EU Regional Policy in the Southern Periphery: Lessons for the Future

Abstract

This article analyzes the European southern periphery's economic development and its experience with EU regional programmes in the light of recent discussions on EU regional policy after 2000. After EU regional policy support increased in 1989, many regions advanced considerably in development, but others did not. Many used structural funds transfers for focused development policies with significant growth effects, but other experiences disappoint. Some regions could not assure efficient programme management and EU regional policies are too complex. Future policies need to mobilize regional entrepreneurship and innovation, rather than competition for investment with generous grants, and to rebalance the present focus on infrastructure. Training is not sufficient to fight unemployment; creating new jobs also requires more flexible labour market regulation. As EU funding will decline after 2000 – with as much as a quarter of the peripheral regions losing ‘Objective 1’ status – correct policies are vital.