,5

14,6

13,0

18,1

14,6

(cid:21)(cid:27)(cid:15)(cid:22)
:

:

(cid:22)(cid:21)(cid:15)(cid:23)
35,2

39,8

23,3

23,2

41,1
39,0

27,0

43,0

33,5

36,4

35,8

34,4

31,7

41,3

19,0

33,3

34,2

29,2

24,5

24,9

26,6

31,8

18,7

19,3

22,7

(cid:21)(cid:20)(cid:15)(cid:28)

(cid:21)(cid:20)(cid:15)(cid:21)
24,9

23,5

26,2

24,8

23,6

28,4

21,6

18,9

16,3

15,7

15,0

16,5

26,5

27,6

27,5

27,7

(cid:21)(cid:28)(cid:15)(cid:27)
26,6

34,3

29,5

22,8

32,8

30,6

33,8

31,7

34,9

26,5

76,7

74,4

77,8

77,0

80,7

81,8

80,6

78,7

80,4

(cid:25)(cid:21)(cid:15)(cid:24)
:

:

(cid:25)(cid:21)(cid:15)(cid:21)
61,0

56,5

71,3

73,2

56,8
55,7

64,4

52,3

61,7

56,9

60,4

62,3

63,3

54,2

78,1

59,1

59,3

58,3

68,0

63,1

61,6

55,4

69,2

71,6

69,2

(cid:26)(cid:24)(cid:15)(cid:27)

(cid:26)(cid:19)(cid:15)(cid:25)
65,9

67,8

65,2

64,6

67,6

62,4

69,5

73,6

76,3

78,5

77,8

75,7

63,9

63,4

64,1

62,0

(cid:25)(cid:23)(cid:15)(cid:19)
68,1

59,5

60,5

76,4

58,9

61,6

57,7

62,2

56,9

68,6

67,8

49,4

80,7

7,1

1,8

1,9

0,1

0,7

2,5

(cid:24)(cid:20)(cid:15)(cid:24)
25,3

48,9

(cid:24)(cid:28)(cid:15)(cid:26)
83,2

98,5

8,1

48,5

131,4
79,8

44,5

82,8

96,3

127,7

45,5

47,3

36,7

46,3

39,1

46,0

56,3

6,0

8,7

7,6

7,8

16,4

4,4

11,3

8,1

(cid:20)(cid:23)(cid:24)(cid:15)(cid:19)

(cid:20)(cid:25)(cid:24)(cid:15)(cid:27)
68,5

71,1

55,8

82,1

119,7

122,3

123,1

88,6

116,2

139,5

103,5

121,5

84,8

358,9

445,4

182,1

(cid:20)(cid:21)(cid:24)(cid:15)(cid:21)
105,9

42,9

106,9

115,8

104,4

95,9

108,3

157,2

160,1

101,4

12,0

13,1

11,5

9,4

:

:

:

:

:

(cid:20)(cid:23)(cid:15)(cid:28)
14,7

14,9

(cid:20)(cid:19)(cid:15)(cid:19)
6,6

6,0

3,7

8,4

3,5
4,5

3,2

4,4

5,7

4,7

7,3

7,3

8,4

6,8

10,0

10,0

9,5

12,1

20,8

17,4

13,8

18,9

23,2

20,0

17,6

(cid:20)(cid:15)(cid:26)

(cid:27)(cid:15)(cid:24)
10,8

12,4

11,0

8,2

8,9

9,0

8,8

8,7

8,0

7,3

8,1

8,4

6,7

8,1

8,1

8,0

(cid:22)(cid:15)(cid:20)
:

3,5

2,7

5,3

:

3,2

3,2

:

2,4

2,0

16,5

17,8

16,0

14,3

32,0

:

:

:

:

(cid:24)(cid:15)(cid:28)
7,1

5,5

(cid:20)(cid:20)(cid:15)(cid:26)
8,0

7,9

5,6

10,8

4,9
4,7

3,9

4,9

5,6

4,8

7,2

8,2

7,1

6,5

13,2

11,6

10,6

16,6

23,7

21,9

19,8

17,3

28,7

24,8

21,9

(cid:21)(cid:15)(cid:23)

(cid:22)(cid:15)(cid:22)
5,3

6,0

4,1

5,9

3,0

3,1

3,0

3,1

3,1

2,3

3,3

3,2

3,5

3,1

2,8

3,7

(cid:23)(cid:15)(cid:19)
4,5

3,3

3,1

5,9

4,3

4,7

4,1

3,4

2,7

3,4

42,1

45,7

40,6

33,1

57,7

62,6

67,4

44,0

52,4

(cid:24)(cid:25)(cid:15)(cid:19)
:

:

(cid:25)(cid:19)(cid:15)(cid:27)
61,9

56,7

18,8

60,9

43,7
30,1

13,0

30,2

32,6

27,0

47,7

42,6

54,0

47,5

68,3

65,4

63,0

65,8

73,0

62,6

61,9

56,2

62,1

66,4

57,9

(cid:22)(cid:21)(cid:15)(cid:21)

(cid:23)(cid:20)(cid:15)(cid:24)
47,0

48,7

46,3

45,6

39,1

31,5

41,4

50,3

42,1

52,1

43,4

38,8

41,6

38,1

36,8

40,3

(cid:22)(cid:26)(cid:15)(cid:20)
59,0

24,9

39,1

71,5

29,4

14,0

37,5

8,1

7,7

4,1

19,1

20,9

18,3

18,8

36,3

:

:

:

:

(cid:24)(cid:15)(cid:26)
6,9

5,4

(cid:20)(cid:25)(cid:15)(cid:20)
12,2

12,6

6,8

15,2

7,6
7,4

5,6

8,4

9,0

7,7

11,4

12,1

12,0

11,1

17,8

18,0

17,8

24,7

32,2

33,0

31,6

26,4

41,4

36,2

31,7

(cid:22)(cid:15)(cid:22)

(cid:23)(cid:15)(cid:25)
7,7

8,7

6,3

8,4

4,3

4,5

4,2

4,4

4,4

3,3

4,6

4,5

4,0

4,3

4,0

5,2

(cid:23)(cid:15)(cid:27)
4,8

4,3

3,7

5,9

5,6

6,3

5,3

4,3

3,3

4,2

26,2

28,0

25,4

24,8

51,2

:

:

:

:

(cid:27)(cid:15)(cid:25)
10,1

8,1

(cid:22)(cid:21)(cid:15)(cid:28)
23,5

22,4

12,8

31,2

13,8
11,3

7,4

11,5

12,1

12,7

19,8

20,8

19,9

18,0

46,9

33,3

31,6

50,4

60,9

54,0

49,0

52,8

65,2

60,2

56,7

(cid:25)(cid:15)(cid:26)

(cid:25)(cid:15)(cid:26)
10,8

13,7

7,7

11,8

5,8

5,3

6,4

4,2

6,5

3,5

7,4

6,7

6,7

6,5

5,9

8,1

(cid:24)(cid:15)(cid:22)
4,9

4,3

3,5

6,7

6,5

7,3

6,2

5,1

3,9

5,8

  MÉDITERRANÉE

    LANGUEDOC-ROUSSILLON

    PROVENCE-ALPES-CÔTE D'AZUR

    CORSE

  DÉPARTEMENTS D'OUTRE-MER

    GUADELOUPE

    MARTINIQUE

    GUYANE

    RÉUNION

,5(/$1’
    BORDER, MIDLAND AND WESTERN

    SOUTHERN AND EASTERN

,7$/,$
  NORD OVEST

    PIEMONTE

    VALLE D'AOSTA

    LIGURIA

  LOMBARDIA
  NORD EST

    TRENTINO-ALTO ADIGE

    VENETO

    FRIULI-VENEZIA GIULIA

  EMILIA-ROMAGNA

  CENTRO (I)

    TOSCANA

    UMBRIA

    MARCHE

  LAZIO

  ABRUZZO-MOLISE

    ABRUZZO

    MOLISE

  CAMPANIA

  SUD

    PUGLIA

    BASILICATA

    CALABRIA

  SICILIA

  SARDEGNA

/8;(0%285*(cid:3)(cid:11)*5$1’(cid:16)’8&+e(cid:12)

1(’(5/$1’
  NOORD-NEDERLAND

    GRONINGEN

    FRIESLAND

    DRENTHE

  OOST-NEDERLAND

    OVERIJSSEL

    GELDERLAND

    FLEVOLAND

  WEST-NEDERLAND

    UTRECHT

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    ZUID-HOLLAND

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  OSTÖSTERREICH

    BURGENLAND

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Employment rate (% popn 
15-64), 1999

l

a
t
o
T

n
e
m
o
W

n
e
M

54,0

52,6

55,4

42,8

:

:

:

:

:

(cid:25)(cid:22)(cid:15)(cid:28)
:

:

(cid:24)(cid:22)(cid:15)(cid:23)
58,8

59,6

63,5

56,2

61,3
61,4

64,4

61,2

59,7

65,5

59,1

58,7

58,3

60,7

51,9

51,9

52,4

49,9

40,7

42,0

43,1

44,4

39,1

39,7

44,9

(cid:25)(cid:20)(cid:15)(cid:27)

(cid:26)(cid:20)(cid:15)(cid:23)
68,1

66,9

70,4

66,5

71,7

71,2

71,8

72,8

72,0

74,7

72,1

71,2

69,3

71,6

72,4

70,0

(cid:25)(cid:27)(cid:15)(cid:27)
69,2

67,9

69,1

69,6

67,0

65,7

67,6

69,4

69,2

71,2

46,0

44,6

47,6

32,3

:

:

:

:

:

(cid:24)(cid:20)(cid:15)(cid:28)
:

:

(cid:22)(cid:27)(cid:15)(cid:25)
46,4

46,9

54,3

44,6

47,8
47,7

51,6

46,9

47,6

54,7

46,7

46,3

45,1

48,7

37,1

35,0

35,3

33,9

23,5

23,9

23,6

29,4

23,0

21,5

29,4

(cid:23)(cid:27)(cid:15)(cid:26)

(cid:25)(cid:20)(cid:15)(cid:24)
58,0

56,4

59,6

57,9

61,0

59,7

61,6

61,1

62,8

64,1

64,7

61,6

56,8

60,9

61,7

59,2

(cid:25)(cid:19)(cid:15)(cid:21)
61,6

58,5

60,4

63,1

58,1

56,2

59,0

59,9

60,4

63,7

62,5

61,1

63,8

53,4

:

:

:

:

:

(cid:26)(cid:24)(cid:15)(cid:26)
:

:

(cid:25)(cid:27)(cid:15)(cid:22)
71,1

72,2

72,4

67,9

74,8
74,8

76,9

75,2

71,8

76,4

71,7

71,3

71,5

72,8

67,3

68,9

69,7

66,0

58,3

60,6

63,4

59,6

55,3

58,7

60,7

(cid:26)(cid:23)(cid:15)(cid:26)

(cid:27)(cid:20)(cid:15)(cid:20)
77,8

77,2

80,6

74,7

82,1

82,2

81,7

84,5

81,0

85,5

79,4

80,7

81,2

81,9

82,6

80,4

(cid:26)(cid:26)(cid:15)(cid:23)
76,9

76,9

77,6

76,2

76,0

75,5

76,2

79,0

77,9

79,2

8
9
9
1

,
)
²

m
k
/
.
h
n
i
(

y
t
i
s
n
e
d

n
p
o
P

104,3

83,4

143,0

29,9

19,0

256,7

355,9

2,0

273,6

(cid:24)(cid:21)(cid:15)(cid:26)
29,4

73,7

(cid:20)(cid:28)(cid:20)(cid:15)(cid:20)
177,4

168,9

36,7

302,2

377,4
165,5

68,1

243,9

151,0

178,7

141,3

153,4

98,4

149,9

304,7

105,4

118,3

74,2

426,2

152,3

211,2

61,0

137,1

198,5

68,8

(cid:20)(cid:25)(cid:23)(cid:15)(cid:28)

(cid:23)(cid:25)(cid:22)(cid:15)(cid:25)
196,9

238,8

184,4

175,7

335,2

319,9

381,1

210,6

844,2

802,1

938,1

1175,1

206,8

488,3

472,1

525,1

(cid:28)(cid:25)(cid:15)(cid:22)
144,8

70,0

80,0

3852,8

68,2

59,2

73,5

84,3

114,8

71,8

8
9
9
1

,
)
0
0
0
(

l

n
o
i
t
a
u
p
o
P

7034

2283

4491

260

1693

438

401

164

690

(cid:22)(cid:26)(cid:19)(cid:24)
979

2726

(cid:24)(cid:26)(cid:24)(cid:27)(cid:27)
6047

4290

120

1637

9009
6590

927

4478

1184

3953

5813

3528

832

1453

5249

1606

1277

329

5795

6765

4088

609

2068

5103

1658

(cid:23)(cid:21)(cid:26)

(cid:20)(cid:24)(cid:26)(cid:19)(cid:26)
1645

559

620

466

3268

1067

1901

300

7328

1094

2495

3369

370

3467

2329

1139

(cid:27)(cid:19)(cid:26)(cid:27)
3411

278

1535

1599

1768

564

1204

2899

1375

514

% population aged: (1998)

Educational attainment of 
those aged 25-59 (% total), 
1999

5
1

r
e
d
n
U

4
6
-
5
1

+
5
6

w
o
L

i

m
u
d
e
M

h
g
H

i

Region

18,1

17,7

18,3

17,5

:

:

:

:

:

(cid:21)(cid:21)(cid:15)(cid:26)
:

:

(cid:20)(cid:23)(cid:15)(cid:25)
11,4

11,8

12,4

10,3

12,9
13,1

15,7

13,1

11,0

10,9

11,9

11,5

12,4

12,9

14,2

15,1

15,0

15,4

19,9

17,9

17,9

17,1

18,2

18,5

15,3

(cid:20)(cid:27)(cid:15)(cid:26)

(cid:20)(cid:27)(cid:15)(cid:23)
18,1

16,7

19,0

18,4

19,4

19,4

18,8

24,1

18,2

18,8

17,6

18,5

18,4

18,0

18,5

17,2

(cid:20)(cid:26)(cid:15)(cid:21)
16,0

15,7

17,2

15,0

16,9

17,4

16,7

18,7

18,5

18,3

63,7

63,4

63,7

64,6

:

:

:

:

:

(cid:25)(cid:25)(cid:15)(cid:19)
:

:

(cid:25)(cid:27)(cid:15)(cid:19)
67,7

68,4

69,3

65,7

70,3
69,0

67,8

69,5

68,1

67,4

66,7

67,1

66,0

66,3

69,4

65,9

66,1

65,0

67,1

67,1

67,7

66,1

66,2

66,1

70,1

(cid:25)(cid:26)(cid:15)(cid:19)

(cid:25)(cid:27)(cid:15)(cid:20)
67,4

68,8

66,7

66,6

67,5

67,2

67,8

66,9

68,1

68,7

68,9

67,6

65,3

69,0

69,1

68,7

(cid:25)(cid:26)(cid:15)(cid:23)
67,6

66,5

66,5

68,7

66,9

66,6

67,1

67,6

66,9

68,4

18,3

18,9

18,0

17,8

:

:

:

:

:

(cid:20)(cid:20)(cid:15)(cid:23)
:

:

(cid:20)(cid:26)(cid:15)(cid:23)
20,9

19,9

18,2

24,0

16,9
17,9

16,5

17,4

20,9

21,7

21,3

21,5

21,6

20,8

16,4

19,1

18,9

19,6

12,9

15,0

14,4

16,7

15,6

15,3

14,5

(cid:20)(cid:23)(cid:15)(cid:22)

(cid:20)(cid:22)(cid:15)(cid:24)
14,5

14,5

14,2

15,0

13,1

13,5

13,4

9,0

13,7

12,4

13,5

13,9

16,2

13,0

12,4

14,1

(cid:20)(cid:24)(cid:15)(cid:23)
16,4

17,8

16,3

16,2

16,2

16,0

16,3

13,7

14,6

13,4

40

41

38

61

:

:

:

:

:

(cid:23)(cid:28)
46

52

(cid:24)(cid:23)
53

54

56

50

52
55

50

56

52

50

54

55

46

54

45

51

51

55

59

59

61

58

56

60

62

(cid:22)(cid:25)

(cid:22)(cid:23)
36

34

36

38

35

37

34

36

32

28

31

33

39

36

36

37

(cid:21)(cid:22)
23

29

24

21

20

18

21

25

26

21

40

40

41

25

:

:

:

:

:

(cid:21)(cid:27)
28

28

(cid:22)(cid:25)
38

37

36

40

37
36

42

35

39

39

36

36

42

35

42

39

40

34

32

32

30

35

34

30

31

(cid:23)(cid:24)

(cid:23)(cid:22)
45

43

47

45

44

45

43

45

42

42

43

41

47

43

43

43

(cid:25)(cid:27)
66

66

69

65

73

76

71

67

67

70

20

19

21

13

:

:

:

:

:

(cid:21)(cid:22)
26

20

(cid:20)(cid:19)
9

9

9

11

11
9

8

9

9

11

10

9

13

12

13

10

10

11

10

9

9

8

10

10

8

(cid:20)(cid:28)

(cid:21)(cid:22)
19

23

18

17

21

19

23

19

26

30

27

26

14

21

21

20

(cid:28)
11

5

7

  MÉDITERRANÉE

    LANGUEDOC-ROUSSILLON

    PROVENCE-ALPES-CÔTE D'AZUR

    CORSE

  DÉPARTEMENTS D'OUTRE-MER

    GUADELOUPE

    MARTINIQUE

    GUYANE

    RÉUNION

,5(/$1’
    BORDER, MIDLAND AND WESTERN

    SOUTHERN AND EASTERN

,7$/,$
  NORD OVEST

    PIEMONTE

    VALLE D'AOSTA

    LIGURIA

  LOMBARDIA
  NORD EST

    TRENTINO-ALTO ADIGE

    VENETO

    FRIULI-VENEZIA GIULIA

  EMILIA-ROMAGNA

  CENTRO (I)

    TOSCANA

    UMBRIA

    MARCHE

  LAZIO

  ABRUZZO-MOLISE

    ABRUZZO

    MOLISE

  CAMPANIA

  SUD

    PUGLIA

    BASILICATA

    CALABRIA

  SICILIA

  SARDEGNA

/8;(0%285*(cid:3)(cid:11)*5$1’(cid:16)’8&+e(cid:12)

1(’(5/$1’
  NOORD-NEDERLAND

    GRONINGEN

    FRIESLAND

    DRENTHE

  OOST-NEDERLAND

    OVERIJSSEL

    GELDERLAND

    FLEVOLAND

  WEST-NEDERLAND

    UTRECHT

    NOORD-HOLLAND

    ZUID-HOLLAND

    ZEELAND

  ZUID-NEDERLAND

    NOORD-BRABANT

    LIMBURG (NL)

g67(55(,&+
  OSTÖSTERREICH

    BURGENLAND

    NIEDERÖSTERREICH

15

    WIEN

7

6

7

8

7

  SÜDÖSTERREICH

    KÄRNTEN

    STEIERMARK

  WESTÖSTERREICH

    OBERÖSTERREICH

10

    SALZBURG

 
 
 
 
 
 
GDP per head (PPS), 
EUR15=100

Employment by sector (% 
total), 1999

(FRQRP\

/DERXU(cid:3)PDUNHW

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-
8
9
-
7
9
9
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Unemployment rate (%)

9
8
9
1

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9
9
9
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9
9
9
1

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Region

    TIROL

    VORARLBERG

32578*$/
  CONTINENTE

    NORTE

    CENTRO (P)

    LISBOA E VALE DO TEJO

    ALENTEJO

    ALGARVE

  AÇORES

  MADEIRA

6820,(cid:18)),1/$1’
  MANNER-SUOMI

    ITÄ-SUOMI

    VÄLI-SUOMI

    POHJOIS-SUOMI

    UUSIMAA (SUURALUE)

    ETELÄ-SUOMI
  ÅLAND

69(5,*(
    STOCKHOLM

    ÖSTRA MELLANSVERIGE

    SYDSVERIGE

    NORRA MELLANSVERIGE

    MELLERSTA NORRLAND

    ÖVRE NORRLAND

    SMÅLAND MED ÖARNA

    VÄSTSVERIGE

81,7(’(cid:3).,1*’20
  NORTH EAST

    TEES VALLEY & DURHAM

    NORTHUMBERLAND AND TYNE & WEAR

  NORTH WEST (INC. MERSEYSIDE)

    CUMBRIA

    CHESHIRE

    GREATER MANCHESTER

    LANCASHIRE

    MERSEYSIDE

  YORKSHIRE & THE HUMBER

    EAST RIDING & NORTH LINCOLNSHIRE

    NORTH YORKSHIRE

    SOUTH YORKSHIRE

    WEST YORKSHIRE

  EAST MIDLANDS

    DERBYSHIRE & NOTTINGHAMSHIRE

8
8
9
1

8
9
9
1

8
9
-
7
9
-
6
9
9
1

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g
a
r
e
v
a

102,0

105,3

113,4

111,8

111,5

112,3

(cid:24)(cid:27)(cid:15)(cid:28)
59,9

51,4

46,3

76,3

57,9

61,4

40,8

39,9

(cid:20)(cid:19)(cid:20)(cid:15)(cid:25)
101,4

81,3

90,5

91,3

131,5

96,0
139,2

(cid:20)(cid:19)(cid:28)(cid:15)(cid:26)
130,7

100,8

102,4

101,9

110,3

106,4

105,7

108,7

(cid:28)(cid:27)(cid:15)(cid:26)
82,7

83,0

82,4

92,3

108,6

105,1

94,1

89,3

78,0

89,4

93,6

93,0

79,0

92,8

94,1

91,0

(cid:26)(cid:24)(cid:15)(cid:22)
76,4

66,0

65,0

94,9

66,8

76,1

52,0

57,5

(cid:20)(cid:19)(cid:20)(cid:15)(cid:25)
101,5

75,1

83,6

87,3

141,5

93,0
122,2

(cid:20)(cid:19)(cid:21)(cid:15)(cid:23)
136,1

93,2

91,8

95,7

97,8

98,2

(cid:26)(cid:22)(cid:15)(cid:25)
74,6

64,7

63,4

92,7

64,6

74,3

51,2

56,4

(cid:28)(cid:27)(cid:15)(cid:28)
98,8

73,5

82,4

86,0

135,5

91,8
112,1

(cid:20)(cid:19)(cid:21)(cid:15)(cid:21)
133,0

94,1

89,6

95,4

97,8

98,4

100,5

101,5

90,5

(cid:20)(cid:19)(cid:21)(cid:15)(cid:21)
79,5

77,5

81,1

89,6

99,7

92,9

(cid:20)(cid:19)(cid:19)(cid:15)(cid:28)
79,1

77,3

80,6

88,9

99,2

111,6

111,0

90,2

86,7

72,8

89,7

95,7

99,9

74,8

92,8

95,3

91,1

89,5

86,1

71,8

88,9

94,5

99,7

74,0

92,0

94,7

90,3

    LEICESTERSHIRE, RUTLAND & NORTHANTS

102,9

102,8

102,2

    LINCOLNSHIRE

  WEST  MIDLANDS

    HEREFORDSHIRE, WORCESTERSHIRE & WARKS

    SHROPSHIRE & STAFFORDSHIRE

    WEST MIDLANDS

  EASTERN

    EAST ANGLIA

    BEDFORDSHIRE, HERTFORDSHIRE

    ESSEX

  LONDON

    INNER LONDON

    OUTER LONDON

  SOUTH EAST

    BERKSHIRE, BUCKS & OXFORDSHIRE

    SURREY, EAST & WEST SUSSEX

    HAMPSHIRE & ISLE OF WIGHT

    KENT

  SOUTH WEST

82,9

90,6

86,8

85,0

95,3

95,7

98,1

102,4

85,7

150,7

:

:

98,7

110,0

96,6

98,0

88,4

93,2

90,3

93,0

98,5

87,1

93,8

103,7

106,6

109,7

93,9

152,9

243,4

96,5

112,7

130,2

110,0

109,6

97,1

93,9

90,0

92,3

98,4

86,7

92,6

102,3

105,3

108,2

92,4

150,1

239,5

94,6

109,4

126,6

106,9

106,2

94,1

93,4

    GLOUCESTERSHIRE, WILTSHIRE & NORTH SOMERSET

104,3

107,9

107,4

    DORSET & SOMERSET

    CORNWALL & ISLES OF SCILLY

90,9

72,9

87,0

70,3

86,7

70,0

4,8

2,0

(cid:20)(cid:21)(cid:15)(cid:25)
12,5

12,6

26,1

4,4

13,0

10,3

18,4

15,0

(cid:25)(cid:15)(cid:23)
6,4

12,6

11,2

9,3

1,1

6,3
9,1

(cid:22)(cid:15)(cid:19)
0,2

2,8

4,5

3,8

4,7

3,7

3,4

3,9

(cid:20)(cid:15)(cid:25)
1,1

1,1

1,2

1,2

5,4

1,8

0,5

1,3

0,2

1,2

2,6

3,0

0,4

0,5

2,0

1,1

1,5

6,2

1,4

2,3

2,2

0,5

1,6

2,8

0,7

1,0

0,3

0,3

0,3

1,3

1,4

1,3

1,5

1,1

2,4

1,7

2,6

5,2

24,3

41,2

(cid:22)(cid:24)(cid:15)(cid:22)
35,6

46,9

31,8

27,9

27,1

19,9

26,0

31,2

(cid:21)(cid:26)(cid:15)(cid:26)
27,7

25,5

28,0

28,1

22,3

32,9
11,6

(cid:21)(cid:24)(cid:15)(cid:19)
15,6

28,3

25,3

27,2

19,4

19,9

34,4

28,8

(cid:21)(cid:25)(cid:15)(cid:19)
28,5

31,2

26,2

28,2

33,4

29,4

28,6

29,5

22,8

28,5

32,1

24,3

30,3

27,5

31,6

34,3

30,9

25,2

33,0

30,2

35,8

32,7

26,4

27,3

25,3

26,1

16,0

13,2

17,7

22,9

24,7

18,2

25,2

25,2

25,6

26,2

24,9

25,1

70,9

56,8

(cid:24)(cid:21)(cid:15)(cid:20)
52,0

40,5

42,1

67,7

60,0

69,9

55,7

53,8

(cid:25)(cid:24)(cid:15)(cid:26)
65,6

61,6

60,4

62,5

76,3

60,5
78,5

(cid:26)(cid:21)(cid:15)(cid:19)
84,0

69,0

70,3

69,1

76,0

76,5

62,3

67,1

(cid:26)(cid:21)(cid:15)(cid:22)
70,2

67,5

72,4

70,5

61,3

68,8

70,8

69,2

76,8

70,3

65,3

72,7

69,4

71,9

66,3

64,5

67,7

68,5

65,4

67,4

61,9

66,6

72,0

69,8

74,0

72,8

83,6

86,4

82,0

75,7

73,8

80,5

73,3

73,7

72,0

72,1

72,6

69,3

100,7

337,5

(cid:21)(cid:15)(cid:26)
2,8

1,8

2,7

4,1

1,9

3,0

:

:

(cid:21)(cid:21)(cid:20)(cid:15)(cid:28)
221,6

63,2

114,3

222,6

355,3

177,2
91,8

(cid:21)(cid:25)(cid:28)(cid:15)(cid:22)
464,9

257,0

271,1

173,8

128,0

149,4

90,1

206,5

(cid:28)(cid:23)(cid:15)(cid:25)
69,4

59,9

77,1

75,5

72,9

167,0

56,7

61,7

61,1

62,1

52,7

103,5

40,6

64,5

89,3

85,9

113,0

41,5

77,2

139,3

57,3

59,8

184,3

226,8

158,2

152,6

73,9

79,2

70,6

150,0

227,0

127,7

141,7

92,9

98,6

154,3

59,2

58,9

2,0

1,5

(cid:23)(cid:15)(cid:27)
4,8

2,9

2,9

6,9

11,6

3,1

2,5

5,5

(cid:22)(cid:15)(cid:27)
3,8

6,4

4,5

6,6

1,1

3,9
0,9

(cid:20)(cid:15)(cid:26)
1,0

1,7

1,8

2,4

2,6

3,9

1,2

1,7

(cid:26)(cid:15)(cid:23)
12,3

11,9

12,6

9,7

6,8

6,9

9,5

7,5

4,7

3,5

(cid:23)(cid:15)(cid:26)
4,8

4,7

2,4

6,1

6,7

3,7

3,7

3,4

(cid:20)(cid:20)(cid:15)(cid:24)
11,5

15,7

12,3

15,6

7,0

12,3
2,1

(cid:26)(cid:15)(cid:25)
5,2

7,8

9,0

9,5

10,3

9,9

6,2

7,7

(cid:25)(cid:15)(cid:20)
9,9

9,9

9,8

6,8

5,6

4,5

6,4

5,4

15,1

11,7

8,8

9,8

5,0

11,7

8,0

6,4

7,9

4,4

6,6

7,6

4,6

5,6

10,0

3,7

4,1

2,9

3,9

7,3

:

:

3,1

2,2

2,5

4,2

4,3

5,1

4,7

4,0

7,9

7,2

8,5

3,9

8,7

6,9

5,1

6,2

4,1

4,3

6,5

3,6

4,4

9,3

3,9

4,4

3,1

4,0

7,8

11,7

5,5

3,2

2,2

3,0

3,6

4,6

4,2

3,5

3,5

7,0

6,9

18,3

(cid:22)(cid:28)(cid:15)(cid:28)
39,9

40,7

35,5

40,0

40,3

41,8

34,9

44,7

(cid:21)(cid:22)(cid:15)(cid:25)
23,6

21,0

21,3

19,9

28,7

24,5
14,8

(cid:21)(cid:28)(cid:15)(cid:20)
28,1

26,0

32,9

23,9

24,3

25,9

27,8

35,2

(cid:22)(cid:19)(cid:15)(cid:22)
35,5

38,7

32,8

30,9

47,4

35,6

29,4

17,0

35,3

28,1

43,5

28,6

27,3

20,5

26,7

30,7

21,4

21,7

28,9

30,1

26,5

29,3

26,6

26,9

22,3

29,7

34,2

33,3

35,4

28,3

24,3

32,2

30,1

25,4

24,6

18,3

29,2

27,7

6,5

4,7

(cid:24)(cid:15)(cid:24)
5,5

5,4

2,7

6,6

10,5

5,3

6,5

4,4

(cid:20)(cid:20)(cid:15)(cid:25)
11,6

15,3

12,9

14,9

7,1

12,9
2,4

(cid:25)(cid:15)(cid:28)
4,8

7,1

9,0

7,7

7,3

6,7

6,2

7,4

(cid:24)(cid:15)(cid:20)
7,1

7,2

7,1

5,3

4,4

3,6

4,9

4,2

9,0

5,8

7,4

3,6

6,6

5,5

4,4

5,2

3,8

3,9

5,5

3,4

4,1

7,5

3,6

4,0

2,8

3,8

7,4

11,1

5,2

2,8

2,0

2,7

2,9

3,9

3,8

3,2

3,1

7,0

7,3

4,6

(cid:28)(cid:15)(cid:24)
9,6

7,9

7,2

12,1

17,1

10,8

7,6

7,0

(cid:22)(cid:20)(cid:15)(cid:21)
31,1

45,1

35,8

41,7

16,1

33,5
:

(cid:20)(cid:25)(cid:15)(cid:22)
10,0

17,8

18,8

22,3

23,8

23,1

13,0

15,2

(cid:20)(cid:21)(cid:15)(cid:22)
21,7

21,6

21,9

14,9

11,5

9,5

13,9

12,5

26,5

14,8

16,0

7,2

19,5

14,3

10,8

12,7

8,5

10,1

13,7

7,5

10,0

18,9

7,6

8,4

6,0

8,1

13,3

21,4

9,2

5,9

3,8

5,1

7,4

8,8

8,3

6,6

7,1

15,1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
’HPRJUDSK\

(GXFDWLRQ

Employment rate (% popn 
15-64), 1999

l

a
t
o
T

n
e
m
o
W

n
e
M

69,0

68,5

(cid:26)(cid:20)(cid:15)(cid:22)
71,7

71,3

82,3

68,0

65,4

70,4

60,9

66,4

(cid:25)(cid:26)(cid:15)(cid:27)
67,8

59,6

65,0

62,8

74,7

68,0
73,8

(cid:26)(cid:20)(cid:15)(cid:25)
78,2

72,4

70,6

69,8

71,0

65,3

74,0

73,1

(cid:26)(cid:20)(cid:15)(cid:25)
62,3

62,4

62,2

68,1

69,9

72,2

68,7

71,7

59,7

69,6

67,3

75,7

66,6

70,5

73,6

71,5

76,6

73,2

71,4

77,4

74,0

67,1

76,3

75,9

77,1

76,1

70,3

65,4

73,5

78,4

80,7

79,0

77,4

75,4

76,9

79,7

77,6

68,6

58,2

55,8

(cid:25)(cid:21)(cid:15)(cid:28)
63,6

62,2

77,1

60,2

53,5

60,0

41,0

57,2

(cid:25)(cid:23)(cid:15)(cid:28)
64,9

57,5

60,9

59,3

72,2

64,7
65,0

(cid:25)(cid:28)(cid:15)(cid:22)
78,2

69,5

66,7

68,3

69,4

67,5

69,9

69,0

(cid:25)(cid:23)(cid:15)(cid:26)
56,8

56,6

56,9

61,6

65,5

65,5

62,1

64,9

53,5

62,9

59,2

66,8

61,9

63,6

66,5

64,4

69,4

66,4

64,5

69,7

67,1

60,5

68,1

68,1

68,8

67,5

63,2

58,2

66,4

70,2

72,2

70,7

70,3

66,7

70,0

73,1

69,7

62,3

79,9

81,0

(cid:27)(cid:19)(cid:15)(cid:21)
80,2

80,8

87,6

76,3

77,4

81,0

81,0

76,9

(cid:26)(cid:19)(cid:15)(cid:27)
70,7

61,6

69,0

66,1

77,3

71,3
81,0

(cid:26)(cid:22)(cid:15)(cid:26)
78,2

75,1

74,5

71,3

72,4

63,2

77,9

77,1

(cid:26)(cid:27)(cid:15)(cid:23)
67,8

68,2

67,4

74,5

74,3

78,8

75,0

78,4

66,4

76,2

74,7

85,1

71,1

77,1

80,6

78,3

83,8

80,1

78,2

84,8

80,8

73,6

84,3

83,5

85,3

84,6

77,5

72,8

80,5

86,4

88,3

87,3

84,6

84,0

83,6

86,1

85,7

74,6

8
9
9
1

,
)
²

m
k
/
.
h
n
i
(

y
t
i
s
n
e
d

n
p
o
P

52,5

133,1

(cid:20)(cid:19)(cid:27)(cid:15)(cid:24)
106,6

167,8

72,3

278,5

19,0

69,8

104,9

333,7

(cid:20)(cid:25)(cid:15)(cid:28)
16,9

9,9

16,5

4,4

148,6

34,5
16,7

(cid:21)(cid:20)(cid:15)(cid:24)
273,2

38,7

90,9

13,2

5,5

3,4

24,2

59,8

(cid:21)(cid:23)(cid:22)(cid:15)(cid:19)
300,7

382,2

256,1

486,5

72,2

422,2

2004,4

464,8

2151,1

324,0

241,4

89,3

836,3

1038,9

266,8

418,0

314,1

105,2

410,1

205,5

240,4

2924,4

281,2

173,5

553,2

436,9

4538,3

8613,4

3504,3

418,8

365,5

468,7

424,3

421,6

204,5

284,4

193,4

137,8

8
9
9
1

,
)
0
0
0
(

l

n
o
i
t
a
u
p
o
P

664

346

(cid:28)(cid:28)(cid:25)(cid:27)
9464

3570

1710

3323

513

348

244

260

(cid:24)(cid:20)(cid:24)(cid:23)
5128

694

705

558

1354

1817
26

(cid:27)(cid:27)(cid:24)(cid:20)
1773

1489

1270

847

391

520

804

1758

(cid:24)(cid:28)(cid:21)(cid:22)(cid:26)
2590

1164

1426

6891

493

984

2577

1427

1409

5043

883

742

1304

2113

4169

2002

1545

623

5333

1213

1492

2628

5377

2181

1590

1606

7187

2761

4427

8004

2099

2560

1771

1575

4901

2162

1181

490

% population aged: (1998)

Educational attainment of 
those aged 25-59 (% total), 
1999

5
1

r
e
d
n
U

4
6
-
5
1

+
5
6

w
o
L

i

m
u
d
e
M

h
g
H

i

Region

18,9

19,6

(cid:20)(cid:26)(cid:15)(cid:19)
16,8

18,7

15,9

15,6

14,5

16,1

23,2

20,3

(cid:20)(cid:27)(cid:15)(cid:26)
18,7

18,3

19,3

21,3

18,9

17,6
18,6

(cid:20)(cid:27)(cid:15)(cid:27)
18,7

18,9

18,3

18,2

17,7

18,8

19,6

19,1

(cid:20)(cid:28)(cid:15)(cid:22)
19,1

19,6

18,7

19,7

18,0

19,2

20,4

19,4

19,7

19,3

18,8

17,9

19,1

20,1

19,0

18,9

19,7

17,9

19,7

18,5

18,9

20,7

19,0

18,5

20,0

18,7

19,6

19,6

19,5

18,9

19,7

17,9

18,8

19,2

18,1

18,7

17,4

17,7

68,0

68,4

(cid:25)(cid:26)(cid:15)(cid:28)
68,0

68,7

66,1

69,1

64,1

65,4

64,7

67,5

(cid:25)(cid:25)(cid:15)(cid:26)
66,7

65,3

64,6

65,9

69,6

66,2
65,2

(cid:25)(cid:23)(cid:15)(cid:20)
66,8

63,7

63,6

62,1

62,3

64,2

63,7

63,5

(cid:25)(cid:23)(cid:15)(cid:28)
64,8

64,9

64,8

64,6

64,2

65,5

64,9

64,1

64,2

64,8

64,2

64,4

65,0

65,1

65,0

65,3

65,5

63,2

64,6

65,0

65,5

63,9

65,0

64,5

65,8

64,9

67,5

68,9

66,6

64,9

66,9

63,4

65,2

64,3

63,4

65,0

61,9

62,3

13,2

12,0

(cid:20)(cid:24)(cid:15)(cid:20)
15,2

12,7

18,0

15,3

21,4

18,5

12,1

12,2

(cid:20)(cid:23)(cid:15)(cid:25)
14,6

16,4

16,1

12,8

11,5

16,2
16,2

(cid:20)(cid:26)(cid:15)(cid:21)
14,5

17,4

18,1

19,7

19,9

17,1

16,7

17,5

(cid:20)(cid:24)(cid:15)(cid:26)
16,1

15,4

16,6

15,7

17,8

15,3

14,7

16,5

16,1

15,9

17,0

17,7

15,9

14,8

16,0

15,9

14,8

19,0

15,7

16,5

15,6

15,4

16,0

17,0

14,2

16,4

12,9

11,5

13,8

16,2

13,3

18,7

16,0

16,5

18,5

16,3

20,7

20,1

26

29

(cid:26)(cid:27)
78

84

79

70

81

81

86

84

(cid:21)(cid:25)
25

27

28

24

23

26
31

(cid:21)(cid:20)
17

21

23

24

24

17

26

22

(cid:20)(cid:28)
24

27

21

21

16

16

21

21

27

21

22

17

24

20

21

22

20

18

24

19

20

28

17

19

12

18

18

20

17

13

13

12

14

15

15

14

15

19

67

63

(cid:20)(cid:21)
12

9

11

16

11

12

8

11

(cid:23)(cid:21)
42

47

42

45

36

44
43

(cid:23)(cid:28)
45

51

47

52

54

54

52

49

(cid:24)(cid:22)
56

53

58

54

62

53

54

56

51

55

58

55

56

54

56

55

56

58

54

53

57

52

57

55

58

60

44

34

50

55

50

54

56

61

57

55

59

61

8

7

(cid:20)(cid:19)
10

7

10

14

8

8

6

5

(cid:22)(cid:22)
33

27

30

30

41

30
26

(cid:22)(cid:19)
39

28

30

24

23

29

22

29

(cid:21)(cid:27)
21

21

21

25

22

32

25

23

22

24

20

28

20

26

24

24

24

24

23

28

23

21

26

26

30

22

38

46

33

32

37

35

30

24

28

31

26

21

    TIROL

    VORARLBERG

32578*$/
  CONTINENTE

    NORTE

    CENTRO (P)

    LISBOA E VALE DO TEJO

    ALENTEJO

    ALGARVE

  AÇORES

  MADEIRA

6820,(cid:18)),1/$1’
  MANNER-SUOMI

    ITÄ-SUOMI

    VÄLI-SUOMI

    POHJOIS-SUOMI

    UUSIMAA (SUURALUE)

    ETELÄ-SUOMI
  ÅLAND

69(5,*(
    STOCKHOLM

    ÖSTRA MELLANSVERIGE

    SYDSVERIGE

    NORRA MELLANSVERIGE

    MELLERSTA NORRLAND

    ÖVRE NORRLAND

    SMÅLAND MED ÖARNA

    VÄSTSVERIGE

81,7(’(cid:3).,1*’20
  NORTH EAST

    TEES VALLEY & DURHAM

    NORTHUMBERLAND AND TYNE & WEAR

  NORTH WEST (INC. MERSEYSIDE)

    CUMBRIA

    CHESHIRE

    GREATER MANCHESTER

    LANCASHIRE

    MERSEYSIDE

  YORKSHIRE & THE HUMBER

    EAST RIDING & NORTH LINCOLNSHIRE

    NORTH YORKSHIRE

    SOUTH YORKSHIRE

    WEST YORKSHIRE

  EAST MIDLANDS

    DERBYSHIRE & NOTTINGHAMSHIRE

    LEICESTERSHIRE, RUTLAND & NORTHANTS

    LINCOLNSHIRE

  WEST  MIDLANDS

    HEREFORDSHIRE, WORCESTERSHIRE & WARKS

    SHROPSHIRE & STAFFORDSHIRE

    WEST MIDLANDS

  EASTERN

    EAST ANGLIA

    BEDFORDSHIRE, HERTFORDSHIRE

    ESSEX

  LONDON

    INNER LONDON

    OUTER LONDON

  SOUTH EAST

    BERKSHIRE, BUCKS & OXFORDSHIRE

    SURREY, EAST & WEST SUSSEX

    HAMPSHIRE & ISLE OF WIGHT

    KENT

  SOUTH WEST

    GLOUCESTERSHIRE, WILTSHIRE & NORTH SOMERSET

    DORSET & SOMERSET

    CORNWALL & ISLES OF SCILLY

 
 
 
 
 
 
Region

    DEVON

  WALES

    WEST WALES & THE VALLEYS

    EAST WALES

  SCOTLAND

    NORTH EASTERN SCOTLAND

    EASTERN SCOTLAND

    SOUTH WESTERN SCOTLAND

    HIGHLANDS & ISLANDS

  NORTHERN IRELAND

%$/*$5,-$
  SOFIA STOLITSA

  SEVERNA BALGARIJA

  YUZHNA BALGARIJA

.<3526

&(6.$(cid:3)5(38%/,.$
    PRAHA

    STREDOCESKY

    JIHOZAPAD

    SEVEROZAPAD

    SEVEROVYCHOD

    JIHOVYCHOD

    STREDNI MORAVA

    OSTRAVSKY

((67,

0$*<$5256=¨*
    KOZEP-MAGYARORSZAG

    KOZEP-DUNANTUL

    NYUGAT-DUNANTUL

    DEL-DUNANTUL

    ESZAK-MAGYARORSZAG

    ESZAK-ALFOLD

    DEL-ALFOLD

/,(789$

/$79,-$

0$/7$

32/6.$
    DOLNOSLASKIE

    KUJAWSKO-POMORSKIE

    LUBELSKIE

    LUBUSKIE

    LODZKIE

    MALOPOLSKIE

    MAZOWIECKIE

    OPOLSKIE

    PODKARPACKIE

    PODLASKIE

    POMORSKIE

    SLASKIE

    SWIETOKRZYSKIE

    WARMINSKO-MAZURSKIE

    WIELKOPOLSKIE

    ZACHODNIOPOMORSKIE

520˘1,$
    NORD-EST

    SUD-EST

    SUD

    SUD-VEST

    VEST

    NORD-VEST

    CENTRU

    BUCURESTI

6/29(1,-$

6/29(16.¨(cid:3)5(38%/,.$

(FRQRP\

/DERXU(cid:3)PDUNHW

GDP per head (PPS), 
EUR15=100

Employment by sector (% 
total), 1999

8
8
9
1

8
9
9
1

8
9
-
7
9
-
6
9
9
1

e
g
a
r
e
v
a

e
r
u
t
l
u
c
i
r
g
A

y
r
t
s
u
d
n
I

i

s
e
c
v
r
e
S

82,4

84,3

:

:

91,7

:

:

:

:

74,4

(cid:29)
:

:

:

(cid:29)

(cid:29)
:

:

:

:

:

:

:

:

(cid:29)

(cid:29)
:

:

:

:

:

:

:

(cid:29)

(cid:29)

(cid:29)

(cid:29)
:

:

:

:

:

:

:

:

:

:

:

:

:

:

:

:

(cid:29)
:

:

:

:

:

:

:

:

(cid:29)

(cid:29)

84,0

80,1

71,1

95,7

97,6

83,3

80,3

71,1

96,7

97,7

128,3

102,6

127,8

102,8

90,3

76,9

76,6

(cid:21)(cid:21)(cid:15)(cid:22)
23,1

22,2

22,3

(cid:26)(cid:28)(cid:15)(cid:22)

90,4

76,8

76,8

(cid:21)(cid:22)(cid:15)(cid:22)
24,4

23,1

23,1

(cid:26)(cid:28)(cid:15)(cid:19)

(cid:25)(cid:19)(cid:15)(cid:22)
114,7

(cid:25)(cid:22)(cid:15)(cid:19)
118,8

46,9

57,4

52,9

52,7

53,4

51,5

56,6

(cid:22)(cid:26)(cid:15)(cid:21)

(cid:23)(cid:28)(cid:15)(cid:19)
72,4

48,0

54,1

37,8

33,3

33,1

37,4

(cid:22)(cid:20)(cid:15)(cid:19)

(cid:21)(cid:26)(cid:15)(cid:26)

(cid:29)

(cid:22)(cid:25)(cid:15)(cid:20)
36,0

33,2

26,1

32,9

31,9

32,8

52,7

31,8

27,4

27,5

35,6

40,3

27,8

27,7

38,1

35,2

(cid:21)(cid:27)(cid:15)(cid:21)
21,6

28,4

25,3

26,5

32,4

26,0

31,8

40,3

(cid:25)(cid:27)(cid:15)(cid:27)

(cid:23)(cid:27)(cid:15)(cid:25)

48,7

60,1

56,2

54,7

56,1

53,6

59,8

(cid:22)(cid:24)(cid:15)(cid:25)

(cid:23)(cid:26)(cid:15)(cid:28)
70,9

45,7

51,3

37,5

32,6

33,1

37,6

(cid:22)(cid:19)(cid:15)(cid:19)

(cid:21)(cid:25)(cid:15)(cid:26)

(cid:29)

(cid:22)(cid:24)(cid:15)(cid:20)
35,1

32,4

25,5

32,0

31,1

32,0

51,3

31,0

26,7

26,8

34,7

39,3

27,1

26,9

37,1

34,3

(cid:22)(cid:19)(cid:15)(cid:26)
24,1

31,0

27,8

28,4

34,1

28,4

34,6

43,5

(cid:25)(cid:26)(cid:15)(cid:26)

(cid:23)(cid:26)(cid:15)(cid:26)

2,4

2,7

2,0

3,7

2,0

3,7

2,0

1,0

5,2

5,0

(cid:21)(cid:23)(cid:15)(cid:23)
2,7

30,8

25,4

(cid:20)(cid:19)(cid:15)(cid:21)

(cid:24)(cid:15)(cid:22)
0,3

5,6

7,8

4,0

6,5

8,2

5,9

3,2

(cid:27)(cid:15)(cid:27)

(cid:26)(cid:15)(cid:19)
1,8

6,6

6,5

10,5

5,5

9,8

15,9

(cid:21)(cid:20)(cid:15)(cid:23)

(cid:20)(cid:26)(cid:15)(cid:21)

(cid:29)

(cid:20)(cid:27)(cid:15)(cid:20)
9,6

20,0

35,6

7,1

23,0

21,2

18,8

10,1

27,1

34,0

9,2

3,6

35,3

14,7

18,9

11,4

(cid:23)(cid:23)(cid:15)(cid:19)
57,7

43,9

50,7

58,6

39,5

41,6

33,2

6,5

(cid:20)(cid:19)(cid:15)(cid:27)

(cid:27)(cid:15)(cid:20)

25,2

29,5

30,3

28,3

25,3

28,4

23,9

26,4

23,2

26,5

(cid:22)(cid:21)(cid:15)(cid:25)
33,5

29,5

35,2

(cid:21)(cid:22)(cid:15)(cid:21)

(cid:23)(cid:19)(cid:15)(cid:24)
22,9

39,9

40,1

42,8

46,5

40,1

45,6

47,7

(cid:22)(cid:20)(cid:15)(cid:27)

(cid:22)(cid:23)(cid:15)(cid:23)
28,2

42,4

43,7

33,6

39,4

32,3

32,0

(cid:21)(cid:25)(cid:15)(cid:24)

(cid:21)(cid:24)(cid:15)(cid:27)

(cid:29)

(cid:22)(cid:20)(cid:15)(cid:23)
33,6

29,0

20,2

39,1

32,0

30,8

24,9

38,9

31,2

19,7

31,6

45,4

25,7

30,8

34,5

31,4

(cid:21)(cid:26)(cid:15)(cid:20)
20,5

23,8

27,3

20,0

27,5

28,6

38,3

37,5

(cid:22)(cid:26)(cid:15)(cid:26)

(cid:22)(cid:28)(cid:15)(cid:23)

72,2

67,7

67,5

67,9

72,5

67,7

74,1

72,6

71,4

68,5

(cid:23)(cid:22)(cid:15)(cid:19)
63,8

39,7

39,4

(cid:25)(cid:25)(cid:15)(cid:25)

(cid:24)(cid:23)(cid:15)(cid:20)
76,6

54,4

52,1

53,3

47,0

51,7

48,4

49,0

(cid:24)(cid:28)(cid:15)(cid:23)

(cid:24)(cid:27)(cid:15)(cid:26)
70,0

51,1

49,9

55,9

55,2

57,9

52,1

(cid:24)(cid:21)(cid:15)(cid:20)

(cid:24)(cid:26)(cid:15)(cid:19)

(cid:29)

(cid:24)(cid:19)(cid:15)(cid:24)
56,9

51,1

44,3

54,1

45,0

48,0

56,3

50,7

41,9

46,5

59,3

51,0

39,2

54,5

46,6

57,2

(cid:21)(cid:27)(cid:15)(cid:28)
21,8

32,3

22,0

21,4

33,0

29,9

28,5

56,0

(cid:24)(cid:20)(cid:15)(cid:21)

(cid:24)(cid:21)(cid:15)(cid:23)

r
e
p

s
n
o
i
t
a
c

i
l

p
p
a

t
n
e
t
a
p

.
r
u
E

9
9
-
8
9
-
7
9
9
1

v
a

,
h
n

i

n
o

i
l
l
i

m

47,5

50,8

35,1

78,3

65,9

138,4

84,7

42,8

17,1

17,1

(cid:29)
:

:

:

(cid:29)

(cid:29)
:

:

:

:

:

:

:

:

(cid:29)

(cid:29)
:

:

:

:

:

:

:

(cid:29)

(cid:29)

(cid:29)

(cid:29)
:

:

:

:

:

:

:

:

:

:

:

:

:

:

:

:

(cid:29)
:

:

:

:

:

:

:

:

(cid:29)

(cid:29)

Unemployment rate (%)

9
8
9
1

,
l
a
t
o
T

9
9
9
1

,
l
a
t
o
T

m
r
e
t

g
n
o
L

%

(

9
9
9
1

l

,
d
e
y
o
p
m
e
n
u

)
.
l
p
m
e
n
u

l

a
t
o
t

9
9
9
1

,
n
e
m
o
W

9
9
9
1

,
h
t
u
o
Y

6,2

8,6

:

:

11,1

:

:

:

:

17,7

(cid:29)
:

:

:

(cid:29)

(cid:29)
:

:

:

:

:

:

:

:

(cid:29)

(cid:29)
:

:

:

:

:

:

:

(cid:29)

(cid:29)

(cid:29)

(cid:29)
:

:

:

:

:

:

:

:

:

:

:

:

:

:

:

:

(cid:29)
:

:

:

:

:

:

:

:

(cid:29)

(cid:29)

5,2

6,9

7,7

5,6

7,6

4,5

6,7

9,6

6,0

9,4

(cid:20)(cid:26)(cid:15)(cid:19)
9,9

20,7

16,5

(cid:22)(cid:15)(cid:20)

(cid:27)(cid:15)(cid:24)
3,2

6,7

6,4

12,6

7,3

8,8

9,7

13,7

(cid:20)(cid:20)(cid:15)(cid:26)

(cid:25)(cid:15)(cid:28)
5,2

6,0

4,4

8,2

11,4

10,1

5,7

(cid:20)(cid:19)(cid:15)(cid:21)

(cid:20)(cid:22)(cid:15)(cid:26)

(cid:24)(cid:15)(cid:22)

(cid:20)(cid:21)(cid:15)(cid:22)
13,8

15,2

12,6

15,3

12,7

9,7

9,2

12,1

16,1

11,4

13,0

9,7

15,6

21,3

9,8

14,9

(cid:25)(cid:15)(cid:21)
7,1

7,3

6,3

5,4

6,6

5,6

7,1

3,4

(cid:26)(cid:15)(cid:22)

(cid:20)(cid:25)(cid:15)(cid:23)

28,4

24,5

24,0

25,4

31,1

19,2

28,2

33,4

37,8

41,2

(cid:24)(cid:22)(cid:15)(cid:22)
48,3

54,7

53,0

(cid:29)

(cid:22)(cid:25)(cid:15)(cid:24)
30,2

30,4

31,5

43,0

32,3

30,1

36,7

46,3

(cid:23)(cid:21)(cid:15)(cid:25)

(cid:23)(cid:26)(cid:15)(cid:28)
52,7

39,5

48,0

42,5

53,3

47,6

42,8

(cid:22)(cid:27)(cid:15)(cid:24)

(cid:24)(cid:22)(cid:15)(cid:21)

(cid:29)

(cid:23)(cid:20)(cid:15)(cid:25)
49,3

41,3

29,4

42,2

38,5

40,3

46,1

25,1

46,1

55,1

42,3

37,0

44,0

42,7

40,1

40,7

(cid:23)(cid:24)(cid:15)(cid:21)
51,9

40,8

42,8

34,8

51,4

38,8

54,5

39,7

(cid:23)(cid:20)(cid:15)(cid:28)

(cid:24)(cid:19)(cid:15)(cid:26)

4,7

5,5

6,2

4,5

6,0

3,6

5,4

7,3

5,0

7,7

(cid:20)(cid:25)(cid:15)(cid:27)
9,6

20,0

16,2

(cid:23)(cid:15)(cid:20)

(cid:20)(cid:19)(cid:15)(cid:20)
3,8

8,9

8,0

15,0

8,8

10,7

11,5

15,4

(cid:20)(cid:19)(cid:15)(cid:21)

(cid:25)(cid:15)(cid:21)
4,8

5,5

4,5

7,4

10,7

8,1

5,2

(cid:28)(cid:15)(cid:21)

(cid:20)(cid:22)(cid:15)(cid:22)

(cid:29)

(cid:20)(cid:22)(cid:15)(cid:21)
14,8

17,0

12,2

16,8

12,2

10,5

9,5

14,5

16,7

11,8

15,1

11,3

15,6

23,1

11,3

16,0

(cid:24)(cid:15)(cid:24)
5,8

6,8

5,3

4,4

6,0

5,1

7,0

3,8

(cid:26)(cid:15)(cid:24)

(cid:20)(cid:25)(cid:15)(cid:23)

10,2

14,8

16,2

12,4

16,3

8,4

14,7

20,6

11,0

16,8

(cid:22)(cid:25)(cid:15)(cid:26)
25,2

41,1

36,4

(cid:22)(cid:15)(cid:19)

(cid:20)(cid:25)(cid:15)(cid:25)
8,4

12,0

11,7

23,0

13,5

17,6

18,3

26,4

(cid:21)(cid:21)(cid:15)(cid:20)

(cid:20)(cid:21)(cid:15)(cid:22)
9,3

9,5

7,2

14,6

20,2

17,1

11,3

(cid:21)(cid:20)(cid:15)(cid:22)

(cid:21)(cid:22)(cid:15)(cid:23)

(cid:25)(cid:15)(cid:24)

(cid:21)(cid:28)(cid:15)(cid:25)
31,1

37,3

35,5

27,5

28,5

29,1

20,9

25,0

47,9

25,9

31,2

23,8

41,6

48,8

24,9

28,5

(cid:20)(cid:26)(cid:15)(cid:22)
21,2

19,7

17,9

19,1

14,9

12,9

16,9

9,2

(cid:20)(cid:27)(cid:15)(cid:24)

(cid:22)(cid:22)(cid:15)(cid:27)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
’HPRJUDSK\

(GXFDWLRQ

% population aged: (1998)

Educational attainment of 
those aged 25-59 (% total), 
1999

4
6
-
5
1

+
5
6

w
o
L

i

m
u
d
e
M

h
g
H

i

Region

119,2

23,1

63,9

13,0

Employment rate (% popn 
15-64), 1999

l

a
t
o
T

n
e
m
o
W

n
e
M

74,2

66,1

63,2

71,0

68,5

79,4

71,7

62,7

74,4

64,0

(cid:24)(cid:23)(cid:15)(cid:20)
:

:

:

(cid:25)(cid:28)(cid:15)(cid:23)

(cid:25)(cid:24)(cid:15)(cid:25)
73,1

67,1

67,6

61,7

66,3

65,4

64,4

59,9

(cid:25)(cid:21)(cid:15)(cid:19)

(cid:24)(cid:24)(cid:15)(cid:23)
59,6

58,5

63,0

52,7

48,1

48,6

54,7

(cid:25)(cid:24)(cid:15)(cid:19)

(cid:24)(cid:28)(cid:15)(cid:24)

(cid:24)(cid:22)(cid:15)(cid:27)

(cid:24)(cid:26)(cid:15)(cid:24)
56,1

56,2

58,9

51,9

59,4

59,9

61,6

54,7

56,8

58,8

57,3

54,8

57,6

51,7

59,5

53,8

(cid:25)(cid:24)(cid:15)(cid:19)
67,9

60,8

67,5

70,6

63,9

64,0

61,8

62,0

(cid:25)(cid:21)(cid:15)(cid:24)

(cid:25)(cid:19)(cid:15)(cid:27)

67,8

60,0

58,0

63,3

63,4

73,3

65,8

58,4

69,9

57,3

(cid:29)
:

:

:

(cid:29)

(cid:24)(cid:26)(cid:15)(cid:23)
68,3

57,2

58,9

53,0

58,2

57,1

54,9

51,7

(cid:24)(cid:27)(cid:15)(cid:19)

(cid:23)(cid:27)(cid:15)(cid:27)
53,4

51,4

55,3

46,9

41,6

42,8

46,5

(cid:25)(cid:20)(cid:15)(cid:23)

(cid:24)(cid:23)(cid:15)(cid:20)

(cid:29)

(cid:24)(cid:20)(cid:15)(cid:25)
50,6

49,9

54,3

43,8

53,6

54,8

56,0

45,6

52,6

52,5

50,0

47,6

54,3

46,5

52,7

47,9

(cid:24)(cid:28)(cid:15)(cid:26)
64,3

54,1

60,9

66,7

59,4

60,1

56,1

55,2

(cid:24)(cid:27)(cid:15)(cid:20)

(cid:24)(cid:22)(cid:15)(cid:27)

80,5

72,1

68,3

78,9

73,7

85,5

77,6

67,1

79,0

70,7

(cid:29)
:

:

:

(cid:29)

(cid:26)(cid:23)(cid:15)(cid:19)
78,2

77,1

76,3

70,5

74,6

73,7

74,0

68,2

(cid:25)(cid:25)(cid:15)(cid:22)

(cid:25)(cid:21)(cid:15)(cid:23)
66,6

65,7

70,8

58,9

54,9

54,4

63,2

(cid:25)(cid:27)(cid:15)(cid:28)

(cid:25)(cid:24)(cid:15)(cid:23)

(cid:29)

(cid:25)(cid:22)(cid:15)(cid:25)
61,8

62,6

63,5

60,5

65,5

65,0

67,3

64,6

60,7

65,3

64,7

62,2

60,7

57,1

66,5

59,9

(cid:26)(cid:19)(cid:15)(cid:23)
71,5

67,6

74,1

74,6

68,6

68,1

67,6

69,5

(cid:25)(cid:25)(cid:15)(cid:27)

(cid:25)(cid:27)(cid:15)(cid:19)

8
9
9
1

,
)
0
0
0
(

l

n
o
i
t
a
u
p
o
P

1068

2933

1868

1066

5120

504

1895

2352

370

1689

(cid:27)(cid:21)(cid:24)(cid:26)
1187

3205

3865

(cid:26)(cid:23)(cid:25)

8
9
9
1

,
)
²

m
k
/
.
h
n
i
(

y
t
i
s
n
e
d

n
p
o
P

159,4

141,2

142,3

139,4

65,5

68,7

105,3

180,5

9,3

(cid:26)(cid:23)(cid:15)(cid:22)
955,9

66,0

63,1

(cid:27)(cid:19)(cid:15)(cid:26)

(cid:20)(cid:19)(cid:21)(cid:28)(cid:24)
1197

(cid:20)(cid:22)(cid:19)(cid:15)(cid:24)
2412,4

1107

1179

1131

1491

1661

1242

1285

(cid:20)(cid:23)(cid:24)(cid:19)

(cid:20)(cid:19)(cid:20)(cid:20)(cid:23)
2862

1112

990

983

1280

1532

1354

(cid:22)(cid:26)(cid:19)(cid:21)

(cid:21)(cid:23)(cid:23)(cid:28)

100,5

66,9

130,8

119,9

118,7

136,5

231,4

(cid:22)(cid:22)(cid:15)(cid:23)

(cid:20)(cid:19)(cid:27)(cid:15)(cid:26)
413,7

98,8

88,5

69,1

95,3

86,3

74,2

(cid:24)(cid:25)(cid:15)(cid:26)

(cid:22)(cid:26)(cid:15)(cid:28)

(cid:22)(cid:27)(cid:24)

(cid:20)(cid:20)(cid:24)(cid:27)(cid:15)(cid:23)

(cid:22)(cid:27)(cid:25)(cid:25)(cid:25)
2984

2099

2241

1021

2668

3211

5066

1091

2120

1224

2182

4890

1327

1462

3348

1731

(cid:21)(cid:21)(cid:24)(cid:19)(cid:22)
3825

2949

3500

2424

2038

2856

2647

2264

(cid:20)(cid:28)(cid:27)(cid:22)

(cid:24)(cid:22)(cid:28)(cid:20)

(cid:20)(cid:21)(cid:22)(cid:15)(cid:26)
149,6

116,8

89,2

73,0

146,4

212,1

141,8

115,9

118,5

60,6

119,3

397,3

113,7

60,4

111,8

75,2

(cid:28)(cid:23)(cid:15)(cid:23)
103,8

82,5

101,6

83,0

63,6

83,6

77,6

1243,3

(cid:28)(cid:26)(cid:15)(cid:28)

(cid:20)(cid:19)(cid:28)(cid:15)(cid:28)

5
1

r
e
d
n
U

17,6

19,1

19,0

19,6

18,6

:

:

:

:

62,4

63,5

63,1

64,2

66,1

:

:

:

:

20,0

17,4

18,0

16,2

15,3

:

:

:

:

(cid:20)(cid:25)(cid:15)(cid:22)
:

16,3

:

(cid:21)(cid:23)(cid:15)(cid:21)

(cid:20)(cid:26)(cid:15)(cid:23)
14,7

17,0

17,4

18,1

17,8

17,8

17,8

18,5

(cid:20)(cid:28)(cid:15)(cid:21)

(cid:20)(cid:26)(cid:15)(cid:24)
15,8

18,0

16,9

17,5

18,6

19,7

17,4

(cid:21)(cid:19)(cid:15)(cid:27)

(cid:20)(cid:28)(cid:15)(cid:22)

(cid:21)(cid:20)(cid:15)(cid:22)

(cid:21)(cid:19)(cid:15)(cid:22)
18,8

21,0

21,3

21,1

18,3

21,4

19,1

19,8

23,0

21,8

21,4

18,9

20,3

22,4

21,3

20,3

(cid:20)(cid:28)(cid:15)(cid:21)
21,8

19,5

18,7

19,0

18,4

19,8

19,4

15,6

(cid:20)(cid:26)(cid:15)(cid:19)

(cid:21)(cid:20)(cid:15)(cid:19)

(cid:25)(cid:26)(cid:15)(cid:28)
:

67,4

:

(cid:25)(cid:23)(cid:15)(cid:26)

(cid:25)(cid:28)(cid:15)(cid:19)
69,1

68,7

69,0

70,1

68,6

68,3

68,9

69,5

(cid:25)(cid:25)(cid:15)(cid:26)

(cid:25)(cid:27)(cid:15)(cid:20)
69,0

69,2

68,4

68,1

67,0

67,0

67,3

(cid:25)(cid:25)(cid:15)(cid:24)

(cid:25)(cid:25)(cid:15)(cid:24)

(cid:25)(cid:26)(cid:15)(cid:19)

(cid:25)(cid:26)(cid:15)(cid:27)
69,3

68,0

65,4

68,5

67,7

66,7

67,3

69,2

65,6

65,1

68,3

70,2

66,2

67,7

67,6

69,3

(cid:25)(cid:27)(cid:15)(cid:19)
66,1

68,6

67,1

67,0

68,9

68,2

68,7

71,1

(cid:25)(cid:28)(cid:15)(cid:26)

(cid:25)(cid:26)(cid:15)(cid:26)

(cid:20)(cid:24)(cid:15)(cid:28)
:

16,3

:

(cid:20)(cid:20)(cid:15)(cid:20)

(cid:20)(cid:22)(cid:15)(cid:25)
16,3

14,3

13,6

11,9

13,6

13,9

13,3

12,0

(cid:20)(cid:23)(cid:15)(cid:20)

(cid:20)(cid:23)(cid:15)(cid:23)
15,2

12,7

14,7

14,4

14,4

13,3

15,3

(cid:20)(cid:21)(cid:15)(cid:26)

(cid:20)(cid:23)(cid:15)(cid:22)

(cid:20)(cid:20)(cid:15)(cid:27)

(cid:20)(cid:20)(cid:15)(cid:28)
11,9

11,1

13,3

10,4

14,1

11,9

13,6

10,9

11,4

13,1

10,3

10,9

13,5

9,9

11,1

10,3

(cid:20)(cid:21)(cid:15)(cid:26)
12,1

11,9

14,1

14,0

12,6

12,1

11,9

13,2

(cid:20)(cid:22)(cid:15)(cid:21)

(cid:20)(cid:20)(cid:15)(cid:21)

16

23

25

20

20

16

18

24

16

30

(cid:29)
:

:

:

(cid:29)

(cid:20)(cid:22)
6

13

12

18

13

12

13

14

(cid:20)(cid:21)

(cid:21)(cid:23)
17

23

23

27

28

30

29

(cid:29)

(cid:20)(cid:22)

(cid:29)

(cid:20)(cid:28)
18

21

22

17

24

16

18

21

18

26

17

14

21

24

18

22

(cid:21)(cid:28)
33

30

33

28

30

28

26

17

(cid:21)(cid:23)

(cid:29)

57

53

52

53

50

50

51

49

53

48

(cid:29)
:

:

:

(cid:29)

(cid:26)(cid:25)
70

78

78

74

78

76

78

77

(cid:24)(cid:27)

(cid:25)(cid:20)
60

64

65

63

60

58

60

(cid:29)

(cid:25)(cid:27)

(cid:29)

(cid:26)(cid:19)
70

70

67

75

66

69

68

72

71

63

71

75

69

67

72

69

(cid:25)(cid:21)
60

60

60

65

61

64

67

63

(cid:25)(cid:19)

(cid:29)

27

25

23

27

30

35

31

27

31

22

(cid:29)
:

:

:

(cid:29)

(cid:20)(cid:20)
24

9

11

8

9

    DEVON

  WALES

    WEST WALES & THE VALLEYS

    EAST WALES

  SCOTLAND

    NORTH EASTERN SCOTLAND

    EASTERN SCOTLAND

    SOUTH WESTERN SCOTLAND

    HIGHLANDS & ISLANDS

  NORTHERN IRELAND

%$/*$5,-$
  SOFIA STOLITSA

  SEVERNA BALGARIJA

  YUZHNA BALGARIJA

.<3526

&(6.$(cid:3)5(38%/,.$
    PRAHA

    STREDOCESKY

    JIHOZAPAD

    SEVEROZAPAD

    SEVEROVYCHOD

12

    JIHOVYCHOD

9

9

(cid:22)(cid:19)

(cid:20)(cid:24)
22

14

13

10

12

12

11

(cid:29)

(cid:20)(cid:27)

(cid:29)

(cid:20)(cid:20)
12

9

11

9

10

15

14

7

12

12

12

10

11

9

11

9

(cid:28)
7

    STREDNI MORAVA

    OSTRAVSKY

((67,

0$*<$5256=¨*
    KOZEP-MAGYARORSZAG

    KOZEP-DUNANTUL

    NYUGAT-DUNANTUL

    DEL-DUNANTUL

    ESZAK-MAGYARORSZAG

    ESZAK-ALFOLD

    DEL-ALFOLD

/,(789$

/$79,-$

0$/7$

32/6.$
    DOLNOSLASKIE

    KUJAWSKO-POMORSKIE

    LUBELSKIE

    LUBUSKIE

    LODZKIE

    MALOPOLSKIE

    MAZOWIECKIE

    OPOLSKIE

    PODKARPACKIE

    PODLASKIE

    POMORSKIE

    SLASKIE

    SWIETOKRZYSKIE

    WARMINSKO-MAZURSKIE

    WIELKOPOLSKIE

    ZACHODNIOPOMORSKIE

520˘1,$
    NORD-EST

10

    SUD-EST

7

7

9

9

7

19

(cid:20)(cid:25)

(cid:29)

    SUD

    SUD-VEST

    VEST

    NORD-VEST

    CENTRU

    BUCURESTI

6/29(1,-$

6/29(16.¨(cid:3)5(38%/,.$

 
 
 
 
 
 
(FRQRP\

/DERXU(cid:3)PDUNHW

Region

GDP per head (PPS), 
EUR15=100

Employment by sector (% 
total), 1999

8
8
9
1

8
9
9
1

8
9
-
7
9
-
6
9
9
1

e
g
a
r
e
v
a

e
r
u
t
l
u
c
i
r
g
A

y
r
t
s
u
d
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6,3
15,7
17,6
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17,0
32,1
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99,4
44,3
42,1
39,2

97,5
44,0
41,3
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3,4
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25,8
41,9
42,7
40,4

70,8
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48,7
50,7

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5,9
15,1
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Employment rate (% popn 
15-64), 1999

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% population aged: (1998)

Educational attainment of 
those aged 25-59 (% total), 
1999

5
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5
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Region

71,9
61,5
60,9
55,0

67,2
53,7
54,9
47,0

77,1
69,5
67,0
63,3

618
1877
1354
1541

310,9
123,9
83,5
98,2

18,0
19,8
21,3
23,6

70,2
68,4
67,3
66,3

11,8
11,8
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10,2

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    VÝCHODNÉ SLOVENSKO