The Structural Funds in Spain in the period 2000-06

At the European Council held in Berlin on 24 and 25 March 1999, the Heads of State and Government reached political agreement on Agenda 2000.The Agenda 2000 action programme is the reference framework for Union policies in the period 2000-06.
The agreement enhances the effectiveness of the Structural Funds by concentrating assistance still further on geographical areas and selected themes.

The Council also judged that, with a budget of EUR 195 billion for the Structural Funds for 2000-06 plus EUR 18 billion from the Cohesion Fund, the Union could continue its overall drive towards social and economic cohesion. Having received European Parliament approval, the new Structural Funds regulations were formally adopted by the Council on 21 June 1999.

In order to launch the new programming round for the Structural Funds, on 1 July 1999 the Commission adopted a series of decisions implementing the new Regulations. It set budget envelopes by Member State for each of the three Objectives: Objective 1 (regions whose development is lagging behind), Objective 2 (areas undergoing conversion) and Objective 3 (education, training and employment). It also identified the eligible areas for Objective 1 for the period 2000-06 and the population ceilings for the Objective 2 areas.

Spain will receive a total of EUR 56 205 million (ESP 9 352 billion) under the Community's regional policy for the 2000-06 period (EUR 40 045 from the Structural Funds and EUR 11 160 million from the Cohesion Fund), compared with the EUR 45 592 million it received in 1994-99 (6% more each year).

1. Objectives

Within this overall budget, assistance from the four Structural Funds, the European Regional Development Fund (ERDF), the European Social Fund (ESF), the European Agricultural Guidance and Guarantee Fund, Guidance Section (EAGGF Guidance Section) and the Financial Instrument for Fisheries Guidance (FIFG) will support one of the three Objectives:

Objective 1 promotes the development and structural adjustment of regions whose development is lagging behind. The regions eligible for Objective 1 are those whose per capita GDP is less than 75% of the Community average.
In Spain the regions of Galicia, Asturias, Castile-Leon, Castile-La Mancha, Extremadura, Valencia, Andalusia, Murcia, Ceuta-Melilla and the Canary Islands will remain eligible under Objective 1 in the period 2000-06. The Cantabria region, however, which was eligible under Objective 1 in the 1994-99 period but has since achieved a level of per capita GDP above 75% of the Community average, lost its eligibility for Objective 1 on 1 January 2000. The region qualifies for transitional assistance until 2006, however.

The budget for Objective 1 in 2000-06 amounts to EUR 38 096 million (ESP 6 339 billion), as against EUR 28 664 million for 1994-99. It is made up of two sub-headings:

• EUR 37 744 million for Galicia, Asturias, Castile-Leon, Castile-La Mancha, Extremadura, Valencia, Andalusia, Murcia, Ceuta- Melilla and the Canary Islands;
  
• EUR 352 million for Cantabria as transitional aid.
  The national authorities are responsible for deciding on the breakdown of funding among the various regions within these two headings.

- Objective 2: areas undergoing conversion

Objective 2 (which now unites Objectives 2 and 5(b) from the period 1994-99) supports the economic and social conversion of areas in structural difficulties. Such areas in the 2000-06 period fall into four categories: industrial areas, rural areas, urban areas and areas dependent on fisheries.
On 1 July 1999, the European Commission fixed for each Member State the population ceiling eligible for Objective 2. In the case of Spain, this ceiling is set at 8 809 000, or 22% of Spain's total population.
Objective 2 funding is allocated among the Member States solely on the basis of eligible population. In other words, each inhabitant of an eligible area qualifies for an identical rate of aid of EUR 41.4 a year (1999 prices).
The amount allocated to Spain under this system is EUR 2 651 million (about ESP 441 billion) (1999 prices). It is broken down into two sub-headings:

• EUR 2 553 million for areas eligible for Objective 2;
  
• EUR 98 million in transitional aid (for areas eligible under Objectives 2 and 5(b) in the 1994-99 period but which are no longer eligible for Objective 2 in the current period).

- Objective 3: Education, training and employment

Objective 3 supports the adjustment and modernisation of educational, training and employment policies and systems. It brings together the former Objectives 3 and 4 and operates under the new Title on employment laid down in the Amsterdam Treaty. Objective 3 is not based on designated areas; instead it may provide assistance anywhere in the European Union, except for the Objective 1 regions.
The Objective 3 allocation for Spain in 2000-06 is EUR 2 140 million (about ESP 356 billion) (1999 prices), as against EUR 2 009 million in the 1994-99 period.

- Fisheries

The Financial Instrument for Fisheries Guidance (FIFG) finances measures to accompany the common fisheries policy. In the Objective 1 regions FIFG funding is included in regional development plans along with the other Funds. The FIFG has allocated Spain a budget of EUR 200 million (ESP 32 277 million) to fund this assistance in areas outside the Objective 1 regions in the 2000-06 period.

2. Community Initiatives

Alongside these three Objectives, the Structural Funds will also provide assistance between 2000 and 2006 through four Community Initiatives:
- Interreg: cross-border, transnational and inter-regional cooperation intended to encourage the harmonious and balanced development of the whole of the Community area;
- Urban: economic and social regeneration of cities in crisis with a view to promoting sustainable urban development;
- Leader: rural development;
- Equal: transnational cooperation to promote new means of combating all forms of discrimination and inequalities in connection with the labour market.
Spain will have a budget for the 2000-06 period of EUR 1 958 million (ESP 326 billion), as follows:

3. Rural development policy

While this is not a Structural Fund policy in its strictest sense, Spain will also benefit under the rural development policy promoted by the EAGGF Guarantee Section.
The Berlin summit of March 1999 made rural development policy a major pillar of the common agricultural policy (CAP). The EAGGF Guarantee Section now supports four measures covering the entire European Union (early retirement, compensation for farming in less?favoured areas, woodland management on farms and agri?environmental measures) and six other measures restricted to regions not eligible under Objective 1 (farm investment, start?up aid for young farmers, training, forestry, processing and marketing of agricultural products, adjustment and diversification of rural areas). This means that rural development is not based on designated areas.
Spain's annual allocation for rural development amounts to EUR 459 million (ESP 76 371 million), equal to 10.6% of the total budget.