EU should reform its regional spending

Press quote (Bloomberg)
20 June 2024

The EU should reform its regional spending — known as ‘cohesion policy’ — to tackle the divergences that services trade promotes, according to a report from the Centre of European Reform. Given that living standards in newer member states are converging with those in western European, “more regional funds should be directed towards city-regions with high growth potential, complementing existing allocations based on relative poverty,’’ researchers John Springford, Sander Tordoir and Lucas Resende Carvalho said.

“Many post-industrial cities have struggled, as productive services firms have chosen richer cities,” they said. “To spread the economic benefits of agglomeration, we propose that the EU should identify ‘growth city regions’ in each member-state. These are non-capital cities that have the potential to become bigger centers for tradeable services — be they tech, engineering, finance, design or education.”