The EU regional policy and its impact on two Mediterranean member states (Italy and Spain)

The aim of EU Regional Policy is to intervene effectively in regions that “lag behind” in economic terms and to finance development programmes through the allocation of Structural Funds which operate in accordance with the principles of subsidiarity, additionality and partnership. This policy should allow regions to converge with EU averages in terms of income and employment. Italy and Spain provide very good examples within the EU as a whole, of significant economic disparities between regions that still appear to be present. We argue and provide substantial evidence of the fact that the persistence of such disparities is mainly due to inefficient administrative and institutional capacity at the regional level. Although some regions have brought themselves towards the average, in Italy and Spain, there is evidence that certain administrative, institutional and implementation problems have tended to appear, hampering the opportunities of regions to converge in the required way. Because of this, regional economic convergence and thereby socio-economic cohesion are still beyond reach. Two decades after the 1988 Reform of the Structural Funds, EU Regional Policy has only partially succeeded in reducing regional economic divergence within Italy and Spain, where regional economic inequalities still exist. Although we demonstrate that some regions have been able to move forward in the requisite way, it is questionable whether all of the support for these regions can actually be eliminated completely in the near future with the challenges that the EU faces, particularly in relation to the latest round of Enlargement