A new European Commission report shows that the EU's Cohesion policy has contributed to reducing disparities in the level of development between rich and poor regions but also that the COVID-19 pandemic has affected the poor regions more.

“The pandemic has increased the risk of inequalities in the EU, and Cohesion policy is one of our main tools to combat this trend and invest in people,” said Commissioner for Jobs and Social Rights Nicolas Schmit.

Schmit and Commissioner for Cohesion and Reforms Elisa Ferreira on Wednesday presented the 8th Cohesion Report. Every three years, the Commission publishes a report on the economic, social, and territorial cohesion in the EU, presenting the progress and the EU’s role as a driver for regional development. It analyses the evolution of cohesion in the EU according to a wide range of indicators, such as prosperity, employment, education levels, and accessibility and governance.

The report says that thanks to Cohesion funding, the GDP per capita of less developed regions is expected to increase by up to 5% by 2023. The same investments also supported a 3.5% reduction in the gap between the GDP per capita of the 10% least developed regions and the 10% most developed regions.

However, the COVID-19 pandemic has affected less developed regions more. In the period between March 2020 and July 2021 those regions had an excess mortality rate of 17% while the most developed regions had a rate of 12%.

The impact of the pandemic on the economy was the strongest in the southern regions which depend on tourism. Compared to 2019, the number of overnight stays in the months after March 2020 dropped by 90%.

There are big differences in access to broadband Internet, which is significantly less available in less developed and rural areas. In cities, two out of three persons have access to fast Internet while in rural areas only one in six persons has access to fast Internet.

The EC report divides member states according to the geographical criterion and the level of development.

The eastern member states are Bulgaria, the Czech Republic, Estonia, Croatia, Latvia, Lithuania, Hungary, Poland, Romania, Slovenia and Slovakia. The southern member states are Greece, Spain, Italy, Cyprus, Malta and Portugal while the northwestern EU countries are Belgium, Denmark, Germany, Ireland, France, Luxembourg, the Netherlands, Austria, Finland and Sweden.

In terms of the level of development, the least developed countries are Bulgaria, Greece, Croatia, Latvia, Lithuania, Hungary, Poland and Romania, and they all have a gross national income of less than 75% of the EU average.

The moderately developed countries, with a gross national income of between 75% and 90% of the EU average are the Czech Republic, Estonia, Cyprus, Malta, Portugal, Slovenia and Slovakia.

The countries with a gross national income of at least 90% of the EU average and above are Belgium, Denmark, Germany, Ireland, Spain, France, Italy, Luxembourg, the Netherlands, Austria, Finland and Sweden.

Since 2001, less developed eastern EU regions have been catching up with the rest of the EU. However, many middle-income and less developed regions, especially in the southern and southwestern EU, have suffered economic stagnation and decline.

Although convergence among the member states accelerated, internal regional disparities increased in fast-growing member states. While large urban centres are growing fast, rural areas are being depopulated and are lagging behind.

The report shows that employment has been growing, but regional disparities remain larger than before 2008.

The number of people at risk of poverty and social exclusion fell by 17 million between 2012 and 2019.

The EU’s population is ageing and is expected to shrink in the coming years. The share of population living in a shrinking region is projected to increase from 34% to 51% between 2020 and 2040.

Cohesion policy has become an important source of investment. Cohesion funding grew from the equivalent of 34% to 52% of total public investment from the 2007-2013 programming period to the 2014-2020 programming period.

“By mapping the areas where Member States and regions need to do more and better, the report allows us to learn from the lessons of the past to be better prepared for the challenges of the future. We need to accelerate the adoption and implementation of Cohesion policy programmes for 2021-2027 so that we can continue supporting regions in recovering from the pandemic, reap the full benefits of the transition to a green and digital Europe and deliver on long term growth,” said Commissioner Ferreira.