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THE REGIONS, THE CRISIS, GOVERNANCEAND THE FUTURE OF EUROPEAN POLICIES
CPMR Policital Bureau, Odessa, June 12th 2009
SUMMARY
1. Overview of global economic situation
2. Impact of the crisis on EU Regions• Survey• Policy Workshop and Manifesto
3. Regional policy• Barca report• Preparing Göteborg General Assembly
1. OVERVIEW OF GLOBAL ECONOMIC SITUATION
Based on forecasts from EU DG ECOFIN, International Monetary Fund, OECD, World Bank
Based on main available indicators: GDP, employment, wages, investments
THE EU IN THE WORLD: LOSING MOMENTUM GDP growth: 2009 as a black year for most advanced economies + Russia and Brazil
Asian economies to continue growing even though at lower speed
-8
-6
-4
-2
0
2
4
6
8
10
2008 2009 2010
% change on the preceding year
0
10
20
30
40
50
60
70
80
90
100
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
US=100
China
Japan
Eurozone
Middle East
RUIndia
AfricaBrazil
THE EU IN THE WORLD: LOSING MOMENTUM GDP/head horizon 2014: EU and Japan losing track of the US, China accelerating convergence during the crisis
22,6
21,2
10,8
8,6
6,6
4,6
19,518,3
15,5 15,5
5,5 5,7
4,1 3,8 3,43,23,73,8
15,0
8,5
0,0
5,0
10,0
15,0
20,0
25,0
%
2007 2014
THE EU IN THE WORLD: LOSING MOMENTUM Share of world GDP: the US and EU losing momentum, China and India catching up
WITHIN THE EU: VERY DIVERSE PICTURES
-14
-12
-10
-8
-6
-4
-2
0
2
4%
2009 2010
Only 1 EU country with positive GDP growth in 2009 (CY)
14 countries will remain in recession in 2010 (grey zones)
WITHIN THE EU: VERY DIVERSE PICTURES
-5000
-4000
-3000
-2000
-1000
0
1000
GD
P p
er
cap
ita in
pp
p c
han
ge 2
008-2
010 v
olu
me in
US
D
Only 4 EU countries with a GDP/head higher in 2010 than in 2008 (CY, PL, SK, EL)
In LU and IE, each citizen will have 4.000 to 5.000 US$ in his pocket
WITHIN THE EU: VERY DIVERSE PICTURES
0
5
10
15
20
25
2008 2009 2010
%
Unemployment raising in all EU countries
Unemployment rate above 10% in 12 EU countries in 2010, above 20% in Spain
65
66
67
68
69
70
71
72
73
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
%
Lisbon target for employment
WITHIN THE EU: VERY DIVERSE PICTURESThe Lisbon strategy 70% employment target missed after having been achieved in 2006
Back to the 2000 situation…
-15
-10
-5
0
5
10
15
% c
ha
ng
e o
n p
rec
ed
ing
ye
ar
2008 2009 2010
WITHIN THE EU: VERY DIVERSE PICTURESReal wages growth slowing down in most EU countries
Consecutive decrease in real wages in 2009/2010 in 4 countries (LT, EE, IE, LV)
UNCERTAIN OUTLOOK FOR 2010 AND BEYOND
EU GDP FORECASTS 2008-2010(Source: DG ECFIN)
-5
-4
-3
-2
-1
0
1
2
3
Sp. 08 Aut. 08 Jan.09 Sp.09
GD
P G
row
th (
an
nu
al p
erc
en
tag
e
ch
an
ge
) GDP 2008
GDP 2009
GDP 2010
EU INVESTMENT FORECASTS(Source: DG ECFIN)
-12
-10
-8
-6
-4
-2
0
2
4
Sp. 08 Aut. 08 Jan.09 Sp.09
Inve
stm
ent
in a
nn
ual
per
cen
tag
e ch
ang
e 2008
2009
2010
EU UNEMPLOYMENT RATE FORECASTS(Source: DG ECFIN)
0
2
4
6
8
10
12
Sp. 08 Aut. 08 Jan.09 Sp.09
Un
emp
loym
ent
rate
(%
of
acti
ve
po
p)
2008
2009
2010
Worsening forecasts for 2010 (GDP, employment and investments)
VARIOUS PERCEPTIONS OF THE SITUATIONCitizens feeling concerned for mid-term perspectives (Source: Eurobarometer jan/feb 09)
VARIOUS PERCEPTIONS OF THE SITUATIONMarkets comforted by G20 decisions and national recovery plans (Eurostoxx 50)
2. IMPACT OF THE CRISIS ON EU REGIONS CPMR Regions participating in the survey
2. IMPACT OF THE CRISIS ON EU REGIONS
Highest level Lowest level GDP/head in %EU27 Aberdeen City and Shire
153.5 Podlaskie
38.4 Population PACA
4,74 Million inhabitants Shetlands Islands
21.900 inhabitants (2006) Unemployment (% labour force)
Primorsko-Goranska 14%
Shetland Islands 1%
Diverse regional profiles
Difficulties to get quantitative data > Qualitative answers
2. IMPACT OF THE CRISIS ON EU REGIONS
•Some Regions expect the crisis to unfold only in the coming months
•Export-oriented and mono-sector Regions as well as declining industrial districts first and strongly hit
•Differenciated impacts within Regions according to economic specificities
No impact
Low impactMedium
generalized impact
Medium-strong impact on few
specific sectors
Strong generalized
impact
-Shetland Is.
-Aberdeen--Ionia Nisia-Stockholm
-Anatoliki Mak.- Thraki-Podlaskie-Itä-Uusimaa-Primorsko-goranska-Region Midtjylland-Principado de Asturias-Friuli V. Giulia-PACA;
-Basse Normandie-Österbotten-Päijät-Häme-Västra Götaland -Nordland-Blekinge County -Bretagne
-Toscana -Puglia-Illes Balears-Castillia y León-Cornwall -Hampshire-Lisboa-Vale do Tejo-Somerset-Wales -East of England
Most Regions medium or strongly impacted
2. IMPACT OF THE CRISIS ON EU REGIONSEU:2009 sharp fall of all indicators. Data are based on % change
on previous year... export to be the most affected one…..
-15
-10
-5
0
5
10
15
% c
ha
ng
e o
n
pre
ce
din
g y
ea
r
GDP per capita 2,7 2,4 0,5 -4,2 -0,3
Total Investments 6,2 5,4 0,1 -10,5 -2,9
Export 9,2 5 1,6 -12,6 -0,2
Employment 0,6 1,7 0,7 -2,6 -1,4
Consumption 2,3 2,2 0,9 -1,5 -0,4
2006 2007 2008 2009 2010
2. IMPACT OF THE CRISIS ON EU REGIONS
1110
666
333333
2222
1
0 2 4 6 8 10 12
Automotive industry and supply chainConstruction–HousingWood and processing
Maritime industry Retail
Tourism Oil/Petrol chemical
MiningFood processing (including fish.)
Chemistry industry Electronics-Engineering
Iron & steel industryTransports-Logistics
Financial sectorTextile
Services
Few sectors left unaffected but a same economic sector can be very differently impacted according to the Region in which it is set
2. IMPACT OF THE CRISIS ON EU REGIONS
17
7
5
5
5
5
4
3
3
2
2
2
2
1
0 2 4 6 8 10 12 14 16 18
Exceptionally rising unemploymentIncreasing household debt/diff iculties in payingStrong increase in claims for benefit payments
Sharp decline in job vacanciesDiff iculties in accessing credit for households
Reduced domestic demands of goods and services,Increases in homelessness and housing w aiting lists
House repossessionRaising poverty/diff iculties in accessing basic services
Salary reductionsNew labour market entrants unable to f ind w ork
Decrease of citizens incomeIncreasing insecurity and tensions
Increase in precarious w orks
Unemployment to severely affect the majority of surveyed regions (17), however the social outwards signs of the crisis are numerous...
impact of the crisis
regional response
Shetlands Is. (Scot.) P.Goronska (HR)
R. Midtjyl land (DK)Nordland (NO)
Aberdeen (Scot.)
Fr iul i V.G (IT )Toscana (IT )
Cornwal l (UK)
K. Makedonia-Thraki (EL)
Itä-Uusimaa (FI)
Västra Götaland (SE)
Österbotten (FI)
P. d Astur ias (ES)
Podlaskie (PL)
Ionian Is.
(EL)
PACA (FR) Bretagne (FR)Aqui taine (FR)
Päi jät-Häme (FI)
Wales (UK) Umbr ia (IT )
Pugl ia (IT )Casti l l i a y Leon (ES)
I l l es Balear s (ES)
East of England (UK)
Lisboa-V. do Tejo (PT)
Basse Normandie (FR)
Hampshi re (UK)
Somerset (UK)
Stockholm (SE)
Regionalized States
Decentralized States
Decentralized-Unitary States
Unitary States
2. IMPACT OF THE CRISIS ON EU REGIONS A broad range of regional responses raising the key question of governance
Budgetary / Fiscal measures • Support to public investment (short and long term)• Support to businesses / SMEs (access to credit with guarantee funds or preferential loan schemes)• Support to labour market (passive and active employment policies)• Social interventions
Regulatory measures• Reduction of administrative burden for businesses• Improve efficiency in public spending
Advisory measures and services•For the business community•For citizens
Governance measures• Strengthening existing partnerships• Creating new partnerships / ad hoc mechanisms
2. IMPACT OF THE CRISIS ON EU REGIONS According to competences and budgets, +/- formal measures packages (7 adopted a formal recovery plan) including
2. IMPACT OF THE CRISIS ON EU REGIONS
Approach Reasoning Regions
Ops have not been changed
1. The SF are not counter-cyclical measures; ÖsterbottenVästra Götaland
2. The measures contained in the operational programs are still valid
Ionian Is. Puglia Asturias
3 SF amount for a very small share of regional investments Päijät-Häme
4. Only delivery on the ground is likely to be re-adapted East of England (ESF)
5. OPs may be changed in the future should circumstances dictate
Ionia NisiaEast of England (ESF)
Ops needs to be partially revised
1 A certain re-prioritization of interventions along with speeding-up of project approvals and implementation is needed
A. Mak-Thraki PodlaskieToscana B. Normandie (ERDF)
2 Some shift in priorities have been made/will be made to readjust the Ops to the changed economic conditions
Lisboa-Vale do TejoItä-Uusimaa (ESF)
Ops needs a radical readjustment
The Structural Funds system should be made more flexible to make it easier for the private sector to access to fund.
Cornwall
Different approaches towards the use of Strucutral Funds in sustaining recovery
2. IMPACT OF THE CRISIS ON EU REGIONS
CPMR Policy Workshop, 16th July, Brussels
Manifesto: 10 signing Regions, 2 asking for amendments
CPMR Seminar « Impact of the crisis on post 2013 EU policies: what the regions expect », Marseille, 27th November 2009
Going on surveying regional situations?
CPMR initiatives
3. IMPACT ON THE DEBATE ON REGIONAL POLICY POST 2013
Low Structural Funds consumption rates (7% in average) used as argument by opposants to Objective 2
The crisis will have unpredictible impacts on GDP levels 2010/2011: which basis for regional policy envelopes calculation?
The « Barca » report proposes DG Regio embarrased with the « Barca » report: a CPMR Contribution?
On the one hand…
3. IMPACT ON THE DEBATE ON REGIONAL POLICY POST 2013
DG Regio embarrased with the « Barca » report supporting a modernized cohesion policy for all EU Regions
…but still shows no clear vision / ideas for the future
CPMR preparing its proposals for the Gothenburg AGM
On the other hand…
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