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Objective 1: trends since 1989

Between 1988 and 1998, the lag in income per head compared with the Community average was reduced by a sixth in the Objective 1 regions. Their GDP per head rose from 63% to 70% of the EU-15 average, a reduction of a sixth. However, this disguises great regional differences.

Some regions have made significant progress, especially the new German Länder (in which the relative level of GDP in relation to the Community average rose from 37% in 1991 to 68% in 1995) and Ireland (from 64% in 1988 to 119% in 1999). Similarly, regions such as Lisbon, Northern Ireland, Burgenland and Flevoland surpassed the 75% Community GDP level during the period. However, other regions either made no noticeable improvement or suffered a decline in their situation between 1988 and 1997: Central Macedonia (63% to 60% of the Union average), Epirus (stable at 43%), Continental Greece (from 72% to 64%), Peloponnese (from 58% to 57%) in Greece, the Mezzogiorno (from 69% to 68%) in Italy, and the regions of Merseyside and Highlands and Islands (80% to 75% and 83% to 76% respectively) in the United Kingdom.

The Objective 1 regions have a high unemployment rate (16.6% in 1999 compared with the 9.2% European Union average), but this has been sharing in the downward trend within the Union during the last three years. It should be noted that unemployment rates in some regions are still much higher than the Union average, especially the regions of Objective 1 in Spain (19.3% in 1999, compared with 27% in 1994), the French Overseas Departments (32%), Italy (22.4%) and the new German Länder (16.7%). These high unemployment rates go hand in hand with relatively low participation in the work force caused by poor employment opportunities and poor job creation, even during the periods of economic recovery, thus widening the gap with the rest of the European Union in terms of employment rates (proportion of the population of working age).

The productivity level of these regions is relatively stagnant compared to the rest of the Union, with GDP per employee rising from 64% of the Union average in 1988 to 67% in 1998, but there is significant progress in Ireland and the new German Länder.

More generally, regional performances cannot be dissociated from the general economic framework in which they develop. Ireland demonstrates a good balance between suitable structural assistance and a healthy and stable macroeconomic policy.

For additional information on the impact of the Community interventions 1994-99, consult the Second Report on cohesion, published in January 2001 (Chapter III.2), and the first interim report containing the latest information, submitted by the Commission to the Council in January 2002.


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