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18 Eur. J.L. & Econ. 5 (2004)

handle is hein.journals/eurjlwec18 and id is 1 raw text is: European Journal of Law and Economics, 18: 5-32, 2004 @ 2004 Kluwer Academic Publishers. Manufactured in The Netherlands. European Regional Policy and Backward Regions: Implications Towards EU Enlargement J. ANDRES FAINA* fai@udc.es JESUS LOPEZ-RODRIGUEZ jelopez@udc.es Department of Economic Analysis and Business Administration, Faculty of Economics, University of A Coruna, A Coruna, 15.071 Campus Zapateira s/n, Spain Abstract In this paper we show that the success of the EU Regional Policy, in terms of boosting growth in objective 1 regions, will mean a big opportunity for Central and Eastern European Countries (CEECs) and hence the increases in competition arising from an enlarged European market combined with a suitable regional development policy should in the future boost the growth of those countries. In the last part of the paper we made a simulation for the funding envelope from 2007, based on the 2000-2006 budget. We show that the figures of the Agenda 2000 provide enough financial support for 90% of the total CEEC population and for 75% of current objective 1 population. Keywords: Regional Policy, European enlargement, Central and Eastern European Countries, strategic planning, regional growth, regional development JEL Classification: R10, RI1, R12, R58 Introduction: The need for a Regional Policy in the EU In order to fully understand EU Regional Policy certain factors must taking into consider- ation: 1. There is no natural tendency toward some kind of spatial balance in the relative devel- opment of the regions. 2. The positive relationship between population density and economic activity is a well- established feature of the EU territory. It is a well-known (and well-documented) fact that the pentagon-shaped area that takes in London, Paris, Milan, Munich and Hamburg constitutes 20% of total EU space. Within this area 40% of the total number of EU citizens producing about 50% of the EU's total GDP are domiciled. This gives rise to major imbalances. 3. Unconditional convergence in per capita GDP levels is not a natural tendency. If a certain level of convergence exists, this is noticeable only in the very long term, since the rate at which these economies are catching is practically negligible. 4. Economic development has to be encouraged in those regions that are lagging behind in terms of development or in areas suffering from severe structural problems. `Jean Monnet Chair in European Industrial Economics.

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