ESPON 1.1.3: Enlargement of the European Union and its Polycentric Spatial Structure

1. ESPON 1.1.3: Enlargement of the European Union and its Polycentric Spatial Structure Lisa Van Well KTH, Royal Institute of Technology, Stockholm ESPON Salzburg Seminar, 13-14 March 2006

2. Key findings- setting the stage • 2004 Enlargement area is a diverse territory: large economic differences between countries. Cyprus, Malta and Slovenia most successful, as well as large major agglomerations- Budapest, Prague and Warsaw that are rapidly “catching up”. Different rates of accessibility. NMs generally more polycentric than “old” MSs. • Concurrent processes of convergence at European level between old and new MS and divergence at national and regional levels. Evidence from previous enlargements (PT, GR) • Rapid economic growth in NMs due to monetary, financial and economic integration and liberalisation of capital flows – but can reinforce economic divergence within NMs. • If market forces only at work- likely to reduce economic disparities between old and new MS, but increase disparities between and within NMAC.

3. Key findings – Economic Cohesion • The move to from centralised, bank-based financial systems to liberal finance-based systems in NMs will encourage further monocentric development. FDI tends to cluster in main metropolitan areas. • Regions in the NMs that are converging in terms of GDP/capita 1995 and GDP growth 1995-2001, show no signs of growing regional specialisation (except Budapest in service sectors -HH). In NMs presence of MEGAS has little effect on growing specialisation, the opposite of the effect on the EU-15 regions. • Regional specialisation and greater sector concentration, especially in the presence of MEGAs lead to increased productivity. But risk is that industry-specific shocks may make highly specialised regions more vulnerable.

4. “Catching up regions”, specialisation and MEGAS

5. Key findings – Territorial Cohesion • Regions become more closely connected- increasing mobility of goods and production factors, intensifying interregional cooperation among various actors. • Border regional typology shows that the situation in border regions in Enlargement area is quite varied. No one policy will fit all. Could be differences in integration potential based on indicators of geographic type of border and # of border crossings, level of economic disparities and membership in Euroregions. • Neighbour-dependent growth: Underlines importance of spatial proximity: the more a region is surrounded by regions with positive economic or population development, the higher is its own economic or population growth.

6. Neighbour-dependent growth: Population change 1995-2000

7. Key finding: Accessibility scenarios • Largest gains in accessibility of the NMs are due to the enlargement process itself (reduced barriers for travel and goods transport ).The infrastructure projects examined in simulations add to this effect. • All policy scenarios contribute to increasing polycentricity at European level by accelerating the economic development of capital and large cities in the NMs. But could aggravate economic disparities between successful and lagging regions in NMs.

8. Policy recommendations: A Phase strategy of European spatial development • Future spatial policy of Europe has responsibility to deal with goal conflicts of competitiveness and territorial cohesion at macro and meso levels- especially pertinent in Enlargement area. • Phase Strategy of Development: Balanced strategy differentiated in time and space. Takes up specific needs of different types of regions • Transition stage of economic development- concentrate on promotion of growth poles. • Later stages, concentrate on development (retaining) of polycentric spatial structures.

9. Policy recommendations: “Policy combinations” • Policy combinations: Multi-level approach for coordinating combinations of policies on horizontal and vertical levels of governance. • Principle-based combinations: top-down sectoral interventions, at macro and meso levels, i.e Structural Funds • Capacity-based combinations: bottom-up with focus on implementing policy interventions in an integrated manner at meso and micro levels

10. Principle-based combinations • Structural policy:Following phase model, concentrate in transition phase on major city regions in NMs to facilitate convergence at European level, ie “Triangle of Central Europe”- Warsaw, Prague, Budapest. Improve situation vis-a vis “pentagon”. Next phase: focus on second-tier cities in cooperation at regional level with neighbouring countries. • Infrastructure policy: In “old” MS, focus on improving accessibility of medium-level central places and compensate accessibility deficits in rural/peripheral areas. In NMs transition period of 10-15 yrs of fast and efficient transport between main cities and with economic centers in W. Europe- later shift to medium sized cities

11. Principle-based combinations • Monetary and Financial Integration: Near future- centralising effects of liberalisation accepted as condition to stimulate rapid economic growth. Long-run- decentralisation plans at national and regional level required to ensure that equity is not overshadowed by efficient competition. • Border region Integration: No single policy instrument can serve different needs in border regions. In short-term, most successful forerunners regions to be promoted, but in medium and long term, focus on the “hardworkers” and “handicapped” for integration. Border region policies formulated on transnational or cross-border level, based on detailed data available here such as flows of workers and enterprises.

12. Capacity-based combinations • Many national spatial strategies have an implicit plan for phase strategy, ie Poland and Bulgaria. • Promote “spill-over” from the growth in major urban areas to lagging regions. Recognise the • complementarities between policies and act through national and regional strategies in territorial governance. • Empower regional and local authorities with capacity for structural fund implementation, monitoring • Encourage mutual learning between regions • Increase awareness of sustainable development in ie Local Agenda 21 work • Assimilate goals of both competitiveness and competition in spatial development plans at all levels.

13. Further research • Analyse governance aspects of implementing a phase strategy with a wide-range of multi-level policy options and time scales: • EU Structural fund support combined with • national policies for growth of major urban agglomerations first, • later support to peripheral and lagging regions and • local measures to strengthen bottom-up capacity of implementation • Further research on the dynamics of cross-border cooperation in achieving the twin goals of competition and competitiveness on all levels. More possibilities to attain data on flows of goods and services in smaller geographic areas. • Both demand a closer trans-regional approach