The financial crisis and the resulting austerity measures implemented in the recent years across Europe have had severe negative effects at the sub-national level, with a sharp decrease in funding available for public investment and pressures to cut the costs of the delivery of public policies at the local and regional level. These factors have triggered transformations of governance patterns across many of the EU member states and stimulated experimentation with new instruments and practices to overcome the budgetary limitations and attempt to deliver effective public policies despite the austerity measures. EU cohesion policy, being the EU’s key structural investment policy, also finds itself in the spotlight and under considerable pressure. On the one hand, in the ongoing EU budget negotiations the net contributor countries are keen to reduce the expenditure on supporting regional economic development in the lagging regions of the EU, while critics of the policy argue that it is not delivering tangible results in bridging the development gap between the leading and lagging areas.  On the other hand, cohesion policy, being a sophisticated investment policy aiming at achieving the EU’s strategic goals through targeted financial support, can (and is expected to) play a major role in efforts to stimulate growth and counterbalance the negative effects of the global economic slowdown and public debt crisis.

Against this background, this double session will look into the effects of the crisis and austerity measures from a sub-national perspective. The consequences of these developments on the territorial administration, regional governance and the reform of EU cohesion policy have so far been largely overlooked in the research to date, therefore the proposed session will offer an opportunity to bridge a major research gap.

The first part of the session will focus on the transnational activities of the local and regional actors.

This second part will in turn focus on the effects of the crisis and austerity on EU cohesion policy and their implications for regional governance. Nicola Franceso Dotti and Rocco Luigi Bubbico will draw on the new Territorial Capital approach to shed light on the reform of EU cohesion policy in the context of the crisis and the squeeze in public finance in the EU member states. Marcin Dabrowski will discuss the role of the financial engineering instruments in EU cohesion policy as a means to ‘do more with less’ and leverage private funding in times of austerity, while examining their effects on regional governance in a comparative perspective. Simona Milio will investigate the effects of the special measures altering the rules of operation of EU cohesion policy, that were put in place in the context of the crisis to facilitate the absorption of the structural funds in the troubled economies of  Southern and East-Central Europe. Finally, Anastassios Chardas will examine the administrative and political impact of the interplay between the austerity policies, domestic territorial reform and the EU cohesion policy in the Greek regional and local authorities.