TOURISM POLICY AND REGIONAL DEVELOPMENT IN THE EUROPEAN UNION

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1 Geogaphica Timisiensis, vol. 19, nr. 2, 2010 (pp ) TOURISM POLICY AND REGIONAL DEVELOPMENT IN THE EUROPEAN UNION Holger LEHMEIER Otto-Friedrich-Universität Bamberg Institut für Geographie Abstract: Tourism is generally accepted as a growingly important industry for the European Union and its member states. Up to 11% of their aggregate GDP are currently depending on the tourism industry. In this paper, the main lines of the tourism policy of the EU are examined, and the most important European programmes for the promotion of tourism projects are displayed. This refers to programmes directly launched by the European Commission as well as to possibilities within the allocation of structural and agricultural funds. Additionally, the paper deals with the underlying concepts of tourism and the corresponding assumptions of its effects. It is shown that tourism can be seen as a means of regional development, contributing to the aim of economic, social and territorial cohesion. Rezumat: Politica turistică şi dezvoltarea regională în Uniunea Europeană. Turismul este în general considerat ca o industrie importantă pentrz Uniunea Europeană şi statele membre. Până la 11% din PIB-ul lor depinde de industria turismului. Articolul analizează principalele direcńii ale politicii europene pentru turism şi prezintă cele mai importante programe europene de promovare a proiectelor turistice. Acestea includ programe lansate directde Comisia Europeană, dar şi posibilităńile de alocare în cadrul fondurilor structurale şi agricole. În plus, articolul subliniază conceptele de turism şi tipurile de impact corespunzătoare. Se subliniază că turismul poate fi conceput ca un mijloc de dezvoltare regională, care să contrie la atingerea obiectivului de coeziune economică, socială şi teritorială. Keywords: Tourism, European Union, Regional Development Cuvinte cheie: turism, Uniunea Europeană, dezvoltare regională 1. INTRODUCTION At the beginning of the 21 st century it is a common belief that tourism is going to be one of the most important industrial branches for the future economic development of the European Union and its member states. The tourism industry is directly responsible for an estimated share of more than 4% of the EU-27 GNP and provides 8 million jobs in 2 million enterprises, which corresponds to 4% of the European labour market. If we take further economic effects in adjacent industries into account, these numbers grow even larger and add up to almost 11% of the EU-27 GDP and 12% of European Union s labour market (EUROPEAN COMMISSION 2010a). The total number of nights spent in hotels dropped somewhat in the course of the current economic crisis, shrinking by 5% in 2009 and falling below 1.5 billion (EUROSTAT 2010). This is an important decline but relatively limited in comparison with other economic sectors (EUROPEAN COMMISSION 2010e). All in all,

2 Tourism Policy and Regional Development in the European Union 122 there is hope that tourism will recover soon and continue to be one of the fastest growing economies worldwide. This importance for Europe s future economic development leads to several questions. What are the main lines of EU s policy towards tourism? What funds are available for this purpose? 2. TOURISM AS A COMPETENCE OF THE EUROPEAN UNION As a supranational organization, the EU can only exercise authority in a political field, if it is assigned to do so by its member states. For a long period and in certain respects until today tourism policy was not a task transferred to the EU. It remains to be an issue of national or regional institutions, instead. With respect to the principle of subsidiarity, the EU can only intervene in tourism policy, if regional of national measures are considered to be insufficient. Given that most needs of the tourism industry can be met better at these inferior political levels, tourism was not seen as an European field of interest until about 20 years ago (FREUNDT 2002, p. 101). During the last decades, this notion changed step by step, transforming tourism policy into an European concern. In 1992, the Maastricht treaty was the first major document to contain a statement concerning tourism, specifying measures in the spheres of energy, civil protection and tourism (Art. G/3t TEU) to be included in the activities of the European Community. Based on that, discussions about an European Programme for the tourism sector started. After several years a proposal for a Multiannual Programme to Assist European Tourism, named PHILOXENIA, was drafted. In the end PHILOXENIA could not pass the legislation process (due to resistance of several member states), but the political aims formulated in this proposal remained to be the main goals of EU s tourism policy until today. The most important points regarding this are: Improvement and exchange of knowledge, the raising of quality standards and increasing the number of third-country tourists (COMMISSION OF THE EUROPEAN COMMUNITIES 1996). Despite of the meagre success of the PHILOXENIA initiative, the regulations concerning tourism increased with every new major contract of the EU. In the treaty of Lisbon (2008/2009), tourism is again defined as one of the areas, in which the EU has competences. However, this refers only to competences to carry out actions to support, coordinate or supplement the actions of the Member States (Art. 6 TFEU). This means that tourism policy is neither an exclusive nor a shared competence and thus generally still business of the member states (or their sub-national units). This time (opposed to former contracts, e.g. the Maastricht treaty), a separate article goes further into detail. The EU should undertake complementary actions in particular to encourage the creation of a favourable environment for the development of undertakings in this sector and to promote cooperation between the Member States, particularly by the exchange of good practice (Art. 195 TFEU). These ambiguous phrases are typical for international agreements and provide a considerable freedom of action. In this case, some affected NGOs and representatives of the tourism industry look sceptically at these new competences of the EU in the tourism field (IAAPA 2010).

3 Holger LEHMEIER INITIATIVES CONCERNING TOURISM LAUNCHED BY THE EUROPEAN COMMISSION Regarding the sectoral organization of the European legislative institutions, tourism is to be classified as a typical cross-section issue. It is influenced by arrangements of many sectoral policies (traffic, agriculture, enterprise, regional development, environment). But which political institution within the EU is in charge of shaping a European tourism policy? A closer look at the EU Administration and at its most important institution, the European Commission, reveals that there is one unit responsible for tourism at the Direction General Enterprise and Industry (DG ENTR). The initiatives coming from this working group are basically designed to be effective on a EU-wide scale. Many of EUs goals concerning tourism development (as described above) can be recognized in their guidelines and aims: The initiative European Destinations of Excellence (EDEN) is awarding outstanding tourist destinations throughout Europe. For this aim a new specific theme is defined every year. EDEN started in 2006 and is running as a preparatory action since The themes proclaimed so far show the range of ideas behind it: Starting with Best Emerging European Rural Destinations of Excellence in 2007, Tourism and local intangible heritage followed in 2008, followed again by Tourism and protected areas in The current theme of 2010 is Aquatic Tourism. The prize winning destination are elected on a national base; each partaking nation assigns one winner every year. Thus, and given the changing themes, over the years a relatively large number can call themselves EDEN destinations. This growing set of European Destinations can then be promoted as an European brand for the European and worldwide market. Additionally, EDEN is aiming at the promotion of sustainable tourism and at enhancing the communication and networking between the awarded destinations (EUROPEAN COMMISSION 2010b). Since 2009 a second programme named CALYPSO is promoting projects in the social tourism sector. The main idea is the promotion of offers for elderly people, youths, disabled citizens and families facing difficult social circumstances. Another notion is the concept that enhancing the offer for these costumers can help overcome many problems caused by seasonality, by utilizing a bigger share of the capacities in off-season time. In 2009 CALYPSO had a one million Euro budget, which is used to support suitable projects (EUROPEAN COMMISSION 2010c). A third programme, called Sustainable Tourism Iron Curtain Trail, promotes the establishment and marketing of cross-border cycling trails in member states along the former Iron Curtain. As its title states, the programme also aims at sustainability. Apart from that, a medium-term goal is to establish transnational networks of regions, being able to cooperate in further EU-Projects (e.g. financed by structural funds) in the future (EUROPEAN COMMISSION 2010d). These initiatives issued by the commission are limited in several aspects; after all, only some regions take part and the budget is relatively small. All three of them will expire in the nearer future EDEN in 2011 and the two others in Thus, DG ENTR is currently planning to rethink the framework for the EU tourism policy, which should be brought in line with the political aims defined in the Lisbon treaty, which foresees a new competence for the EU in the tourisms field, changes the institutional context for the

4 Tourism Policy and Regional Development in the European Union 124 European tourism and offers the opportunity for a political initiative from the Commission in the field of tourism (EUROPEAN COMMISSION 2010e). The three existing initiatives, however, do not have a significant importance to the tourism industry, mainly due to the shortcomings mentioned above (small budget, few regions involved). This should nevertheless not lead into the false assumption, that the EU had no influence in the tourism business. Quite contrary to that, the importance of the EU in this context is a decisive factor. There are two reasons for that. Firstly, the general economic and political framework created by the EU is of great importance for the tourism sector. Especially the loss of importance of the interior frontiers within the Union, as well as the introduction of the Euro as a common currency has to be considered beneficial. Moreover, numerous EU regulations (concerning issues of the environmental, traffic and transports or consumers policies) had strong influence. The EU policy regarding small and medium-sized enterprises (SME) is of particular interest for companies of the tourism sector, given the fact that approximately 95% of them have less than ten employees (FREUNDT 2002, p.103). The European structural policy is another important factor. In this context, tourism is often seen as a method used for regional development. In the following part of this paper, I will display the main EU funds for regional development and point out the corresponding possibilities for tourism projects. 4. PROMOTION OF TOURISM WITHIN THE EUROPEAN STRUCTURAL POLICY The term European structural policy subsumes the measures undertaken by the EU to achieve the objectives of social, economic and territorial cohesion. In the financial framework (Tab.1), the funds provided for this policy can be found under the Heading 1B: Cohesion for Growth and Employment. Using more than 35% of the Union s overall budget, this policy is one of the cornerstones of the political activities of the EU. The only other asset with comparable size (almost 45%) is the agricultural policy ( Heading 2: Preservation and Management of Natural Resources ). Tab.1 EU financial framework Cadrul fianciar al UE Commitment appropriations Billion % 1. Sustainable Growth 436,770 44,81 1a. Competitiveness for Growth and 89,363 9,17 Employment 1b. Cohesion for Growth and Employment 347,407 35,64 2. Preservation and Management of Natural 413,061 42,38 Resources of which: market related expenditure and 330,085 33,86 direct payments (CAP 1 st pillar) of which: rural development policy (CAP 2 nd pillar) 77,662 7,97

5 Holger LEHMEIER Citizenship, Freedom, Security and 12,216 1,25 Justice 3a. Freedom, Security and Justice 7,549 0,77 3b. Citizenship 4,667 0,77 4. EU as a global player 55,935 5,74 5. Administration 55,925 5,74 6. Compensations 0,862 0,09 Total commitment appropriations 974, Data: The European Parliament, the Council of the European Union and the Commission of the European Communities 2006; European Commission (2006) In the preliminary debates about a possible adjustment of the structural policy in the new funding period, two different basic principles of territorial development could be seen. On the one (traditional) side, it was argued that one should aim at a balance between the regions of the EU by alimenting the underdeveloped and peripheral regions. On the other (upcoming) side, the idea was that only enhancing the overall competitiveness of the EU as a whole can help to achieve the aim of cohesion on the long run. As a result of this discussion, the new structural policy is stressing the idea of competitiveness more than in the preceding funding periods, albeit the balancing idea is still the mainstream in territorial development (ZIEGLER 2008, p.301). The ambiguity of the new structural policy leads to three different objectives for (Tab 2). The most important of them is Convergence. It refers to the improvement of the situation in the least developed regions in Europe, particularly in the new member states. This concept of regional development clearly mirrors the balancing notion, and it is still using more than 80% of EU s structural funds. At the same time, the objective Regional Competitiveness and Employment, which can be used for all regions outside the convergence criteria, uses only 16%. The last objective European Territorial Cooperation continues the INTERREG initiative and is using a minor share of 2,5% (EUROPEAN COMMISSION 2008a). Tab.2. Allocation of funds within the commitment Cohesion for Growth and Employment Alocarea fondurilor pentru Coeziune pentru creştereşi locuri de muncă Objective Funds Beneficiary Billion % Convergence European regional development fund (ERDF) European Social Fund (ESF) Cohesion Fund Regions with GNI / inhabitant < 75% of EU average Member States with GNI / inhabitant < 90% of EU average 283,206 81,54%

6 Tourism Policy and Regional Development in the European Union 126 Regional Competitiveness and Employment ERDF, ESF Regions outside the cohesion criteria 55,411 15,95% European Territorial Cooperation ERDF Border regions, transnational cooperation 8,755 2,52% 347, % Data: European Commission 2008a, European Commission 2008b, Council Regulation (EC) No 1083/2006; concept: (slightly modified and updated) Grabski-Kieron/ Krajewski 2007, p.14. Three funds are used for these purposes, the European regional development fund (ERDF), the European Social Fund (ESF) and the Cohesion Fund. All three of them could be used for the promotion of tourism under certain circumstances, but the ERDF is by far the most important in this respect. Its usage is regulated in REGULATION (EC) No 1080/2006. Several measures that can be undertaken to achieve the Convergence objective are mentioned there. Tourism is explicitly listed as one of them. Convergence can therefore be achieved by the promotion of Tourism, including promotion of natural assets as potential for the development of sustainable tourism; protection and enhancement of natural heritage in support of socio-economic development; aid to improve the supply of tourism services through new higher added-value services and to encourage new, more sustainable patterns of tourism (Art. 4(6) REGULATION (EC) No 1080/2006). Furthermore, sustainable tourism and improved regional attractiveness is mentioned in the combination with cultural assets (Art. 4(7) REGULATION (EC) No 1080/2006). Promotion of tourism is also addressed in connection with Regional Competitiveness and Employment, where sustainable tourism is seen as a potential method for the protection and enhancement of the natural and cultural heritage (Art.5(2f) REGULATION (EC) No 1080/2006). Lastly, tourism is also listed as a option regarding the objective European Territorial Cooperation, if it forms part of cross-border entrepreneurship (Art.6 (1a) REGULATION (EC) No 1080/2006) or if it helps to develop transnational collaboration (Art.6(2b) REGULATION (EC) No 1080/2006). 5. PROMOTION OF TOURISM WITHIN THE EU AGRICULTURAL POLICY It is also possible to promote tourism within the secondr large field of EU s political activity, namely the agricultural policy. However, the biggest part of the funds allocated in this context is still used for direct payments to farmers and other market related activities, the so called first pillar of the Common Agricultural Policy (CAP). But over the last decades, the sustainable development of rural areas emerged as another issue, forming the second pillar of the CAP. In the current financial framework ( ), almost 80% of the funds available for the EU agricultural policy are used for the first pillar. Additional

7 Holger LEHMEIER 127 programmes in the fisheries sector and other minor initiatives are also undertaken and use another 1.3% of the funds, so that almost 19% can be used for rural development. The corresponding fund is called European Agricultural Fund for Rural Development (EAFRD) and is accounting for over 77 billion in the timeframe The policy pursued in this field is geared to three thematic axes and the additional LEADER axis (Tab 3). Tab 3: Allocation of funds within the EU agricultural policy Alocarea fondurilor în cadrul politicii agricole europene Objectives Funds Aims Billion % market related expenditure and direct payments (CAP 1st pillar) rural development policy (CAP 2nd pillar) miscellaneous (fishery policy, Life+, et al.) European Agricultural Fund for Guarantee (EAFG) European Agricultural Fund for Rural Development (EAFRD) European Fisheries Fund (EFF), further programmes market regulations and assurance of incomes Competitiveness (axis 1) Land management/ environment (axis 2) The wider rural economy (axis 3) Quality of life Economic diversification LEADER axis (cross-sectional) 330,085 79,91% 77,662 18,80% 5,314 1,29% 413, % Data: The European Parliament, the Council of The European Union And The Commission of the European Communities (2006), European Commission (2006) For the promotion of tourism, the 3 rd axis (The wider rural economy) is of special interest. Encouragement of tourism activities is one of the listed possibilities that can contribute to economic diversification of rural areas (Art.52 COUNCIL REGULATION (EC) No 1698/2005). Further definitions clarify that (a) small-scale infrastructure such as information centres and the signposting of tourist sites; (b) recreational infrastructure such as that offering access to natural areas, and small-capacity accommodation; (c) the development and/or marketing of tourism services relating to rural tourism can be covered in this regard (Art.55 COUNCIL REGULATION (EC) No 1698/2005).

8 Tourism Policy and Regional Development in the European Union 128 Apart from that the LEADER approach (being the 4 th axis of the 2 nd pillar of the CAP) has significant importance for the promotion of rural tourism. Currently ( ), this programme has reached its fourth generation, after the successful implementation of LEADER I, LEADER II and LEADER+ in former times. Nowadays, the programme is simply called LEADER again, but since 2007 it is an integral part of the rural development policy instead of being an EU Community Initiative. The main idea behind LEADER (Liaison entre actions de développement de l économie rurale) is to provide a crosssectional, bottom-up initiative, where local stakeholders can contribute to a sustainable development of rural areas (Art. 61 COUNCIL REGULATION (EC) No 1698/2005). There is a wide range of activities and projects that can be promoted via LEADER, and the implementation of rural tourism is one of the most popular choices amongst them. 6. PERSPECTIVES AND MOTIVES The programmes mentioned above and their objectives reveal two basic perspectives on tourism and tourism industry. According to these perspectives the duties of tourism policy vary. On the one hand, the tourism industry can be seen as an existing (either growing or shrinking) economic sector. In some aspects this sector needs to be controlled and regulated. Thus, it can for example become socially acceptable and accessible by people that could not take part in tourism so far (e.g. by poorer people, elderly people, disabled citizens). Tourism could also become (more) sustainable and its damaging effects on nature, society and economy could be mitigated. Negative consequences like exceeding consumption of resources and land, increasing traffic volume, and the emission of CO 2 should be decreased. This concept becomes especially evident with the initiatives directly planned by the Commission (EDEN, CALYPSO, Iron Curtain Trail). But it also resonates whenever regulations concerning tourism development give instructions on how to build up the tourism business. It also fits in this concept that EU s tourism policy should assist in the worldwide marketing of European tourist destinations and help to maintain a certain level of quality. Furthermore it should prohibit an overly destructive competition between Europe s destinations (e.g. if there is no sufficient specialization) (EUROPEAN COMMISSION 2010e). But on the other hand, tourism can be seen as a way to achieve other objectives. If that is the case, regulations don t refer to how to develop tourism, but why it should be developed: Within the European structural and agricultural policies the economic effects of tourism are the central point of interest. New jobs in the tourist destinations cause a higher employment rate and the rising incomes increase the local demand. Together with the demand directly created by the tourists themselves (by buying goods and services), tourism can help to diminish spatial disparities. It does so by relocating the consumption from the region of the tourists origin into the tourism destination. Thus tourism can be seen as a way to bring economic development into less favoured regions (EISENSTEIN/ROSINSKI 2003, p.811f). This coincides of course with one of the basic

9 Holger LEHMEIER 129 goals the EU is striving for, namely social, economic and territorial cohesion (COMMISSION OF THE EUROPEAN COMMUNITIES 2007, p.2). Besides that, (sustainable) tourism is often brought into connection with ecological issues. Certain forms of tourism which pick preservation of nature as a central theme can be used as means of education and for the conveying of values. Additionally it can help to finance ecological projects. Tourism can thus be seen as a contribution to the preservation of nature (Art.6(2b) REGULATION (EC) No 1080/2006, COMMISSION OF THE EUROPEAN COMMUNITIES 2007, p.2). Another view on tourism stresses the potential it has for cultural exchange and international understanding. These cosmopolitical views on tourism have their roots in the 19 th century tradition of romantic voyaging. On closer examination several doubts may arise, for example if one takes the asymmetric relations between visitors and visited people into consideration (KOLLAND 2003, p.15). Regardless of this doubts, this rather idealistic concept still has influence on important current definitions of tourism. According to the statutes of the World Tourism Organization (UNWTO), tourism can contribute to international understanding, peace, prosperity, and universal respect for, and observance of, human rights and fundamental freedoms for all without distinction as to race, sex, language or religion (Art.3. UNWTO 1970). This concept appears casually in documents composed by the EU as well. Tourism should be used in order to create something like an European spirit; tourism brings Europeans together, breaks down barriers and consolidates European identity and vision (COMMISSION OF THE EUROPEAN COMMUNITIES 1996, p.2). During the last years, however, this rather normative perception is steadily losing importance in comparison to the economic view on tourism. These types are not to be understood as exclusive; they overlap more often than not. This becomes evident, if we take a look at the significance of tourism in the context of European territorial cooperation. There, mutual understanding (as a general objective) is achieved through personal contact between people. One source for this contact can be economic activity, and the common implementation of a project in the tourism sector can be one of these activities (Art.6 (1a) REGULATION (EC) No 1080/2006). 7. CONCLUSION Summing up, one can say that the European Union provides for the promotion of tourism projects in many ways. Firstly the beneficiary effects of the European Unification have to be mentioned, especially the introduction of a common currency and the freedom of travel. As a second point, it became clear that the EU had originally no competences regarding tourism, but this is changing towards the development of an European Tourism policy. The growing number of initiatives concerning tourism development launched by the European Commission has to be seen as a consequence of this. But the most important influence of the EU on tourism lies in its structural and agricultural policies. In this context, tourism is seen as a means for regional development and to achieve economic, social and territorial cohesion. The enlargements of the EU lead to an increase of peripheral regions in need of relevant structural support and many of them are rural regions. That means that the importance of EUs structural policy and of the rural development policy is an important

10 Tourism Policy and Regional Development in the European Union 130 issue for the future. But can the promotion of tourism be a solution in this context? Given the number of potential tourism destinations in peripheral areas, it is uncertain if there is a sufficient demand for this kind of tourism. Lastly, the crucial question will surely be: Will the economic benefits for the region remain after the funding is done? REFERENCES Eisenstein, B., Rosinski, A. (2003): Ökonomische Effekte des Tourismus. In: Becker, C., Hopfinger, H. & A. Steinecke (Eds.): Geographie des Freizeit und des Tourismus: Bilanz und Ausblick. München/Wien, pp Freundt, A., (2002), Tourismuspolitik der Europäischen Union. in Borghardt, J. et al. (Eds.): ReiseRäume. Dortmund, pp Grabski-Kieron, U. & KRAJEWSKI, C., (2007), Ländliche Raumentwicklung in der erweiterten EU. in Geographische Rundschau 59,3, pp Kolland, F. (2003), Konfliktlinien im Kulturtourismus. in Bachleitner, R & H.J. Kagelmann (Eds.): Kultur/Städte/Tourismus. Munich/Vienna, pp Ziegler, A. (2008), Europas Regionen zwischen Ausgleich und Wachstum. in Krumbein, W. (ed.), Kritische Regionalwissenschaft. Münster, pp * * *, (1996), Commission of the European Communities Proposal for a Council Decision on a First Multiannual Programme to Assist European Tourism "PHILOXENIA" ( ). COM(96) 168 final. * * *, (2007), Commission of the European Communities, Communication from the Commission. Agenda for a sustainable and competitive European tourism. COM (2007) 621 final. * * *, Council Regulation (EC) No 1083/2006 of 11 July 2006 laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund and repealing Regulation (EC) No 1260/1999. * * *, Council Regulation (EC) No 1698/2005 of 20 September 2005 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD). * * *, (2006), EUROPEAN COMMISSION Fact Sheet New Perspectives for EU Rural Development ( ). * * *, European Commission (2008a): Regional Policy Inforegio Funds available ( ). * * *, European Commission (2008b): Regional Policy Inforegio Cohesion Fund ( ). * * *, European Commission (2010a): Tourism Enterprise and Industry, ( ). * * *, European Commission (2010b): Destinations of Excellence ( ). * * *, European Commission (2010c): Calypso. ( ).

11 Holger LEHMEIER 131 * * *, European Commission (2010d): Sustainable Tourism Iron Curtain Trail ( ). * * * European Commission (2010e): New action lines of the tourism sector in the framework of the Lisbon Treaty, ( ). * * *, Eurostat (2010): Tourism in the EU27. Newsrelease STAT/10/26, 22 February * * *, IAAPA (International Association of Amusement Parks and Attractions) (2010): Der Lissabon Vertrag und Tourismus-Politik ( ). * * *, Regulation (EC) No 1080/2006 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 5 July 2006 on the European Regional Development Fund and repealing Regulation (EC) No 1783/1999. * * *, TEU (The Maastricht Treaty. Provisions Amending the Treaty Establishing The European Economic Community With A View To Establishing The European Community). Maastricht * * *, TFEU (Consolidated Version Of The Treaty On The Functioning Of The European Union). Lisbon * * *, The European Parliament, The Council of the European Union and the Commission of the European Communities (2006): Interinstitutional Agreement between the European Parliament, the Council and the Commission on budgetary discipline and sound financial management (2006/C 139/01). * * *, UNWTO (World Tourism Organization) (1970): Statutes of the World Tourism Organization.