wiiw Opinion corner: Is the EU Danube Region Strategy helpful?

05 May 2015

wiiw expert Gabor Hunya assesses the potential of the EU Strategy for the Danube Region to help diminishing the social and economic backwardness in the EU Eastern periphery.

The EU Strategy for the Danube Region (EUSDR) is a macro regional strategy of the European Commission covering the region between the Black Forest and the Black Sea. Its main aim is to develop the Danube Region 1 by increasing interregional cooperation and network building. The basic idea is to follow a bottom-up approach: stakeholders, NGOs and other interested parties are invited to define projects which can be implemented together with partners from other countries. The intention behind the joint implementation of projects is to increase knowledge transfer in the region and to help the less developed countries use more of their approved budgets of the EU regional funds.

The EUSDR has not set up new permanent institutions or offices. Beyond online interaction, regular meetings of national representatives and coordinators take place covering 11 priority areas. Lack of EU guidance and coordination has been identified as a shortcoming and will lead to the establishment of an office for the EUSDR, called the Danube Strategy Point, in Brussels in the first half of 2015.

The implementation of the EUSDR is by its nature slow and progress is difficult to measure; it has no quantitative targets. Participation is uneven in the various working groups and projects ranging from islands of enthusiasm to wide-spread scepticism. Having consulted a number of stakeholders in the regions and after participating in some EUSDR events, I learned to appreciate the unfolding cooperation initiatives. This is a ‘soft’ programme supporting communication between people and institutions and not one financing large investment projects. It can contribute to overcoming backwardness in some people’s minds, not by any of the macroeconomic indicators.

The EUSDR is a project with no substantial new financial resources; therefore it is not very attractive for national authorities beyond those having to do with it directly. But the bottom-up process has attracted a number of interested parties setting up some reasonable joint projects (See for example those aiming at increasing competitiveness in the Danube Region. Cooperation initiatives between clusters, universities, municipalities are all the more important because lack of trust in authorities and partners has been one of the major obstacles to business cooperation in the less developed part of the Danube Region. Transferring knowledge and joint reflection and deliberation have been widely missing.

EU-financed projects have often failed due to lack of understanding between stakeholders, and business opportunities have often been left unused due to lack of clustering of SMEs. EUSDR projects can contribute to solving these problems by mediating between EU and national goals, public initiatives and SMEs.

The extreme heterogeneity in the Danube Region hinders achieving its goals. First of all, there are countries and territories with different status and access to external funding – EU members, future members and neighbourhood countries. Second, the countries of the Danube Region have very different institutional capacity and financial means which could be utilised to provide the basic organisational infrastructure for cooperation projects. Fortunately, some technical assistance and EU financing has been made available to facilitators beyond the current programmes.

The Danube Transnational Programme (DTP) 2014-2020, a funding instrument of territorial cooperation for the same group of countries, will hopefully complement the EUSDR in a way that larger cooperation projects can find the necessary funding. It is this programme rather than the EUSDR that may foster the catching-up process of backward regions.

In cooperation with the Centre for European Economic Research (ZEW), Mannheim and the Institute for Applied Economic Research (IAW), Tübingen wiiw participates in the research project Socio-economic Assessment of the Danube Region: State of the Region, Challenges and Strategy Development, aiming to assess economic conditions in the region and to help identify cooperation projects. This multi-annual research project, lasting from 2013 to 2015, is funded by the Ministry of Baden Württemberg.

1 The participating countries and regions in the EUSDR comprise: Baden-Wuerttemberg, Bavaria, Austria, the Czech Republic, Hungary, Slovakia, Slovenia, Romania, Bulgaria, Moldavia, Serbia, Montenegro, Bosnia and Herzegovina and border regions of Ukraine. --