The Eighth report on economic, social and territorial cohesion shows trends in EU regions, cities and rural areas. While the green and digital transitions will be key drivers of growth in the EU, appropriate policies are needed to prevent new economic, social and territorial disparities.
The 2008 financial crisis, the COVID-19 pandemic and changing demographic trends have highlighted the importance of cohesion policy in funding regional priorities. Cohesion funding has grown from the equivalent of 34 % of public investment in the 2007-2013 period, to 51 % in 2014-2020 for eligible EU countries.
Demographic change will affect all regions in the coming decades. The biggest shifts will come in the form of a shrinking labour force and student population and a growing number of over-65s.
Shrinking populations
Between 2010 and 2019, declining natural change in the population – more deaths than births – was offset by net inward migration. Total population change for the EU-27 over this period was 1.9 per 1000 residents. The north-western and southern EU saw the biggest total population change, while the population of the eastern EU declined.
Overall, the fastest growth occurred in the urban areas, resulting in pressure on the housing market and greater demand for services. In intermediate and rural areas, the population declined.
While the population of the EU overall has not declined, the share of people in the EU living in a region with a declining population is expected to increase from 34 % in 2020 to 45 % in 2030 and 51 % in 2040. This trend will affect the north-western, southern and eastern EU, and urban, intermediate and rural areas equally. The share of people living in a rapidly growing region will decline from 18 % of the EU in 2020, to 2 % in 2040.
Rapid reductions in population are more likely to occur in rural regions than in urban ones (11 % as against 1 %) and this gap is likely to remain in the future (14 % as against 3 % in 2030).
A growing generation gap
Over the past 150 years, the shape of the EU’s population pyramid has changed from a triangle to a lightbulb, narrow at the top and bottom with a bulge in the middle. This indicates that the EU’s population will shrink in the coming decades. The number of people aged 0-29 is 24 % smaller than those in the 30-59 bracket, who account for the bulge in the pyramid. This is a difference of about 44 million people, or 10 % of the total EU population. Future migration is expected to make up some, but not all of this difference.
A slower reduction in population is expected in several Irish, French and Nordic regions, where the number of 0-29-year-olds is 10 % smaller than the 30-59 group. The opposite is true for regions in northern Spain and eastern Germany, where the figure is at least 40 %.
An increasing demand for healthcare
More over-65s in the EU in the coming decades will result in greater demand for healthcare, services and infrastructure adapted to the needs of the elderly. The biggest increase in the number of over-65s is projected in many parts of Austria, Ireland, the Netherlands, Poland, Spain and Slovakia.
However, this age group will decline in a few regions in Bulgaria, Greece, Portugal and Romania. Ensuring continuing healthcare services in rural areas will require balancing accessibility with cost-effectiveness. Investment will need to avoid over- or under provision while ensuring that care centres are close to healthcare services. More focus will need to be placed on services like cardiology, while obstetrics will see a decline in demand.
As the working-age population (ages 20-64) shrinks by an estimated 4 % in the EU as a whole over the next decade, companies will likely be forced to choose between investing more in technology to replace people or foregoing growth altogether. The biggest reductions in this age bracket, of 10 % and more, are anticipated in eastern Europe, eastern Germany, and parts of Spain. Regions where this age group is expected to increase are southern Sweden, Ireland, parts of France, Corsica, the Balearic Islands and the Greek island of Lesbos.
The 0-19 age group is expected to decline by 5 % in the EU. The most dramatic fall, of over 10 %, is expected in many southern and eastern regions. The consequences are that many schools will be forced to close or consolidate, which could result in greater travelling distances for children, particularly in rural areas. In contrast, the number of young people is likely to increase in Cyprus, Malta, and some regions of Germany and Sweden.
The distribution of the three age groups – young adults, working-age people and over-65s – across urban, intermediate and rural areas reflects their needs. Urban areas are likely to have a higher share of young people studying and looking for work. More working-age people will settle in intermediate areas where housing is less expensive than in cities, while over-65s will tend to opt for a quieter life in rural areas.
The importance of regional centres
Rural areas are not always likely to have fewer services than cities. Services include shops, banks, pharmacies, hospitals and cinemas. Rural areas near a regional centre – defined as the largest settlement within a 45-minute drive – tend to have more services than big cities, relative to total population.
This means a small town acting as a regional centre would likely have more services than a small town near a big city. Meanwhile, a town near a city is less likely to have the same range of services because these are already available in the city.
The important economic and social roles of regional centres in providing services to rural residents should be accounted for when making future investment and development decisions.
Less trust of the EU in rural areas
In addition to demographic change, the 6th chapter of the report also contains the results of Eurostat surveys on people’s satisfaction with life in cities, towns and suburbs, and rural areas, and levels of trust in the EU between these areas.
Rural residents are less likely to trust higher levels of government than people living in cities. Rural discontent is greatest towards the EU, followed by dissatisfaction with national and regional government, according to Eurobarometer.
While overall, trust in the EU has increased between 2015 and 2019, the divide between rural and urban areas has remained the same. In 2019, 56 % of city residents trusted the EU, compared with 51 % of rural residents.
Rural residents are less likely to think their voice counts in their Member State or in the EU. The gap between rural and urban residents regarding lack of trust in the EU is seen in almost all Member States, except Hungary and Ireland. In these two countries, urban residents distrust the EU more than their rural counterparts.
Trust in the EU is lowest in Greece, France and Czechia for both rural and urban residents. It is highest in Bulgaria, Estonia and Lithuania.
‘A lack of trust, a conviction that your voice does not count, and a frustration with democracy are all factors that can reduce voter turnout at elections and polarise the vote,’ the report states.
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#EURegioDataStories: Exploring the EU regional demographic trends
