REX/111
EU-TURKEY JCC
14th meeting
of the
EU-Turkey Joint Consultative Committee
Brussels, 28 and 29November 2002
Draft Working Document
on
Regional disparities in TurkeyRapporteur: MrsGiacomina Cassina,
Member of the European Economic and Social Committee
1.Economic and social cohesion policy in Community integration
1.1 The concept underpinning economic and social cohesion policy was set out as far back as the 1957, in the Preamble to the Treaty of Rome, when the signatory states declared that they were "anxious to strengthen the unity of their economies and to ensure their harmonious development by reducing the differences existing between the various regions and the backwardness of the less-favoured regions". The conviction of the "founding fathers" was that economic integration should be characterised by competition between areas with similar or comparable, rather than disparate, levels of development and production. Although such disparities might provide some additional opportunities for development, they would not in the long term be conducive the comprehensive development of the regions' potential.
1.2 In other words, the objective of redistributing resources to the less-advantaged areas is both an expression of solidarity towards regions labouring under the greatest difficulties and a guarantee of growing markets and competitiveness for their more advanced counterparts.
1.3 A genuine, structured regional policy within the European Community only came about in 1975, when the Council set up the European Regional Development Fund (ERDF), with the aim of redressing the Community's main regional imbalances, particularly those caused by a predominantly agricultural economy, industrial change and structural unemployment. During its first years, however, the ERDF operated basically as a financial support mechanism for meeting the priorities set by the Member States.
1.4 Through a number of specific financial instruments, the Community supports policies to upgrade human resources (European Social Fund – ESF, set up in 1958), convert and modernise agriculture (European Agricultural Guidance and Guarantee Fund – EAGGF) and help disadvantaged regions (ERDF). These instruments are referred to collectively as the "Structural Funds".
1.5 In 1986, the Single European Act (the first amendment to the Treaty of Rome) enshrined economic and social cohesion as one of the Community's objectives. Indeed, this cohesion has assumed such importance that under Article130b (now Article159) of the Treaty establishing the European Community, the Member States must take account of it in coordinating their economic policies. The way Community policies and actions, and the single market, are designed and put into practice must also reflect the objectives of economic and social cohesion and help to achieve them. This was to be officially confirmed in the Treaty of Maastricht, Article2 of which declares that "the Community shall have as its task, by establishing a common market and an economic and monetary union (…), to promote (…) economic and social cohesion".
1.6 The requirement to make actions financed by the Structural Funds more consistent and effective led to reform of the funds. This was accomplished in 1988 with the adoption of five regulations by the Council, based on a series of fundamental principles: concentration, programming, partnership, additionality and proper management. Regional disparities were no longer indicated by the Member States, but were measured in accordance with territorial statistical units defined in uniform manner for the entire Community – NUTS. Under the reform, the amounts allocated to the funds were doubled.
1.7 Under the Treaty of Maastricht (1992), which also laid down the objectives and criteria for the establishment of economic and monetary union (EMU), the Member States accepted a mutual obligation to bring their economic and monetary policies into convergence, by seeking to balance their budgets, keeping down inflation, cutting public debt and achieving monetary stability. Building EMU was clearly more costly for countries whose development was lagging behind generally (and not in certain regions only). The Cohesion Fund was set up for these countries – Greece, Ireland, Spain and Portugal – with the specific aim of improving the environment and transport infrastructure and also civil infrastructure, especially for education and training. Lastly, a Financial Instrument for Fisheries Guidance (FIFG) was introduced. The overall resources allocated to the Structural Funds accounted for approximately one-third of the Community budget in the mid-1990s, as the next round of EU accessions began to emerge.
1.8 The 1994-1999 programming period followed the reform of the Structural Funds implementing regulations. During this period, the strategy for enlargement to the candidate countries was defined, through the guidelines set out in the Commission's Agenda 2000 communication (published in July 1997).
1.9 The second report on economic and social cohesion was published at the beginning of the next programming period (2000-2006), providing an interesting assessment of the outcome of more than twenty years of Community regional policy. More importantly, it raised a series of problems concerning the future of cohesion policy in an enlarged Community.
2.The second report on economic and social cohesion (2001)
2.1 One of the reasons for a positive assessment of economic and social cohesion policy is given as the increase in per capita GDP in all the Objective1 regions[1]. A number of Italian regions which had always been eligible for Community interventions have now either crossed the threshold of 75% of average per capita Community GDP, or are about to do so. Moreover, some countries which as a whole were lagging behind in development can point to important achievements: Ireland is a special example (per capita GDP has risen from 64% of the Community average in 1988 to 102% in 2002), but general living conditions have also improved in Greece and Portugal (the relevant figures rising from 58 to 66%, and from 61 to 73% respectively over the same period).
2.2 Factors for concern pointed out by the report include the fact that disparities in income between Member States and, more particularly, between regions, remain considerable: the average per capita income of the 10% of the population living in the most prosperous regions is 2.6times greater than that of the 10% in the poorest regions. This means that development and incomes have been more sustained in the richer than in the poorer regions. Furthermore, such gaps have been widening within some countries, accompanied by deterioration in urban areas.
2.2.1 These issues should not be taken to mean that economic and social cohesion policy has failed. It is important to note that some of these problems have been produced by the strong increase in competitiveness enjoyed by the more advanced regions following the consolidation of the single market and these regions' ability to attract local and foreign investment. The benchmark used – per capita GDP – has itself also been subject to some criticism from both economists and other sectors of society and even the administrations of some Member States.
2.3 The second report also devotes considerable attention to the outlook for regional policy. Its projections take account of the situation in the applicant countries, and this has triggered a lively debate both within and between the Member States. Enlargement to 25, 27 or 28 Member States will significantly alter the parameters for average income: none of the applicant countries (with the exception of Cyprus – to be checked against the situation for the entire island) has an average per capita income above 75% of the Community average, while a series of EU regions which are currently eligible for Objective1 funds will, according to the figures, be excluded from their scope. The report suggests that four options, and their effects, be examined:
continuing rigidly with the present 75% eligibility threshold;
providing temporary support (phasing-out) for regions which would no longer be covered as a result of enlargement;
setting a threshold higher than 75%, which would allow certain regions of the present Member States to be included;
fixing two different thresholds, one for the current EU countries and another for the future Member States.
2.3.1 Discussion is still in course, but the Council should reach a decision in the coming months. It must be borne in mind that no-one, unfortunately, is clearly and forcefully calling for an increase in the cohesion policy budget (which would have to be at the expense of other policies, for example agriculture), or even for a fresh look at the problem with a view to increasing the corresponding EU budgetary resources, presently amounting to less than 1.27% of Community GDP.
N.B.:the following points may be amended significantly if a single combined report by the EESC and Turkish rapporteurs is submitted.
3.Regional policy in Turkey with a view to accession
3.1 Turkey's size in terms of area and population, together with the diversity of economic activity and territorial structure immediately suggest that the country needs a robust regional development policy. However, under the terms of its Constitution, Turkey is a strongly unitary and centralised country. Territorial administrative units (departments and districts) have very limited powers: their functions are essentially executive, and are decided by delegation from the central administration on the basis of the principles of deconcentration[2], delegation[3] and deregulation. There are no real regional structures for handling power, but three types of local government exist: departments, municipalities and metropolitan areas, in addition to village administrations (populations of under 2,000). Turkey therefore does not at present possess any official regional subdivision, but this does not mean the country cannot prepare for the economic and social cohesion aspects of the acquis. In practice, what is important is not only administrative subdivision, but the ability to devise a statistical view of the territory, identifying areas for action and determining the best type of intervention to generate development. The lack of regional administrative structures, however, does militate against potential application of the principle of partnership within the country – a principle which, as seen in point 1.6 above, is essential to the rationale governing the use of the Structural Funds.
3.2 Turkey is fully aware of the need for prepare for harmonisation of its regional policy with European economic and social cohesion policy, and has undertaken a series of studies with a view to defining NUTS 2 levels in the country, as reported in the 2002 Regular Report on Turkey's progress towards accession (9October 2002).
3.3 Turkey consistently claims that it has launched a vigorous regional policy. Quite apart from the parameters and procedures under economic and social cohesion policy, Turkey's efforts in less developed areas should not be underestimated. The problem is that such action was initially designed more to meet production-related (sectoral) requirements rather than those of comprehensive and, most importantly, territorially integrated development. An example is the project for the coal- and steel-rich Zonguldak-Bartin-Karabük region, drawn up jointly by the Turkish State Planning Organization and the World Bank.
3.3.1 In contrast, the major development plan involving the construction of dams on the Tigris and Euphrates (GAP: south-eastern Anatolian programme), planned since 1989 and partly implemented, is something of a special case. The original project was recently revised and adjusted, and now sets ambitious objectives beyond irrigation and hydroelectricity, to encompass territorial management, sustainable development, enhancing living conditions, empowering local inhabitants, upgrading human resources, etc. The restructured GAP project should soon be approved by the Council of Ministers, and the Turkish government stresses that it has been designed in such a way as to fit far more easily into the Community regional policy approach than did the original version.
4.Questions (to be developed with the Turkish rapporteur)
4.1 Beyond the mechanisms, instruments and procedures for implementing economic and social cohesion policy, what view do Turkish socio-occupational organisations have of regional development?
4.2 What instruments and procedures can be used to monitor the effects of, and guarantee consistency between, the various policies and social and economic development of less developed regions in Turkey?
4.3 How do the social partners plan to be involved in carrying out the preparatory work for the Community acquis in the area of economic and social cohesion policy, with the aim of ensuring that the partnership principle is also applied to their contribution to the country's development?
4.4 … further points may be suggested at the EESC preparatory meeting.
[1]Regions in which per capita GDP is less than 75% of the average Community GDP and which are therefore entitled to resources intended to boost development