The European Commission, DG XVI, has published its latest report in the Regional Development Series, entitled "Cohesion and the development challenge facing the lagging regions". The report analyzes the economic performance of the Objective 1 regions in the 1980s and makes an assessment of the impact of the completion of the internal market on these regions. The study reveals a wide divergence in the performance of these regions and a broad trend towards greater heterogeneity amongst the group of lagging regions. Thus, while some regions are catching up, some are falling still further behind. The main challenge for Community regional policy in the 1990s is to maintain the momentum of convergence in the successful regions and to "turn around" the situation in the stationary or diverging regions. The national macro-economic context, general infrastructure and the existence of an innovative environment in the regions were pin-pointed as the main factors influencing regional development. The report concludes that success will depend on: - A high level of information, widely shared; - A prevailing entrepreneurial culture; - A well-organized institutional framework. It also stresses the importance of basic infrastructure requirements, education and vocational training.