Working for the regions
More than a third of the budget of the Union is devoted to regional development and economic and social cohesion through a series of European funds.
The amounts available
For the period between 2000 and 2006, EUR 213 billion has been earmarked for all structural instruments for the 15 Member States. In addition, about EUR 22 billion in preaccession aid, and another EUR 22 billion in structural interventions for the new Member States in the period 2004–06, will be spent within the Union ’s adjusted financial perspectives. The total of about EUR 257 billion represents approximately 37 % of the EU budget for the period up to 2006. Most of the funding is being spent through multiannual development programmes, managed jointly by Commission services, the Member States and regional authorities. The European subsidies do not replace but rather supplement national aid.
The Structural Funds
Each of the four existing Structural Funds has its own specific thematic area. The European Regional Development Fund (ERDF) finances infrastructure, jobcreating investment, local development projects and aid for small firms. The European Social Fund (ESF) promotes the return of the unemployed and disadvantaged groups to the workforce, mainly by financing training measures and systems of recruitment assistance. The Financial Instrument for Fisheries Guidance (FIFG) helps adapt and modernise the fishing industry. The Guidance Section of the European Agricultural Guidance and Guarantee Fund (EAGGF-Guidance) finances rural development measures and provides aid for farmers, mainly in regions lagging behind in their development. Other financial instruments exist in addition to these Structural Funds, including notably the Cohesion Fund.
The priority objectives
To enhance its impact and secure the best possible results, 94 % of structural funding for the period 2000–06 is concentrated on three objectives:
Objective 1: Helping regions whose development is lagging behind to catch up.
Objective 2: Supporting economic and social conversion in industrial, rural, urban or fisheries dependent areas facing structural difficulties.
Objective 3: Modernising systems of training and promoting employment. Measures financed by Objective 3 cover the whole Union except for the Objective 1 regions, where measures for training and employment are included in the catch-up programmes.
What does Europe do for your country and region?
Community initiatives and innovative actions
Four Community initiatives are aimed at finding solutions to problems common to a number of or all Member States and regions: Interreg III for the development of crossborder, interregional and transnational cooperation; URBAN II to support innovative strategies in cities and urban neighbourhoods; Leader+ to promote rural development initiatives; EQUAL to combat discrimination in the labour market. The Community initiatives absorb 5.35 % of the Structural Funds budget. In addition, programmes for innovative actions receive funding to work as laboratories of ideas for disadvantaged regions.
The Cohesion Fund
A special fund, the Cohesion Fund, is designed to assist the least prosperous countries of the Union : the 10 new Member States as well as Ireland (until the end of 2003), Greece , Portugal and Spain . At the beginning, the criterion is that the country’s gross national product (GNP) is no greater than 90 % of the average for the Union . The Cohesion Fund intervenes throughout the national territory to co-finance major projects involving the environment and trans-European transportation networks rather than programmes and thus makes it possible to avoid having the cost of these works disrupt budgetary efforts in the countries to satisfy the demands of economic and monetary union. Furthermore, it assists these countries to conform to European norms in these areas.
One third of the funding for the Cohesion Fund is reserved for the new Member States between 2004 and 2006.
For the first time in the history of its progressive enlargements, the European Union has called for preaccession aid for the 10 central and east European countries (CEECs), of which eight became members in 2004 ( Czech Republic , Estonia , Hungary , Latvia , Lithuania , Poland , Slovakia and Slovenia ). This aid continues to be employed in Bulgaria and Romania .