EU Admits Policy Failure in Cohesion Report

October 29, 2014 Updated: April 24, 2016

Sometimes when things get messy in the United States and people want to feel good about themselves, they have a look across the pond and see that the situation in old Europe is even more messy.

Usually the main feature of this spectator sport is the euro crisis, but there are other fun things people mostly forget, like the EU’s equivalent of a China five year plan. An investment fund of epic proportions (450 billion euro), the biggest difference is the name. In Europe it’s called the seven year Cohesion Policy.

Its goal, also not to dissimilar to an antiquated communist agenda, is to make the EU’s 274 regions more equal and give everybody a job. This goal is to be achieved by investing funds of richer nations (like Germany and the Netherlands) in the projects of poorer nations such as Bulgaria and Slovakia. 

Telecommunication and transportation infrastructure, as well as research and development and professional training initiatives are the preferred outlets, with a strong preference for sustainability.

Investment for jobs and growth


Every seven years, the European Commission comes out with a report to highlight the results of its activity. So far, the programs have been a wild success, at least when taking Sir Humphrey Applebee’s measure of success: Activity supersedes tangible results. 

So over the past year, the EU has invested in the professional training of 15 million people per year, invested in 200,000 small and medium sized companies (SMEs) and 61,000 research projects. It also claims to have created 600,000 jobs. At 533,000 euros per job, one wonders whether the private sector could have done that more cheaply.

What’s worse, the report states unemployment actually increased in 210 regions and doubled in 50 over the last five years. Sure, this period coincides with the financial crisis of 2008, but other countries like the United States have recovered more lost jobs than Europe has. 

Of course, the most cohesive of all European Union policies, namely the euro common currency, is responsible for the persistently high unemployment and inequality among European regions. 

As long as the euro stays and exchange rates cannot adjust to differences in competitiveness freely, no amount of money spent on network infrastructure and training will make the differences between a Greece and a Germany disappear. This is of no concern to the commissioners in Brussels though, as long as the redistribution show continues.