Austria's Regional Policy after Austria's Accession to the EU: More or Less Autonomy?

Over the next five years, Austria might be able to obtain about Sch 20.9 billion from the EU Structural Fund. This would significantly enhance the importance of regional policy in Austria. Because projects supported by EU funds must be co-financed by the national government, the total volume of financing is likely to increase markedly: ECU 1,163 million (63 percent) must be raised at the national level for the common regional policy. The incorporation of pre-existing support schemes and of infrastructure projects into the system of co-financing will, however, have the budgetary effects small; on the other hand, EU decisions on regional policy will play an important role in the design of national regional policy. It is also for this reason that the list of assisted regions in Austria agreed upon in the negotiations with the EU is of great importance. This list covers regions with 40.9 percent of the population; it is about as comprehensive as in comparable countries. The differentiation between assisted and non-assisted regions clearly follows the logic of regional economics. The economic performance, as measured by GDP per capita, in Burgenland (Objective 5b region) is markedly below that in the non-assisted regions; there are still significant differences with regard to the Objective 5b regions. This does not hold, though, with regard to the Objective 2 regions; in these regions, however, labor market problems are very severe, with 11 jobless per vacancy. In the assisted regions, the potential for restructuring is limited by the scarcity of skilled labor. The unfavorable development of employment (1981/1991 –1.4 percent as compared to +7.5 percent in non-assisted regions) in the Objective 1 and Objective 5b regions has been "solved" by commuting to non-assisted regions; even Objective 2 regions suffer from outmigration. Thus, assisted regions do indeed have to cope with more serious regional problems. Nonetheless, there are doubts whether the coverage of the agreed-upon assistance scheme is not too broad. Therefore, it must be hoped that Austria's policy makers will be able to resist the demands of less deserving areas included in the designated assisted regions. The regional incentive schemes as elaborated in the preparation of the EDPP provide adequate guidance for focusing assistance funds to the most disadvantaged areas.