ZEW economist Sebastian Siegloch first gave an overview of the current situation of regional inequality in Germany. “We observe that regions are drifting apart in terms of municipal per capita debt. This is a problem because many municipalities in Germany are crucial for the provision of public services. Not least, this has a major impact on the quality of life,” Siegloch told the approximately 100 spectators who followed the event via livestream. In addition, the coronavirus pandemic hit the municipalities particularly hard at a time when they had just begun to reduce their investment backlog. The impact of this varies greatly from region to region in Germany. Siegloch also pointed out that inequality should not be viewed purely in economic terms, but that social and ecological living conditions must also be taken into account; in Germany, for example, there are regional differences in life expectancy.
In the subsequent discussion, the ZEW economist emphasised that regional policy is better than its reputation and can make an important contribution to reducing regional inequalities and creating equal opportunities – as long as the funding is targeted. To this end, he said, it is particularly important that decisions are made by local actors and that the projects are co-financed by the municipalities or companies. “The goal is to make regionally meaningful investments and to reduce regional inequality to a level with which local citizens are satisfied,” Siegloch said.
Structural funds can have a positive impact
Constanze Krehl, who has been an SPD member of the European Parliament on the Committee on Regional Development since 2004, emphasised that structural funds can have a very positive impact. “The economic development of the East German federal states has benefited from the structural funds,” said Krehl. As an example, the MEP cited her home state of Saxony, which has developed positively since the 1990s, whether in terms of creating new jobs, industries or transport infrastructure. Structural funds helped municipalities there to implement voluntary services of general interest. “Such developments take time,” Krehl explained. Regional policy and regional funding must always initiate a transformation process. At the same time, she made it clear that the EU can only provide a framework and that successful implementation depends on the individual Member States.
Looking to the future, Krehl would like to see the European fund for rural development being used not only for agricultural subsidies, but also for the development of rural regions. It is also important to further intensify transnational cooperation. “In the future, we must learn much more to think transnationally and use opportunities to create new thriving border regions. I therefore strongly support increased cross-border cooperation in regional policy,” said the MEP.