age is a lower relative or comparative cost than another producer.In this radically reshaped European Union, the sense of regional identity will be a healthy counter balance to the decision-making by Ministers which member states Governments will undertake at the level of the Union itself. National government policies aim at providing incentives to invest. Indeed attracting investment and capital flow from abroad, raising the skill level of the working force, protecting infant industries, and creating a positive climate for industries that wish to settle in a certain area. Those industries spur the economy of the region by creating employment.Growth is concentrated by geographic area such as urbanised, metropolitan areas and the same applies to underdevelopment. In rural areas, urbanisation is low and there is a particular lack of economic infrastructure and of factors of production. There is a clear desequilibrium between rural and urban areas. Indeed industries look for low production cost, which they will find in urban areas. Consequently, the less favoured regions raise their production cost because they cant allow themselves to reduce it because of economic reasons. Lower tariffs barriers then introduce increased competition; where increased pressure is applied on the depressed regions due to the lack of economies of scales. They are reductions in the average total cost of producing a product as the firm expands of its output in the long run or in simple words the economies of mass production (see table 1 & 2). Government policies should create industries capable of mobilising a workforce from the surroundings, raising the standards of living and stimulating local entrepreneurship in the underdeveloped regions. There seems to be a clear point that the success of the better off regions is paid for by the reduction in the potential for development of the others. It is also important to mention that market forces do not bring about an...
