The European Union Structural Funds and Regional Development. The Perspective of Small and Medium Enterprises in Eastern Poland

Abstract

The article concentrates on the role of European Union (EU) structural funds in the development of small and medium enterprises (SMEs). The analysis presented in this paper is based on the results of computer-assisted telephone interviews conducted with 394 representatives of enterprises localized in three Polish Voivodships: the Podkarpackie, the Lubelskie and the Podlaskie. The entire EU structural funds are based on the assumption that by additionally financing the development of SMEs, they influence regional development indirectly. Even though EU structural funds are not the only factor influencing economic growth and the creation of Gross Domestic Product, they affect the development potential of enterprises indirectly. However, from the perspective of the representatives of researched SMEs, EU structural funds are not so significant for commitment to investment. Actually, for SMEs in Eastern Poland, they have no effect on future investment plans. This bottom-up perspective researched in one of the poorest areas of the EU puts the assumption of the positive relation between the EU structural funds and regional development into doubt.     

Culture for competitiveness: valuing diversity in EU-Europe and the ‘creative city’ of Berlin

The European Union (EU) has in recent years propagated an approach to ‘culture’ that pulls together support for the creative and cultural industries with diversity-sensitive immigration and integration strategies, drawing on popular policy visions of the ‘creative’ and ‘intercultural’ city. This approach emphasizes the role that the diversity of culture, as personal resource, can play in enhancing economic competitiveness. The article examines its logic and possible effects through an analysis of EU documents and policy in Berlin. Berlin intersects with the EU’s agenda, using EU structural funds and participating in the European program ‘Intercultural Cities’. It is shown that the attempt to use ‘culture for competitiveness’ equates support-worthy ‘diversity’ with forms of culture that conform to (neo)liberal values and priorities. The attempt to shape a cosmopolitan place attractive for investment and the high-skilled feeds into gentrification processes that create ‘diverse’ neighborhoods where ‘difference’ has no place.     

The impact of EU Objective 1 funds on regional development: Evidence from the U.K. and the prospect of Brexit

Brexit means that regions of the United Kingdom will lose access to the EU Cohesion Policy. Have EU funds been effective, and what might be the consequences of an interruption of EU financial support? This paper studies the impact of “Objective 1” funding—the highest form of EU aid—in Cornwall and South Yorkshire, two of the U.K.’s most subsidized regions. Counterfactual methodologies assessing their labor market and economic performance provide evidence of a positive effect of EU Objective 1 funds. When in 2006 South Yorkshire lost Objective 1 eligibility, this massively reduced its share of EU funds and the region was unable to sustain the gains obtained in previous years. This suggests that while Structural Funds may be effectively improving socio‐economic conditions of poorer regions, the performance of subsidized areas could be deeply affected by a reduction (or worse, an interruption) of EU aid.     

Spatial and sectoral differentiation of support to innovative companies from EU funds in Czechia

This paper aims to introduce a case study of Czechia in distribution of the EU funds and their spatial patterns. EU funds receive plenty attention from both European society and the scientific community. However, there is a lack of detailed evaluations of spatial and sectoral differentiation, which might bring a better understanding to the whole EU funds system. This paper attempts to fill this gap with a method of geographical differentiation analysis of the Czech operational programme Enterprise and Innovations 2007–15, which should increase the competitiveness of industry and develop services for commercial activities. Historically, subsidies often go to peripheral regions at the borderland with Slovakia and Poland, while regions along the borders with Germany and Austria receive only a low level of support. Jurisdictions of the major recipients from hi-tech sectors are mainly in the close vicinity of the largest cities (Praha, Brno), which are natural centres of high technologically demanding sectors, but a high share of high-tech subsidies goes to some peripheral districts as well. These findings can contribute not only to the academic discussion about contradictory developmental impacts of subsidies but to the all-European debate on the EU funds purposes as well.     

Competing discourses of territorial development: tensions between cities and regions as a result of the new regionalism

Competition between metropolitan areas and old regions is one of the most visible results of the ‘new regionalism’ policy in the EU. The aim of this paper is to explain the newly emerged tensions between the regions and the cities within the EU in the context of the ‘new regionalism’. The newly introduced ‘Integrated Territorial Investments’ (ITI), a potentially powerful instrument of the cohesion policy of the EU was presented as ‘a flexible mechanism for formulating integrated responses to diverse territorial needs’. However, this flexibility produced a competitive relationship between cities and regions in their chase for money. Based on interviews with sub-state officials, the study focuses on two countries: Czechia and Slovakia. They are both major recipients of EU structural funds and the ITI tool is being implemented in both of them, however with different outcomes. Three variables have been identified as major factors causing the tensions: insufficient administrative capacity, political challenges and lack of shared understanding of priorities of regional development among sub-state actors.     

The Unbearable Instability of Structural Funds' Distribution

In order to promote “cohesion, competitiveness and cooperation” across Europe, the EU has established a common regional policy to support underdeveloped territories. This EU regional policy required to set up a very complex mechanism to implement such a huge effort to coordinate many interventions across highly differentiated territories. However, those territories are provided with very different institutional settings, and then the mechanism to coordinate all of them becomes particularly complex. The aim of this paper is to discuss the EU multi-level governance for structural funds (SFs), revising the origin, rationale and evolution of this policy in order to identify the limits of the institutional mechanism for the implementation of this policy. These limits will show their effects on the unstable distribution of SFs across the EU regions on a long-term perspective. Results show that the intervention of the EU is neither constant nor stable across regions, independently from their development paths. This instability should provide further arguments on the discussion about the SF policy and governance in order to take into considerations also institutional limits of the EU.     

Does EU cohesion policy work? Theory and evidence

This paper evaluates the effectiveness of European Cohesion Policy in the regions of 12 EU countries in the period 1991–2008, on the basis of a spatial growth model, which allows for the identification of both direct and indirect effects of EU funds on GDP per worker growth. We find that “Objective 1” funds are characterized by strong spatial externalities and a positive and concave effect on the growth of GDP per worker, which reaches a peak at the ratio funds/GDP of approximately 3 percent and becomes non‐significant after 4 percent. “Objective 2” and “Cohesion” funds have nonsignificant effects, while all the other funds exert a positive and significant effect, but their size is very limited. EU Cohesion Policy, moreover, appears to have increased its effectiveness over time. In the period 2000–2006 Objective 1 funds are estimated to have a median multiplier equal to 1.52, and to have added 0.37 percent to the GDP per worker growth. Overall, in the period 1991–2008, funds are estimated to have added 1.4 percent to the median annual growth, and to have reduced regional disparities of 8 basis points in terms of the Gini index.     

EU Regional Policy After 2006: Will Scotland Notice the Difference?

In order to accommodate the recent enlargements of the European Union (EU) there has been considerable changes to the operation of EU regional policy which means that Scotland along with other regions in the EU-15 will receive considerably less money from the Structural Funds in the future. This article discusses the extent to which the reduction in EU funding for economic development will impact on the Scottish economy. The issue is explored by considering the contribution, which Structural Funds have made in the past to economic development in Western Scotland, which has received the lion's share of the money allocated to Scotland. It is suggested that whilst the amount of economic development in Scotland will not be significantly reduced as a result of the decline in EU funds the types of projects and organizations receiving funding will alter because of changes made to the way in which the funds are administered in Scotland.     

The End of the Beginning?: Welsh Regional Policy and Objective One

'West Wales and the Valleys' now qualify for EU Objective One status, entitled to draw down up to 1.3 billion in EU funds, matched from public and private sources between 2000 and 2006. However, there are many issues raised by the process of organizing the subsequent programme. There are questions over policy focus in the economically diverse Objective One areas, how governance of these policies will work, and the wider implications of Objective One in financial and political terms. There is also debate over previous regional policy initiatives in a Wales that for many years had access to a relatively large share of the UK's regional policy budget and EU funds, yet still faced falling GDP per head as a proportion of the UK average, west Wales and the Valleys' very Objective One status relying on GDP per capita under 75% of the EU average.     

'Euroscepticism', Political Agendas and Spatial Planning: British National and Regional Planning Policy in Uncertain Times

Over the last 10 years, European Union interest in planning has increased significantly. Although land use planning remains a function of each member state, the legal obligations imposed by the EU in the fields of environmental law, structural funds, the Common Agricultural Policy, and Trans-European Transport Networks, have all impacted upon the context of the operation of the British planning process. Many of the EU initiatives have had to be transposed into domestic legislation, while others form an important-if oft-times uncertain-framework for British policy-makers. This paper examines the relationship between the European Union's policies and initiatives as they have potentially impacted upon the British planning system and the contents of Britain's national and regional planning policy guidance to local planning authorities in the assessment period 1988-1997. But the Conservative governments adopted a 'Eurosceptic' approach to their relations with Europe and, as demonstrated within this paper, also towards spatial planning issues that caused uncertainty in practice. The research indicates that although the EU has impacted upon British planning, particularly at the local level of government, this has not been reflected at the national and regional levels in planning policy documentation, mainly because of the 'Eurosceptic' attitude of the government. Policy-makers at both the national and regional levels in England, Scotland and Wales are now recognizing the need, however, to keep apace with changes occurring simultaneously with regard to enhanced European integration, and the approach of the Blair government since 1997 has re-focused the relationship between the EU and UK over spatial planning.     

Do EU funds crowd out other public expenditures? Evidence on the additionality principle from the detailed Czech municipalities’ data

European Union (EU) funds flowing into budgets of public sector organizations of its member states should be additional to their nationally funded expenditures. To investigate this additionality principle systematically, we develop a new empirical method. Our main hypothesis is that some of the EU-funded projects are crowding out national public expenditures. Not being able to reject the hypothesis would be consistent with violating the additionality principle. To test the hypothesis, we examine how EU funding translates into actual spending of relatively comparable municipalities of the Czech Republic. We innovatively match the municipal authorities’ budgetary data on EU-funded expenditure projects with their other, nationally funded, expenditures. We find no systemic crowding out of national public expenditures by EU funds at the level of operational programmes in the Czech municipalities’ data, which is consistent with no evidence of violating the additionality principle. Nonetheless, going down to the municipal level enables us to show how the results can pinpoint individual cases of EU fund’s potential mismanagement in Czech municipalities. Overall, we provide the first evaluation of the additionality principle at the level of individual recipients of EU funds and in doing so we develop a methodological approach potentially applicable to other fund recipients.     

Unwritten Factors Affecting Structural Funds: The Influence of Regional Political Behaviours on the Implementation of EU Cohesion Policy

While EU regional policy has the ambitious objective of supporting lagging regions and promoting inter-regional convergence, its impact is dependent on the ability of regional policymakers to secure and use EU funding to meet the region's needs. This paper aims to show under which conditions politics has a defining influence on the distribution, allocation and utilization of structural funds (SF), specifically in Objective 1 regions. The empirical analysis focuses on the 2000–2006 programming cycle in France, Germany, Italy, Spain and the UK. The results show that regions politically aligned with national governing coalitions tend to perform better in terms of received SF support and enjoy more flexibility in implementing SF. However, the influence of regional political behaviours on economic performances is very limited. The findings confirm the importance of politics in influencing SF implementation, but its limited influence on economic outcomes.     

Are we spending too much to grow? The case of Structural Funds

We evaluate whether the impact of EU Structural and Cohesion Funds (EUF) on Member States’ regional economic growth depends on the intensity of treatment, measured by the normalized amount of funds distributed in each region. We use an original data set that covers all the main sources of EUF and extend the regression discontinuity design to the case of continuous treatment. The results suggest an average positive effect on regional growth. The estimated conditional intensity‐growth function is concave and presents a maximum value. Therefore, the exceeding funds could have been allocated to other lagging regions without reducing the effect on growth.     

Ex-Ante Analysis of the Regional Impacts of the Common Agricultural Policy: A Rural–Urban Recursive Dynamic CGE Model Approach

A recursive dynamic regional Computable General Equilibrium model is developed to assess the economic impacts of two Common Agricultural Policy (CAP) scenarios in six NUTS-3 (Nomenclature of Territorial Units for Statistics) (NUTS-1: major socio-economic regions, NUTS-2: basic regions for the application of regional policies, NUTS-3: small regions for specific diagnoses) regions of the European Union (EU). The main goal of the analysis is to assess the scenario effects (change in production, prices, income, employment) in the rural and urban parts of these regions as well as on the different sectors. The two scenarios analysed are related to a 30% reduction in Pillar 1 (market measures and direct support to farmers) support and the introduction of an EU-wide flat rate level of Pillar 1 support complemented by a 45% increase in Pillar 2 (Rural Development Policy) funds. Results show that the overall gross domestic product effects are not significant, due to the relatively low importance of both the agricultural sector and CAP spending in the regional economies. However, impacts on the agricultural sector are quite important and differ according to the nature of the policy shock. Also, the structural characteristics of each case study influence the rural–urban and sectoral spillovers, including impacts on region-specific agricultural activity.     

Local Strategies within a European Policy Framework

This article discusses the Lisbon Agenda from the perspective of entrepreneurship policy. After a brief overview of the events leading up to the development of the Lisbon Agenda, the authors describe the goals and content of this policy framework as well as of the structural funds. Using examples of initiatives towards implementation at the local level, the authors illustrate the necessity to promote entrepreneurship in order to foster economic growth in communities and regions. We assess how the new European growth policy became translated into an action plan realized through structural funds and community initiatives and demonstrate that a greater focus on entrepreneurship policy could strengthen the Lisbon Strategy and aid in the achievement of its goals.     

Intergenerational Trust Funds in the Pacific

This paper serves to introduce the topic of intergenerational trust funds and their legal forms in the Pacific. It gives an overview of the nature of these funds, what distinguishes them one from the other, and their strengths and weaknesses from a legal point of view. Intergenerational trust funds started with primarily budget support purposes but have been adapted over the years to serve other purposes, in particular the protection of ecosystems and for climate adaptation and environmental protection and disaster relief. Following a consideration of the structural and operational aspects of some key Pacific funds, the paper concludes with a reflection on practice over the years and identifies what is or should be best practice for such funds.     

The Budget of the European Union and its Contribution to Finance Programmes for Health and Consumer Protection

The objective of this paper is to shed light on the dynamic financial aspects of the European Union's (EU's) strategy towards financing the programmes for health and consumer protection. Also it presents the perspectives of the new community approach to public health, while it recognizes that although EU's efforts, member states remain responsible for the organization and delivery of health services and medical care. Therefore, community's actions simply complements national policies. The paper analyses also aspects of the budgetary data provided by the European Commission Concerning the allocation of funds in all the areas and activities of the EU's budget focusing the attention on EU health programmes. The paper underlines the need for an integrated, transparent and proactive public health at all levels in the EU while, it emphasizes the need to promote, in European and national level, a broad strategy on public health to meet the key responsibilities and new challenges.     

European briefing

The objective of this article is to shed light on the main financial elements related to the last enlargement of the European Union (EU), which is the largest in its history. In their methodological assessment and analysis the authors identify the main financial impacts, in terms of trade flows, and also expenditures and contributions to the EU budget, while they make estimations for financing needs of main EU policies in the light of the next financial framework. Negotiations of the next financial framework for the EU, are going to be difficult, especially with ten new Member States joining in 2004. The authors are of the opinion that the financial pressures and also the need to sufficiently finance EU policies constitute the main factors which will determine the functions of the EU financial system in future. Enlargement poses also a severe challenge for EU structural and cohesion policies, the implications of which should be considered in designing the actions of the new financial framework from 2007 onwards.     

Finance,Home Building,and Urban Residential Structuring

Abstract: The aim of this article is to improve our understanding of finance in home building by introducing an actor perspective in structure‐oriented theories of capital circulation. David Harvey's three‐circuit theory, with fixity‐motion processes and (de‐/re)‐territorialisation, is taken as the starting point. The analysis is based on a case study of Norwegian home‐building finance, outlining the emerging structure of housing and finance under the Norwegian version of neoliberalism; comprising deregulation and re‐regulation phases. The article delineates today's home‐building finance, and identifies large banks, small banks, large investment funds and small investment funds as structural actors operating within actual fixity and motion processes, causing a distinct territorialisation of urban landscapes, as exemplified by gentrification.