The current state of regional policy and its perspectives

Abstract

The regional policy of the European Union (EU) is interconnected with many other policy areas. Therefore the approach of this paper is multi-dimensional. The three dimensions chosen are: the current state of regional policy itself and its medium and long-term perspectives. First of all, the success of regional policy is assessed as well as the issues arising from it. Then the paper focuses on the current multi-annual financial framework (MFF) which determines the medium-term developments of regional policy and presents new incentives built into the framework which aim to strengthen the efficiency of regional policy. In addition, it is examined how the new institutional arrangements of the European Union introduced by the Lisbon Treaty have changed and shaped the formation of budgetary policy. It is discussed if the so-called net balance perspective of the Member States is sufficient and it is argued that if the MFF were only a so-called zero-sum game then the Member States could never reach Pareto optimality.

Finally, the paper takes a look at the long-term perspectives of regional policy. At this point, the impact of possible further enlargements of the European Union is considered. One of the purposes of this paper is to assess quantitatively their impact on the budget and particularly on the structural funds of the EU. The analysis aims to respond to a few important questions regarding the hypothetical future of the EU budget. In order to do this, the gross domestic product (GDP) of the potential member states and how it influences the GDP of the EU are analysed. It is shown that only Turkey would create a greater impact in terms of regional policy. Meanwhile, the Western Balkan countries taken individually have only a slight impact on the average GDP of the EU, and only if we aggregate them would their total impact mean a more significant change, but it would still remain similar to the impact of the enlargement of 2007.