Evolution of the Czech Regional Policy in the Context of the EU Regional Policy

1. Evolution of the Czech Regional Policy in the Context of the EU Regional Policy RNDr. Jan Vozáb, PhD external lecturer, Charles University, Prague consultant, partner Berman Group

2. Background for Czech regional policy evolution • Character of regional differences • Prague vs. Rest of the country • West-East gradient • Micro-regional vs. mezo-regional differences • Structures for Czech regional policy • State interventions vs. local and later regional interventions • Strong sectoral ministries but weak ministry for regional development -> weak formal/official regional policy • Limited (or lack of) co-operation, networking and partnership, both, horizontally and vertically

3. Evolution stages of the Czech regional policy and main influences forming it First half of 90s Second half of 90s Pre-accession 2000-04 EU accession 2004-06 New programming 2007-13 Towards integration Two parallel systems Creation of regional governments, devolution EU accession – Chapter 21, acquis Moderate regional policy Phare instrument and pre-accesion funds Economic transition

4. Development of the Czech RP until 1996 • Moderate regional disparities emerging at microregional/local level mostly • Pro-claimed economic liberalism • very narrow official/explicit regional policy • no programming/strategic documents • very limited supporting mechanisms aimed at SMEs support on a project basis • Sectoral and fiscal policy instruments much larger than RP, with unintentional and unconceived regional impacts • No influence of EU RP: Phare instrument focused on transition issues and mostly institutional building

5. Regional policy in the second half of 90s • Increasing unemployment (3.5% -> 9%), growing regional disparities both, at NUTS III as well as at local level • Moderate regional policy of the new government • first programming documents at national and regional levels • more and stronger delivery agencies • The Act on Regional Development, Government Principles of RP • Non-regional policy instruments prevail, partly intentional regional impacts (SMEs support, labour market policy) • Modest preparation for EU ESC policy started • separated Phare and CZ policies, Phare project based, very limited support in the field of EU ESC policy • first („training“) operational programmes (e.g. ROPs) – usually no or very modest implementation

6. Czech regional policy prior EU accession: 2000-2004 • High unemployment remains with regional differences, economy grows, regional disparities continue to grow • Pre-accession instruments support • direct aim at EU ESC policy adjustment – but still project based • pilot SF like „programmes“ implemented at small scale at local level • National preparing for EU ESC policy • programming (two rounds) as well as project preparation • new implementing structures built – parallel to existing ones • twinning – no particular effects • NUTS II level created • Former national/regional policies continue unchanged • Public administration reform

7. Pre-accession instr. International aid - Centralised, EC responsibility Spending technically based Accession oriented =>IB projects important Limited financial resources Many projects not supported Larger projects prefered Support „out-of-system“ Selection of projects similar to public procurements Differences between pre-accession instruments and Structural Funds • STRUCTURAL FUNDS • Support to national policies • Decentralised, member state responsibility • Spending based on programming • ESC oriented => Economic development objectives • Larger financial resources • Absorption capacity threat • Small projects are usual • SF co-finances regular national programs • „First come first serve“ project selection possible

8. Czech regional policy after EU accession2004-2006: two parallel systems • EU ESC policy and programmes parallel to the Czech ones • parallel programmes and other documents • new implementing bodies – eg. Reg. Councils, Secretariats • new dept. of existing ones – eg. CzechInvest, Regional Labour Offices, • parallel delivery mechanisms – based on demand of high number of small local and regional stake-holders • parallel financial flows, too much match funding for end users • Former Czech RP and national „programmes“ continue unchanged, sometimes competitive to EU Funds´ programmes • New interventions introduced by ESC policy • more development and target oriented (incl. indicators) • new fields (e.g. innovations, life-long learning) • new roles of programme management structures – MAs, IBs, • Serious absorption capacity problems

9. Comparison of EU ESC policy and Czech national policies interventions Supply driven projects Top down ESC policy interventions In-system Czech policies interventions Out-of-system Bottom-up Demand driven projects

10. Czech regional policy in the new programming period 2007-2013 • Continuous economic growth, decreased unemployment • Large EU funds indicative allocation for the Czech Republic • ESC policy becomes the core of the Czech RP, aimed particularly at • Innovations, research & development, HR adaptation, Adjustment to EU environmental standards (accession requirements), transportation infrastructue, interventions from regional level (ROPs) • Merging national and EU programmes • Former national interventions in the field of ESC policy mostly (not fully) integrated into SF programmes • SF implementation structures partly adapted, many new created due to new programmes -> likely difficulties in co-ordination • Financial flows for SF programmes/projects partly streamlined • Big threat of insufficient SF absorption, delays in SF implementation

11. CZ regional policy vs. EU regional policy development concept EU ESC policy Merging CZ RP and EU ESC policy Czech RP in 90s welfare concept re-active policy pro-active policy

12. Conclusion: New policy paradigm partially accepted but old institutions prevail • New interventions – more Lisbon or a development nature, BUT • old delivery mechanisms to continue • wide and non-targeted intervention focus still planned • Merging national programmes into SF programmes, BUT • excessive fragmentation continues: 24 OPs, 15 MAs • attempts to „hide“ non-ESC policy interventions into SF OPs • redistribution nature of SF OPs – real implementation at the lowest possible level • Financial flows streamlined for SF implementation BUT old legislation and bureaucratic structures • high administrative burden at the level of MAs and IBs • complicated project management for FBs and end users