Regional policy of the European Union

Abstract

There are big disparities between the development of different regions and countries in Europe. Existing regional disparities in a country or in a group of countries such as the European Union make it necessary to apply regional policy, which can be defined as a set ofpolicy instruments, which have been assembled for the purpose of achieving greater cohesion and the stimulation of economic activity in the less-favoured regions. Regional policy has positive influence on the development of declining regions and is needed to achieve greater cohesion between rich and weaker areas. It gives advantage to the whole economy by creating additional output and income arising from increased economic activity and avoiding costs of migration of individuals, who would otherwise have been forced to leave assisted areas. In the process of European integration, there is a special need for common regional policy in order to meet its influence on certain weaker territories, particularly peripheral areas and regions relying tao much on stagnating activities and to ensure goodfunctioning of the Common Market and, later on, economic and monetary union. Structural Funds are very powerful instruments in European regional policy. According to theoretical estimates, they resulted in accelerated growth rate in many backward regions and had an important cohesion impact, in terms of the reduction of income disparities. All estimates are positive about the impact of Structural Funds assistance on growth and employment in objective I regions. The European Union's regional policy achieved also greater interest in strategie thinking and planning and provided a comprehensive and integrated approach to the problems of regional development. The regional development of the European Union is a difficult, but also fascinating challenge. An efficient regional policy can enhance the well being of the regions in all their variety and beauty, but the process towards greater cohesion will take a very long time.