Narrowing economic disparities

Transition regions

Some regions of the EU that qualified for funding under the convergence programme in the 2007-13 period will no longer be eligible in the post-2014 period because their level of wealth exceeds the threshold of 75% of the average gross domestic product per person in the EU.

This is, in some cases, a sign of success, because it means that they have grown stronger economically over the lifetime of the previous programme. But it is politically difficult for regions, and their national governments, to accept that they will lose substantial funding from one year to the next.

This problem was particularly acute in the transition from the 2000-06 programming period to the 2007-13 period because eight poorer countries from central and eastern Europe joined the EU in 2004. The addition of these countries reduced the average per person income level substantially. Regions in member states that were in the EU before 2004 were no longer eligible for what was called ‘Objective One' funding, even though their level of economic development had not changed.

To address this ‘statistical effect', as it was known, the deal struck by EU leaders on the 2007-13 multi-annual budget included funding for ‘phasing-out' regions. From a total allocation for convergence regions (those under the 75% threshold) of €282.8 billion for 2007-13, €14bn was reserved for the 16 phasing-out regions in the 15 pre-2004 member states.

Regions no longer eligible for Objective One funding because of their own economic development over the period (rather than the statistical effect) were able to obtain funding from programmes designed to boost regional competitiveness and employment. These 13 regions were allocated €11.4bn from the €55bn budget for the European Regional Development Fund (ERDF) and the European Social Fund (ESF).

For the next programming period, Johannes Hahn, the European commissioner for regional policy, wants to help all regions that are no longer eligible by creating ‘transition regions'. This category would include all regions that were formerly eligible. Hahn estimates that this would apply to 60 million people, or 12% of the EU's population.

Simon Taylor