Regional Policy of the EU in the Visegrád countries

The Visegrád Four: regional cooperation within the EU

The Visegrád Four group, established in 1991 through the Visegrád Declaration, aimed at strengthening regional identity, cooperation and solidarity between Czech Republic, Hungary, Poland and Slovakia.

All four countries joined the European Union with the 2004 enlargement process. In the context of the Kroměříž declaration^[1], on the occasion of the accession to the EU, the Prime Ministers of the four countries reaffirmed their intention to consolidate internal regional cooperation while simultaneously inaugurating a path towards integration in the European Union. More precisely, the Group’s plan for the EU-Visegrád cooperation included a joint effort on areas such as the Common Foreign and Security Policy and the European Security and Defence Policy, border management, economic cooperation^[2]. The Visegrád Four further re-stated in 2011 their commitment in contributing to the EU integration, by supporting and engaging in “projects aimed at fostering cohesion and enhancing competitiveness of the V4 and EU in a global context”^[3]. In the same circumstance, the need for a mutual engagement to achieve convergence within the European Union, particularly through the Regional Policy implemented as part of the multiannual financial frameworks, was reiterated. Further indicated fields of hoped intensified cooperation included energy security, transport infrastructure, labour market and trade, democracy and security^[4].

EU Cohesion Policy in the Visegrád Four

With the main objectives of promoting growth in less developed regions in the European area and reducing differences in terms of development levels, the EU Regional or Cohesion Policy is implemented in European regions through 7-years long programming periods. Therefore, a few priority fields of intervention become common denominator in all funding periods, namely employment and labour market, research & development, environment and energy and education. Specific goals include creating jobs and supporting small and medium-sized enterprises (SMEs), encouraging the construction and renovation of infrastructures and transport networks. Most notably, the principal aim is to increase GDP per capita in those EU regions (Convergence or Objective 1 Regions) categorized as NUTS 2 (population of maximum 3 million inhabitants) and where GDP per capita is less than 75% of the EU average. On the other hand, more developed regions in the interested countries are allocated funds through the Regional Competitiveness and Employment Objective or Objective 2^[5].

With their accession to the European Union, all four countries became eligible for the EU Cohesion and Structural funds since 2004, therefore receiving funding support between 2004-06, and becoming beneficiaries for the programming periods in 2007-2013, 2014-2020 and 2021-2027 as well. As a matter of fact, the majority of the regions comprehending the Visegrád countries are categorised as less developed regions, therefore in need of support in their process of catching up and convergence due to high regional socioeconomic disparities.

In terms of eligibility and objectives for the 2007-2013 programming period, all regions in Czech Republic classified as Convergence Regions except for the Prague region, where funds were allocated for the Competitiveness and Employment objective. Similarly, in Hungary all regions except for Közép-Magyarország, subject to the phasing-in assistance, were classified as Convergence Regions. Poland was entirely covered by the Convergence Objective, whereas Slovakia was entirely subject to it except for the Bratislava region, which fell under the Regional Competitiveness and Employment Objective^[6].

For the programming period 2014-2020, regions eligibility remained almost unchanged. Only in Poland, the Mazowieckie region shifted from Convergence Region to a more developed region, reaching a GDP per capita above 75% of the EU average.

2004-2006 Period

Before accession to the EU on 1 May 2004, the four countries were subject to pre-accession programs including PHARE (Poland and Hungary Aid for Restructuring of the Economy), SAPARD (Special Accession Programme for Agriculture and Rural Development) and ISPA (Instrument for Structural Policies for Pre-Accession). These programs assisted the countries in the economic transition process throughout the 1990s, to help achieve favourable social and economic conditions for the accession.

By joining the EU, the Visegrád members entered the seven-year programming period in process and became beneficiaries of a number of funds for the 2004-2006 period: the European Regional Development Fund (ERDF), the European Social Fund (ESF), the European Guidance and Guarantee Fund for Agriculture (EAGGF), the Financial Instrument for Fisheries Development (FIFG), and the Cohesion Fund.

• Czech Republic received funds through 13 programmes over this two-year period, amounting to more than EUR 1.69. About 13,000 projects were financed and completed. Most of the funds were allocated through the ERDF Common Regional Operational Programme and the Rural Development and Multifunctional Agriculture programme offered the highest possibility of receiving support^[7]. The funding proved to be highly fruitful in the country, with more than 99% of the allocated money effectively used throughout the period^[8].
• In Hungary, the 2004-2006 Cohesion and Structural Funds allowed for the creation of around 22,000 jobs, supported women inclusion in the labor force and provided financial aid to SMEs. Around 20,000 projects were concluded, particularly in the field of environmental protection and transport and infrastructure^[9]. Results of this programming period, however, show that while the country initiated a process of external convergence with EU Member States, internal convergence de facto deteriorated^[10].
• All regions in Poland qualified as eligible for the Cohesion Policy funds. Around 85,000 projects were completed through an investment of EUR 22.5 billion. SMEs were offered support through more than 15,000 projects^[11]. More than 60% of the funding was devoted to hard infrastructure, 24% to private enterprises and around 15% to human resources^[12].
• In Slovakia, the 2004-2006 program attempted at fostering convergence in terms of inter-regional infrastructures between the eastern regions and the area near the capital of the country. Inequalities in the job market and unemployment were highly targeted, as well. The highest percentage of success was achieved in the agriculture and fisheries field, whereas environmental projects scarcely reached the goals set for the period^[13].

2007- 2013 Period

The main objectives of the subsequent programming period once again focused on convergence and employment, regional competitiveness and on the European Territorial Cooperation^[14]. The latter promoted cooperation among internal regions as well as between external bordering regions.

• For Czech Republic, for the 2007-2013 period, the EU allocated around EUR 26.7 billion^[15] throughout 17 programmes. The funding was almost entirely devoted to the convergence objective. Financial aid aimed at the Regional Competitiveness and Employment Objective, on the other hand, exclusively targeted the region of Prague^[16]. Among the most relevant results achieved in this programming period, 96% of the financing was used, with the creation of over 20,000 new jobs^[17], and substantial support provided through direct investment to SMEs. Invested funds equally interested public transport and environment in the infrastructure and energy sector, as well as research, tourism and education^[18].
• Hungary received EUR 22.9 billion for the Convergence Objective, EUR 2.03 billion for the Regional Competitiveness and Employment Objective, and EUR 386 million aimed at the European Territorial Cooperation, making up for a totality of EUR 25.3 billion^[19]. In order to meet the “Lisbon objectives” defined through the EU Lisbon Strategy aimed at increasing competitiveness, Hungary devoted more than half of the financial aid to SMEs development, technology and science, research and innovation, as well as employment, education and health^[20]. Around EUR 7 billion were allocated to boost transport infrastructure, both at the inter-regional and at the transnational levels. Nonetheless, regional disparities between the capital and the other areas persisted.
• As far as Poland is concerned, the country was the largest recipient of the 2007-2013 period. Funds amounted to EUR 67 billion, of which EUR 66.6 billion targeted the Convergence Objective and EUR 731 million aimed at the European Territorial Cooperation Objective, all implemented throughout 21 programmes^[21]. The programme that received the highest amount of financial support, with EUR 28 billion, was “Infrastructure and Environment”. A further significant amount of the funds were invested in innovation and entrepreneurship^[22]. However, between 2009 and 2013 employment rates did not increase, only registering a slight improvement between 2013 and 2015^[23].
• Funding to Slovakia for the period amounted to EUR 11.7 million, of which EUR 0.5 billion were directed at the Regional Competitiveness and Employment Objective (only interesting the region of Bratislava), and EUR 0.2 billion at the European Territorial Cooperation. The remaining financial amount addressed the Convergence Objective^[24]. The main areas of intervention for Slovakia in this programming period, receiving the largest percentage of funding, were transport infrastructure, enterprise support, and urban development and social infrastructure.

2014- 2020 Period

• Czech Republic was allocated around EUR 22 billion and eight operational programmes were implemented. The country’s goals targeted competitiveness through innovation of small and medium-sized enterprises, transports and infrastructure, employment and education, energy efficiency and environmental protection in a number of sectors.
• On the other hand, six programmes were carried out in Hungary in the programming period under scrutiny, with a total investment of EUR 21.9 billion. The majority of the founding amount (EUR 15 billion) was devoted to those Hungarian regions that were less developed, namely Közép-Dunántúl, Nyugat-Dunántúl, Dél-Dunántúl, Észak-Magyarország, Észak-Alföld and Dél-Alföld^[25].
• In the course of the 2014-2020 period, EU funding to Poland amounted to EUR 77.6 billion, including EUR 51.2 billion for the regions of Dolnośląskie, Kujawsko-Pomorskie, Łódzkie, Lubelskie, Lubuskie, Małopolskie, Opolskie, Podkarpackie, Podlaskie, Pomorskie, Śląskie, Świętokrzyskie, Warmińsko-mazurskie, Wielkopolskie and Zachodniopomorskie, to promote their development. Overall, the Cohesion Policy in Poland comprehends 22 operational programmes^[26].
• Slovakia was provided EUR 9.2 billion for less developed regions, on a total of EUR 14 billion under the whole Cohesion Policy.

Results and future strategy

The first years of implementation of the standard EU Regional Policy in the Visegrád Four showed slight and slow progress, due to problems in terms of project design and management by regional authorities, causing delays and complications, and at times due to scarce monitoring and support from the EU. One could say that, between 2004 and 2014, regional disparities remained unchanged, due to existing deep-rooted differences related to historical legacy and urbanization processes and further aggravated by the global recession.

Re-elaboration of data from the European Commission Ex-Post Evaluations (2007-2014)

The table above shows that in all four countries, significant improvements in terms of employment levels were registered in the long term. GDP growth shows a positive trend in consideration of the economic downturn and its effects, and most notably in comparison with the EU average trend, which, for instance, in 2014-2015 registered a GDP growth of 1.9%.

Overall, the long-term effects of EU Regional Policy and Structural funding were extremely positive for the Visegrád countries. Data from the European Commission show that over the 2003-2017 period, GDP per capita underwent a growth of 62% in Czech Republic^[31], 57% in Hungary^[32], 100% in Poland^[33] and 94% in Slovakia^[34].

As far as the new programming period, 2021-2027, is concerned, the economic downturn related to the pandemic crisis urged for EU funds to be disbursed through the recovery plan. Indeed, the macroeconomic indicators show a worse trend, in comparison with previous periods, and EU funds have undergone an overall re-design for the relaunch of European economies, particularly through the Next Generation EU fund. Most of the funds devoted to the Visegrád Four will be in the context of the Recovery and Resilience Facility^[35] fund. In terms of recipients, among the four countries, in the course of 2021-2022 Poland will receive the highest amount of allocated funds (EUR 26.9 billion). Czech Republic will receive EUR 8.6 billion, Hungary EUR 6.4 billion and Slovakia EUR 6.3 billion^[36]. With the overall EU purpose to exploit the 2021-2027 Multiannual Financial Framework to guide the Member States towards a green and digital Europe, the Visegrád countries have agreed on the necessity to implement the Green Deal and encourage digital progress, to invest in research and development and innovation in a cooperative V4 manner, within the EU^[37]. However, simultaneously, funds allocated for the Common Agricultural Policy (CAP) for the period were perceived by the Visegrád Four as insufficient, in comparison with other policy areas, and as part of the overall cohesion objective^[38].

References:

^[1] “The Kroměříž Declaration: Declaration of Prime Ministers of the Czech Republic, the Republic of Hungary, the Republic of Poland and the Slovak Republic on cooperation of the Visegrad Group countries after their accession to the European Union”. The Visegrad Group. 12 May 2004. https://www.visegradgroup.eu/2004/declaration-of-prime

^[2] “Guidelines on the Future Areas of Visegrad Cooperation”. The Visegrad Group. Accessed July 4th, 2021. https://www.visegradgroup.eu/cooperation/guidelines-on-the-future-110412

^[3] “The Bratislava Declaration of the Prime Ministers of the Czech Republic, the Republic of Hungary, the Republic of Poland and the Slovak Republic on the occasion of the 20th anniversary of the Visegrad Group”. The Visegrad Group. Bratislava, 15 February 2011. https://www.visegradgroup.eu/2011/the-bratislava

^[4] Ibidem

^[5] European Commission. “Is my region covered?”. Accessed June 28th, 2021. https://ec.europa.eu/regional_policy/en/policy/how/is-my-region-covered/2007-2013/

^[6] Ibidem

^[7] Ministry of Regional Development of Czech Republic. “Financial Drawing Results”. Accessed June 28th, 2021. https://www.dotaceeu.cz/en/evropske-fondy-v-cr/programove-obdobi-2004-2006-(1)/vysledky-cerpani

^[8] Ministry of Regional Development of Czech Republic. “Programming period 2004-2006”. Accessed June 28th, 2021.https://www.dotaceeu.cz/en/evropske-fondy-v-cr/programove-obdobi-2004-2006-(1)

^[9] European Commission. “European Cohesion Policy in Hungary”. https://ec.europa.eu/regional_policy/sources/docgener/informat/country2009/hu_en.pdf

^[10] Monasterolo, Irene. The European Regional Policy in Hungary. An Evaluation of the Objectives and Instruments for the Cohesion. (Budapest:2007), p. 2-3

^[11] European Commission. “European Cohesion Policy in Poland”. https://ec.europa.eu/regional_policy/sources/docgener/informat/country2009/pl_en.pdf

^[12] Kozak, Marek W. Impact of Cohesion policy on Poland. (Warsaw: 2011), p. 5.

^[13] European Commission. “Slovakia: Ex Post Evaluation of Cohesion Policy Programmes 2000-2006 financed by the European Regional Development Fund in Objective 1 and 2 regions. Work Package 1: Coordination, Analysis and Synthesis”. https://ec.europa.eu/regional_policy/sources/docgener/evaluation/pdf/expost2006/wp1_tsk4_slovakia.pdf

^[14] Ministry of Regional Development of Czech Republic. “Programming period 2007-2013”. Accessed June 28th, 2021. https://www.dotaceeu.cz/en/evropske-fondy-v-cr/programove-obdobi-2007-2013

^[15] European Commission. “European Cohesion Policy in the Czech Republic”. https://ec.europa.eu/regional_policy/sources/docgener/informat/country2009/cs_en.pdf

^[16] Ibidem

^[17] European Commission. “Cohesion Policy: supporting growth and jobs. Czech Republic”. https://ec.europa.eu/regional_policy/sources/docgener/evaluation/pdf/expost2013/wp1_cz_factsheet_en.pdf

^[18] European Commission. “Cohesion Policy and the Czech Republic”. October 2014. https://ec.europa.eu/regional_policy/sources/information/cohesion-policy-achievement-and-future-investment/factsheet/czech_republic_en.pdf

^[19] European Commission. “European Cohesion Policy in Hungary”. https://ec.europa.eu/regional_policy/sources/docgener/informat/country2009/hu_en.pdf

^[20] Ibidem

^[21] European Commission. “European Cohesion Policy in Poland”. https://ec.europa.eu/regional_policy/sources/docgener/informat/country2009/pl_en.pdf

^[22] Ibidem

^[23] European Commission. “Ex post evaluation of Cohesion Policy programmes 2007-2013, focusing on the European Regional Development Fund (ERDF) and the Cohesion Fund (CF).Task 3 Country Report Poland. WP1: Synthesis report”. September 2016. https://ec.europa.eu/regional_policy/sources/docgener/evaluation/pdf/expost2013/wp1_pl_report_en.pdf

^[24] European Commission. “European Cohesion Policy in Slovakia”. https://ec.europa.eu/regional_policy/sources/docgener/informat/country2009/sk_en.pdf

^[25] European Commission. “Cohesion Policy and Hungary”. 2014. https://ec.europa.eu/regional_policy/en/information/publications/factsheets/2014/cohesion-policy-and-hungary

^[26] European Commission. “Cohesion Policy and Poland”. March 2014. https://ec.europa.eu/regional_policy/sources/information/cohesion-policy-achievement-and-future-investment/factsheet/poland_en.pdf

^[27] European Commission. “Country report Czech Republic – Work Package 1 Ex post evaluation of Cohesion Policy programmes 2007-2013, focusing on the European Regional Development Fund (ERDF) and the Cohesion Fund (CF)”. 2016. https://ec.europa.eu/regional_policy/it/information/publications/evaluations/2016/country-report-czech-republic-work-package-1-ex-post-evaluation-of-cohesion-policy-programmes-2007-2013-focusing-on-the-european-regional-development-fund-erdf-and-the-cohesion-fund-cf

^[28] European Commission. “Country report Hungary – Work Package 1 Ex post evaluation of Cohesion Policy programmes 2007-2013, focusing on the European Regional Development Fund (ERDF) and the Cohesion Fund (CF)”. 2016. https://ec.europa.eu/regional_policy/it/information/publications/evaluations/2016/country-report-hungary-work-package-1-ex-post-evaluation-of-cohesion-policy-programmes-2007-2013-focusing-on-the-european-regional-development-fund-erdf-and-the-cohesion-fund-cf

^[29] European Commission. “Country report Poland – Work Package 1 Ex post evaluation of Cohesion Policy programmes 2007-2013, focusing on the European Regional Development Fund (ERDF) and the Cohesion Fund (CF)”. 2016. https://ec.europa.eu/regional_policy/en/information/publications/evaluations/2016/country-report-poland-work-package-1-ex-post-evaluation-of-cohesion-policy-programmes-2007-2013-focusing-on-the-european-regional-development-fund-erdf-and-the-cohesion-fund-cf

^[30] European Commission. “Country report Slovak Republic – Work Package 1 Ex post evaluation of Cohesion Policy programmes 2007-2013, focusing on the European Regional Development Fund (ERDF) and the Cohesion Fund (CF)”. 2016. https://ec.europa.eu/regional_policy/it/information/publications/evaluations/2016/country-report-slovak-republic-work-package-1-ex-post-evaluation-of-cohesion-policy-programmes-2007-2013-focusing-on-the-european-regional-development-fund-erdf-and-the-cohesion-fund-cf

^[31] European Commission. “Growing Together: EU Support to Czechia since 2004”. 2019. https://ec.europa.eu/regional_policy/en/information/publications/factsheets/2019/growing-together-eu-support-to-czechia-that-joined-in-2004

^[32] European Commission. “Growing Together: EU Support to Hungary since 2004”. 2019. https://ec.europa.eu/regional_policy/en/information/publications/factsheets/2019/growing-together-eu-support-to-hungary-that-joined-in-2004

^[33] European Commission. “Growing Together: EU Support to Poland since 2004”. 2019. https://ec.europa.eu/regional_policy/en/information/publications/factsheets/2019/growing-together-eu-support-to-poland-that-joined-in-2004

^[34] European Commission. “Growing Together: EU Support to Slovakia since 2004”. 2019. https://ec.europa.eu/regional_policy/en/information/publications/factsheets/2019/growing-together-eu-support-to-slovakia-that-joined-in-2004

^[35] Astrov, Vasily, Holzner, Mario. “The Visegrád Countries: Coronavirus Pandemic, EU Transfers, and their Impact on Austria. Policy Notes and Reports 43”. The Vienna Institute for International Economic Studies. (Vienna: February 2021), p. 14.

^[36] Ibidem, p. 15

^[37] “Visegrad Group Joint Declaration on Mutual Cooperation in Digital Projects”. The Visegrad Group. Krakow, Feburary 17, 2021. https://www.visegradgroup.eu/download.php?docID=458

^[38]The Ministers of Agriculture of the Visegrad Group (Czech Republic, Hungary, Poland and Slovakia), Bulgaria, Croatia, Estonia, Latvia, Lithuania, Romania and Slovenia. “Joint Declaration of the Ministers of Agriculture of the Visegrad Group and Bulgaria, Croatia, Estonia, Latvia, Lithuania, Romania and Slovenia on the important elements of the Common Agricultural Policy reform in relation to the agreement on the 2021–2027 Multiannual Financial Framework”. The Visegrad Group. July 2020. https://www.visegradgroup.eu/calendar/events-in-2020/joint-declaration-of-the