Cohesion policy in the EU: Going beyond fiscal transfers?

Should cohesion policy in the EU be reformed? This question becomes pressing in light of the coming enlargement of the EU. Indeed, without reform enlargement will involve an increase in the budget for cohesion policies, as well as a reallocation of funds across regions. Furthermore, it is an appropriate occasion to rethink the various rules and criteria associated with cohesion policies. Recently, the European Commission published its Second Report on Economic and Social Cohesion (henceforth SRESC. (2001). The report praises the effectiveness of current cohesion policies and suggests a mere continuation of current practices in the future. This paper challenges this conclusion and discusses some options for reform. The paper starts with a brief introduction to the current cohesion policy and the changes that will occur in light of EU enlargement. Subsequently, we address two questions. Is there a need for cohesion policy reform? And if so, how should it be reformed?