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Challenges for Cohesion: Looking Ahead to 2035

A new report published by the Directorate-General for Regional and Urban Policy analyses how the future impact of globalisation and technological change, demographic shifts, and the transition to a climate-neutral economy are reshaping regional disparities and development potential across the European Union up to 2035.

The analysis – led by the Vienna Institute for International Economic Studies and in partnership with the University Politecnico di Milano, Ismeri Europa, E3-Modelling, Applica, PBL Netherlands Environmental Assessment Agency and Cambridge Econometrics – provides data-led insights into the risks and opportunities these challenges pose for EU Cohesion Policy.

EU Cohesion Policy report
Challenges for Cohesion: Looking Ahead to 2035

Written by the Vienna Institute for International Economic Studies, the University Politecnico di Milano, Cambridge Econometrics, Ismeri Europa, E3-Modelling, Applica and PBL Netherlands Environmental Assessment Agency.

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Key Findings

Using macroeconomic model E3ME-ERR, a series of future growth scenarios were developed to explore varying political and institutional settings. EU regions were also benchmarked against global trends in demography, energy and the climate transition.

 

Demographic Challenge

According to results produced by the E3ME-ERR model, initial population inflows into more developed regions may temporarily reduce GDP per capita until labour markets adjust. Over time, however, these inflows can lead to higher GDP per capita as new arrivals on the labour market gain employment and contribute to regional economic activity.

Transition to a Climate-Neutral Economy

The E3ME-ERR modelling results indicates that the impact of the green transition on regional disparities across the EU is strongly shaped by three factors: the availability of financing, the geographic distribution of investments in renewable energy, and the speed at which economies adapt to the phase-out of carbon emissions. If financing needs are not adequately met, more developed regions are likely to benefit most from the transition.

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Madalina Suta

Head of European & Global Economic & Social Policy

t: +32 2 897 9987

e:cs@camecon.com

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