6_Lecture_The economic geography of Southern Europe, continuation

Lecture 1 - Introduction: economic geography and its recent paradigms
Regional
Geography
of Southern
Europe
WS 2021-2022
Lecture 6
08-12-2021

Structure of
the course
1) Introduction to regional geography and the focal study region
2) Regional geography of Southern Europe: differences and uniqueness
3) The territorial governance of Southern Europe
4) Spatial planning (including SSP) and planning systems of Southern Europe
5) The economic geography of Southern Europe
6) The economic geography of Southern Europe, continuation (08/12/2021, live)
7) EU integration, EU funding and EU Cohesion Policy (15/12/2021, recorded)
8) Research and development in Southern Europe: where and what for (12/01/2022)
9) The social dimension of cross-border relations across SE (19/01/2022)
10) Southern Europe and sustainability transition efforts (26/01/2022)
11) Conclusion: Regional futures across Southern Europe (02/02/2022)
Lectures Regional Geography of Southern Europe

Examination
Exam I
Exam II
• 09 February 2022, 12:00 - 14:00 (+15m*)
• Join Zoom Meeting
• 23 March 2022, 12:00 - 14:00 (+15m*)
• Join Zoom Meeting
*for the technical component and email me

Understanding the economic
landscape of Southern Europe:
Italy

Economic geography: Italy
Key insights:
Italy’s economy comprises a developed industrial
north, dominated by private companies, and a less-
developed, highly subsidized, agricultural south, with
a legacy of unemployment and underdevelopment.
The Italian economy is driven in large part by the
manufacture of high-quality consumer goods
produced by small and medium-sized enterprises,
many of them family-owned.
Italy also has a sizable underground economy, which by
some estimates accounts for as much as 17% of GDP.
These activities are most common within the
agriculture, construction, and service sectors.
Source

Source
Italy's Industrial Clusters
Agricultural products
milk, grapes, wheat,
maize, tomatoes,
apples, olives, sugar
beet, oranges, rice
Industries
tourism, machinery,
iron and steel,
chemicals, food
processing, textiles,
motor vehicles,
clothing, footwear,
ceramics
Accentuated
regional
disparities

Clusters are geographic concentrations of industries
related by knowledge, skills, inputs, demand and/or other
linkages. (Delgado et al., 2016)
Defining industry clusters
What set of related economic activities constitutes a cluster?
Clusters based on inter-industry
linkages conditional from multi-
region analysis (across regions).
Cluster definitions based on
observed linkages among industries
or firms in a single region.
Region-specific cluster definitions could thus be too narrow (or myopic) in
terms of the linkages captured because they abstract from the linkages that
may be present in other locations. Thus, region-specific cluster definitions
could be complemented by comparable cluster definitions derived from
patterns across multiple regions. (Delgado et al., 2016)

Japanese
Industrial
Cluster
Zones
Türkcan et al 2009
Multi-region
analysis.

Japanese Industrial Cluster Zones
Source
firms in a single region

Industrial Clusters
Source
“routines”

Source
Strong and
diversified
tourism industry
(urban; beach;
alpine)

Italy is the third-largest economy in the euro zone
Before brexit

Exports
$558.3 billion (2020 est.) packaged medicines,
cars/vehicle parts, refined petroleum,
trunks/cases, wine (2019) partners: Germany
12%, France 11%, US 10%, UK 5%, Spain 5%,
Switzerland 5% (2019)
Imports
$486.4 billion (2020 est.) crude petroleum, cars,
packaged medicines, natural gas, refined
petroleum (2019)
partners: Germany 16%, France 9%, China 7%,
Spain 5%, Netherlands 5%, Belgium 5% (2019)
Source
Italy’s economy returned to modest growth in
late 2014 for the first time since 2011.
In 2015-16, Italy’s economy grew at about 1%
each year, and in 2017 growth accelerated to
1.5% of GDP.
In 2017, overall unemployment was 11.4%, but
youth unemployment remained high at 37.1%.
GDP - composition, by sector of origin
agriculture: 2.1% (2017 est.)
industry: 23.9% (2017 est.)
services: 73.9% (2017 est.)
Unemployment rate
9.88% (2019 est.)
10.63% (2018 est.)

Understanding the economic
landscape of Southern Europe:
Greece

Economic geography: Greece
Key insights:
Greece has a capitalist economy with a public sector
accounting for about 40% of GDP and with per
capita GDP about two-thirds that of the leading
euro-zone economies.
Tourism provides 18% of GDP. Immigrants make up
nearly one-fifth of the work force, mainly in
agricultural and unskilled jobs.
Greece is a major beneficiary of EU aid, equal to
about 3.3% of annual GDP.
The Greek economy averaged growth of about 4%
per year between 2003 and 2007, but the economy
went into recession in 2009 as a result of the world
financial crisis, tightening credit conditions, and
Athens' failure to address a growing budget deficit.

By 2013, the economy had
contracted 26%, compared
with the pre-crisis level of
2007.
Greece met the EU's
Growth and Stability Pact
budget deficit criterion of
no more than 3% of GDP in
2007-08, but disrupted it in
2009, when the deficit
reached 15% of GDP.
Source
In 2014, the Greek economy began to turn the corner
on the recession. Greece achieved three significant
milestones: balancing the budget; issuing government
debt in financial markets for the first time since 2010;
and generating 0.7% GDP growth — the first economic
expansion since 2007.

• Tourism- and shipping-
based EU economy;
• Increasing Chinese port
control;
• Oil and gas disputes with
Turkey
• Predominantly rural
territory
Industries - tourism, food
and tobacco processing,
textiles, chemicals, metal
products, mining, petroleum
Agricultural products -
maize, olives, wheat, milk,
peaches/nectarines,
oranges, tomatoes, grapes,
milk, potatoes

Exports
$59.02 billion (2020 est.)
refined petroleum, packaged medicines,
aluminum plating, computers, cotton (2019)
Export partners:
Italy 10%, Germany 7%, Turkey 5%, Cyprus 5%,
Bulgaria 5% (2019)
Imports
$71.76 billion (2020 est.)
crude and refined petroleum, packaged
medicines, cars, ships (2019)
Import partners:
Germany 11%, China 9%, Italy 8%, Iraq 7%,
Russia 6%, Netherlands 5% (2019)
Source
Source

Source
Spatial
Planning
Framework
for
Industry
Place-based EU policy
EU smart specialization strategies
Overall Europeanization process

Source
Greater-than 14%
Unemployment PT: 6.4%

Source
Southern
European
2015
Youth
unemployment
includes all the
youth (i.e
people between
the ages of 15
and 24,
inclusive) who
are unemployed
Source

Source
Greater-than 33%
(2020)

Economic geography: The Western Balkans (or Southeast Europe)
Source Jovan Bliznakovski (adapted)
Albania
Bosnia and Herzegovina
Kosovo
Montenegro
Serbia
The Republic of North Macedonia
Source
North
and Herzegovina

The EU aims to promote peace, stability and economic
development in the Western Balkans and open up the
prospect of EU integration.
The Western Balkans & EU Integration
Governance Instruments
A. The Stabilisation and Association Process (SAP)
Launched in 1999, the SAP is the strategic framework
supporting the gradual rapprochement of the Western
Balkan countries with the EU. It is based on bilateral
contractual relations, financial assistance, political
dialogue, trade relations and regional cooperation.
C. Regional cooperation
Source
European integration and regional cooperation are closely intertwined. One of the key aims of the
Stabilisation and Association Process (SAP) is to encourage countries of the region to cooperate among
themselves across a wide range of areas, including the prosecution of war crimes, border issues, refugees
and the fight against organised crime. The Sarajevo-based Regional Cooperation Council (RCC) aims to
support the European and Euro-Atlantic aspirations of its non-EU members, and to develop cooperation in
such fields as economic and social development, energy and infrastructure, justice and home affairs,
security, building human capital, and parliamentary relations.

The Western Balkans & EU Integration: current status
Albania
Albania applied for EU membership on 28 April 2009. In 2012, the
Commission recommended that the country be granted
candidate status, subject to the adoption of pending reforms. In
October 2013, the Commission unequivocally recommended
granting Albania the status of candidate for EU membership,
which it obtained in June 2014. In the light of the country’s
progress, the Commission recommended opening accession
negotiations with Albania in 2016, 2018 and 2019. In June 2018,
the Council agreed to the possible opening of accession
negotiations with Albania in June 2019, provided the necessary
conditions had been fulfilled. However, both in June 2019 and
October 2019, the Council failed to greenlight the opening of
accession negotiations. In March 2020, it finally decided to open
accession negotiations, pending the fulfilment of a set of
conditions. In July 2020, the Commission presented the draft
negotiating framework – the first to take into account the
‘revised methodology for enlargement to the Western Balkans’
that was published in February 2020 – to the Member States.
Almost a year and a half later, accession negotiations with
Albania – and North Macedonia – have not yet been opened.
Source
Source of the map: CIA World
Factbook 2020/2021

Bosnia and Herzegovina
Bosnia and Herzegovina (BiH) is a potential candidate country. A
stabilisation and association agreements was negotiated and
signed in June 2008 but its entry into force was frozen, mainly
owing to the country’s failure to implement a key ruling of the
European Court of Human Rights.
The EU’s ‘renewed approach’ to the country, which put more
focus on economic governance, allowed the long overdue entry
into force of the SAA on 1 June 2015.
The country submitted its membership application on 15
February 2016. In May 2019, the Commission published its
opinion, including a list of 14 key priorities for BiH, on the basis
of BiH’s replies to a comprehensive questionnaire. One of the 14
key priorities is ensuring the proper functioning of the
Stabilisation and Association Parliamentary Committee (SAPC),
the parliamentary dimension of the SAA. In July 2020, almost five
years after the first EU-BiH SAPC meeting in November 2015, the
BiH Parliament voted on the SAPC’s Rules of Procedure, which
were formally adopted by the second EU-BiH SAPC in June 2021.
Source
Factbook 2020/2021

The Republic of North Macedonia
The former Yugoslav Republic of Macedonia (now the Republic of
North Macedonia) applied for EU membership in March 2004
and was granted EU candidate status in December 2005.
However, the country was unable to open accession negotiations
for many years, mainly owing to the dispute with Greece over
the country’s use of the name ‘Macedonia’. This dispute was
successfully resolved through the ‘Prespa Agreement’ on the
country’s new name – Republic of North Macedonia or North
Macedonia – which entered into force in February 2019. Since
2009, the Commission, with the unwavering support of
Parliament, had invariably recommended that accession
negotiations be opened. In June 2018, the Council agreed to the
possible opening of accession negotiations with North
Macedonia in June 2019, provided the necessary conditions
were fulfilled. However, in both June 2019 and October 2019,
the Council failed to greenlight the opening of accession
negotiations. In March 2020, the Council decided to open
accession negotiations without additional conditionality. In July
2020, the Commission presented the draft negotiating
framework. Accession negotiations with North Macedonia – and
Albania – have not yet been opened. Source
Factbook 2020/2021

Kosovo
Kosovo is a potential candidate for EU accession. It unilaterally
declared its independence in February 2008. Five EU Member
States (Cyprus, Greece, Romania, Slovakia and Spain) and two
countries in the region (Serbia and Bosnia and Herzegovina)
have not recognised Kosovo’s independence.
In July 2018, six years after a visa liberalisation roadmap was
issued, the Commission confirmed that Kosovo had fulfilled all
the criteria. The European Parliament immediately followed suit
and entered into interinstitutional negotiations, which are
ongoing. In the region, only Kosovo remains excluded from visa
liberalisation, as some EU Member States continue to have
reservations. After a landmark agreement on normalising
relations was reached in April 2013 by Belgrade and Pristina
(the ‘Brussels Agreement’), the European Council decided in
June 2013 to open negotiations on an SAA with Kosovo, which
entered into force on 1 April 2016. Kosovo’s future EU integration
– like Serbia’s – remains closely linked to the EU-facilitated high-
level dialogue between Kosovo and Serbia, which should lead to
a legally binding comprehensive agreement on the normalisation
of their relations.
Source
Factbook 2020/2021

Montenegro
Montenegro, which gained independence in 2006, applied for EU
membership in December 2008.
It was granted candidate status in December 2010 and
accession negotiations were opened in June 2012. In line with
the EU’s ‘new approach’ to the accession process, the crucial rule
of law chapters – Chapter 23 on judicial reform and fundamental
rights and Chapter 24 on freedom, security and justice – were
opened at an early stage in the negotiations, in December 2013.
To date, all 33 screened negotiating chapters have been opened,
of which only three have been provisionally closed. The last
remaining key chapter (on competition policy) was opened in
June 2020.
In its Western Balkans Strategy, published in February 2018, the
Commission stated that Montenegro (and Serbia) could join the
EU by 2025, albeit acknowledging that this perspective was
‘extremely ambitious’.
Source
Factbook 2020/2021

Serbia
Serbia submitted its application for EU membership in December
2009 and was granted candidate status in March 2012 after
Belgrade and Pristina reached an agreement on Kosovo’s
regional representation. Accession negotiations were formally
opened on 21 January 2014.
The first two chapters, including the one on normalisation of
relations with Kosovo, were opened in December 2015. The key
rule of law Chapters 23 and 24 were opened on 18 July 2016. To
date, 18 out of 35 negotiating chapters have been opened, two
of which have been provisionally closed. Since December 2019,
no new chapters have been opened. In its Western Balkans
Strategy, published in February 2018, the Commission stated
that Serbia (and Montenegro) could join the EU by 2025, albeit
acknowledging that this perspective was ‘extremely ambitious’.
Serbia’s future EU integration – like Kosovo’s – remains closely
linked to the EU-facilitated high-level dialogue between Serbia
and Kosovo, which should lead to a legally binding
comprehensive agreement on the normalisation of their
relations.
Source
Factbook 2020/2021

Source
SME Policy Index: Western Balkans and Turkey 2019
Unleashing the Transformation Potential for Growth in the Western Balkans
Government at a Glance: Western Balkans

With public spending on research and development
amounting to only 0.06% of GDP in 2018, the public
scientific research sector remains underfunded.
Investment in the scientific research system would
make the profession more attractive, leading to
higher-quality research outputs.
Albania is one of the economies in Europe most
at risk for multiple natural hazards. It would
benefit from an all-inclusive land-use policy
framework to provide clear direction, focusing
on modernising building codes, updating seismic
hazard maps and combatting unregulated and
illegal building.
Source

Economic geography: Albania
Industries
food, footwear, apparel and clothing, timber, oil,
cement, chemicals, mining, basic metals,
hydropower
milk, maize, tomatoes, potatoes, watermelons,
wheat, grapes, cucumbers, onions, apples
Imports ($5.67 billion 2020 est.)
refined petroleum, cars, tanned hides, packaged
medical supplies, footwear parts (2019)
partners:
Italy 28%, Greece 12%, China 11%, Turkey 9%,
Germany 5% (2019)
Exports ($3.47 billion 2020 est.)
leather footwear and parts, crude petroleum,
iron alloys, clothing, electricity, perfumes (2019)
partners:
Italy 48%, Spain 8%, Germany 5%/6%, Greece
4%/5%, (2019)
Source

The first attempt to develop clusters in
Albania dates back to 2004, through a
dedicated project financed by USAID,
namely Enterprise Development and Export
Markets (EDEM).
The project identified four potential
clusters in Albania:
• the leather products,
• meat processing industry,
• medical and aromatic herbs and
• tourism. The main selection criterion for
these specific clusters was, as the
project name indicates, the potential of
these sectors to export.
Economic geography: Albania
Source
In 2010, AIDA (Albanian Investment
Development Agency) was established,
with a twofold objective:
– Improve the Albanian ability to attract
foreign direct investments
– Support exports and SMEs to be more
competitive and increase their capacity
to innovate.

The employment rate of women increased from 29.5% in 2015 to 33%
in 2018 and 35.6% in Q2/2019. However, it is still very low, at 10.2
percentage points below the WB6 average and 27.7 percentage points
below the EU average. Increasing access to affordable and quality
childcare and implementing measures to reduce gender stereotypes in
education and the workplace would help to increase employment
rates of women and the total workforce of the economy.
Brain drain is reducing
human capital for research
and development and
efforts to counter this
should be increased,
including additional
funding incentives.
Source

Economic geography: Bosnia and Herzegovina
Industries
steel, coal, iron ore, lead, zinc, manganese,
bauxite, aluminum, motor vehicle assembly,
textiles, tobacco products, wooden furniture,
ammunition, domestic appliances, oil refining
maize, milk, vegetables, potatoes, wheat,
plums/sloes, apples, barley, cabbages, poultry
Imports
$9.710 billion (2020 est.)
refined petroleum, cars, packaged
medicines, coal, electricity (2019)
partners: Croatia 15%, Serbia 13%,
Germany 10%, Italy 9%, Slovenia 7%,
China 6% (2019)
Exports
$6.810 billion (2020 est.)
electricity, seating, leather shoes, furniture,
insulated wiring (2019)
partners:
Germany 14%, Italy 12%, Croatia 11%, Serbia
11%, Austria 9%, Slovenia 8% (2019)

Youth unemployment is very high (49.5% in 2019)
indicating severe problems with the school-to-work
transition. Youth unemployment and skills
mismatches need to be reduced, e.g. by introducing
employment support policies,
Only 17.3% of arable lands are irrigated, while
water network losses and lack of water storage
facilities persist. Increasing investment in
maintaining the existing irrigation network while
bringing new areas under irrigation would improve
the agriculture sector’s productivity.
Source

Economic geography: Kosovo
Industries
mineral mining, construction materials, base
metals, leather, machinery, appliances,
foodstuffs/beverages, textiles
wheat, corn, berries, potatoes, peppers, fruit,
dairy, livestock, fish
Imports
$4.19 billion (2020 est.)
foodstuffs, livestock, wood, petroleum,
chemicals, machinery, minerals, textiles,
stone, ceramic/glass products, electrical
equipment
partners:
Germany 12%, Serbia 12%, Turkey 10%,
China 9%, Italy 6%, North Macedonia
5%, Albania 5% (2017)
Exports
mining, processed metal products, scrap metals,
leather products, machinery, appliances,
prepared foodstuffs, beverages, tobacco
partners:
Albania 16%, India 14%, North Macedonia 12%,
Serbia 11%, Switzerland 6%, Germany 5% (2017)

The pressure on land and soil resources is growing,
especially in the context of a pronounced decrease
in agricultural land, from 38% in 2012 to 18.5% in
2016.
A land-use management framework for cleaning up
contaminated land would lower the pressure on land
and soil resources.
Despite the proliferation of government
supported ICT training programmes, the
number of businesses applying for digital
transformation programmes has remained
relatively low. Their lack of relevance to the
industry can widen the gap between the skills
available and those sought by companies.
Developing a common digital competence
framework for ICT professionals would help to
meet the needs of the labour market. Source
Montenegro has
achieved some level
of preparation in
the fight against
corruption. It made
limited progress in
2020 Source
The country
experienced a sharp
recession in 2020 as
the COVID-19
pandemic took a
heavy toll on its
tourism-dependent
economy. Source

Economic geography: Montenegro
Industries
steelmaking, aluminium, agricultural processing,
consumer goods, tourism
Imports
refined petroleum, cars, packaged medicines, recreational boats,
cigarettes (2019)
partners:
Serbia 30%, Bosnia and Herzegovina 8%, Croatia 8%, Italy 6%, Greece
6%, Germany 5% (2019)
Exports
aluminium, packaged medicines, cars, zinc, wine (2019)
partners:
Serbia 17%, Hungary 15%, China 11%, Russia 7%, Bosnia and
Herzegovina 6%, Germany 6%, Italy 5%, Poland 5% (2019)
milk, potatoes, grapes, vegetables, tomatoes,
watermelons, wheat, apples, cabbages, barley
UNIDO helps
promote
Montenegrin food
clusters
As regards governance,
there is a need to
strengthen
stakeholders'
participation, and the
government's capacity
to implement reforms.

Only 25% of individuals used the Internet to
interact with public authorities in 2019, compared
to an EU average of 55%.
Many important services allow only for one-way
interaction, showing a need to boost e-government
services and digital inclusion overall.
North Macedonia lags behind in tourism
development.
An intra-governmental body could improve co-
ordination among ministries and other public
institutions, while actively involving private and
public stakeholders in developing and
implementing tourism strategies. Source

Economic geography: North Macedonia
Industries
food processing, beverages, textiles, chemicals, iron, steel, cement, energy,
pharmaceuticals, automotive parts
milk, grapes, wheat, potatoes, green chillies/peppers, cabbages, tomatoes,
maize, barley, watermelons
Imports
platinum, refined petroleum, laboratory
ceramics, cars, insulated wiring (2019)
partners: UK 14%, Germany 14%, Greece 8%,
Serbia 8% (2019)
Exports
support catalysts, centrifuges, insulated wiring,
vehicle parts, buses, seats (2019)
partners: Germany 45%, Serbia 8%, Bulgaria
5% (2019)
Source

The majority of State-owned enterprises engage in
commercial activities and do not fall under the
public ownership framework.
A comprehensive state ownership policy is important
to reduce inefficiencies and low overall returns on
the state’s investment.
Sporadic public-private co-operation and the
lack of financial resources are among the main
obstacles to a more efficient implementation of
tourism master plans and development
programmes. The harmonised and efficient
development of competitive and sustainable
tourism products could be promoted by a
stronger involvement of the municipalities.
Source

Economic geography: Serbia
Industries
automobiles, base metals, furniture, food processing, machinery, chemicals,
sugar, tires, clothes, pharmaceuticals
maize, wheat, sugar beets, milk, sunflower seed, potatoes, soybeans,
plums/sloes, apples, barley
Imports ($30.15 billion 2020 est.)
crude petroleum, cars, packaged
medicines, natural gas, refined
petroleum (2019)
partners: Germany 13%, Russia 9%,
Italy 8%, Hungary 6%, China 5%,
Turkey 5% (2019)
Exports ($25.42 billion 2020 est.)
insulated wiring, tires, corn, cars, iron products, copper (2019)
partners:
Germany 12%, Italy 10%, Bosnia and Herzegovina 7%, Romania 6%, Russia 5% (2019)
Source

The Western Balkans economic geography: conclusions

The Western Balkans economic geography: conclusions
Source

The Western Balkans EU Integration: conclusions
Source (Aug 14th 2021 edition)

6_Lecture_The economic geography of Southern Europe, continuation

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