WINNER OR LOSER IN THE NEW EUROPE? REGIONAL FUNDING, INWARD INVESTMENT AND PROSPECTS FOR THE WELSH ECONOMY

This article examines the prospects for the Welsh economy in a changing European context. To a large extent Wales ’ economic transformation in recent years has been enabled and supported by regional aid funding at UK and European levels. The run-down of regional support may have major implications for Wales ’ attractiveness to mobile international invest-ment, which is itself changing in volume and nature, as well as the promotion of indigenous firm growth. These concerns together with local difficulties affect-ing the role of the development agencies cast doubt on the economy’s capability for maintaining progress. Wales is certainly not unique among the EU’s ’northern ’ regions in facing an uncertain future in the ’new ’ Europe but its case would seem to be particu-larly interesting for two reasons. First the Welsh economy’s performance in recent years has been widely presented as an economic success story. Secondly Wales has been presented as possessing a reasonable degree of institutional capacity by UK standards, reflecting a quasi-regional state with the potential for developing a regional innovation sys-tem