Convergence or divergence of regionsin the Visegrad Group countriesand Regional State Aidafter accession to the EU:

conclusions for New Cohesion Policy

Adam A. Ambroziak, Ph.D.

associate professor, SGH

Convergence or divergence of regionsin the Visegrad Group countriesand Regional State Aidafter accession to the EU:conclusions for New Cohesion Policy

• Regional state aid

• Impact on economic activities

• Process of convergence in terms of GDP

• Conclusions

Regional state aid maps

2001-2006 2007-2013 2014-2020

50%

50%40%

30%

50%

35%

25%

10%

Regional state aid

2001

2003

2005

2007

2009

2011

2013

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

CZHUPLSK

2001200220032004200520062007200820092010201120122013

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

4.00%

4.50%Cumulated regional state aid Regional state aid to GDP

mn

Changes in the concentration of economic operators

0.02% 0.04% 0.06% 0.08% 0.10% 0.12% 0.14% 0.16% 0.18%

-0.01

-1.73472347597681E-18

0.01

0.02

0.03

0.04

0.05

0.06

0.07

0.08

CZ

HU

PL

SK

CZ01

SK01

HU10HU22

CZ03PL12

CZ02CZ04 CZ05

CZ06

CZ07

CZ08

HU21

PL22PL41

PL42

PL51

PL63

SK02

HU23HU31

HU32HU33

PL11

PL21PL31

PL32

PL33

PL34PL43

PL52

PL61PL62

SK03

SK04

50% 40% 30-40% 10% NUTS 0

The ratio of numer of economic operators to population in 2012

Chan

ges

in th

e ra

tio o

f con

cent

ratio

n of

ec

onom

ic o

pera

tors

in

NU

TS2

regi

ons

of th

e V4

cou

ntri

es

betw

een

2008

-201

2

Regional State Aid ceilings:

Productivity

20% 30% 40% 50% 60% 70% 80%0

5

10

15

20

25

30

35

40

45

50

CZ

HU

PL

SK

CZ01

SK01

HU10

HU22

CZ03

PL12

CZ02CZ04 CZ05

CZ06

CZ07CZ08

HU21PL22

PL41

PL42

PL51

PL63

SK02

HU23

HU31

HU32

HU33

PL11

PL21

PL31

PL32

PL33

PL34PL43

PL52

PL61

PL62

SK03

SK04

50% 40% 30-40% 10% NUTS 0

The ratio of GVA per 1000 employed to the EU28 in 2011

Chan

ges

in th

e ra

tio o

f GVA

per

100

0 em

ploy

ed to

the

EU28

ave

rage

bet

wee

n 20

00-2

011

Regional State Aid ceilings:

Economic activity rate

55% 60% 65% 70% 75% 80%

-2

0

2

4

6

8

10

UE-28

CZ

HU

PLSK

CZ01SK01

HU10

HU22 CZ03

PL12

CZ02

CZ04

CZ05

CZ06

CZ07

CZ08

HU21

PL22

PL41

PL42

PL51

PL63

SK02

HU23HU31

HU32

HU33

PL11

PL21

PL31

PL32

PL33

PL34PL43

PL52

PL61

PL62

SK03

SK04

50% 40% 30-40% 10% NUTS 0

The ratio of employed and unemployed persons to the population in 2013

Chan

ge in

eco

nom

ic a

ctivi

ty ra

te

betw

een

2004

-201

3

Regional State Aid ceilings:

Employment

40% 45% 50% 55% 60% 65%

-3

-2

-1

0

1

2

3

4

5

6

7

UE-28CZHU

PLSK

CZ01

SK01

HU10

HU22

CZ03

PL12

CZ02

CZ04

CZ05

CZ06CZ07

CZ08

HU21

PL22

PL41PL42

PL51 PL63

SK02

HU23HU31

HU32

HU33

PL11

PL21PL31

PL32

PL33

PL34

PL43

PL52

PL61

PL62SK03

SK04

50% 40% 30-40% 10% NUTS 0

Employment rate in 2013

Chan

ge in

em

ploy

men

t rat

e be

twee

n 20

04-2

013

Regional State Aid ceilings:

Unemployment

2% 4% 6% 8% 10% 12% 14% 16% 18% 20%

-20

-15

-10

-5

0

5

10

UE-28

CZ

HU

PL

SK

CZ01

SK01

HU10HU22

CZ03

PL12

CZ02

CZ04

CZ05

CZ06CZ07

CZ08

HU21

PL22PL41

PL42PL51

PL63

SK02

HU23HU31

HU32

HU33

PL11

PL21

PL31

PL32

PL33

PL34

PL43

PL52PL61

PL62

SK03 SK04

50% 40% 30-40% 10% NUTS 0

Unemployment rate in 2013

Chan

ge in

une

mpl

oym

ent r

ate

betw

een

2004

-201

3

Regional State Aid ceilings:

The dispersion of regional GDP per capita at NUTS 2 level

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

-3

-1

1

3

5

7

9

11

13

BE

BG

CZDK

DE

IE

EL

ES

FR

HR

IT

HU

NL

AT

PL

PT

RO

SI

SK

FISE

UK

Dispersion of regional GDP per capita by NUTS 2 regions in 2011

Chan

ge in

a d

isper

sion

of re

gion

al G

DP

per c

apita

by N

UTS 2

regi

ons

in 2

004-

2011

(p.p

.)

Process of convergence in terms of GDP

25% 30% 35% 40% 45% 50% 55% 60% 65% 70% 75% 80% 85% 90% 95% 100%105%110%115%120%125%130%135%140%145%150%155%160%165%170%175%180%185%190%

-10

0

10

20

30

40

50

60

70

CZ01

SK01

HU10

HU22

CZ03

PL12

CZ02CZ04

CZ05

CZ06CZ07

CZ08

HU21

PL22

PL41

PL42

PL51PL63

SK02

HU23

HU31

HU32

HU33

PL11

PL21PL31

PL32

PL33PL34

PL43PL52

PL61PL62SK03

SK04

50% 40% 30-40% 10%

Ratio of GDP per capita (PPS) to the EU average in 2011

Chan

ge in

a ra

tio o

f GD

P pe

r cap

ita

(PPS

) to

the

EU a

vera

ge in

200

4-20

11

45% 60% 75% Regional State Aid ceilings:

Conclusions

the fastest convergence in terms of GDP per capita and the unemployment rate was observed in the best developed regions;

the poorest regions remained the poorest;

many doubts whether the highest intensity of public subsidies in the poorest regions and lack of them in the most developed areas are tailored to the needs and goals of the V4

Continuation of the current policy: distortion of competition

divergence within the V4 countries