Lecture of Filiz Hyusmenova at the conference “Different Regions, One Standard” held under her aegis in Sofia on December 7, 2007
REGIONAL POLICY AND ITS IMPLEMENTATION ON A NATIONAL LEVEL

Dear Ladies and Gentlemen, thank you for your presence at today’s conference “Different Regions, One Standard,” It is my pleasure to present to you the key parameters of the European regional policy.
The European Union is a prosperous economic zone in the world. After the new states joined it, its inner market has a human potential of over 480 million people. Yet the economic and social differences among member-states and among individual regions weaken its general dynamics.
These differences now are twice bigger in Europe of the 27 countries and 268 regions than in Europe of the 15 countries. Regions like London, Luxemburg, and Brussels have up to 303% of the average gross domestic product of the EU per capita, while the Bulgarian regions of North-west, North Central and South Central have 26% of the EU GDP per capita. These figures are shown on the map. European regions with the lowest GDP and lowest purchasing power within the EU are shown in red, and the most advanced regions are shown in green.
One of the possibilities for overcoming differences and drawing regions together is the regional policy implemented by the European Union. It is a tool of financial solidarity and a powerful factor of economic integration. For its regional policy over 2007—2013, the EU allotted 347.4 billion Euro which is somewhat more than one third of its total budget.
Through this policy the Union strives to assist: the catching up of backward regions; the restructuring of industrial zones in crisis; the economic diversification of rural areas with dwindling farm production; the renewal of disintegrating urban areas. The main concern of this policy is the opening of new jobs. In a nutshell, its goal is to strengthen the economic, social and territorial cohesion of the Union.
This solidarity policy has real dimensions. It helps people find a job and live better in their own country, region, district or village. Through its implementation highways, high-speed trains and airports bring outlying regions closer to the big centers of economic development. Small and medium-size enterprises are created in backward regions. The environment in former waste disposal areas of industrial regions is improved. The information society is advancing in rural areas. Education and entertainment services are developed in the suburbs.
The EU experience has shown that regional policy can be effective only if concentrated on a limited number of sufficiently big territories. That is why the normative basis of structure funds adopted in 1999 answers the effort to curb the spread of assistance programs and clarifying the criteria for the choice of regions whose development needs public assistance the most. By the way, part of the structure funds is devoted to disadvantaged social groups on the territory of the entire Union, regardless of their geographic location.
That is why the EU has divided its territory into “planning regions.” They partly coincide with the national administrative units, since administrative structure is different in the different states. The division systems is called NUTS, from the French Nomenclature des Unites Territoriales Statistiques (Nomenclature of Statistical Territorial Units). The NUTS classification is hierarchical: it includes three regional levels: NUTS 1, 2, and 3. Every country can define additional hierarchical levels within NUTS 3.
Bulgaria defines its planning regions on a NUTS 2 level. The requirement for this type of regions is to have a population between 8000,000 and 3 million.

The regional policy goals are determined for every single program period. The program period lasts 5 years. The EU provides a concrete financial framework for the implementation of the goals of every program period.
I will dwell briefly on some key goals of the European regional policy for the 2007—2013 program period.
Convergence is one of the goals. It assists growth conditions and the factors leading to a real boost of economic indicators in underdeveloped member states and areas. In EU-27 this goal affects 17 member states or 84 regions with a population of 154 million people. The total amount of financial assistance under this goal is 199.3 billion Euro, which accounts for 81.5% of all European funds. All Bulgarian regions fall under the convergence priority goal.
The regional competitiveness and employment goal is aimed at enhancing competitiveness and attractiveness of regions, and boosting employment. The programs under this goal will help regions forecast and support economic changes through innovations and knowledge-based economy, encouraging entrepreneurship, environment protection and improving the access to it. More and better jobs will be provided by workforce adaptation and investment in human resources. The total amount is 4.5 billion Euro distributed among 168 regions in 19 member states, i.e. 314 million people.
The European territorial cooperation goal will fund common local and regional initiatives. Transnational cooperation is directed towards integrated territorial development, inter-regional cooperation and exchange of experience. The population to be covered by this goal totals 181.7 million (37.5% of the total EU population); all European regions and citizens fall into one of all 13 transnational regions. This goal is allocated 7.8 billion Euro, which accounts for 2.5% of all funds.
The above goals will be implemented by structure funds envisaged in the EU directives. There are four structure funds each one funding specific area. They assist in a different way for achieving the goals of European regional policy: for instance, the European Regional Development Fund, the European Social Fund, and the Cohesion Fund assist the convergence goal.
The European Regional Development Fund (ERDF) funds infrastructure development, investment for job openings, local development projects and small enterprises support. The European Social Fund (ESF) helps unemployed and disadvantaged groups find a job, mainly through funding training and auxiliary job search systems. The Financial Instrument for Fisheries Guidance (FIFG) assists the adaptation and modernization of this sector. The Guidance department of the European Agricultural Guidance and Guarantee Fund (EAGGF-G) funds measures for rural areas development and grants assistance to farm producers mainly in backward regions.
These structure funds coexist with other financial instruments such as the Cohesion Fund (CF). It is a special fund aimed at supporting the least developed member states. Support is provided only if the country’s gross national product does not exceed 90% of the average for the EU. The Cohesion Fund is used for financing large projects (not programs) on the entire EU territory related to the environment and trans-European transportation networks, thus allowing countries to overcome their budget restrictions entailed by such expenditures in their efforts to meet the requirements of the international currency union. Moreover, it helps these countries to reach the European standards in these areas. For the new program period 2007-2013, public transportation is its investment priority. Jointly with ERDF, the fund will finance long-term investment programs managed by a decentralization principle.
The key principles of the cohesion policy (complementability, long-term planning, partnership and joint management) are being applied to the three funds: ERDF, ESF, and the Cohesion Fund. The joint management principle means that the management of these funds is the responsibility of the member states which select bodies responsible for the drafting, implementation and monitoring of the measures of each operative program.
The fulfillment of the goals of the European regional policy is assessed periodically. According to ART. 159 of the Statutes, every three years the European Commission shall submit a report to the EP, the Council, the Economic and Social Committee and the Regions Committee on the progress of economic and social cohesion and the way in which the means of the European Union have contributed to cohesion. The Fourth Cohesion Report was submitted to the EP this year.
According to data from the Fourth Cohesion Report of the European Commission, the expected impact of the cohesion policy over the new program period can boil down to the following:
-    A 5-15% increase in the GDP by 2020 which would have not been possible in most of the new member states without the cohesion policy;
-    Opening of 2 million new jobs by 2015 in regions within the Convergence goal;
-    A 20 to 30% drop in the unemployment rate;
-    Multiplied positive results of national policies;
-    An overall positive effect for the entire EU-27 in the long run.
Besides the above cohesion policy tools, three additional financial sources were approved for the new program period – JASPAR, JEREMY, and JESSICA.
JASPAR is a program for new technical partnership assistance. It assists joint projects in European regions and provides for cooperation development between the European Commission, the European Investment Bank and the European Bank for Reconstruction and Development in maintaining joint expertise and support to member countries and regions in the preparation of large projects.
JEREMY improves access to funding by providing joint European resources for small and medium-size enterprises. It is a joint initiative of the European Commission, the European Investment Bank and the European Investment Fund.
JESSICA works for establishing sustainable urban development. The program provides for a joint European support to sustainable investment in urban areas. It is an initiative of the European Commission, the European Investment Bank and the European Bank for Reconstruction and Development.
The regional European policy is necessary more than ever before. It is neither obsolete, nor has it exhausted its possibilities. This is not a charity policy. It is not just a re-distribution of resources. On the contrary, its goal is to generate new resources. This is not a policy “from above,” but rather a too decentralized, partnership-based policy with shared responsibilities, where concrete projects are managed according to the place itself. It is also a policy of exchanging knowledge, technologies and “good practices” allowing the establishment of cooperation networks covering all Europe. This is a coordinated policy which provides opportunities for initiative, and what is more, it encourages and supports initiatives. In this way, the European regional policy lends an added value to regions and helps making them attractive places for life and investment.

Results have not been late in coming: within some fifteen years regional policy has proved its benefits. It will meet the challenges if it adapts its goals, means and methods to meeting the new tasks of expansion and the growing demands of economic globalization.
Thank you for your attention.