The value of interregional cooperation: experiences from Europe

1. The value of interregional cooperation: experiences from Europe Robert Leonardi Director, ESOCLAB, London School of Economics 25 March 2010

2. The impact of the Single Market on national markets and frontiers • Objective of the single market was to peel away national borders in order to permit the free flow of goods, people, services and capital (Single European Act, Cassis de Dijon case, 1979) • Differences between Free Market, Customs Union, and Single Market in terms of management of agreements, interactions with third parties, and enforcement of rules on compliance, state aids, competition, cohesion • Europeanisation of policy sectors: single market, cohesion, agriculture, competition, single currency

3. Impact of market integration on “natural” economic basins • History of the European nation-state relatively recent. Question we need to ask is: what existed in terms of economic interaction before national borders interrupted the flow of goods and people across economic basins? • Examples of economic basins: Rhine valley, northern Mediterranean, Northern Adriatic, Via Egnatia, Black Sea Basin, Baltic Area, etc. • Formerly “central” economic areas in Europe became national peripheries: centre-periphery theory

4. Differences among types of economic integration • Free Trade Area: state-to-state bilateral agreements, minimal multi-lateral component, limited to goods, no institutional framework, no independent body to settle disaggrements, no arrangement for agreement with third parties.

5. Custom Union • Multi-lateral agreement on free circulation of goods • Elimination of tariffs & quotas on goods • Common institutions to manage agreements on free circulation of goods (Commission, Council, Court of Justice, Economic & Social Committee • Court to settle disagreements among partners on free circulation of goods (Van Gend en Loos case in 1962) • Common approach toward third parties outside of customs union

6. Single Market • All elements of Customs Union plus (Single European Act, 1986) • Elimination of all non-tariff barriers to trade • Free circulation of people, capital, services • Currency union, Maastricht Treaty, 1992 • Enhanced powers of European Parliament • Cohesion policy (SEA) • Presence of EU as legal entity (Lisbon Treaty, 2009)

7. Interreg Programmes: Community Initiatives • Pro-active approach to the recreation of local economic spaces • Cross-border programmes at local and provincial levels • Interreg has proven to be important in the preparation of further enlargement, especially in 2004 and 2007 (10 + 2 new member states) • 1999-2004 Interreg cross-border and Phare cross-border important initiatives in preparing enlargement to eight central-eastern European states and Norway. • European Economic Area (Norway, Switzerland, Iceland) • 2007-2013 ENPI programme beyond EU borders with Russia, Moldova, Ukraine, South Caucuses, Tunisia, Morocco,

8. Cross-border programmes 2007-2013

9. Transnational Cooperation Areas: 2007-2013

10. Conclusions • Cross-border cooperation vital to the creation of new economic space • Creation of synergies across national borders • Attraction of investments; creation of new economic opportunities • New logic for development of cross-border infrastructure; Trans-European Networks