Cross-border Cooperation in the Field of Investment Activity with Regional Development Implications

Content from this work may be used under the terms of theCreativeCommonsAttribution 3.0 licence. Any further distribution of this work must maintain attribution to the author(s) and the title of the work, journal citation and DOI. Published under licence by IOP Publishing Ltd People, Buildings and Environment 2020 IOP Conf. Series: Earth and Environmental Science 656 (2021) 012009 IOP Publishing doi:10.1088/1755-1315/656/1/012009 1 Cross-border Cooperation in the Field of Investment Activity with Regional Development Implications L Vaňková 1, G Kocourková 1 and Z Krejza1 1 Brno University of Technology, Faculty of Civil Engineering, Veveří 331/95, 602 00 Brno, Czech Republic [email protected] Abstract. The article focuses on the issue of cross-border cooperation in the field of investment activity and its impact on the sustainable regional development. In particular, subsidy funds of the European Union are closely linked to regional development. This article covers the research of mapping the situation of cross-border cooperation of the territory of interest, which is partly formed by the South Moravian Region in the Czech Republic and partly by the Trnava and Bratislava Regions in the Slovak Republic. This area comprises 43 municipalities in the Czech Republic and 70 municipalities in the Slovak Republic. The questionnaire survey carried out showed that cross-border cooperation is more applied in the Czech Republic, while the Slovak Republic is more sceptical about the cross-border cooperation projects. Based on the evaluation of the questionnaires, a specific investment project was chosen between the municipalities of Mikulčice and Kopčany, which was financed through the European Regional Development Fund, specifically the Interreg V-A programme the Slovak Republic – Czech Republic. Analysis of the current state of financing was carried out for this project with proposals of possible other financing options. At the end of the article, the impact of the project on the sustainable development of border regions is evaluated. 1. Introduction Investments and investment activities are the cornerstone of any sustainable development. Without a sufficient supply of investment, whether in the form of money, time, ideas or know-how, any territory shall gradually decline. In many cases, however, there are barriers in the form of national borders, which unfortunately prevent economic, environmental but also social development. It can be seen on a specific example how the ties were broken after the split of Czechoslovakia in 1993. The territory, which until then was a communication area became marginal and there was a partial diversion from the neighbouring state and orientation towards the interior of its state. Besides the common life of people in border areas, the division also affected the motorway network, where the originally planned D1 motorway was not implemented through the Zlín Region to the Slovak Republic but to the north to Poland, which of course affects the further development of the territory. Each territory should evolve in accordance with its surroundings and exploit the full potential and potential synergies that can be gained from cooperation. Factors affecting the sustainable development of the territory can be improved through the possibility of cross-border cooperation. The goal of the paper is to identify opportunities that contribute to the sustainable cross-border cooperation and affect motivation to increase cooperation between cross-border partners. The objective implementation is connected with the evaluation of the questionnaire survey in the interest People, Buildings and Environment 2020 IOP Conf. Series: Earth and Environmental Science 656 (2021) 012009 IOP Publishing doi:10.1088/1755-1315/656/1/012009 2 municipalities and with the analysis of impacts the specific implemented project on the sustainable development of cross-border cooperation. 2. Literature Review Borders separate places that are different from different perspectives. Borders can be perceived from a political, cultural or physical point of view [1]. This creates a certain barrier in the area to which border regions, i.e. areas adjacent to the border, inherently belong and which are affected by its influence. With regard to the permeability of the border and willingness to cooperate with each other, border can be perceived either as a place of contact and co-development or a place that rather separates the societies [2]. It is important to identify factors that contribute to the sustainable cross-border cooperation and affect motivation to increase cooperation between cross-border partners [3]. Cooperation represents a voluntary relationship which cannot be enforced, and depends on specific actors and their communication. Therefore, it is not possible to determine the only correct system of how cooperation should arise. Cooperation can be short-term or long-term and can deepen and improve over time [4]. Very often, cooperation can compensate for shortcomings associated with a smaller area of the territory or for overcoming negative globalization impacts [5]. Border regions in general have many things in common, there is a lower population, lower economic potential, they are regions with the elements of a periphery, with poor transport services and usually higher unemployment [6]. In addition to the aforementioned general features, there are also a number of specific characteristics associated with a particular border area affected by their economic, political and social activities. Cross-border cooperation thus helps to eliminate these disadvantages while strengthening the benefits of border areas. Cross-border cooperation can be seen in two ways. One way is to view it as a cross-border cooperation across the border of two or more states. Another option is cross-border co-operation between the regions, areas or municipalities within one state [7]. A broader view is offered by the possibility that cross-border cooperation can be undertaken by both private entities and by the state in order to gain benefit from joint activities that may be of economic, social, environmental or political character [8]. A distinction can be made between direct cross-border cooperation between states sharing a common border or indirect cross-border cooperation between states not sharing a common border at EU level [7]. Several forms of cross-border cooperation are used in Europe. These are mainly Euroregions, where municipalities, regions, areas or legal entities can be grouped together [9]. Euroregions do not have legal entity and are merely coordinators of cross-border cooperation and the means to exchange information and obtain subsidies [10]. European Grouping for Territorial Cooperation (EGTC) represents the possibility of implementing cross-border regional cooperation at a time when cohesion policy in general and regional cooperation are undergoing significant changes. In this way, regional and local authorities are offered the opportunity to form cross-border groupings with legal entity. The Czech Republic is currently member of the 4 EGTC [11]. Around the world, not just in the EU, there is another form of cooperation: twin cities and municipalities [12]. Their goals can be varied, ranging from knowledge transfer in a variety of areas, through tourism promotion, joint transport planning to exchange stays [13]. Cooperation can also be developed on the basis of joint memoranda, with a rather non-binding nature. Concluded treaties and cooperation agreements can be short-term (mostly for specific projects) or longterm with a greater emphasis places on continuing cooperation in multiple projects [14]. Promoting cross-border cooperation is one of the areas in which the European Union is involved. The use of territorial impact assessment procedures is gaining increasing relevance in the European Union policy evaluation processes [15]. Financial support is provided by the European Regional Development Fund (ERDF), where the projects focus on selected topics, such as improving transport links and links to important cross-border routes, cooperation in the research and development area, support for the business environment, ICT development etc. [16]. However, most of the funding is usually directed into economic cooperation and business support [17]. People, Buildings and Environment 2020 IOP Conf. Series: Earth and Environmental Science 656 (2021) 012009 IOP Publishing doi:10.1088/1755-1315/656/1/012009 3 The following grant titles – Cross-border Cooperation Programmes are used for cross-border cooperation:  Interreg V-A Czech Republic – Poland, for the territory of the CR managed by MRD,  Interreg V-A Slovak Republic – Czech Republic, for the territory of the CR managed by MRD,  Interreg V-A Austria – Czech Republic, for the territory of the CR managed by MRD,  Cross-border Cooperation Programme Czech Republic – Bavaria Free State ETC Goal 20142020, for the territory of the CR managed by MRD  Cooperation Programme Free State of Saxony – Czech Republic 2014-2020, for the territory of the CR managed by MRD [18]. Each of the above-mentioned programmes applies the leading partner and at least one cross-border partner approach. Public institutions, non-profit organizations or business entities may apply for project contributions. Each cross-border cooperation project must meet at least 3 out of 4 criteria, the first two being obligatory:  Joint project preparation,  Joint project implementation,  Shared staff,  Shared co-financing [19]. The Interreg V-A programme Slovak Republic - Czech Republic, with the help of cross-border projects, addresses common challenges in border areas. The Managing Authority of the programme is the Ministry of Agriculture and Development of the Slovak Republic and the National Authority is the Ministry for Regional Development of the Czech Republic. The priority axes of this programme include making use of the innovation potential, a quality environment, developing local initiatives and technical assistance. For the Czech Republic, the programme area is made up of the NUTS III regions, namely the South Moravian Region, the Zlín Region and the Moravian-Silesian Region. The Slovak part consists of the NUTS II Trnava Self-Governing Region, Trenčín Self-Governing Region and Žilina SelfGoverning Region. The funding allocated to this programme from the ERDF for the 2014-2020 period is EUR 90,139,463. The programme funding granted for each sub-project shall be a maximum of 85% of the total eligible expenditure of the corresponding project [19]. 3. Methodology The research examined cross-border cooperation in the area of public investment with a subsequent impact on the development of the selected border regions. The research areas of interest were part of southern Moravia (South Moravian Region) and part of western Slovakia (Trnava and Bratislava Regions), see Figure 1. The procedure for this research included individual partial steps from the initial delimitation of the area of interest, through the creation of a database of individual municipalities to the creation and distribution of a questionnaire and evaluation of responses. The first step was to delimit the area of interest. A circular sector with a radius of approximately 50 km was established, with the centre at the point where the border watercourses of the Czech-Austrian the Dyje river and the Czech-Slovak the Morava river have their confluence. All municipalities were listed in this area of interest. There were 43 municipalities in the Czech Republic and 70 in the Slovak Republic. For these municipalities, basic data whether it is a town, township or municipality, the area of the municipality and the number of inhabitants living in the researched municipality were subsequently found. People, Buildings and Environment 2020 IOP Conf. Series: Earth and Environmental Science 656 (2021) 012009 IOP Publishing doi:10.1088/1755-1315/656/1/012009 4 Figure 1. Map of examined area [20] Already in this initial phase it was found out that the Czech Republic has better processed information systems and it was therefore easier to obtain data. The survey was slightly more difficult for the Slovak Republic; however the information was always found. Subsequent detailed analysis of municipalities included data such as population age structure, civic amenities, transport services and technical infrastructure. It was also researched what is the focus of the region, agriculture or industry, whether there are possibilities of spa, tourism, agritourism or culture in the municipality and what negative influences affect the municipality itself and its surroundings. The websites of individual municipalities, the websites of the Regional Information Service (risy.cz) and map portals were used to obtain this information. The next step was to create a questionnaire which contained questions concerning cross-border cooperation of municipal development in demographic and economic terms, but also questions dealing with job opportunities, transport services and amenities of municipalities, cultural and social life, leisure opportunities and types of buildings for housing or recreation. The questionnaire was then sent via a web application to all assessed municipalities. As the number of returned questionnaires was not high enough, a second set of questionnaires was sent. Cross-border cooperation analysis between areas of interest was subsequently carried out from the available data. Based on the analysis, the municipality of Mikulčice in the South Moravian Region and the municipality of Kopčany in the Trnava Region were selected as a typical example of cross-border cooperation in investment activities. In the cadastral area of these municipalities it was an investment project “Footbridge across the Morava River including the access road in the archaeological park Mikulčice – Kopčany”. 4. Results The results of the questionnaire survey can be used to make an insight into individual municipalities and the following evaluation can be conducted. The charts illustrating the responses of the interviewed municipalities were created. 30 completed questionnaires (out of 43 distributed) were available for the Czech Republic and 35 (out of 70 distributed) for the Slovak Republic. Responses were evaluated in percentage. 1. What area have you established cross-border cooperation in? (multiple options can be selected)  Formal (e.g. formal visits of municipal representatives, mutual contacts, etc.)  Cultural (e.g. organizing of cultural events - feast, ball, etc.)  Sport (e.g. organizing sports tournaments, etc.) People, Buildings and Environment 2020 IOP Conf. Series: Earth and Environmental Science 656 (2021) 012009 IOP Publishing doi:10.1088/1755-1315/656/1/012009 5  Investment (e.g. construction of cycle paths, information centres, etc.)  Educational (e.g. children's clubs, school cooperation, etc.)  Safety (e.g. integrated rescue system, volunteer firefighters, etc.)  Other (please specify in the following question)  None Figure 2. Cross-border cooperation [authors‘ own work] In this question, municipalities were asked about the area of cross-border cooperation. It can be seen in Figure 2 that in the Czech Republic this was most often a formal cooperation, selected by 53.3% of municipalities. It has to be taken into account that municipalities had the possibility to choose multiple answers. The second most frequently chosen answer was, with the same number of answers 43.3%, cultural and investment cooperation. 30.0% of municipalities chose to carry out cross-border cooperation within sport - organizing sports activities and tournaments. In the Slovak Republic, cultural cooperation was the most common with 42.9% of cases. Then it was sports (34.3%) and formal (31.4%) cooperation. Educational and safety cooperation was not significant in any of the countries. The municipalities also chose the “other” area of cooperation. In the case of the answer "other" cooperation, the municipalities were asked for more detailed specification. However, this was done only by the Slovak side, when it stated cultural and social cooperation, which was described as publishing monographs of the municipality, postcards and calendars. The answer with no cooperation was quite significant. 2. How do you assess the benefits of cross-border cooperation?  Unnecessary  Beneficial  Really beneficial  I don't know Most municipalities assess the benefits of cross-border cooperation as beneficial, while a smaller number would consider cooperation really beneficial, see in Figure 3. No municipality defined crossborder cooperation as unnecessary. Municipalities that replied in the previous question that they had not established any cross-border cooperation, answered at this point "I do not know". People, Buildings and Environment 2020 IOP Conf. Series: Earth and Environmental Science 656 (2021) 012009 IOP Publishing doi:10.1088/1755-1315/656/1/012009 6 Figure 3. Benefits of cross-border cooperation of municipalities [authors‘ own work] 3. How do you assess the support by public institutions in establishing cross-border cooperation?  None  Sufficient  Above average  I don't know Figure 4. Support of public institutions in establishing cross-border cooperation [authors‘ own work] Figure 4 shows that 41.4% of municipalities in the Czech Republic and 31.4% in the Slovak Republic opted for sufficient support from public institutions. The response that public institutions do not provide any support was also strongly represented. In the Slovak Republic, none of the interviewed municipalities thinks that the support provided was above average. The answers to the question "I do not know" appeared because the municipalities did not establish any cross-border cooperation. The chart shows a really significant proportion of municipalities in the Slovak Republic that have not established any cross-border cooperation. People, Buildings and Environment 2020 IOP Conf. Series: Earth and Environmental Science 656 (2021) 012009 IOP Publishing doi:10.1088/1755-1315/656/1/012009 7 4. In what way did the public institutions support and have supported now establishing of crossborder cooperation? (multiple options can be selected)  Financial resources  Information resources  Organizational resources  Informal social gatherings  Other (please specify)  No support Figure 5. Way of support of public institutions in establishing cross-border cooperation [authors‘ own work] In this question, municipalities had the opportunity to choose multiple answers. Figure 5 shows that 31% of municipalities in the Czech Republic and only 14.3% in the Slovak Republic chose financial assistance from public organizations. Mostly municipalities responded that support for public institutions in establishing cross-border cooperation took place through information sources or informal social gatherings. The answer “none” was chosen by the municipalities which used the same answer in the previous questions. 5. How do you assess the possibilities of obtaining projects in cooperation with municipalities across borders?  None  Sufficient  Above average  I don't know It can be seen from Figure 6 that 55.2% of municipalities in the Czech Republic assessed the possibility of obtaining projects in cooperation with municipalities across borders as sufficient, in the Slovak Republic it was 26.5% of the municipalities. Only 3.5% of municipalities in the Czech Republic considered the possibility of obtaining cross-border cooperation projects as above average. In the Slovak Republic, there was a more frequent option "none". The answer “I do not know” and the answer “none” was chosen by the same percentage of municipalities in the Czech Republic. People, Buildings and Environment 2020 IOP Conf. Series: Earth and Environmental Science 656 (2021) 012009 IOP Publishing doi:10.1088/1755-1315/656/1/012009 8 Figure 6. Possibilities of obtaining projects in cooperation with municipalities across borders [authors‘ own work] 4.1. Investment project of cross-border cooperation between the Czech Republic and the Slovak Republic A long-term effort to create Czech-Slovak cross-border Archeopark Mikulčice-Kopčany was supported in cooperation with the South Moravian Region and the Trnava Self-Governing Region. Specifically, it concerns the project “Footbridge across the Morava River, including access roads in the archaeological park Mikulčice-Kopčany”, which is supported by the INTERREG V-A programme Slovak Republic – Czech Republic. The role of a leading partner in this project is represented by the South Moravian Region and the main cross-border partner is Trnava Self-Governing Region. The aim of the project is to connect the monuments of the Great Moravian Empire, unique nature and landscape character and to connect two national networks of cycle paths. The project aims at making cultural heritage more attractive by creating a safe connection between Mikulčice and Kopčany for cyclists, hikers and local inhabitants. Visitors will be attracted by the unique location of monuments of Slavic fortified settlement of Great Moravia, which are associated with the beginnings of Christianity. Table 1. Funding of the project of the footbridge across the Morava River [authors‘ own work] Total project expenditure EUR 3,796,790.57 ERDF (85%) EUR 3,227,271.21 State budget of the Czech Republic EUR 61,906.21 Budget of the South Moravian Region EUR 222,853.09 State budget of the Slovak Republic EUR 222,853.09 Budget of Trnava Self-Governing Region EUR 61,906.21 The project concerns the construction of a 143-meter footbridge across the Morava River, which follows the border between the Czech and Slovak Republics, and the construction of adjoining access roads of a total length of 3.1 kilometres, indicating an 8.5-kilometer-long new cycle path that will be connected to the already existing infrastructure. The project was implemented from September 2017 to August 2019. Table 1 below shows that the total expenditure of the project was EUR 3,796,790.57. The European Union resources, or more specifically the European Regional Development Fund (ERDF), provided EUR 3,227,271.98, which represents an 85% participation. The remaining expenses were divided between the Czech and the Slovak part. The Czech part is made up of 5% contribution of the People, Buildings and Environment 2020 IOP Conf. Series: Earth and Environmental Science 656 (2021) 012009 IOP Publishing doi:10.1088/1755-1315/656/1/012009 9 state budget of the Czech Republic and 10% is the share of the South Moravian Region. For the Slovak part it was co-financed from the state budget of the Slovak Republic in the amount of 10% and the share of Trnava Self-Governing Region was 5%. This project was also created with the idea of using the footbridge by persons with reduced mobility or orientation capacity. A paved path for comfortable movement for pedestrians and cyclists leads between the car park and the forest at the archaeological centre. In front of the dam near the Morava River, a ramp to the asphalt dam is made, the adjacent downstream and upstream and upstream parts of the Morava River watercourse are adapted together with handling exit from the dam and the footbridge was made. When accessing the footbridge, it is necessary to overcome a greater height difference over a short distance and therefore it is not possible to guarantee barrier-free accessibility parameters. Parts of the route through the archaeological park are formed by paths suitable for the safe movement of persons with reduced mobility. When passing through the natural terrain with a ford across the grass river it was not possible to design the road as a barrier-free and to provide it with guiding elements for persons with reduced orientation ability. 5. Discussion The analysis of cross-border cooperation in the area of interest included a questionnaire survey. The return rate of questionnaires was 70% in the Czech Republic and 50% in the Slovak Republic. The responses submitted clearly showed that the Czech Republic has better experience in cross-border cooperation. From the questionnaires received from municipalities from the Slovak Republic, the answer was more often that they do not carry out cross-border cooperation, have no experience, or do not feel support from public institutions in establishing cross-border cooperation with other municipalities. From the pre-set possibilities, what type of cooperation it most often is, both sides chose formal, cultural and sports cross-border cooperation. Significant cooperation has been established by the Czech Republic in investment activities, while in the Slovak Republic there is not such a significant representation of investment cooperation. The answers to individual questions could be slightly distorted by the position of the municipality as a partner in the project. The assumption was that the municipalities responded as the leading partner of the project, not as a cross-border (main) partner. Generally speaking, the benefits of cross-border cooperation are evident and the possibilities for obtaining projects are sufficient. Support from public institutions in establishing cross-border cooperation is either sufficient or many municipalities do not feel any support. If municipalities receive the support from public institutions, it is most often information, organizational and informal, or financial support. For the proper management of cross-border cooperation and projects managed across borders between the Czech Republic and the Slovak Republic, the SK – CZ Regional Advisory and Information Centre was established for the purpose of appropriate coordination of projects through the Interreg V-A SK-CZ programme. The footbridge project was also carried out through the SK – CZ Regional Advisory and Information Centre. As already mentioned, the total cost of the project was EUR 3,796,790.57. The analysis of financing showed that the municipalities themselves did not participate financially in the project. Therefore, other funding options for this project were further explored, which could theoretically had been used if the project was not funded in the way it actually was. These are theoretical options for involving municipalities in project financing, reducing the European Union contribution from the ERDF, or reversing the roles of leading and main cross-border partners. Four new options were set: a) Financing option with the contribution from municipalities In the case of this theoretical option, the regions, as the leading and main cross-border partner, would retain the same share of financing. However, the financing will involve also municipalities whose shares will be deducted from the contributions from the state budgets. The ERDF would provide a financial contribution of up to 85% of the total eligible expenditure. b) Financing option when ERDF contribution is reduced