Prof. Dominic Power Uppsala University dominic.power@kultgeog.uu.se

1. Prof. Dominic Power Uppsala Universitydominic.power@kultgeog.uu.se European Integration Lecture II: Governmental policies to integrate Europe

2. Europeanisation: govt’s role Last lecture concentrated on Europeanisation as an organic process is proceeding This week I will look at the policies and ideas that have come from top-down Key questions: • How inevitable or organic has European economic integration been? • Can it be considered a purely artificial political project? • In the face of globalisation and superpower politics was it the only logical survival policy? • Is there an underlying political and ideology driving European economic and regional development?

3. EU regional econ development policies: ideological dimensions • Cohesion and stopping wars at the heart of early EU; integration and fighting unemployment and marginalisation now at the heart of EU social and economic policy • Certain keywords appear all the time: cohesion, stability, equality of opportunities, democratisation, integration, networks, cross-border, even development. A short history: • 1957 Treaty of Rome refers to the need "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". • 1958 European Social Fund (ESF) and the European Agricultural Guidance and Guarantee Fund (EAGGF). • 1975 European Regional Development Fund (ERDF). • 1986 The Single European Act lays the basis for a genuine cohesion policy. • 1989-93 The European Council in Brussels in February 1988 overhauls the operation of the solidarity Funds (now referred to as the Structural Funds) and allocates ECU 68 billion to them (at 1997 prices). • 1992 The Treaty on European Union, which came into force in 1993, designates cohesion as one of the main objectives of the Union, alongside economic and monetary union and the single market. Cohesion Fund set up. • 1994-99 The Edinburgh European Council (December 1993) increases cohesion policy 40%. Financial Instrument for Fisheries Guidance (FIFG) is created. • 1997 Treaty of Amsterdam confirms the importance of cohesion and also includes a Title on Employment. • 2000-2006 The Berlin European Council (March 1999) reforms the Structural Funds and adjusts the operation of the Cohesion Fund. New measures aimed at applicant countries in Central and Eastern Europe.

4. Regional policy: policies • Long history of continuing the tradition of supply-side economics… …Key supply-side solutions the EU has adopted: Funding and grants to: • Better infrastructure (structural funding) • Better workers (education) • Better research (research funding) Changes to laws, directives, etc.: • Better regulatory systems (more open, more American!) • Better access to resources (open up financial markets, improve banking, etc.) • Common standards so make cross border trade easier and safer… controversial! • Guidelines and common standards for qualifications, education, etc. • Same environmental standards across Europe • Same equality standards across Europe

5. Structural funds • Structural funds and changes to the legal framework are the main proactive policy the EU takes in order to integrate economies • 1/3 of EU budget: €213 billion • 3 different types of regions funded: • Objective 1: lagging behind • Objective 2: structural difficulties • Objective 3: need to catch up • Cohesion Fund: specific environmental and transport infrastructure projects in Spain, Greece, Ireland and Portugal… The Instrument for Structural Policies for pre-Accession (the Cohesion fund for new members) • Should not forget CAP funding… Peeter will be talking about this more

7. European Economic Union Policies: Supporting certain sectors • Old method (Keynesian economics): throw lots of money (borrowed by the state) at large firms that are in difficulty (most likely because they are obsolete) • Since the 1980s and neo-liberal wave in Europe government has started trying to be less interventionist in sectors… try not to bail out losers and instead to lay the foundations for growth • Cluster building/technopoles/science parks… regional agglomerations of specific activities… sectoral policy has gone local (this is what is also happening in all EU countries) • It tends to be certain sectors that attract all the attention: The knowledge economy…

8. Supporting the knowledge economy Who are they up against? • E.g. Singapore and Hong Kong’s knowledge economy investments What roles can govt. and EU play in supporting the knowledge economy? • Education and research: linking universities, universities+industry, supporting basic research • But this needs to be linked to the business world by entrepreneurs… something Western Europe is pretty bad at producing… • QUESTION: how does Europe create entrepreneurship? • QUESTION: how do we create culture? Who wants our culture and for how long?

9. EU dilemmas • Has structural funding, etc. worked… differences are narrowing but in some places more than others… how to get the best of local conditions (or avoid the most dangerous local conditions) • Enlargement • Must we accept uneven development and a barren countryside? Should we just leave some cities rot? Can’t we just leave it for summerhouses and Sunday walks? • You can’t buy me love… Kiruna and Brussels • How do we balance econ-devel with politics and democracy? Is econ-devel a local, national or supra-national task? What does this mean for conflicts between the different levels? • By chasing the knowledge economy are we in danger of creating new divisions and uneven development?