EU Regional Policy and Greece: A Side-Payment or a Goal-Oriented Activity?

EU Regional Policy and Greece A Side-Payment or a Goal-Oriented Activity ?

Dissertation Michalis PEGLIS Programme: Public Administration and Public Policy MSC Government Department

August 1998, The London School of Economics And Political Science

Essay on “EU Regional Policy and Greece: A Side-Payment or A Goal-Oriented Activity ?”

August 1998, LSE

Table of Contents

Acknowledgements I.

Introduction

II.

Greece and EU Regional Policy: a case study a. Bargaining in the European Councils b. Regional policy and Greek performance c. Regional Policy and Subnational Government

III.

Evaluation of the findings of the case study a. Intergovernmental bargaining b. Trends of the indicators c. Decentralisation process

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IV.

The general debate a. Intergovernmental theories b. Neo-functionalist theories c. The debate about the effects d. Different concepts about the EU

V.

Concluding remarks

Bibliography Appendix A: Trends of the Greek economy Footnotes

Length of the dissertation: 9,547 words

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Acknowledgements I would like to thank Mr. Efthimios Christodoulou, Mr. Kostas Hatzidakis, Dr. Dimitris Katsoulis, Mr. Thrasivoulos LazaridIs and Mr. Michael Papakonstantinou for taking the time to provide me with their views during the interviews that we did on the topic of this essay.

I would also like to thank all the Prefects that took part in the survey conducted by completing and returning the questionnaire and the BOTSIS Foundation for assisting me in the search of the newspapers that I needed for my research.

Finally, I would like to express my gratitude to the State Scholarships Foundation (SSF) of Greece for the financial support, without which this dissertation would not be possible.

I.

Introduction

With the term ‘regional policy’ we refer to the structural funds and the cohesion fund of the European Union (EU), which aim the development of the poorer regions and member states of the EU. This policy has come to be the second largest item in the budget of the EU accounting at around 35% of its budget.

This essay will discuss the case of Greece as a recipient of the regional policy of the EU. More specifically it will discuss the application of the two major approaches to the regional policy: the intergovernmentalist ‘side-payment’ and the idealist ‘goal-oriented’ approach. The rational for selecting Greece as a case study for these two approaches is that Greece, as the poorest member of the EU, has been a prime recipient of the regional policy and therefore, it is of interest to see how would these two hypotheses apply.

The topic of regional policy in the European Union is, of course, a large and multidimensional one. Aspects include the decision-making process for its adoption, the debate about ‘what’ causes convergence of the poorer regions or member-states, the administrative side of the policy and the role of the Commission, the emerging of the subnational authorities as actors in their own respect and other. Most of these topics are dealt in multiple and controversial

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ways in the relevant literature. Many of these topics will be touched in the following chapters, but this will be done so in a functional manner. The focus of this essay is the position of Greece during the decision making process for the adoption of the regional policy, as well as some the consequences that it has had in Greece.

There are three types of primary material that we have collected for this case study: First, we took interviews from five people, who, under some capacity, have dealt with this issue in Greece: - Mr. Efthimios CHRISTODOULOU, current member of the European Parliament, who was minister of national economy during the European Council of Maastricht and later governor of the Bank of Greece; - Mr. Michael PAPAKONSTANTINOU, who was minister of foreign affairs during the European Council of Edinburg; Both these former ministers were interviewed on the Greek positions and tactics during the negotiations in both the European Councils of Maastricht and Edinburg in December ‘91 and ‘92 respectively.

- Mr. Thrasivoulos LAZARIDIS, chairman of the Greek delegation in the Committee of the Regions of the European Union for the period 1993-97 and Mayor of Kalamaria; - Dr. Dimitris KATSOULIS, currently advisor to the dep. minister of Interior; They were both interviewed on the role of the EU regional policy in the reform of the subnational government in Greece during recent years.

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- Mr. Kostas HATZIDAKIS, current member of the European Parliament (MEP), member of the regional policy committee and co-ordinator of the European People’s Party (EPP) group in that Committee, was interviewed on the current trends in the European Parliament towards the adoption of the new regulations for the structural funds and the third round of the Community Support Frameworks (CSFs) that will run for the years 2000-2006.

Secondly, we collected the views of the Prefects, the elected heads of the second level of the subnational government in Greece. For this purpose a questionnaire was conducted and sent to all the 54 Prefects, focusing on the EU regional policy and the development of the local and regional government in Greece during the last four years that they have been in office. The results presented are based on the views of the 25 Prefects that returned the questionnaires.

Thirdly, we have also studied the reports of three major newspapers (TO VIMA, ELEFTHEROTIPIA, and KATHIMERINI) during the period of major decisions for the regional policy: the days before and after the European Councils of Maastricht and Edinburg. The aim of this reference was to get a thorough understanding of the political scene and debate in Greece inside which the positions of the Greek government were shaped.

Additionally, we have used official publications of the European Commission and a series of secondary sources, books and articles on regional policy in the framework of the EU. The aim of this material has been twofold: firstly, to analyse and evaluate the Greek position during the negotiations for the European Councils of Maastricht and Edinburg, the tactics and the bargaining elements of this position and their relation to the theories under consideration. Secondly, to evaluate the consequences of the EU regional policy on the evolution of the subnational government in Greece.

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The aim of this essay is to draw some conclusions on the Greek case of the EU regional policy and from this to discuss the general debate about whether the regional policy of the EU is a side-payment or a goal-oriented activity, discussing the strengths and weaknesses of each approach.

The hypothesis that I will put forward is that the EU regional policy decisions of Maastricht and Edinburg were not side-payments for Greece, as the evidence will suggest. Furthermore, I will try to demonstrate that the EU regional policy has played an important role in generating a process of decentralisation of power in favour of the subnational structures that consecutive Greek governments had neglected before. The end of this process is still unknown, but the evidence that exists suggests that it is a lasting one. These developments will be discussed in the framework of the two theories on regional policy under consideration.

II.

Greece and EU Regional Policy: a case study

a.

Bargaining in the European Councils

The European Councils of Maastricht and Edinburg have taken their place in the history of the EU apart from other reasons, for major redistributive decisions. The Maastricht Summit for the decision to create the Cohesion fund and the Edinburg Summit for the decision to substantially extend the budget for the regional policy.

From ECU 18,6bn in 1992 to ECU 30bn in 1999 (1992 prices) out of which ECU 2.6bn will go to the Cohesion Fund, these increases are larger in absolute terms than the previous doubling in 1988. The total amount will account to 35% of the EU budget in 1999.

There has been a lot of reference on the bargaining aspect of both these decisions from the side of the ‘poor-four’ - Greece, Ireland, Portugal and Spain (Pollack, 1995; Hooghe and Keating, 1994; Marks, 1993). These refer to the negotiations

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that took place where the decisions concerning regional policy were linked with the agreement upon other major issues of the EU, such as the Maastricht Treaty and the start of the negotiations with the EFTA countries for the enlargement of the EU. For this purpose we traced the Greek position in both these negotiations by interviewing two policy makers of the Greek government back then, as well as by studying the reports in the press during the days before and after the European Councils of Maastricht and Edinburg.

The Maastricht Summit The Greek government went to Maastricht with the following agenda, not necessarily in priority order: -

to put Greece in the Western European Union (WEE);

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to defend its position on the so called ‘Macedonian question’, which means the conditions under which independence would be recognised to the ‘former Yugoslav Republic of Macedonia’, that was coming out of the disintegration of the former Yugoslavia;

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to support the Spanish demand for the establishment of the new Cohesion Fund;

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to promote a flexible interpretation of the convergence criteria in order to secure the fastest possible integration of Greece in the EMU, as well as the adoption of the Common Foreign and Security Policy, a topic of high priority for Greece due to its security concerns;

The application of Greece in the WEE together with the issue of the Yugoslav disintegration were the two dominant items on the Greek agenda that the press had been extensively reporting in the days that proceeded the Maastricht Summit.

So important was the Greek application in the WEE that the then foreign minister, Mr. Samaras, few days before the Maastricht Summit repeatedly stated to the

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press that Greece would not sign the Maastricht Treaty if it were not allowed to enter the WEEi. This was already a controversial point due to general debate in the EU at that time about its defence institutions and specifically about the role of the WEE and NATO. The case of Greece was even more complicated due to the application of Turkey to join the WEE as well. The difficulty of this application is further demonstrated by the negative vote of the General Assembly of the WEE, on December the 3, 1991, few days before the Maastricht Council. This vote was not binding the EU Summit, but still outlined the difficulty of the case and raised the stakes of the application in the Greek political arena.

The end of the Maastricht Summit found Greece with most of its agenda points accepted. It had been allowed to join the WEE, it got a friendly statement on the Yugoslav crises, the Spanish demand for the Cohesion fund was met and the Maastricht criteria were interpreted in a more flexible way.

As far as the last point is concerned, the then minister of national economy, Mr. Christodoulou, explained to us that there were two ways that this was achieved: the first one was the inclusion of the term ‘tendency’ in the Maastricht Treaty for the criteria at stake. The Greek government together with Italy, Spain and Ireland demanded that this term be included in the definition of the convergence criteria, against the emphasis of the Dutch Presidency towards a more ‘strict’ interpretation of the criteria in the Treaty. The second aspect where the Greek government had to bargain was for the European Council to be the appropriate body to decide which countries would be the ones to form what was latter called the ‘euro zone’ and generally to decide which countries are eligible for membership. This may appear of minor importance, however, according to Mr. Christodoulou it was very important for Greece because this is a body the decisions of which are influenced by political parameters and bargaining. This, according to the former minister, was the case because for Greece the EMU was a very desirable evolution that the Greek government had to bargain in order to facilitate its earliest possible integration in this ‘exclusive club’rd.

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The Edinburg Summit The European Council in Edinburg is even more interesting from this perspective.

According to the then foreign minister, Mr. Papakonstantinou, and the extensive reports of the press the Greek government went to Edinburg with two main issues on its agenda: -

the first one was to make sure that the statement of the European Council of Lisbon on the Macedonian question, the number one foreign policy issue of Greece at that time, would not change;

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the second one was to support the Spanish effort for the doubling of the structural funds, something of obvious importance for Greece;

The first item of the Greek agenda faced a negative mood in the Council of foreign ministers that proceeded the European Council, as well as in the Summit itself. The extensive reports in the Greek press and the interview of the then foreign minister revealed that the Greek government threatened to veto the agreement on the budget of the regional policy unless it got a statement that would reaffirm the Lisbon statement on the Macedonian question. Just to indicate how important this issue was for the Greek government, the newspaper ‘The Guardian’ was reporting: “from the 12 European leaders, in Edinburg, only Constantine Mitsotakis is in danger to lose his job after Sunday if the result of the Summit meeting is against him”ii, referring though to the Macedonian question and not to the budget for the structural funds.

The four main points of the final outcome of the Summit were: the accommodation of the Danish reservations on the Maastricht Treaty in order to overcome the negative result of its first referendum on the Treaty; the budget agreement on the 1,27% of the Community GNP and the doubling of the funds for the regional policy; the agreement to start the negotiations with the EFTA

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countries on 1/1/1994 and; a general statement on the Macedonian question that could be interpreted in different ways by different people. The Greek Prime Minister did not veto the Summit outcome and coming back to Greece he tried to defend that it was a successful outcome. With the exception of the small communist party, the other two parties of the Greek parliament (PASOK and SIN) with public statements stated that he should have vetoed this outcome and therefore the successful result for Greece of the budget negotiation for the regional policy.

More bargaining…

In his interview, the former minister of foreign affairs also talked about the negotiations for the level of funding that Greece would get from the structural funds. He emphasised that although in the European Council the ‘poor four’ were standing together to get a higher overall amount for the regional policy against the wealthier countries who would ‘pay the bill’, when it came to define how much each one would get, then they were competing against each other. In these negotiations the role of the President of the Commission, Mr. Delors at that time, was very influential, being the drafter of the budget. This role according to the Greek minister was becoming more important due to the personality of Mr. Delors, a person with a high prestige in Europe. The President of the Commission met separately with each foreign minister and bargained for the amount that the relevant country would get. In these negotiations the prime arguments of the Greek side were the needs of Greece for big infrastructure projects. Mr. Papakonstantinou reported that Mr. Delors even asked for support on other topics of interest to the Commission in return to a ‘good deal’ agreed on the funding levels for Greece. One such topic reported was the financial support of the Länders of the former Eastern Germany.

Furthermore, since these agreements went to the Council of Ministers for final approval there was a lot of bilateral and multilateral bargains of each

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recipient country with counterparts from other countries for support on their level of funding in exchange of support to other topics. The involvement of private firms from wealthy countries to big, usually construction, projects (such as the metro of Athens) funded by the EU in a cohesion country was always a good reason for the wealthy country to support a budget proposal for this poor country.

Concerning the use of veto in Edinburg the Greek former minister explained to us that “I tried to avoid it of course… it would harm our relations with the Spanish Government that had supported Greece on numerous occasions… it would isolate us”.

b.

Regional policy and Greek performance

A selection of indicators are presented in Appendix A. Greece’s membership in the EU has proved very positive financially. This has been the result of been a beneficiary in both the Common Agricultural Policy (CAP) and the regional policy. As table 1 shows, Greece has had an overall net income from the EU accounting to 4.62% of its GDP in 1994. Only from the regional policy Greece has been receiving annual amounts representing over 3% of its GDP (Commission, 1996).

However, the performance of the Greek economy during recent years even with the substantial transfers from the EU has been poor and middling. During the period 1986-93, most of it covered by the first Community Support Framework, Greece has had an annual average of 1.5% increase of its GDP. This has been below the Community average and far below the average increase of the GDP of the four cohesion countries (table 2). Furthermore, the evolution of the Gross Domestic Product (GDP) per head of the 13 Greek regions until 1991 is disappointing (table 3). Ten years after the accession of Greece in the EU, all the 13 regions of Greece experience decreases of the GDP per head.

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When we take a look in the evolution of the GDP per head in Purchasing Power Standards (PPS) from 1980 when Greece became member of the EC till 1995 when the second Community Support Framework had already been launched, the results are more encouraging, with some increases of the GDP per head in PPS in most of the regions (table 4).

c.

Regional Policy and Subnational Government

The impact of the EU regional policy on the Greek subnational structures can be traced back to the Integrated Mediterranean Programmes iii (IMPs) in 1985. Before the introduction of the IMPs the Greek local government consisted of:  54 prefectures headed by an appointed Prefect;  304 municipalities headed by an elected Mayor;  5,695 communities with less than 1,000 inhabitants headed by an elected President, out of which 3,284 represented less than 500 inhabitants (Verney and Papageorgiou, 1993, p.110).

For the needs of the IMPs the Greek government proceeded with a new Law (1622/86) that created 13 administrative Regions each one headed by an appointed Regional Secretary. These units were not exactly regional authorities, as they were an extension of the national administration. Their prime responsibility was to function as monitoring units for the implementation of the IMPs. The IMPs ran into various troubles in Greece that “resulted from the Greek administration’s attempt to run regional programmes without devolving any subnational powers to the regional level” (ibid. p.159).

The first doubling of the structural funds in 1988 extended substantially the level of funding from the Community for the development of the Greek regions.

Furthermore, with the new regulations of the funds the Commission gained a

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decisive role, as a ‘hands-on’ financial manageriv. Specifically, the principles of ‘programming’ and ‘partnership’ of the new regulations demanded from the weak subnational structures of Greece new roles in the implementation of the structural funds. The experience of the IMPs constituted an established bad record for the capacity of the local government to meet the needs of the development projects, in the absence of adequate delegation of power, responsibilities and resources from the central administration.

In his interview, Dr. Katsoulis identified a series of problems that the weak subnational structures were facing in the implementation of the first Community Support Framework for Greece. Being small and fragmented the few thousand communities were totally unable to present serious proposals for development projects and therefore to take advantage of the EU funding. They lacked the resources, the expertise and the bargaining power. They were unable to effectively monitor the implementation of the various development projects and to coordinate with other communities for projects that involved wider areas and, therefore, they could only deal with very small-scale projects in their territory, uncoordinated and unimportant for the general development of the country side.

This reality has been a long standing problem for Greece and has played a serious role in the low growth rates that Greece has had during recent years, regardless of the increasing amounts of monies coming from the EU after 1985.

The socialist government (PASOK) was planning to proceed with the introduction of elections for the Prefects. This was agreed at that time even by the conservative party (ND) during a coalition government that took place for a few months (November ‘89-April ’90). These elections were planned for the autumn of 1990. However, the change in government in April 1990 and the coming of the autonomous government of ND postponed the whole process until PASOK came back in 1993. Since 1993 there has been a series of reforms introduced promoting decentralisation of power towards the local and regional authorities. These include:

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 In 1994 a new law introduced elections for the Prefect and the first elections took place in October 1994.  In 1997 a new law (‘Kapodistrias’) altered the local administration map of Greece. From now on the situation is as follows: - 890 municipalities, 55% of which have over 5,000 inhabitants. Out of these 890 municipalities 757 are new and were created by merging former communities and the remaining 133 are municipalities that remained unaltered.

- 133 communities (103 of the old ones and 30 new that were established by the merging of small communities of the previous status quo).  In 1997 another new law introduced the Regions (‘perifereies’) as the third level of subnational administration, headed by a General Secretary, appointed by the Minister of Interior. These were the units established in 1986 for the needs of the IMPs but this time they became part of the subnational government, with additional responsibilities being given to them, although still lacking popular mandate.

According to Dr. Katsoulis, the problem nowadays is not the delegation of further responsibilities to the Prefects and the Mayors, but the effective execution of the existing ones. This has been enhanced with the introduction of the elected Prefect and the restructuring of the local administration map of Greece. Dr. Katsoulis believes that during the recent years there is a clear political will from the government and the major political parties to decentralise. The problems according to him arise in the process of decentralisation, as there is substantial opposition primarily from the senior public servants, who view this process negatively, because it signalises the end for certain powers that they used to have.

The impact of the EU regional policy on the subnational government was further discussed with the former chairman of the Greek delegation in the Committee of the Regions. In his interview Mr Lazaridis emphasised the role that the European

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Union has played in the process of the administrative decentralisation in Greece.

When the Committee of the Regions was founded by the Maastricht Treaty the only elected subnational government representatives were the heads of the municipalities (Mayors) and the communities (Presidents). As a result, the original composition of the Greek delegation in the Committee of the Regions that the conservative government appointed included 8 Mayors and 4 Regional Secretaries of the 13 Regions that Greece was divided into since 1986, as an extension of the national administration. There were serious doubts about whether such a delegation would be approved by the Council of Ministers, as there was a vague interpretation of the article 198a of the Maastricht Treaty that describes the composition of the Committee of the Regions consisting of “representatives of regional and local authorities”. Before this came to be proved there was a change of the Greek government in the autumn of ‘93 and the new socialist government proceeded with appointing 12 Mayors in the Committee. Later on, after the election of the 54 Prefects in October ’94, the composition of the Greek delegation was changed with the appointment of 6 mayors and 6 of the newly elected Prefects.

Mr. Lazaridis emphasised the role that the EU has played in the process of decentralisation of the Greek state as both a catalyst and a model. As far as the Committee of the Regions, Mr. Lazaridis explained that although as an institution it only has an advisory role, it has been very important for Greece. It brought the local government in direct contact with the European Union, as well as with its counterparts in the different member states. This facilitated the transfer of experiences of how things are done in other countries, promoted bilateral contacts with other subnational authorities and, generally, generated a process of ‘Europeanisation’ of the local authorities. He is very optimistic for the future development of the devolution of power in the Greek state and he foresees the introduction of the elected third level of local administration in the middle term future. ‘The need for strong subnational institutions has been very well appreciated in Greece during the recent years due to the EU’… ‘Good access to

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the EU funding requires strong subnational authorities’, Mr. Lazaridis emphasised.

We traced the attitudes of the subnational government in Greece towards these developments by conducting a questionnaire that we distributed to all the 54 firstly elected Prefects that are ending their mandate this autumn. The full results from this questionnaire are presented in Appendix B. The overall message that this questionnaire gives is a positive and optimistic view for the future of the subnational government in Greece. The main points that came out of this survey is a positive view on the role of the EU regional policy in the prefectures and a positive view on the involvement of the Commission in the projects funded by the EU. Almost unanimously, they believe that the role that the EU is dedicating to the regions can contribute to the further administrative decentralisation of Greece.

They want more responsibilities to be given to them from the central administration, while they think that the support they receive (financial etc.) is not adequate. They are critical towards the central government, administration and the political parties for the lack of further decentralisation and they blame them for centralisation, bad culture, bureaucracy, lack of expertise etc. Finally, they have a positive view on the consequences of the single currency on their regions.

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III.

Evaluation of the findings of the case study

a.

Intergovernmental bargaining

Out of the analysis of the Greek positions in the two European Councils we can assume that each member state of the EU entered the negotiations of Maastricht with an agenda of its own, with various points, some of them common with other members and some of more national character.

Using the intergovernmental approach we can claim that the threat of the Greek foreign minister to veto the Maastricht Treaty should not Greece be allowed to enter the WEE is a clear example of tactical bargaining, since there is no functional linkage between the two issues. The acceptance of the Greek application to join the WEE and the friendly statement it got on the Macedonian question was what Greece demanded in exchange for its support to the other topics of the Summit. These can be viewed as the side-payments for Greece for not vetoing the Maastricht Treaty.

The same is claimed for the Edinburg Summit where Greece considered vetoing the whole outcome and therefore the successful result on the structural funds’ budget, unless it got a friendly statement on the Macedonian question, which had turned out to be so important for the domestic politics of Greece. The final general statement on this issue, using the intergovernmental approach, was the sidepayment for the Greek government that came out of its bargains in Edinburg for not vetoing the whole or part of its outcome.

In both cases we evidence strong bargaining, tactical linkages, threat to veto and, finally, some sort of accommodation of the national agenda points and the subsequent approval of the other decisions of the Summits. But if that means that the side-payment of Greece to sign the Maastricht Treaty was the acceptance of its application towards the WEE then what was the cohesion fund for Greece?

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Similarly, in Edinburg, if the side-payment for Greece was the statement on the Macedonian question then what was the decision for the doubling of the structural funds?

Using the intergovernmental approach, from the above analysis of both these European Councils we conclude that the positive decisions taken for the regional policy can not fulfil the definition of side-payments for the position of the Greek government. They may well be defined as side-payments for the case of the Spanish government, which undertook the protagonistic role in this bargaining, but not for Greece. The Greek agenda during both these meetings was so dominated by other issues of national interest that the Greek government considered to veto the agreements on the regional policy if these other points of its agenda were not accommodated.

Of course one could question the chances of the Greek government actually vetoing the Edinburg Summit because of a ‘statement’ on the Macedonian question. Significant reference is given about the political consequences of a veto at a European Council. However, the rules of the European Council give each member state such a possibility. This is well known to everyone around the table and is what facilitates extensive bargaining and some sort of accommodation at the end.

b.

Trends of the indicators

The indicators presented on the trends of the Greek economy can not be used for a thorough evaluation of the regional policy, as such a task would require a much more detailed analysis of different macro and micro indicators, related with other domestic and international trends that could reveal the whole picture. For example, between the flow of the EU transfers and the effects that they have on basic indicators, such as those presented, there is obviously a time gap, that is

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difficult to estimate, as these policies aim to have a structural impact on the different sectors of the economy, that requires a longer period of time in order to be able to draw conclusions upon the extent of their effectiveness. Furthermore, a thorough evaluation of the impact of the Greek integration in the EU would have to consider the series of policies pursued at the national level, starting from the economy and going to other sectors that affect the development process of a country.

We can not therefore conclude whether the middling performance of the Greek economy is due to the negative effects of its integration in the Community market, or whether this middling performance is regardless of the positive effects out of its integration in the Community market. This of course has generally proved a difficult task for most of the EU member states especially those in its periphery.

This difficulty in evaluating the effects of market integration has played an important role in generating a big debate among economists about the effects of the market integration of the EU for the poorer member states and therefore about the necessity of policies such as the regional policy. With the advent of the EMU this debate has been extended.

The message, however, of our data is that although there is an overall improvement of the Greek economy 15 years after its accession in the Community this is not adequate, given the length of the period and the level of the Community funding, especially after 1988 and the first doubling of the structural funds.

c.

Decentralisation process

For the case of Greece, Pollack argues that “the regions have generally been unable to muster the capabilities and competencies to participate actively in EC regional policy; and the result has been, instead, to strengthen the central government vis-à-vis the regions” (Pollack, 1995, p.377). This is true, but it is one

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interpretation of what has happened. On the other side, we do evidence a change of preferences in the Greek political scene, against a long tradition of centralised power of the national administration.

In order to attempt an evaluation of the process of decentralisation in Greece, we will put forward a couple of questions: why did the Greek government decide to end a tradition of centralised state and weak subnational structures that had been predominant for decades only in the middle of the 1980s? What changed at that time that made them shift their preferences towards the reform of the state, since there is no conventional obligation of Greece to the EU to decentralise?

Our suggestion is that the EU regional policy has played a role in this process, especially after the first experience of the IMPs and the subsequent incapacity of Greece to adequately take advantage of these funds. Generally, and apart or because of all the problems that took place in the implementation of the IMPs they still “had stimulated the introduction of regional structures and promoted the idea of regional programmes as a feature of Greek national development planning” (Verney and Papageorgiou, 1993, p.160).

The 1988 regulations of the structural funds and especially the principles of ‘programming’ and ‘partnership’ have been strong catalysts for these developments. As the evidence from the questionnaire implies, the prefectures have acquired a sense of regional identity, being critical to the central state in Athens, positive and optimistic about the role of the EU towards further decentralisation that they consider as an important element for the development of the country. This will of course play a role in the future developments, especially in the light of further interaction with the EU policies. As Leonardi has put it: “the experience of the last twenty years shows that the process of European integration has had an impact on the direction and content of sub-national governmental reform” (Leonardi, 1993, p.7, italics in original).

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Another question though would be why did the regional policy facilitate a process of decentralisation in Greece and not in Ireland, that has also been a prime recipient of the regional policy? Ireland has not altered its centralised structures, but has successfully been using the regional policy funds, experiencing the highest rates of economic growth in the EU for several years. The answer to this question lies in the domestic politics in each member state. “Europe and European structural policy are able to act as catalysts for national developments, but have been unable to impose their own logic” (Hooghe and Keeting, 1994, p.388). This statement seems real for the case of Ireland but not for the case of Greece.

In order to understand how the preferences of the Greek government changed in favour of a process of decentralisation one must examine the domestic political arena. The administrative reform in Greece that led to the introduction of the elected second level of local administration in 1994 and, later on in 1997, to the restructuring of the boundaries of the local municipalities and communities may of course be analysed from different perspectives.

From a rational or public choice approach the institutional reform with the introduction of the elected Prefects in 1994 can be conceived as an intention of the central state managers to bureau-shape (Dunleavy, 1991, ch. 7-8). Additionally, the governing party could extend its popular support by claiming the credit for giving the citizens the opportunity to select their representatives on the second level of the subnational government. Furthermore, local government has traditionally been a winning field for left-wing parties. The result of the first elections for this new institution may justify this claim, as the governing party (PASOK) elected 38 out of the 54 Prefects, a result that is much higher than its result at the national elections 11 months earlier (46% for PASOK and 39% for ND). The law of 1997 on the restructuring of the local communities and municipalities fits well in a rational ‘preference-shaping’ attempt (Dunleavy, 1991: ch.5). It can be seen as a well designed effort of the governing party, PASOK, to gerrymander the electoral map of Greece on the local administration

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level in order to maximise the number of the mayors it can elect at the upcoming elections this autumn, by making the right ‘tailoring’ of local populations. This has been the main argument of the conservative opposition against the ‘method’ used by the socialist government to decide how the communities would merge.

Both these evolutions though may well be analysed from an idealist approach. The introduction of elections for the Prefects can be seen as a necessity for Greece, a common thing in most EU countries, that would create stronger subnational institutions, with a popular mandate, more accountable to their citizens and therefore more able to respond to the needs of the districts they administer for growth and development. Furthermore, they can be seen as a better way to accelerate the capacity of the regions to take advantage of the EU regional policy funds. The recent mergers of the communities and municipalities in Greece can be perceived as a response to a long standing necessity to end the fragmentation of the local government; as a way to promote better co-ordination among them and towards the central administration in Athens and the EU institutions dealing with regional policy; and all this to enhance the development of the country by creating stronger subnational institutions, that Greece had been lacking.

What ever the exact combination of reasons has been that originated this process of decentralisation of power in Greece, the outcome is a steady and lasting one that should not be neglected or underestimated for its importance. In this perspective we consider that the European Union in general and the regional policy in particular have had a strong impact in these reforms, as a catalyst for the change of preferences in the Greek political arena.

IV.

The general debate

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a.

Intergovernmental theories

The conventional side-payment hypothesis argues that at the negotiations for the Maastricht Treaty the ‘big’ countries came up with the ‘big’ project called Economic and Monetary Union (EMU). The theory proclaims that these countries had more intense preferences for such a project, as they expected themselves to be the prime beneficiaries. “In general terms, the wealthier member states, such as, Britain, France and Germany, have more intense preferences for major programs such as market integration, monetary cooperation, and enlargement; these intense preferences can then be exploited by poorer member states, which demand sidepayments in other areas as a condition of agreement” (Pollack, 1995, p.365). The poorer member states are perceived to have less intense preferences for the EMU. That is why they used this opportunity to threaten the wealthier countries that they could only get such a proposal pass the European Council if they got a good sidepayment. This side-payment is supposed to be the adoption of the new cohesion fund in the new Treaty of the European Union. Furthermore, the content of the side-payment does not have to be functional with the ‘big-project’ at stake. In the case of the adoption of the cohesion fund, according to this argument, this was accepted not because it was functionally linked with the EMU and the convergence criteria. This is the case because “the linkages between issues are tactical and not functional” (ibid. p. 366) and “there is little or no need for the recipient member states to demonstrate losses from market integration or EMU. The important element in each bargain is not the functional effect of integration on poorer regions but the ability of member governments to veto projects of interest to other, wealthier member governments (ibid.).

Preference formation The first point that we would like to put up for discussion is the content of the preferences of the member states. According to Pollack these preferences are “in general terms” fixed. His argument treats member states as ‘black boxes’ with a priori set preferences for wealth, security, power etc. in line with the realist

24

account. A member of the ‘poor-four’ at the Maastricht and the Edinburg Summits is expected to act more or less as Spain did, linking the adoption of the ‘big’ projects with the decisions for the redistribution. This may well be true for Spain and the two European Councils under discussion, but it should be used to put all the other countries in the same ‘basket’. The agenda of a member state is a much more dynamic synthesis that derives primarily from the domestic politics.

The analysis of the Greek case at the negotiations in Maastricht and Edinburg confirms this point. The Greek government not only did not have an intense preference for the decisions to adopt the cohesion fund and to double the structural funds but it even considered to veto both these decisions in order to promote its higher agenda points, deriving from the domestic political arena. This does not mean that Greece was against the redistributive decisions. As we explained in the presentation of the Greek case, the Greek government was in favour of the Spanish demands, but it had some other topics on higher priority.

Under different circumstances the Spanish demands would have been Greece’s highest priorities, but at those meetings this was not the case. For example it had been Greece that few years back in 1984 undertook a bargaining for compensation to the accession of Spain and Portugal in the EU, because of similarities in the agricultural products. That bargaining (supported by Italy and France) had then led to the creation of the IMPs.

Preference intensity This brings us to the second point that the argument of Pollack raises. Under his analysis of the preferences of the member states, a less wealthy country is expected to have less intense preferences for, say, the EMU. Our analysis shows that this can not be conceived a priori for any member state. In order to conclude on the intensity of preferences of a member state for the EMU, one must take a closer look in the domestic political arena. Although the case of Greece is not revealing from this aspect, the formation of the national interests implies that it is

25

not necessarily true that a country like Greece must have a preference for EMU less intense than that of Germany, for example. Such a case has been Britain, that, although a member of ‘big-three’, it has had less intense preferences for the EMU than any of the countries of the ‘poor-four’ due to its domestic political agenda.

This agenda is of course subject to change. That is why an analysis that fits well in explaining the behaviour of a member state in one occasion may prove irrelevant in explaining its behaviour on a future occasion. For Greece, for example, the EMU has been received very positively as a firm step towards further integration that is very welcome due to the security concerns that have a high place in the domestic agenda.

These remarks about the formation and the intensity of the national preferences are not meant to underestimate the process of the bargaining in the European Councils, the linkages pursued by the member states and the ‘deals’ that are reached. They are only meant to demonstrate that such an intergovernmental analysis of the European Councils must start with a thorough understanding of the different national preferences for both the content and the intensity, that will interact in the proceedings of the Summit. This analysis of the national preferences may prove a difficult task, as it requires an understanding of the domestic parameters in each member state that shape its national preferences.

Only that way can for example the Greek position be understood, considering to veto what would be expected to be its goal at the two meetings that we approached. The level of understanding of the domestic politics of the member states that shape their national preferences in the European Councils will determine the level of understanding of the outcomes of the European Councils.

As Moravcsik puts it: “national interests are, therefore, neither invariant not unimportant, but emerge through domestic political conflict as societal groups compete for political influence (…). An understanding of domestic politics is a precondition for, not a supplement to, the analysis of the strategic interaction among states” (1993, p. 481).

26

Limits of the side-payment hypothesis But is the intergovernmental approach, with the remarks just presented, capable to fully capture the politics and the policies of the EU? How does the intergovernmental approach explain the historical development of the regional policy? Furthermore, in the evaluation of the Greek case we suggested that the EU regional policy has been a catalyst for a change in the national preferences that led to the introduction of a process of decentralisation of power towards local and regional government. How does this finding fit with the intergovernmental approach?

From a small interstate transfer in the ‘70s to the second largest receipt on the budget of the EU today accounting for approximately 35% of the budget with an active role dedicated to the Commission and the subnational governments obviously a lot of things have changed. The role of the Commission has become a big part in this debate, with some interpreting its role as of minor importance to the central elements of the policy that are decided by the member states, as the gate-keepers and those who believe in the existence of spill-over effects from which the Commission has gained a lot.

The explanations provided by the side-payment hypothesis would advocate that this 35% of the EU budget is the product of tactical linkages of the poorer member statesv to the wealthier ones in exchange for support to big market integration projects in consecutive European Councils over the years. Although a static analysis of a European Council may confirm this bargaining approach, we consider it to be inadequate to provide a convincing explanation for its historical development from a transfer to a policy. Such an explanation would, for start, have to deal with the first doubling of the structural funds in 1988 and the administrative aspect of these funds with the regulations that the Commission proposed and the member states accepted.

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Pollack argues that the 1988 reforms of the regulations for the structural funds provide further support to the intergovernmental thesis of member-states as the gate-keepers and interprets them as a result of the interest of those ‘who pay’ to avoid misusing of the funds. Even if this is true, the concern of these member states was for the money to be spent for the purposes that they had been assigned.

This does not imply a particular model of administration of the funds. This particular model, that the Commission proposed and the Council accepted, with the principles of ‘programming’ and ‘partnership’ has had a substantial effect in the content of the regional policy and after all in its consequences on member states, transforming the funding to a policyvi. To put it similarly: “[b]eyond and beneath the highly visible politics of member state bargaining lies a dimly lit process of institutional formation, and here the Commission has played a vital role” (Marks, 1993, p.392).

It is precisely the shape of these new regulations that granted the Commission a decisive role, and this has had an impact on the uprising of the subnational governments, as actors in their own respect, changing the substance of the regional policy and for some the substance of the European politics. These developments are not adequately captured by the side-payment hypothesis, the analysis of which ends by explaining ‘why’ those who pay had an increasing interest in the proper use of their money and accepted a much more active role of the Commission in order to monitor that. Without these additional remarks though, the bargaining and the tactical linkages of the poorer member states that extended the budget of the regional policy can not capture the consequences that this has created, such as the effects of the regional policy on the decentralisation of power in Greece.

This has proceeded even after the amended regulations of 1993, when the Commission, following the irritation of some countries, returned certain powers back to the member states over the implementation of the funds. The new regulations continued the thrust of the 1988 reforms, while, certain changes were

28

necessary anyway to improve their effectiveness, using the experience acquired. vii The doubling of the structural funds that took place a year before, out of the bargaining in Edinburg consolidated furthermore the regional policy. As Tsoukalis has put it “[u]ndoubtedly, the EU had travelled a very long way since the 1970s when member governments were involved in interminable negotiations about very small sums of money” (Tsoukalis, 1997, p.202).

b.

Neo-functionalist theories

Neo-functionalist theories argue for the unintended consequences that this policy has created, the additional competencies acquired by the Commission and the mobilisation of the regional authorities within the member states. The Community Initiatives have been sited as a prime example of how this was facilitated with certain examples (i.e. RECHAR) demonstrating the capacity of the regions to ‘outflank’ the national governments. As Marks puts it: “[s]ubnational governments have developed vertical linkages with the Commission that bypass member states and challenge their traditional role as sole intermediary between the subnational and supranational levels of government” (Marks, 1993, p.402) and furthermore: “we are seeing the emergence of multilevel governance, a system of continuous negotiation among nested governments at several territorial tiers – supranational, national, regional, and local- as a result of a broad process of institutional creation and decisional reallocation that has pulled some previously centralised functions of the state up to the supranational level and some down to the local/regional level” (ibid. p.392, italics in original).

The intergovernmentalists respond by arguing the de jure supremacy of the member states in the Treaties of the EU. As far as the regions are concerned, they argue that the regional mobilisation is a middling or marginal phenomenon against the predominance of the national government and that “regions are indeed

29

independent actors, but in a play – or institutional structure – laid down by the member states” (Pollack, 1995, p.377).

Both arguments debate on how the power is distributed between the supranational and the national authorities in the EU. The neo-functionalists claim that out of the experience of the regional policy the Commission and the regional authorities have been ‘winners’, while the member governments have been ‘losers’. On the contrary the intergovernmentalists argue that member governments are still the ‘gate-keepers’.

c.

The debate about the effects There has been an active debate about whether the process of market

integration produces convergence or divergence of the poorer regions and member states with the wealthier ones. Furthermore, it is debated whether convergence requires an active policy of the EU, rather than the free interaction of the market forces. An alternative path would be a free-market model, where, after a period of adaptation, everybody becomes better off in the market equilibrium. In this debate the advocates of the active policy seem to have won the day. As Tsoukalis puts is: “[t]he main message from regional economic theories is that there are no strong reasons to expect the elimination of regional problems through the free interplay of market forces” (1997, p.189).

The regional policy has had different effects in different cases of regions and member states. This diversity of results is responsible to a large extent for the debate about its necessity in the EU. Ireland and Greece are two contrast examples in this debate that can be used to support the opposite conclusion. For the EMU project, extensive reference has been given to the so-called ‘double’ pressures that the poorer member states were faced with. One the one hand they had to meet the convergence criteria by constraining public expenditure and on the other they had

30

to prepare themselves for higher levels of competition from which they may pay a price for not being ready. This argument brings in the point about the linkages of the issues, suggesting a functional linkage between the preparation for the EMU and decisions such as the creation of the cohesion fund and the doubling of the structural funds, in ’91 and ’92 respectively. As Tsoukalis has put it: “the link between the internal market and EMU on the one hand and redistribution on the other had become firmly established” (1997, p.202).

This discussion becomes even more interesting nowadays with the advent of the single currency, where another debate has started about whether the EU needs to be prepared to support regions that may be faced with the negative consequences from the single currency with additional funding.

d.

Different concepts about the EU

Although an attempt to bridge the two hypotheses can be a useful exercise, this has certain limits. These are limits posed by the fact that each approach implies a different concept about what the European Union is all about.

The side-payment approach conceptualises the EU as a Union of states, with the guarantee of the veto, in an intergovernmental set-up, capable to reduce transaction costs for negotiating agreements via issue linkages that can be mutually beneficial, creating therefore a positive-sum game for all. According to Moravcsik “[s]uch theories suggest that the EC is best seen as an international regime for policy co-ordination, the substantive and institutional development of which may be explained through the sequential analysis of national preference formation and intergovernmental strategic interaction” (1993, p.480).

Goal-oriented approaches view the regional policy as a tool to promote convergence of the poorer regions and member states with the richer ones of the

31

EU. Furthermore they place regional policy within a certain concept for the EU as an “index of the political and social cohesion of a new system; large transfers of funds, as a very tangible expression of solidarity, presuppose the existence of a developed sense of Gemeinschaft… which is, of course, not a feature of international organisations" (Tsoukalis, 1997, p.187, italics in original). Goaloriented approaches do not of course neglect the bargaining framework within which EU decisions for large budget packages are taken. However they view these evolutions within this concept for the European Union, as well as a clear functional linkage between the topics, such as the single market and the EMU, which downgrades the bargaining in the European Councils to a ‘goal-oriented activity’, rather than a ‘game-theory application’.

We are not aiming here to provide an overall evaluation of the performance of the two approaches in the EU record. Our discussion has focused on the regional policy and we tried to present and discuss the main points of each hypothesis. Our conclusion is that each approach has certain merits and certain limits in explaining the regional policy of the EU. The case study of Greece has helped to reveal some of these and this has been our objective.

V.

Concluding remarks

From our analysis we conclude that when it comes to the major decisions for the adoption of the regional policy and its funding, the intergovernmental approach is accurate in capturing the bargaining that is taking place. It is not accurate though to fully explain the historical transformation of redistribution in the EU from an interstate transfer to a policy in the late ‘80s, as the concept of ‘tactical linkages’ is inadequate. On the other hand the goal-oriented approach may work well to describe some of the trends that the regional policy has promoted in recent years on certain member states, such as being a catalyst of institutional change in Greece. It is though inadequate to provide a thorough explanation of the

32

circumstances under which the major decisions have been taken concerning the adoption of this policy. The evolution of the regional policy has been challenging traditional approaches to the policies and the politics of the European Union, raising serious questions over their ability to explain, even more to predict the current developments of the EU. As far as our original question, about whether the regional policy has been a sidepayment or a goal-oriented activity for the case of Greece we conclude that for the cases of the decisions taken in Maastricht and Edinburg it has not been a sidepayment. Furthermore, we aimed to show that ‘something’ has happened in the Greek political arena in recent years in favour of a decentralisation of power from the central administration to the local and regional authorities. This ‘something’ we believe has to do with the European Union in general and the regional policy in particular and this is what we tried to demonstrate.

The EU today has launched the discussion on the new regulations for the structural funds and the third round of the Community Support Frameworks that will run for the years 2000-2006. The Commission has submitted its proposals and a thorough debate is taking place in the European Parliament. Another tough intergovernmental debate is expected to take place for the adoption of these new regulations. Out of this debate we expect both the traditional hypotheses of the regional policy to claim credit for the outcome, as it has been the case in the past.

The years of 2000-2006 will be the first years of the single currency, as well as the years of the next enlargement. Until then perhaps new approaches of the politics and the policies of the EU may be in place that will be better equipped to explain this institution called the European Union.

33

Bibliography

Bianchi G., (1993) ‘The IMPs: A missed Opportunity? An Appraisal of the Design and Implementation of the Integrated Mediterranean Programmes’, in Leonardi, R. (ed.)

The Regions and the European Community: The Regional Response to the Single Market in the Underdeveloped Areas (London: Frank Cass) pp.47-70.

Commission (1994) Competitiveness and Cohesion: Trends in the Regions (Luxembourg: Office for Official Publications of the European Communities).

Commission (1996) The Structural funds in 1994 (Luxembourg: Official Publications of the European Communities).

Christodoulakis, N. (1994) ‘Greece and European Monetary Union: a challenge or a helping hand’, in Mortensen, J. (ed.) Improving Economic and Social Cohesion in the European Community (London: Macmillan).

Dunleavy, P (1991) Democracy, Bureaucracy & Public Choice (Hemel Hempstead: Harvester Wheatsheaf).

Economist Intelligence Unit (1997) The Pros and Cons of EMU (EIU).

George, S (1996) Politics and Policy in the European Union, 3rd edition (Oxford and New York: Oxford University Press).

Harvie, C. (1994) The Rise of Regional Europe (London: Routledge).

Hooghe, l. & Keating, M. (1994) ‘The Politics of EU Regional Policy’, Journal of European Public Policy, 1(3) pp.367-93.

Jones, B. & Keating, M. (eds) (1995) The European Union and the Regions (Oxford: Clarendon Press).

Leonardi, R. (ed.) (1993) The Regions and the European Community. The Regional Response to the Single Market in the Underdeveloped Areas (London: Frank Cass).

Leonardi, R. (1995) Convergence, Cohesion and Integration in the European Union (London: Macmillan).

Loughlin J. (1997) ‘Regional Policy in the European Union’, in Stavridis, S., Mossialos, E., Morgan, R., Machin, H. (eds) (1997) New Challenges to the European Union: Policies and Policy Making (Hampshire: Dartmouth) pp.439-66.

Marks, G. (1993) ‘Structural Policy and Multilevel Governance in the EC’, in Cafruny, A. and Rosenthal, G. (eds) The state of the European Community, Vol.2: The Maastricht Debates and Beyond (Boulder: Lynne Rienner) pp. 391-411.

Marks, G., Hooghe L. & Blank K. (1995) European Integration and the State (Florence: EUI Working paper).

Moravcsik, A. (1993) ‘Preferences and Power in the European Community: A Liberal Intergovernmentalist Approach’, Journal of Common Market Studies, 31(4) pp.473524.

Papageorgiou, F and Verney, S (1993) ‘Regional Planning and the Integrated Mediterranean Programmes in Greece’, in Leonardi, R. (ed.) The Regions and the European Community: The Regional Response to the Single Market in the Underdeveloped Areas (London: Frank Cass) pp.139-61.

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Pollack, M.A. (1995) ‘Regional Actors in an Intergovernmental Play: The Making and Implementation of EC Structural Policy’, in C. Rhodes & S. Mazey (eds) The State of the European Union, Vol.3, (London: Longman) pp.361-89.

Pollack, M.A. (1997) ‘Delegation, Agency and Agenda Setting in the European Community’, International Organisation, 51(1) pp.99-134.

Richardson, J. (ed) (1996) European Union: Power and Policy-making (London: Routledge).

Smith, D.L. & Wanke, J. (1993) ‘Completing the Single European Market: An Analysis of the impact on the Member States’, American Journal of Political Science, 37(2) pp.529-54.

Tsoukalis, L. (1997) The New European Economy Revisited, 3 edn (Oxford and New York: Oxford University Press).

Tsoukalis, L. (1998) The European Agenda: Issues of Globalization, Equity and Legitimacy (Florence: Jean Monnet Chair Papers) April.

Verney, S and Papageorgiou, F. (1993) ‘Prefecture councils in Greece: decentralisation in the European context’, in Leonardi, R. (ed.) The Regions and the European Community: The Regional Response to the Single Market in the Underdeveloped Areas (London: Frank Cass) pp.109-38.

Weber, S. and Wiesmuth, H. (1991) ‘Issue Linkage in the European Community’, Journal of Common Market Studies, 29(3) pp.255-67.

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Appendix A

Trends of the Greek economy

Table 1: Net transfers through the EU budget, 1984-1994 (Receipts minus contributions expressed in ECU m. and as % of national GDP) 1984 ECUm %

1988 ECUm %

1992 ECUm %

1994 ECUm %

1008.2

1491.6

3512.9

3812.6

2.34

3.30

4.65

4.62

Greec e

Source: Tsoukalis, 1997.

Table 2: Trends in GDP and GDP per head, 1986-1993

Annual growth rate

Annual population growth GDP per head (PPS)

1986 1987 1988 1989 1990 1991 1992 1993 1986-93

GR 1.6 -0.5 4.4 3.5 -1.1 3.3 0.9 -0.2 1.5

E 3.2 5.6 5.2 4.7 3.6 2.2 0.8 -1.0 3.0

IRL -0.4 4.5 4.2 6.2 9.0 2.6 4.8 2.5 4.1

P 4.1 5.3 3.9 5.2 4.4 2.1 1.1 -1.2 3.1

EUR4 2.9 4.7 4.9 4.7 3.4 2.3 1.1 -0.7 2.9

EUR8 2.9 2.6 3.3 2.9 1.4 1.0 -0.5 -0.5 2.2

EUR12 2.9 2.9 4.3 3.5 3.0 1.5 1.0 -0.5 2.3

1986-93

0.6

0.2

0.1

-0.1

0.2

0.5

0.4

1986 1993

51 49

71 76

63 78

52 60

64 70

109 107

100 100

Key: GR = Greece, E = Spain, IRL = Ireland, P = Portugal Source: Commission, 1994.

Table 3: Index Scores for GDP per head in the Greek Regions in ECU, 198191 (EC=100) Region

1981

1984

1986

1987

1988

1989

1991

36

Diff. 1991-

East. Macedonia & Thrace Central Macedonia Western Macedonia Thessalia Ipeiros Ionian Islands Western Greece Central Greece Peloponese Attica Northern Aegean Southern Aegean Crete

44

52

42

41

42

44

37

81 -7

48 46 48 39 44 45 65 54 52 35 47 43

49 43 48 39 46 46 62 52 54 37 51 45

40 35 39 32 38 38 51 43 44 30 42 37

38 34 37 30 36 36 49 41 42 29 40 35

39 35 38 31 37 37 50 42 44 30 41 36

41 37 41 33 40 39 53 45 40 32 44 38

39 40 38 31 37 36 50 41 46 30 41 37

-9 -6 -10 -8 -7 -9 -15 -13 -6 -5 -6 -6

Source: Leonardi, 1993.

Table 4: Index Scores for GDP per head in PPS* in the Greek Regions in ECU (EC/EU=100) 1980

1991

1995

Diff. 19951980

41 52 48 48 38 41 45 72 52 59 42 36 45

45 47 48 45 38 44 43 60 49 55 44 36 49

59 66 60 61 43 61 56 65 57 74 50 74 71

+18 +14 +12 +13 +5 +20 +11 -7 +5 +15 +8 +38 +26

Region East. Macedonia & Thrace Central Macedonia Western Macedonia Thessalia Ipeiros Ionian Islands Western Greece Central Greece Peloponese Attica Northern Aegean Southern Aegean Crete

* Purchasing Power Standards Source: Data for 1980, 1991: Leonardi, (1993); Data for 1995: Eurostat.

37

38

FOOTNOTES

39

i The report of newspaper “ELEFTHEROTIPIA”, December 5, 1991, p.7, was titled: “Greek veto in the Maastricht agreements, if Greece is not integrated in the WEE” where statements of the Greek foreign minister on this issue were reported (my translation). rd Greece is at the moment the member-state that spends by far more per capita money towards national defence. The receipt of national defence on the annual budget is perceived to be oppositely analogous with the process of integration of the European Union. ii From newspaper “ELEFTHEROTIPIA”, Sunday 13th of December 1992, p.5, my translation. iii According to Leonardi: “[t]he issue of whether the IMPs have in fact helped local economies to adjust their production strategies away from traditional products and toward new economic vistas has never been seriously addressed” (1995, p.7). iv The IMPs’ innovations both in content and in methodology have been acknowledged as “a major break with previous trends in the Community’s regional policy and the precursor to the formulation of the Community Support Frameworks” (Bianchi, 1993, p.49). v Especially after the accession of three additional less wealthy countries in the ‘80s. vi Such an approach should probably start by examining the regulations of the IMPs few years back.

According to Bianchi: “Regulation 1787/84 outspokenly broke with both traditional Community regional policy and the history of legislative ambiguity and compromise that had long clouded the course of an effective regional policy at the European level” (1993, p.66). vii Nowadays, at the discussions on the new regulations for the structural funds that will run until 2006 a similar debate takes place. With its original proposals, the Commission attempt to keep the decision making power to set the guidelines for the funds, withdrawing from the power to co-decide with the member states, but returning later to check whether the money have been spent according to these guidelines, with ex post evaluation of the use of the funds. It is further suggesting a 10% of funds to be kept an as ‘efficiency reserve’ to be given in the middle of the term to those member states with the best performance, a proposal that was received with scepticism in the European Parliament. In a way, the Commission is trying to ‘bureau-shape’ its role, by keeping the main decision making to her and delegating the implementation of these decisions exclusively to the member states. The final decisions on this issue will be very interesting for the topic under discussion.