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Regions of EU regional policy

For regional policy purposes, the European Union uses the NUTS system of regional subdivision. There are three levels under the NUTS system, and each Member State is divided up into these levels (according to population). For the utilisation of EU funds, the regions on the NUTS II level are used the most; for this reason, cohesion regions were created in the Czech Republic.

Each EU Member State has developed its own system of administrative subdivisions to respect the natural needs of public administration and the population. For this reason, 27 different systems of national administrative subdivision exist in the European Union, which fact restricts the possibility of mutual statistical and economic comparison of the regions for the purposes of economic and social cohesion (ESC) policy.
For statistical monitoring and analysis of the economic and social situation in the region, a common nomenclature of territorial units for statistics (NUTS) was developed in 1988.  On the basis thereof, there are three primary levels of regional subdivision: NUTS I, NUTS II, and NUTS III.
 

 
Level Recommended minimum population Recommended maximum population
NUTS I 3,000,000 7,000,000
NUTS II 800,000 3,000,000
NUTS III 150,000 800,000

Historically, the Czech Republic was traditionally divided up into regions corresponding to the NUTS III level; however, due to its accession to the European Union, it had to introduce one more level between the country level and region level corresponding to the NUTS II level: cohesion regions.  Aid from EU funds under the Convergence Objective, and partially also the Regional Competitiveness and Employment Objective, is directed at the NUTS II level. 
For the purpose of the effective procurement of resources from the European Funds, cohesion regions that comprise one or more regions were created in the Czech Republic. European Cohesion Policy is aimed in particular at territorial units with a population between 800,000 and three million. As the Czech regions usually do not have such a population, the following cohesions regions were created: Northwest, Northeast, Southeast, Southwest, Central Bohemia, Central Moravia and Moravia-Silesia. These are managed by regional councils to which aid under the Convergence Objective (i.e., assistance provided to less developed regions) and the Capital City of Prague is directed. 

 

The map shows the 14 regions (NUTS III) within the 8 cohesion regions (NUTS II)

Prague exceeds substantially the economic indicators of the other parts of the Czech Republic; therefore, it does not fulfil the criteria for receiving funding from the financially most voluminous objectivs of the Convergence cohesion policy, which is intended to transform the economies of less developed EU regions and states into more efficient ones and bring the development of the various parts of the EU in line with each other (convergence = bringing nearer).     
Prague, as the territory whose GDP exceeds 75% of the EU average, is entitled to utilise resources from the Regional Competitiveness and Employment Objective. A smaller volume of money is flowing into the Czech capital from the European funds than into the rest of the country because Prague enjoys a very dynamic economy and low unemployment even without EU incentives.  

 

In addition to the three NUTS levels, there exist two lower levels of territorial statistical subdivision, which, however, are no longer decisive for the allocation of resources from EU funds. They are called Local Administrative Units (LAU).

Level Name Units
NUTS I State 1
NUTS II Cohesion Regions 8
NUTS III Regions 14
LAU I Districts 76 + 15 Prague city districts
LAU II Municipalities 6249