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Coordinator teacher: Prof. univ. dr.

Anca Dodescu The Economics of European Union Oradea 2010

PORTUGALS ACCESSION TO THE EUROPEAN UNION

THE IMPACT OF THE EU REGIONAL POLICY ON PORTUGAL

Student: Vtor Santos ovitorsantos@hotmail.com University of Trs-os-Montes e Alto Douro Portugal

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Table of contents Introduction .......................................................................................................................................... 3 Portugals accession to EU .................................................................................................................. 4 A short summary of the history of European Union ..................................................................... 4 April 25, 1974 (the CARNATION revolution)............................................................................. 4 The accession of Portugal to the European Union ........................................................................ 5 Advantages and Disadvantages ............................................................................................. 6 Advantages and Disadvantages of EU enlargement for Portugal ................................................. 7 Impact of enlargement for Portugal ....................................................................................... 7 Advantages ..................................................................................................................... 7 Difficults ......................................................................................................................... 8 Action needed ................................................................................................................. 8 EU Regional Policy 2007-2013 ........................................................................................................... 8 Objectives ..................................................................................................................................... 9 Classification of Regions .............................................................................................................. 9 Common border .......................................................................................................................... 10 Regional disparities in Portugal ......................................................................................................... 10 Structural Funds and Cohesion Fund in Portugal for the period 2007-2013 ..................................... 13 3 Examples of success projects of regional development implemented in Portugal ......................... 16 Hydroelectric Alqueva ................................................................................................................ 16 Expansion of Funchal Airport ..................................................................................................... 16 Expansion of sewage treatment plant wastewater of the Alto Zzere e Ca .............................. 17 Conclusion ......................................................................................................................................... 18 Bibliography ...................................................................................................................................... 19 Attachments ....................................................................................................................................... 20

Index of graphs and tables. Table 1: EU Regional Policy ............................................................................................................. 10 Graphic 1: Unemployment rate by NUTS II in 2006 and 2007 ......................................................... 10 Graphic 2: Unemployment rate by gender and educational level ...................................................... 10 Graphic 3: Inhabitants per hospital and health centers, by NUTS ..................................................... 11

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Introduction

This work was carried out for the discipline of Economics of European Union taught by prof. dr. Anca Dodescu and assist. Lavinia Chirila at the University of Oradea. The work focuses on the position of Portugal in the European Union. It is studied the accession of Portugal, as well the advantages and disadvantages and the difficulties facing the country today caused by the recent enlargements. It is taken into account to study also provides support for the EU to support member countries, including the structural and cohesion funds for the period 2007 to 2013. Following the previous section, we present a picture of regional disparities in Portugal as well as structural and cohesion funds for the period under review. Finally present some projects in Portugal using the support offered by the European Union, and these represent some of the sectors supported, such as transport, energy and environment.

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Portugals accession to EU
A short summary of the history of European Union

At the end of World War II, Europe was completely devastated. Western Europe, who until the second war had taken the role as the main center of power and decision of the world had lost him for the two powers now emerged that the U.S.A. and the USSR. For the reconstruction of Western Europe was essential American economic help, known as the Marshall Plan. To administer the pool money allocated by America, was created OEEC Organization for European Economic Cooperation. The Treaty of Paris established the European Coal and Steel Community (ECSC). The idea of putting two basic benefits to the restoration of Western Europe on a common management, had as main aim to liberalize trade in these two products among signatory countries. The merit of the ECSC is twofold: on the political, encouraged the reconciliation and cooperation Franco-German and opened the way for the European community, in economic terms, contributed to the recovery of Europe to liberate the production and trade of raw materials essential to industry.
April 25, 1974 (the CARNATION revolution)

An important factor to Portugal joining the EEC was the end of dictatorship that lived in Portugal. The fall of the Salazar regime in Portugal (1974) and the death of General Franco in Spain (1975) put an end to the latest right-wing dictatorships in Europe. The two countries are committed to the establishment of democratic governments, which constituted an important step towards accession to the European community. The Carnation Revolution was a period in the history of Portugal, triggered by a military coup took place on April 25, 1974 that toppled the dictatorial regime in force since 1933 and initiated a process that would end with the deployment of a democratic regime with the entry into force of a new Constitution on 25 April 1976. This movement was born around 1973, originally based on claims from the business world as a struggle for the prestige of the armed forces, eventually extending to the current political regime. Without military support, and with the accession of the population, the regime's resistance to the coup was virtually nonexistent, recording only four fatalities.

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Among the immediate measures of the Revolution include the extinction of the political police (PIDE / DGS) and Censorship.

The accession of Portugal to the European Union

Portugal is a member of the European Union since January 1, 1986, after submitting its candidacy to join the March 28, 1977 and have signed the pre-accession agreement to December 3, 1980. The accession of Portugal to the European Union was done at same time that Spain. Portugal's accession to the European Economic Community (EEC) is one of the consequences of the April 25, 1974 and subsequent amendments to this resolution resulted in economic, political and social. The 25th of April have just ended a breakdown in economic policy, with a huge external dependency, and political power challenged by a population with poor living conditions and poor purchasing power. With it, Portugal lost the colonial market and is forced to focus more attention on the European market. The EEC is concerned about the accession of Portugal, who will encounter many difficulties in view of their economic situation. But from 1980 the Portuguese economy and political power will have the first priority of foreign policy membership of the EEC, verifying from 1985 a period of expansion in economic activity. On January 1, 1986 Portugal is formally a member of the EEC, an important milestone for the current situation of the Portuguese economy. From 1986 to 1991 we have a transitional period of accession to the EEC, since the level of development in Portugal is lower than the other member states. So that Portugal can win this inequality, will receive the EEC Structural Funds which aim to modernize the manufacturing sector. The EEC also imposes certain directives in the legislative area covering various economic sectors outside, such as taxation, energy, environment. Portugal has to gradually adapt its legislation to EU standards. During this period the Portuguese economy is positive, verifying an effective economic development. However, it is still far from the Portuguese economy by leveling the other member states.

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Advantages and Disadvantages

The European Union (EU), as the EEC has brought enormous benefits to Portugal, thereby improving the living conditions of most of the population: It was easier movement of people between countries; Ease the exchange of products without be subject to border controls and customs fees which favors trade; A bet on export industries with higher added value, and great technological innovation and labor-skilled workforce. But progress remains very slow; A bet on skilled services - tourism, conferences, international trade, logistics, aviation and maritime transport, etc.. Portugal has significant competitive advantages in these sectors; A bet on agriculture and agro forestry specializes in companies with competitive products with high added value. Some sectors, such as wine or the cork has been very dynamic in the world. Increased quality and access to information; Conditions of public roads have improved greatly; Came into being better doctors and hospitals, due to the contribution of EU funds People began to spend their holidays abroad more frequently, Increased wages, hours of work per week decreased Bet more on education, began to have other courses and education became compulsory up to age 15. Due to an amazing succession of incompetent politicians, backed supporters in machines that feed the corruption that is rampant in the state, municipalities and public enterprises, the overall results were not the best for the country. Portugal continues to diverge in their development of the EU average. Portugal became vulnerable to the entry of competing products from other Member States and as our productivity is low compared with the average European, competition does not favor us. Due to some factors such as technological backwardness and geographical characteristics of our country, as well as due to a common agricultural policy that does absolutely nothing for Portugal, we were very prejudiced in sectors such as Agriculture and Fisheries. The loss of sovereignty of Portugal;

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Advantages and Disadvantages of EU enlargement for Portugal

Portugal was faced with new challenges since 2000 with the accession of new countries, from 15 to 27 member states of the European Union. The benefits of EU enlargement have political, economic and cultural contexts: The enlargement of the zone of peace, prosperity and stability in Europe will provide better security to the population. The increase for the European market of over 100 million people in fast growing economies, boost economic growth and employment and the current Member States or candidate countries. Is there a better quality of life for the citizens of Europe, as candidate countries to adopt European standards of environmental protection and the fight against crime, drugs and illegal immigration. The new member states will enrich the EU for increased cultural diversity, exchange of ideas and improve knowledge and understanding between peoples. The enlargement will strengthen the EU position in world affairs, as regards foreign policy, security, trade etc..

Impact of enlargement for Portugal

Advantages

New opportunities for business and for economic and financial groups; Export and investment opportunities in new markets; The fact that these countries were emerging economies will enhance the attractive conditions for Portuguese investment in these countries; Free movement of workers - flows; Prospects for a major increase in trade in products and services. Low wages are our main competitive factor with the disadvantage that in Portugal the manpower is not as high educational qualifications; Allowed the strengthening of democracy and political stability and society in general.

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Difficults

Migratory movements; Increased competition in the economy domestic and foreign markets, including competition with labor-national work; Relocation of enterprises and investment (including foreign direct investment); Loss of power and political influence in the European Union; Worsening of the position; Increase in commercial competition; Divert investment flows; Reduction in the intensity of Community grants; Potential effects on competitiveness and competition between companies; Fears about a transfer of existing EU financial aid to other countries and regions; Movement of foreign direct investment and multinational enterprises.
Action needed

Entrepreneurs with initiative and support for internationalization; Enjoy all the benefits of the enlargement of the market; Harness the huge investments in the candidate countries, notably in infrastructure (environment and transport as priority areas) and technical assistance; Enjoy the whole experience that Portugal is in services (banking, insurance) are important for these countries; Modernize and enhance the competitiveness of productive sectors, increasing the export capacity

EU Regional Policy 2007-2013


The European Union is one of its main tasks, enshrined in the Treaties, the promotion of economic, social and territorial cohesion. In this context, cohesion policy aims primarily to promote harmonious development of the whole Union, and in particular, contribute to reducing disparities between levels of development of various regions. The persistence of inequality between countries of the European Union led to the creation of a Community regional policy, to reduce the differences from region to region, so as to create a community based on cohesion.

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In order to make the community a space solid and cohesive regional policy works in three key areas, monitoring and support of regional policies for each member, Integration of regional common policies in various sectors, eg CAP and implementation of Structural Funds (ERDF, FSE, EAGF, EAFRD, FIFG) It was created a Committee of the Regions that is an institution that emerged in the Maastricht Treaty (1992) and seeks, through structural funds to help poorer EU regions, requiring the participation of representatives of regions in policy. By giving special treatment to those areas, benefiting the most disadvantaged in the distribution of funds from the Structural Funds, aims to contribute to reducing inequality at Community level. In the current Community Framework (CSF IV - 2017 - 2013) funding from the Structural Funds are organized according to three objectives: Convergence - the more favored regions for about 80% of the total by seeking to improve conditions for growth and employment. It focuses on the physical and human capital, innovation, environment and administrative efficiency Competitiveness - increase competitiveness, employment and attractiveness Cooperation Strengthening cooperation across borders, transnational and interregional.
Objectives

Reduce disparities between countries and regions. Support the poorer regions. Promote competitiveness; Implement the exchange of good practices and exchange of goods between regions; Improving the living conditions of populations;
Classification of Regions

The regions are classified according to different objectives and data to their specific needs, this classification will determine which receive support.1 These classifications are divided by: Regions competitiveness Phasing-in Regions Phasing-out Regions Convergence Regions

Attachment 1

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Common border

The EU also enjoys the gift of subsidies to regions across borders in order to provide the use of capabilities and solve common problems, extending to many fields. An example is Galicia and Northern Portugal.2

Regional disparities in Portugal


In Portugal the differences and inequalities evident. We watch, therefore, an almost uninhabited interior, where the between regions are
portuguesas-e-a-politica-regional-da-UE-11-%C2%BA#open_download

Table 1:

population is aging. And in return, we see a coastline with a large concentration of young and enterprising population. The regional differences are visible by the strong demographic pressure on the coast. The rural areas are left behind and urban areas grow. This fact leads to economic costs, social and environmental impacts that can skew the cohesion of our development. This inequality is reflected naturally in the well-being and quality of life.
Graphic 1: Unemployment rate by NUTS II in 2006 and 2007 Graphic 2: Unemployment rate by gender and educational level gfgin 2007

3rd cycle 2nd quarter 2006 2nd quarter 2007

secondary Men

higher Women

Attachment 2

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Source: http://www.scribd.com/doc/31204953/As-regioes-

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Graphic 3: Inhabitants per hospital and health centers, by NUTS II, 2004 gfgin 2007

Inhabitants per hospital

Inhabitants per health centers

thousands of inhabitants

As the community level is also nationally important to strengthen the economic and social cohesion in order to appreciate the whole and all its human and natural resources. To make our country a country with a more balanced development, it is proposed: Improved accessibility Qualification of manpower Creation of local services Incentives for positive discrimination (fiscal, credit, subsidies of various sorts) that attract investment and leverage existing resources to set young people

Since 1989, when the first application of the Community Support Framework (CSF I) were invested in Portugal over the past three CSF (1989-2006) more than 47 billion euros of EU funds, which contributed decisively to modernization of our economy, our society and our territory. The National Strategic Reference Framework for 2007-2013 finds that social policies should ensure the removal of factors of social exclusion and mitigate the risks of poverty and social exclusion. Therefore it is planned policies of educational qualifications and professional upgrading of tools to support integration in employment and combating poverty.

The development of differences and the measurement of convergence between Portuguese regions in economic and social terms, is a very important aspect of the analysis of the Portuguese situation.

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The effect of "population size" is crucial: as would be expected, the Lisbon region significantly influences the behavior of the national average, exceeding even that in both variables. In this quadrant also forms part of the Algarve region, revealing its attractiveness and its good economic performance. In contrast, the North shows a smaller effect on GDP growth. The Alentejo reveals, for their part, some homogeneity in the behavior of sub-regions, being less favorable quadrant (with growth rates in positions below the national average). With a favorable performance in terms of GDP growth, but with reduction in population terms, are the Centre, the Azores (very near the national average in both variables) and Madeira. The Portuguese regional situation as regards the correction of disparities - measured by GDP per capita in various regions - does not seem to be stabilized to the extent that they are not showing a clear trend towards the inter-regional convergence is to be realized. The inherent lack of a consolidated process of convergence inter-regional calls, hence the continuity of the orientation of public policies to overcome the inter-regional disparities. The portrait of the country in territorial terms of competitiveness and territorial cohesion shows us a reality that has progressively away from dichotomies Coast/Interior and North/South in favor of a system increasingly based on clusters that do not obey this territorial pattern, where emerge new centers of economic and demographic dynamics, not consistent with the dichotomy Coast/Interior and with the transformations in production specialization in major metropolitan areas of North and Lisbon. These promising poles are located on the main roads along the coast of Central/North connection to Spain, which allowed them to benefit from the intensification of relations between the two countries (often dependent on non-market services) and/or have entered an area Wider influence of large metropolitan regions, but still without power are projected to change in sub-regional qualitative visible, whose sustainability in terms of market is very differentiated.

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Structural Funds and Cohesion Fund in Portugal for the period 2007-2013
The organization of the Operational Programmes of the 2007-2013 period reflects the significant changes to the new EU regulations of structural and cohesion funds, compared to the previous programming period, as evidenced by the introduction of rules de49 single-fund programming and single-objective and the convergence between structural funds and cohesion on the multi-annual programming. The rule of single-fund programming requires that each program is operating only received funding for a structural fund (ERDF and ESF) by invoking this rule to the Cohesion Fund and without prejudice to the adoption of the flexibility mechanism corresponding to the possibility of each of the Structural Funds may co-finance investments and development actions encompassed in the types of intervention of another structural fund by up to 10% of the funding allocated per axis. The rule of single-objective programming requires that each program is only part of an operational objective of EU cohesion policy for 2007-2013 (unless otherwise agreed between the Commission and Member State), being first imposed in Portugal very differentiations significant between regions. The convergence between the structural funds and cohesion fund for programming multi translates into the requirement for joint programming of the ERDF and Cohesion Fund operational programs of national territorial coverage (in which each priority is funded only by a fund) .

In terms of eligibility of the Portuguese regions, we have: The regions North, Centre, Alentejo and the Azores, are included in the Convergence Objective; The Algarve is framed in the transitional regime of the Convergence Objective, called Statistical phasing-out; The Lisbon region is part of the Regional Competitiveness and Employment; The Autonomous Region of Madeira is included in the transitional Regional Competitiveness and Employment, called phasing-in. The diversity in the framework of the Portuguese regions in the objectives of cohesion policy has, given the rule of single-objective programming, another very important effect: the thematic operational programs have a limited territorial reach EU standards in the areas framed
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the Convergence Objective (except, of course, national eligibility of assistance from the Cohesion Fund). This territorial limitation adds to the national decision, reached in consensus with the Government of the Azores, to restrict the coverage of thematic operational programs to the mainland (which stated that the Community regulatory discipline make it impossible to fit into the operational programs thematic interventions carried Autonomous Region of Madeira). Reference should also be the following: Given the exceptional possibilities exist and having regard to the consecration of both the strategic priority on the qualification of the Portuguese population, whether the guiding principle relating to the concentration of assistance, adopt a single thematic operational program co-funded by European Social Fund ( that framework to integrate the priorities of investments and development actions to be undertaken in the region of Lisbon and the Algarve region, with rigid financial allocations); Taking also into account the guiding principle for the concentration of operations and, as well as the rule of single-fund programming, the Regional Operational Programmes of the Mainland will be exclusively co-financed by the European Regional Development Fund. For Portugal it is assumed as the main strategic aim qualification of the Portuguese population, valuing the knowledge, science, technology and innovation, as well as the promotion of high and sustained levels of economic development and socio-cultural and territorial qualification, a framework for development and equal opportunities, as well as increasing the efficiency and quality of public institutions. This is essential for the support of Structural Funds and Cohesion Fund, for all the Operational Programmes for the period 2007-2013, three major Thematic Operational Agendas, focused on three key areas of intervention, the potential human factors economic competitiveness and improving the area: Operational Agenda for Human Potential, which brings together a set of interventions aimed at promoting academic and professional qualifications of the Portuguese and the promotion of employment and social inclusion, and the conditions for the development of equal gender and citizenship. The agenda includes the following main areas of intervention: Initial Qualification, Adaptability and Lifelong Learning, Management and Professional Development, Advanced Training for Competitiveness, Entrepreneurship Support and Transition to Working Life, Citizenship, Inclusion and Social Development In addition, the Promotion of Gender Equality. Operational Agenda for Competitiveness Factors, which includes measures that aim to stimulate the qualification of the productive sector, through innovation, technological development and stimulation of entrepreneurship and improvement of various components of entrepreneurial
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activity, with relief to reduce the public costs of context. The agenda includes, as its main areas of intervention, incentives for the Production of Knowledge and Technological Development, Incentives for Innovation and Renewal of Business Model and the pattern of specialization, Tools Financial Engineering Finance and Risk Sharing in Innovation, Integrated Interventions for Reducing Costs of Public Context, Class Actions for Enterprise Development, Incentives for Development of Information Society, Network and Infrastructure Support for Regional Competitiveness and also Integrated Actions for the Economic Enhancement of the Territories are less competitive. Operational Agenda for Territorial Development which, in order to provide the country and its regions and subregions of a better attractiveness for investment in production and living conditions for populations, covers interventions in nature and infrastructural endowment equipment essential to the qualification of the territories and the strengthening of economic, social and territorial cohesion. This Agenda hosts as key areas for action on improving international connectivity, the Accessibility and Mobility, Protection and Exploitation of the Environment, Cities Policy and also the Network Infrastructure and Equipment for the territorial and social cohesion.

Consistent with the strategic and operational priorities, it is feasible to deploy significant resources community - about 21 500 M , whose use will comply with three main orientations: Increase in appropriations for the Qualification of Human Resources, through the ESF account for approximately 37% of all structural funds, increasing by 10 percentage points to its relative position compared to CSF III - in an amount exceeding 6 000 M ; Strengthening of funds aimed at promoting the sustained growth of the Portuguese economy, which will receive more than 5 000 M , involving the Competitiveness Factors Thematic OP and the Regional OPs, the corresponding interventions, cofinanced by ERDF, come to represent about 65% of the Fund (an increase of 11 percentage points over the equivalent amount in the CSF III); Strengthening the financial importance of the Regional Operational Programmes of the Mainland, only co-financed by the ERDF, which now represent 55% of ERDF funds in the mainland (a rise of 9 percentage points to their relative importance compared to the equivalent of the CSF III ), indicating that the financial allocation from the Regional Operational Programmes of the Mainland Convergence regions (North, Centre and Alentejo) will increase by 10% in real terms over the equivalent amount of CSF III.
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3 Examples of success projects of regional development implemented in Portugal


Hydroelectric Alqueva Total Value: 116.9 Million Euros The Alqueva dam is the largest Portuguese dam, situated on the Guadiana river in the Alentejo countryside near the village of Alqueva. It has a height of 96 m above the foundation and a length of 458 m. crowning The installed capacity of electricity generation is 260 MW. The reservoir reaches the full height, the 250 sq km, the largest artificial lake in Europe. It was built for the purpose of irrigation throughout the Alentejo and electricity generation, in addition to other complementary activities. Several of the global infrastructure are already built (dam Pedrgo, 12 infrastructure, Aldeia da Luz) and many other advanced phase of the project. Is currently under construction to strengthen the power of the Alqueva Dam, which is made up of two new power generators reversible, with 130mW of power each. Thus, the installed capacity of the dam will double. The new plant will be functional in July 2012.

Expansion of Funchal Airport

Total Value: 269.8 Million Euros The Madeira International Airport occasionally known as Funchal Airport is the main airport of Madeira. Madeira Airport was inaugurated on July 8, 1964 with a runway 1,600 meters long. The archipelago has thus gained new connections to the continent since until then the trips were made by boat. The first landing of an airplane occurred in 1957 in Madeira, an experimental track in Santa Catarina. In 1972, given the inability of the small airstrip in receiving aircraft capable of venting the flow of tourists seeking the Madeira Island, began to be considered an extension so they could recognize intercontinental flights. A project engineer Edgar Cardoso was then presented and the following year, opened a new terminal capable of receiving 500 thousand passengers per year. Between 1982 and 1986 the runway
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was increased to 1800 meters, and it proceeded to the expansion of aircraft parking platform. However, the engineer Antonio Tavares adapted Segades studies Edgar Cardoso and planned a new extension to the runway. Thus, the September 15, 2000 took place the inauguration of the extension of the runway to 2,781 meters. This is partly built on slab on the sea, being built on 180 pillars. Today, this is qualified to receive Boeing 747 as well as almost any type of civil aviation, the main gateway for tourists in the region as well as postal services and urgent orders as well as some essential services. It is also an international airport which serves domestic flights.

Expansion of sewage treatment plant wastewater of the Alto Zzere e Ca

Total Value: 154.9 Million Euros Municipal System Water Supply and Sanitation and the Alto Zzere Coa was created in July 2000 with the aim of satisfying the needs of the population of the region, the amount and quality of water and increase levels of treatment wastewater. With the completion of the enlargement project to Superior Mondego, the Municipal System of Water Supply and Sanitation and the Alto Zzere Coa has the capacity to provide a maximum water flow of about 17.3 million m3 per year and will be sized to handle a flow of sewage, industrial and domestic, from 11.6 million m3 per year. In terms of water supply and wastewater disposal will be served a population of around 149 million inhabitants to supply about 111,500 inhabitants and Sanitation.

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Conclusion
For the purpose of presenting the new cohesion policy for the period 2007 to 2013, observed that the policies have changed little from the previous period. What is seen as a most relevant change is incorporated into the new EU countries which, in turn, economic indicators are far below what the former members. This situation presents itself as a new challenge for the bloc. However, in view of the success of policies for regional development and territorial cohesion put in place by then, new policies are virtually reproductions of old. Development of transport and support for small and medium enterprises continue to top the investments. Moreover, it also transfers resources to encourage innovation, sustainable development, better organization of cities and municipal infrastructure, investing in people, assistance to the regions to improve their financial management capacity; border, transnational and interregional cooperation. A very important issue is the financial audit to monitor the use of funds so that it is correctly and effectively. In an international context increasingly integrated and rapidly changing, the positive evolution of the Portuguese economy will depend heavily on the ability to change the structural characteristics of its tissue organization and productive, streamlining the activities of tradable goods and services to enhance their comparative attractiveness and also to facilitate the internationalization of activities with strong potential for global growth over the coming years particularly to internationalize in a sustained way, knowledge and innovation capacity in economic activities with export vocation. The preparation of this work was very interesting to me because it was a theme that I did not have great knowledge, the level of funds available for Europe and the projects were carried out in Portugal with this support.

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