Economic and financial crisis — Regional and urban dimension

KEY POINTS

Regional impact

• The crisis ended a long period during which regional disparities in gross domestic product (GDP) per head and unemployment had narrowed. In particular:
  • GDP: in two thirds of EU regions, the annual GDP contracted by up to – 6 % between 2007 and 2010, while 1 out of 2 regions saw total employment shrink.
  • Unemployment: more than 4 out of 5 regions saw an increase between 2008 and 2010. In 2008, 52 regions had 1 out of 3 economically active young people out of work.
  • Migration: between 2009 and 2011, the annual increase in the number of EU citizens living outside their home country was 0.9 million, whereas between 2004 and 2008, it was 1.5 million.

Urban impact

• The report examines the impact the crisis had on regions with over 250,000 inhabitants, known as metro regions, as well as on cities. It considers the following points.
  • Metro regions: between 2007 and 2010, in 2 out of 3 EU countries the GDP per head increased on average compared to the country as a whole. During the same period, it fell in 3 out of 5 regions, particularly in the smaller ones.
  • Cities: in 2011, city dwellers in the ‘old’ EU countries (EU-15) were at greater risk of poverty or social exclusion than those living elsewhere. Cities in more developed EU countries tended to have lower employment and higher unemployment rates than towns, suburbs and rural areas.

Cohesion policy impact

• Due to the crisis, most EU countries are experiencing:
  • GDP and employment levels below pre-crisis levels;
  • higher levels of unemployment, poverty and exclusion;
  • reduced household income, depressing consumption and imports;
  • unprecedented levels of public debt and need for fiscal consolidation (i.e. to reduce government deficits and debt).
• The Commission recommends that future cohesion programmes:
  • reflect the different intensity of the problems experienced throughout the EU;
  • place special emphasis on investment to promote economic growth and create jobs;
  • concentrate resources on selected areas, notably
    • employment, especially for young people
    • training and education
    • social inclusion
    • innovation and SMEs
    • energy efficiency and a low-carbon economy
    • information and communication technologies, including the digital economy.
• A Commission staff working paper accompanying the report provides additional statistical evidence.