4.2 EU regional policies

Initially, from 1957 to the mid-1970s, the European Community, in line with the dominant centralism of its member states, showed little interest in regional problems, with the exception of south-west France and the chronic ‘underdevelopment’ of southern Italy. Generalised regional policy only developed from 1973 when the UK and the Irish Republic joined, though ironically they have been among the most centralist of all member states. However, they wanted ‘compensation’ for their regional problems and their relative poverty and peripheral location with respect to continental markets, and these were major issues in the negotiations to join. In consequence, the European Regional Development Fund (ERDF) was set up in 1975, and regions in the north and west of Britain, all of Ireland, and north-west France were added to the recipients of regional aid.

However, it was only in the face of accelerated globalisation, and particularly the intensified competition from the world's two other main economic blocs based on the USA and Japan, that economic and social ‘cohesion’ became a major EU objective. The Single European Act was passed in 1986 to establish the SEM by 1992; and it favoured cross-sectoral development strategies at regional levels and ‘fine-grained’ region-to-region, rather than simply state-to-state, integration. In 1988 the structural funds (the ERDF, the Social Fund and the ‘guidance section’ of the Common Agricultural Policy) were doubled, and there was a decision to concentrate resources in regions ‘lagging behind’ – the so-called ‘Objective One’ regions. Altogether five regional ‘Objectives’ were created and these subsequently became a focus for alliances, as regions of the various types, especially those with ‘industrial’ and ‘rural’ problems, sought to defend their particular interests. Though it was mainly the state governments that did the negotiating, the EU insisted that they consult their regional ‘partners’. The ‘region-forming’ role of the Commission was clearly seen when it forced the Irish government to re-establish regional advisory bodies in 1988, one year after the government had dissolved them in a budget cut (Anderson and Goodman, 1995)! A decade later when the economic success of the ‘Celtic Tiger’ meant that the Republic of Ireland as a whole would lose its ‘Objective One’ status, the government redrew the regional map dividing the state into two regions in order to retain this status for the relatively poor counties to the north and west. But then for short-term reasons of electoral expediency, it included Counties Clare and Kerry (see Figure 1 in Section 2.3) which did not qualify for ‘Objective One’ status on the standard per-capita income grounds, and again the Commission stepped in, excluded these counties and determined a regional framework.

In 1988 the Commission created the Consultative Committee of Local and Regional Authorities to strengthen its own links with these sub-state bodies. The Commission's periodic ranking of regions for aid purposes also increased the political significance of regions, and the legitimacy of regionalism was further enhanced by the Regional Policy Committee of the European Parliament which sponsored two ‘Regions of the Community’ conferences in 1984 and 1991 (the 1984 conference leading to the creation of the Association of European Regions with over 170 members). The Commission also sponsored the Association of European Border Regions and in 1990 established INTERREG, which involved pooling the various structural funds available to the respective border regions in order to promote specifically cross-border economic cooperation. As well as directly furthering economic and social ‘cohesion’, regionalism has also been encouraged for the more political if less acknowledged objective of countering or bypassing state governments where they presented obstacles to integration. Regions and regionalism were allies or potential allies for the Commission vis-à-vis inter-governmentalism and the controlling states.

The Commission's 1991 regional discussion document Europe 2000 (an early example of the ‘new regionalism’, above, which drew on optimistic versions of ‘post-Fordism’) argued that with ‘flexible specialisation’ reducing the importance of scale economies, less advantaged regions could become prosperous by producing specialised products for niche markets. It argued that ‘flexible production systems’ were making firms more mobile and that their location decisions were increasingly influenced by qualitative life-style factors. Drawing on the experiences of ‘Silicon Glen’ in Scotland, Rennes in France, the Basque Country in Spain, and South Wales, and noting the potential of information technology and telecommunications for altering comparative advantage, it claimed that ‘new location factors’ were opening up economic opportunities for peripheral regions and more ‘even’ development. However, it remained the case that EU integration was mainly a market-led neo-liberal project and the redistributive measures to counter the negative effects of integration were (and still are) very limited. EU regional funds, for instance, typically amount to less than 1 per cent of total EU GDP (and less than the efficiency gains from the single market which largely accrue to the already better-off regions), though regional aid has increased and the structural funds have amounted to well over a third of the EU budget compared to less than a tenth in 1980.