Brussels, 19/07/2007 (Agence Europe) - In her speech presenting the 4th economic and social report at the European Economic and Social Committee (EESC) plenary session on 12 July in Brussels (EUROPE 9469/9470), Danuta Hübner underlined the fact that, on the basis of the most up-to-date statistics, “We need to establish and share a common understanding of the main challenges, which will confront European regions after 2013”. The commissioner considers that the 4th economic and social report already provides some initial indications:
1) demographic challenge. The rate of European population growth is almost nil today and it will begin to decline around 2020. Between 2000 and 2005, 86% of the growth in population will essentially come from migrations, indicated Ms Hübner. She also added that 85 EU regions (mainly in the new member states) were already experiencing this decline in their population, while 76 regions were registering a growth in population due to immigration. These tendencies will limit future growth and employment. Despite the fact that employment rates will continue to increase until around 2017, thanks to greater participation in the labour force, the decline will begin just afterwards.
2) challenge of changes in our economic structure. Many regions in the Union have a strong concentration of economic activity in sectors where competition from emerging economies is higher. The commissioner explained, therefore, that 39 regions which have more than 3% of their total employment concentrated in textiles and leather, a percentage that is as high as 13% in northern Portugal.
Hi-tech economic activities are also concentrated geographically in a few urban centres. This situation creates opportunities but also leads to congestion, poverty and high unemployment rates, as is the case in some cities in France, Belgium, southern Italy and Hungary. Another observation is that people are leaving the cities for the suburbs where there is greater growth. Economic activities are starting to follow this decentralisation pattern.
3) challenge of climate change. Many regions will be increasingly confronted by an asymmetrical impact of climate change, as well as with new challenges such as energy efficiency and supply. 7% of citizens in the EU live in high flood risk areas and 9% in regions where it rains on average 120 days a year. This has repercussions on tourism and farming in certain regions.
4) training capacity challenge. To remain competitive in a knowledge economy and reach the objectives in the Lisbon strategy (70% employment rates), 20 million new jobs need to be created by 2010, a quarter of which must go to women and another quarter to people aged 55-64. Danuta Hübner said that these jobs should ideally be created in most of the new member states, as well as in a number of southern regions of the EU15.
5) challenge of regional disparities. Regional disparities remain very important and have occurred as a result of EU enlargement. Despite the impressive growth rates in new EU member states and convergence of most EU15 regions, there are still 70 regions and a total of 123 million citizens living with a GDP/per capita that is 75% less than the Community average.
The Commission said: “We need to examine how policies at national and Community level have operated in the past and to what extent they are adjusting to respond to these challenges”.
Hübner notes that the 4th cohesion report once again contained some interesting indications. She highlighted the appearance of a new phenomenon: public investment over recent years has been declining as budgets are confronted with the consequences of an ageing population (reform of pensions, more costly education and health systems). At the same time, the commissioner indicated that we are witnessing a process in which decision making and public investment is gradually but steadily decentralising towards regional and local levels. Therefore between 2000-05, public spending at these levels grew by 3.6% a year, faster than GDP (1.7% and overall public spending (2.4%). As a result, the share of local and regional authorities in public investment increased from 25.4% to 26.8%. In some countries, such as Spain, Finland, Portugal and Denmark, this proportion has increased by 10 percentage points over the last decade. The report also highlights the fact that in four cohesion countries, public investment in infrastructure, human resources, modernisation and diversification of regional economies led to overall investment being 25% higher between 2000-05 than it would have been without cohesion policy. The Commission also pointed out that the European Social Fund (ESF) helps 11% of Europeans on the dole find work every year. The report formulates a whole range of questions on how cohesion policy could be adapted to new global challenges and how it could be improved to maximise its future impact. (gb)