Communication from the Commission - Regions for economic change {SEC(2006) 1432}
Date: 2006-11-08
Institutions: European Commission
Subjects: EU initiative, EU regional policy, regional cooperation, regional development

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 8.11.2006 
COM(2006) 675 final 

COMMUNICATION FROM THE COMMISSION 

REGIONS FOR ECONOMIC CHANGE 

{SEC(2006) 1432} 

EN 

   EN 

 
 
 
  
COMMUNICATION FROM THE COMMISSION 

REGIONS FOR ECONOMIC CHANGE 

"Progress towards economic reform is under way, Europe is on the move. If we can redouble 
our energies, the renewed Lisbon strategy will be seen as a genuine turning point towards 
growth and jobs in Europe. It is time to move up a gear." 

José-Manuel Durão Barroso 

25 January 2006 

"The European Council welcomes the Commission's Communication 'Time to move up a 
gear'. It invites the Council, the Commission and the Member States to organise the exchange 
of experiences in a practical way." 

European Council 

24 March 2006 

EN 

2 

   EN 

 
 
Summary 

For the period 2007-2013 the Commission plans to focus, in partnership with Member States, 
two existing instruments of European Regional Policy – Inter-regional Co-operation and the 
testing  best  practice  for  economic 
Urban  development  network  programme  –  on 
modernisation and increased competitiveness. This new initiative will be called Regions For 
Economic Change and will further enhance the contribution of European Cohesion Policy to 
achieving  the  goals  of  the  renewed  Lisbon  agenda.  The  total  budget  will  be  of  the  order  of 
€ 375 million. 

Under  the  new  initiative,  Interregional  Co-operation  and  the  Urban  development  network 
programme  will  continue  to  operate  as  at  present.  Volunteer  networks  of  participating 
Member  States,  regions  and  cities  will  select  development  themes  which  interest  them  and 
pursue them through joint networks co-financed through the European Regional Development 
Fund  (ERDF);  participating  Member  States,  regions  and  cities  will  continue  to  play  the 
leading role in the animation and work of the network.  

A  new  element  for  2007-2013  will  be  that  the  Commission  will  itself  offer  the  networks  a 
number of themes focused on economic modernisation and the renewed Lisbon agenda. When 
Member States, regions or cities choose to pursue these themes, they will have the possibility 
of working more closely with the Commission. The second major novelty will be to place at 
the  heart  of  Regions  for  Economic  Change  a  fast  track  option.  This  will  provide  the 
opportunity for the Commission to play the lead role in testing selected ideas with a view to 
their rapid dissemination through the European Regional Policy programmes assisted by the 
ERDF,  the  'mainstream'  programmes.  Volunteer  networks  will  be  established  around  the 
selected themes and the Commission will animate them and collate results. This will provide 
the Commission with a testing ground for its economic modernisation ideas within the themes 
it  has  laid  down.  The  themes  will  be  chosen  and  the  programmes  animated  through  a 
coordinated effort by Commission services. 

Two  other  novelties  will  aim  to  reinforce  the  Communication  and  dissemination  of  best 
practice results in particular in relation to projects clearly contributing to the Union's jobs and 
growth agenda. The first will be the introduction of an annual Regions For Economic Change 
conference, with an associated website and publications, which will be held to coincide with 
the spring European Council – beginning in March 2007. The second will be the introduction 
of annual awards for the best project ideas in different categories of economic modernisation. 

It is further suggested that the initiative Regions For Economic Change could, where relevant, 
be  reported  to  the  European  Council  in  the  Commission's  annual  progress  reports  on  the 
renewed Lisbon agenda. 

The Commission services, Member States, regions and cities will be working in a coordinated 
way to secure the widest support for Regions For Economic Change and its fast track option. 
It is planned that the first thematic networks will be in operation by the end of 2006. 

EN 

3 

   EN 

 
Introduction 

1. European Cohesion Policy is responding to the challenge issued by President Barroso, in 
January 2006, to "move up a gear" in its efforts to create growth and more and better jobs. 

In the nine months which have passed since he issued his call that the Union should redouble 
its  efforts  to  bring  about  economic  modernisation,  Member  States,  regions,  and  cities, 
working  closely  with  the  Commission,  have  begun  intensive  preparations  for  new 
development  programmes  to  run  until  2013.  The  programmes  will  allocate  € 350  billion  of 
Community support and lever a further € 150 billion of investment from national public and 
private  sources  through  co-financing.  They  will  be  adopted  by  the  Commission  in  the  first 
part of 2007. 

2.  These  programmes  will  be  the  culmination  of  a  number  of  steps  the  Commission  has 
already taken to ensure that this € 500 billion investment effort concentrates Union support on 
economic modernisation and the enhancement of competitiveness. 

•  It  established  –  and  was  supported  by  the  European  Council  –  a  close  link  between  the 
regulatory  framework  of  European  Cohesion  Policy  and  the  renewed  Lisbon  agenda  by 
making  a  clear  connection  between  regional  economic  convergence  and  economic 
modernisation. 

•  It  introduced  the  idea  of  quantitative  targets  for  Member  States  to  help  them  and  their 
regions  to  concentrate  the  use  of  Cohesion  Policy  finance,  from  the  European  Regional 
Development Fund (ERDF) and the European Social Fund (ESF) and the Cohesion Fund, 
on modernising-investments. This concentration will be achieved by "earmarking" 60% of 
the investment effort for modernisation in the worst-off regions between 2007 and 2013. 
For  all  other  regions,  the  "earmark"  target  will  be  75%.  The  60%  target  is  voluntary  for 
EU-10 Member States and a number have already opted to be bound by it. 

•  The Council adopted the Community strategic guidelines on cohesion which focus on three 
modernising priorities, and detailed guidelines for investments for urban development.  

Each of these decisions by the  Commission is guiding  Member States, regions and cities to 
seek  those  investments  in  their  economic  convergence  programmes  which  will  bring 
maximum  added  value  in  economic  modernisation  and  increased  competitiveness.  They  are 
helping European Cohesion Policy move up a gear. More can be done. 

Regions For Economic Change and its fast track option 

3.  The  regional  convergence  and  competitiveness  and  employment  programmes  which 
allocate  European  Cohesion  Policy  finance  from  the  ERDF  and  ESF  are  managed  in  a 
decentralised way, in full respect of the subsidiarity principle. The choice  of investments to 
benefit from ERDF and ESF co-finance in 2007-2013 will be made, for the most part, by the 
Member States, regions and cities themselves.  

Regions  For  Economic  Change  will  be  dedicated  to  discovering  best  practice  in  economic 
modernisation in particular in relation to projects clearly contributing to the Union's jobs and 
growth  agenda  and  spreading  this  to  all  regions  in  order  to  help  stimulate  their  regional 
growth and reducing economic disparities. It will thus play an important part in implementing 
the Community strategic guidelines on cohesion, which emphasise the importance of sharing 

EN 

4 

   EN 

 
development  strategies  at  national,  regional  and  local  level  and  on  networking  especially  to 
ensure the transfer of ideas to mainstream national and regional cohesion programmes1. It will 
be particularly important for those Member States and regions which are furthest away from 
the Union's average performance.  

Regions  For  Economic  Change  will  focus  two  existing  instruments  of  European  Regional 
Policy  –  the  Interregional  Cooperation  programme  and  the  Urban  Development  network 
programme  –  around  economic  development  themes  set  by  the  Commission  and  coherent 
with the Community strategic guidelines on cohesion. It will function within the framework 
of  the  new  European  Territorial  Cooperation  Objective2.  The  two  instruments  will  in  total 
have a budget of € 375 million in 2007-2013. 

4. Regions For Economic Change will introduce a number of novelties. 

•  Regions  and  cities  will  continue  to  have  the  possibility  to  form  and  manage  their  own 
networks but will also be asked to do so around themes selected to connect Union policies 
to  the  modernisation  agenda.  The  Commission  will,  through  a  coordinated  effort  by  its 
services,  and  in  cooperation  with  Member  States,  set  out  the  themes  to  be  pursued  (see 
paragraphs 14 to 16 and Commission staff working document, SEC(2006) 1432). 

•  A new fast track option will provide a rapid testing ground for policy ideas emanating from 
Commissioners  and  their  services.  Within  this  option,  the  Commission  will  be  the  prime 
mover  in  setting  up  the  network  of  volunteer  regions  and  cities  and  animating  the 
programmes (see paragraphs 7 and 8). 

•  There  will  be  a  "two-way  bridge"  between  thematic  development  and  mainstream 
European  Regional  Policy  programmes.  Through  this  "two-way  bridge"  projects  tested 
under the € 375 million budget of the Regions For Economic Change instruments will be 
rapidly disseminated into mainstream programmes (see paragraphs 9 and 10). 

–  Regions  or  cities  which  have  already  developed  projects,  either  individually  or 
together  with  others,  which  prove  to  be  best  practice,  will  have  the  opportunity  to 
bring  their  experiences  into  the  fast  track  option  so  that  they  may  be  rapidly  and 
widely disseminated. 

–  Regions and cities participating in Regions For Economic Change will be asked for a 
commitment  that  they  will  proactively  introduce  best  practice  ideas  into  their 
mainstream  programmes.  They  could  achieve  this  by  introducing  a  Regions  For 
Economic  Change  priority  (in  ERDF  programmes)  or  a  specific  clause  into  their 
mainstream programmes. Such a commitment will be required for participation in the 
fast track option. 

•  Regions For Economic Change will incorporate an enhanced and vigorous communication 
effort to quickly spread best practice among all regions and cities of the Union. This will 

1 

2 

COM(2006)  386:  Proposal  for  a  Council  Decision  on  Community  Strategic  Guidelines  on  Cohesion, 
recital 13. 
The legal basis is provided by Article 7(3) of Council Regulation No 1083/2006 of 11 July 2006 laying 
down general provisions on the European Regional Development Fund, the European Social Fund and 
the  Cohesion  Fund  and  repealing  Regulation  (EC)  No  1260/1999.  For  further  detail  regarding  the 
implementation provisions see the ERDF Regulation (EC) No 1080/2006 of 5 July 2006. 

EN 

5 

   EN 

 
                                                 
include the introduction of annual regional innovation awards for projects which bring high 
quality results in terms of economic modernisation (see paragraphs 11 to 13). 

instrument  with  which 

5. These novelties will ensure that Regions For Economic Change provides the Union with a 
to  prompt  economic  modernisation  and  enhanced 
new 
competitiveness,  with  a  clear  role  for  the  Commission  within  the  fast  track  option.  It  will 
provide an opportunity for regions and cities to work on specific themes geared to economic 
modernisation.  It  will  further  stimulate  progressive  thinking  in  the  implementation  of 
programmes  assisted  by  European  Regional  Policy  through  the  ERDF  and  ensure  a  steady 
improvement in their contribution to the modernisation objectives. 

6. Regions For Economic Change will be easy-to-operate and introduce no new bureaucracy 
since it will operate through the existing instruments of the Interregional Cooperation and the 
Urban Development  network  programmes. It will fully respect the principles of subsidiarity 
and decentralisation. Regions For Economic Change will thus complement the decisions and 
actions already taken by the Commission and the Council. 

7.  Beyond  assuring  co-finance  for  Regions  For  Economic  Change  programmes  through  the 
European  territorial  cooperation  objective  of  European  Cohesion  Policy,  the  Commission 
will, for networks operating within the fast track option, provide ongoing expert support and, 
if necessary, administrative back-up. The co-financing of proven ideas can be taken over by 
ERDF-assisted European Regional Policy programmes and finance may also be sought from 
schemes  operated  by  the  European  Investment  Bank  and  the  European  Bank  for 
Reconstruction and Development. The JASPERS technical assistance initiative may also play 
a part in project development. 

8. The fast track option will be part of Regions For Economic Change. As with the rest of the 
initiative, it will be voluntary for regions and cities but will have the important difference that 
the  Commission,  rather  than  regions  and  cities,  will  be  the  prime  mover.  The  Commission 
will  set  out  the  themes  to  be  pursued  in  co-operation  with  Member  States;  will  invite 
interested regions and cities to become part of the networks pursuing the theme; will animate, 
together  with  the  managing  authorities,  the  thematic  networks;  and  will  collate  results. 
Furthermore, networks within the fast track option will be offered expertise to develop action 
plans for testing and evaluating best practice methods. Like the rest of Regions For Economic 
Change,  it  will  work  through  the  existing  mechanisms  for  Interregional  Cooperation  and 
Urban Development. 

The "two-way" bridge 

9. Experience has demonstrated the need to establish a firm link between pilot schemes which 
develop  new  ideas  and  the  European  Regional  Policy  programmes  assisted  by  the  ERDF 
which carry the bulk of the policy's budget. This will be critical to the speedy and widespread 
dissemination  and  implementation  of  new  ideas.  Regions  For  Economic  Change,  especially 
under its fast track option, will introduce arrangements which will make possible a two-way 
exchange.  The  initiative  will  also  build  upon  the  experience  of  the  EQUAL  Community 
Initiative,  which  is  making  an  important  contribution  to  the  spread  of  best  practice  in  the 
domains of action co-financed by the ESF.  

First,  regions  which  have  developed  ideas  which  prove  to  be  examples  of  best  practice  – 
either  in  their  ERDF-assisted  European  Regional  Policy  programmes,  or  other  EU 

EN 

6 

   EN 

 
programmes or their own national or regional schemes – will have the chance to have them 
evaluated under Regions For Economic Change and disseminated throughout the Union. 

Second,  Member  States,  regions  and  cities  participating  in  Regions  For  Economic  Change 
networks  will  be  asked  to  demonstrate  that  they  make  a  bridge  between  their  work  within 
Regions  For  Economic  Change  networks  and  their  mainstream  programmes.  This  aims  to 
ensure  rapid  dissemination  among  the  mainstream  programmes  of  ideas  piloted  by  the 
initiative and this bridge will be essential for regions participating in networks within the fast 
track option. 

10. This "bridge" between the two types of regional development activity could be ensured by 
various  easy-to-meet  requirements  –  for  example,  through  the  inclusion  of  a  Regions  For 
Economic  Change  priority  (in  ERDF  programmes)  or  a  specific  commitment  clause  in  the 
mainstream programmes of regions and cities participating in the initiative which will ensure 
that their programmes have the scope to take up new ideas. 

An enhanced communication effort 

11.  Effective  communication  will  be  a  key  part  of  Regions  For  Economic  Change.  It  will 
ensure  the  rapid  dissemination  of  ideas,  results  and  details  of  the  best  practice  projects. 
Foundation for this will be a co-ordinated effort by the information units of the participating 
Commission services in the organisation of seminars, publications and other communication 
tools. 

12. A key element  of this will be the Regions For Economic Change conference  to  be  held 
each  year  and  timed  to  coincide  with  the  spring  European  Council.  This  will  clearly 
demonstrate 
to  economic 
the  contribution  which  Community  policies  are  making 
modernisation  and  the  achievement  of  Lisbon  objectives.  The  first  of  these  annual 
conferences will be held in March 2007. 

The  March  2007  conference  will  "switch-on"  a  new  website  for  the  exchange  of  good 
practice. At its launch the website will contain details of 50 projects in the key policy areas of 
research,  technical  innovation;  information  society;  sustainable  economic  development;  and 
financial engineering. They will be drawn from the experience of on-going programmes. By 
end-2007 the number of projects will have risen to at least 150. Each year at the Regions For 
Economic Change conference, the Commission will publish a volume detailing best-practice 
projects drawn from the different sources covered by the initiative. 

13.  Integral  to  the  communication  policy  of  Regions  For  Economic  Change  will  be  the 
creation of annual innovation awards for best projects in the area of selected themes linked to 
economic  modernisation.  These  awards  will  improve  information  about  good  practice, 
stimulate  the  exchange  of  experience  and  provide  visibility  for  progressive-thinking.  They 
will be presented each year at the Regions For Economic Change spring conference. Details 
of the first application of the awards will be announced at the conference in March 2007. 

EN 

7 

   EN 

 
Regions For Economic Change and its fast track option: a summary 

The following table summarises the characteristics of Regions For Economic Change, paying 
particular attention to its fast track option: 

Networks to pursue the themes for 
economic modernisation and 
competitiveness 

Regions For 
Economic Change 

Fast track option 

Yes 

Yes 

Prime mover in establishing networks 

Region or city 

Commission 

Lead actor in the network 

Region or city 

Region or city 

European Regional Policy support for the 
network programme 

Additional Commission support for 
expertise and administration 

Yes 

No 

Yes 

Yes 

Evaluation of results 

Regions and cities 

Commission, regions 
and cities 

Commitment to proactively introduce best 
practice ideas into mainstream programmes 

Desirable 

Essential 

Participation of programme managing 
authorities in networks 

Participation in the annual Regions For 
Economic Change awards 

Desirable 

Essential 

Yes 

Yes 

Quick dissemination of results 

Desirable 

Essential 

Themes for modernisation 

14. The new regulatory framework for European Cohesion Policy 2007-2013 sets out, under 
the over-arching objective of economic modernisation, strategic guidelines for investment by 
Member  States  and  regions.  It  calls  upon  them  to  maximise  the  convergence  effect  of  their 
investments by concentrating, as far  as  is  useful, on the themes indicated by the guidelines. 
The choice of theme will vary between Member States and regions according to their relative 
economic strength. This effort of concentration will be reinforced by "earmarking" targets. 

15.  The  strategic  guidelines  offer  to  Member  States  and  regions  a  range  of  themes  around 
which they might build their economic development programmes. The three thematic sets of 
guidelines and the cross-cutting territorial dimension can be summarised as follows: 

EN 

8 

   EN 

 
 
 
•  improvement  of  the  attractiveness  of  Member  States,  regions  and  cities  by  improving 
accessibility,  ensuring  adequate  quality  and  level  of  services,  and  preserving  their 
environmental potential; 

•  encouragement of innovation, entrepreneurship and the growth of the knowledge economy 
by  research  and  innovation  capacities,  including  eco-innovation,  new  information  and 
communication technologies; 

•  creation  of  more  and  better  jobs  by  attracting  more  people  into  employment  or 
entrepreneurial activity, improving adaptability of workers and enterprises and increasing 
investment in human capital; 

•  achievement  of  a  high  overall  growth  potential  and  an  even  regional  development  by 

paying particular attention to specific geographical circumstances. 

These guidelines are similar to the areas for priority action identified by the European Council 
in  March  2006:  investing  more  in  knowledge  and  innovation;  unlocking  business  potential, 
especially  of  SME's;  and  increasing  employment  opportunities  for  priority  categories.  The 
European Council also drew attention to the importance of investments in the field of energy. 
As  a  general  principle,  the  initiative  will  contribute  to  the  Cohesion  policy  cross-cutting 
principles  of  promoting  gender  equality,  reducing  disabilities  and  promoting  sustainable 
development.  

16.  Considerable  work  has  already  been  undertaken  by  different  Commission  services  to 
establish  the  themes  to  be  pursued  under  Regions  For  Economic  Change.  The  themes  are 
described more fully in Commission staff working document, SEC(2006) 1432. 

The  cooperation  between  Commission  services,  which  has  led  to  the  establishment  of  the 
themes,  will  continue  throughout  the  implementation  of  Regions  For  Economic  Change, 
especially  under  its  fast  track  option.  The  Commission's  leadership  of  the  various  thematic 
networks  under  the  fast  track  option  will  be  shared  between  different  Commission  services. 
The aim is to maintain a close link between Community policies and the thematic networks, 
thus  providing  a  chance  for  different  policies  to  pilot  important  ideas  which  link  them  to 
economic modernisation. 

Next Steps 

17.  The  Commission  services,  Member  States,  regions  and  cities  will  be  working  in  a 
coordinated way to secure the widest support for Regions For Economic Change and its fast 
track  option.  The  Finnish  Presidency  will  conclude  discussions  at  an  informal  meeting  of 
Regional Policy ministers to take place in Brussels on 21 November by asking Member States 
to endorse the refocusing of the existing instruments together with the Commission's choice 
of objectives and themes. 

The Commission services are well advanced in the organisation of the fast track option and it 
is planned that the first thematic networks will be in operation by the end of 2006. 

EN 

9 

   EN