European Common policies Prepared by Dr. Endre Domonkos (PhD) 2013/2014. Academic Year, Spring Semester

I. The evolution and development of the policy of economic and social cohesion I. Treaty of Rome: regional policy and regional support weren’t included. European Regional Development Fund (ERDF) was set up in 1975. The fund was established to complement the activities of the European Social Fund (ESF) and the Guidance Section of the European Agricultural Guarantee and Guidance Fund (EAGGF). These three funds together were referred as Structural Funds in the EC Treaty. The introduction of Financial Instrument for Fisheries Guidance (FIFG) in 1993.

I. The evolution and development of the policy of economic and social cohesion II. The Southern enlargement of the Community: problems of economic disparities between the Member States. Southern countries: they expected Community compensation to assist them to catch up with the rest of Europe. Single European Act: economic and social cohesion as Community objective. The provision of regional and structural transfers is also justified by certain impacts of integration.

I. The evolution and development of the policy of economic and social cohesion III. Structural and cohesion funds: developing infrastructure (to create equal conditions in Member States). The reform of regional and structural policies: coordinating the activities of the different funds. Shifting from financing individual projects to more complex programme-oriented development aid. The use of Structural Funds is based on principles laid down for each financial planning period.

I. The evolution and development of the policy of economic and social cohesion IV. 4 principles of the Structural Funds: 1. The principle of concentration: 2. The principle of partnership: 3. The principle of additionality: 4. Principle of programming and planning:

I. The evolution and development of the policy of economic and social cohesion V. Distribution of Structural Funds: on the basis of the Nomenclature of Statistical Territorial Units (NUTS). System to classify regions into 5 categories according to their size. NUTS II: basis for the allocation of Structural Funds (territory, which covers a population of 1.5 to 2 million). The Treaty of Maastricht: setting up the Cohesion Fund. Financial contribution for investments in the area environment + transport infrastructure.

I. The evolution and development of the policy of economic and social cohesion VI. The significance of the EU’s structural and cohesion policy: the share of this policy increased to one third of the EU total expenditure on the second half of the 1990s. Delors II Package: Achieved results: improvement of the situation of less developed regions and preventing of regional imbalances + significant development in the least favoured regions of the Union (fast GDP growth in real terms).

I. The evolution and development of the policy of economic and social cohesion VII. From 2007, two Structural Funds, the European Regional Development Fund (ERDF), and the European Social Fund (ESF) assist the realisation of the economic and social cohesion policy. European Agricultural Fund for Rural Development replaced the Guidance Section of the EAGGF + the European Fisheries Fund (EFF) replaced the FIFG. These funds aren’t Structural Funds! The EU’s economic and social cohesion: to reduce disparities between the levels of development of the EU’s regions + to reduce the backwardness of the least favoured regions or islands, including rural areas.

I. The evolution and development of the policy of economic and social cohesion VIII. Until 1 January 2007, decisions were taken by the Council unanimously. From 1 January 2007, tasks, priority objectives and the organisation of Structural Funds are defined by the Council by qualified majority. The European Commission: submission of a report to the EP, the Council, the Economic and Social Committee and the Committee of the Regions in every three years on the progress made towards achieving economic and social cohesion).

I. The evolution and development of the policy of economic and social cohesion IX. The results of the policy of economic and social cohesion in the nineties increased the benefits of membership countries and regions on the periphery of the EU. Community support to the Central, Eastern and Southern Europe. The accession of CEEs countries: level of development below the EU-average. The provisions of AGENDA 2000: reconciling enlargement with the sustainability or regional policy by restructuring the system for financing the Funds between 2000 and 2006.

II. The operation of the Structural and Cohesion Funds before 1999 I. In 1988: reform of the Structural Funds, setting five Objectives (+1 Objective for the Nordic countries) by the Council Objective 1: Objective 2: Objective 3: Objective 4:

II. The operation of the Structural and Cohesion Funds before 1999 II. Objective 5: (a) (b) Objective 6: The European Regional Development Fund (ERDF) financed Objectives 1, 2, 5b and 6 until 1999. The European Social Fund (ESF) focused on Objectives 3 and 4.

II. The operation of the Structural and Cohesion Funds before 1999 III. The Guidance Section of the European Agricultural Guidance and Guarantee Fund (EAGGF) and the Financial Instrument for Fisheries Guidance (FIFG) served Objective 5a + Objectives 1 and 5b. Community Initiatives: Community Initiatives: didn’t fit into any of the six Objectives + involved more than one region (cross-border, transitional and inter-regional cooperation). The four cohesion countries were the followings: Spain, Greece, Portugal and Ireland.

III. The Structural and Cohesion Funds between 2000 and 2006 I. Eastward enlargement of the EU: countries, where the level of development was well below the Community average. All regions of Central and Eastern European candidate countries were eligible for structural assistance following their accession. Two important implications: AGENDA 2000: decision was taken on the new structural and cohesion policy regulatory and financial framework for the period 2000-2006.

III. The Structural and Cohesion Funds between 2000 and 2006 II. EUR 260 billion for structural measures; 195 billion for the Structural Funds and 18 billion for the Cohesion Fund in old Member States. An additional 47 billion was set aside for structural measures in the new Member States. AGENDA 2000: increasing the efficiency of the use and disbursement of Structural and Cohesion Funds. The number of priority Objectives was reduced from 6 to 3, according to the European Commission’s proposal.

III. The Structural and Cohesion Funds between 2000 and 2006 III. Objective 1: Objective 1 represented 69.7% of the funding + covered NUTS 2 regions whose per capita GDP did not exceed 75% of the Community average. Objective 2: Objective 2 united and complemented former objectives 2 and 5b. Objective 3: Funding was available for all regions not covered by Objective 1.

III. The Structural and Cohesion Funds between 2000 and 2006 IV. AGENDA 2000 reduced Community Initiatives from 13 to the following four: 1. INTERREG; 2. URBAN; 3. LEADER; 4. EQUAL; Statistical effect of enlargement on old Member States.

III. The Structural and Cohesion Funds between 2000 and 2006 V. AGENDA 2000: it left the Cohesion Fund unchanged for the period from 2000 to 2006. The budget of the Cohesion Fund between 2000 and 2006 was increased to 18 EUR billion (up from 15 billion for 1993-1999). In 2003, mid-term review prepared by the European Commission: Ireland lost its eligibility from 1 January 2004. AGENDA 2000 also decided on the ceiling figures of Community co-financing of structural and cohesion measures.

III. The Structural and Cohesion Funds between 2000 and 2006 VI. Introduction 4% ceiling by AGENDA 2000. Gradual phasing-in of structural and cohesion funding in the period 2004-2006. Copenhagen financial package: in the years of 2004 to 2006 the new Member States were entitled to a much lower funding than the old ones (EUR 21.7 billion instead of 30 billion). Equal treatment only from 2007. In the case of Bulgaria and Romania: eligibility for a fixed amount of support + equal treatment from 2010.

IV. The Structural and Cohesion Funds between 2007 and 2013 I. Enlargement of the EU on 1 May 2004: disparities in development within the Union grew considerably. The consequence of enlargement: the gaps between Member States and their regions widened. Disparities between regions: in terms of GDP per capita. In the EU of 27 Members, approximately 10% of the population lives in the most dynamically developing regions. In the Union of 27, approximately 25% of citizens lived in regions below 75% of average per capita EU GDP.

IV. The Structural and Cohesion Funds between 2007 and 2013 II. The European Commission proposed a revision of the composition and objectives of the Structural and Cohesion Funds (EUR 344 billion for the seven-year period). Restructuring the Funds + revision of Objectives From 1 January: the four Structural Funds, the Cohesion Fund + Community Initiatives were replaced with a new system consisting of just two of the old Structural Funds, the ERDF and the ESF and the Cohesion Fund. Creation of European Agricultural Fund for Rural Development (EAFRD) to replace the EAGGF Guidance Section and the European Fisheries Fund (EFF) to replace FIFG.

IV. The Structural and Cohesion Funds between 2007 and 2013 III. Between 2007 and 2013, the Structural and Cohesion Funds serve three Objectives: Objective 1: Convergence: Objective 2: Regional Competitiveness and Employment: Objective 3: Territorial cooperation:

IV. The Structural and Cohesion Funds between 2007 and 2013 IV. Reduction on national contribution for co-financing EU Funds. New ceilings for Community co-financing: Reduction of national support ceiling from 4% to 3.79% (only for those countries that have a GDP below 40% of the EU-25 average between 2001 and 2003). Reduction of national support ceiling: unfavourable for the new Member States of the EU.

V. Economic, social and territorial cohesion under the TFEU Economic, social and territorial cohesion is an area of shared competence of the Member States and the Union. Economic, social and territorial cohesion is governed by Part Three Title XVIII of the TFEU (Articles 174-178). Expansion of territorial scope of the policy. The TFEU reaffirms the decision-making procedure that has been applicable pursuant to the EC Treaty since 1 January 2007. Decisions relating to the Cohesion Fund are also taken by the Council acting by qualified majority, in the ordinary legislative procedure.

VI. Novelties in the field of cohesion policy Legislative proposals for cohesion policy between 2014 and 2020 To reinforce the strategic dimension of cohesion policy + to ensure that investment is targeted on Europe’s long term goals for growth and jobs. The Fifth Cohesion Report was adopted in November 2010. The Fifth Cohesion Forum was held in January 2011. High Level Group, reflecting on future cohesion policy Europe 2020 Strategy: territorial cohesion.

VII. Literature - Zoltán Horváth (2011): Handbook on the European Union, Hungarian National Assembly, Fourth Edition, 12., Regional policy – Economic, social and territorial cohesion in the EU, Hvgorac, pp. 382-405. - Zoltán Horváth – Bálint Ódor (2010): The Union after Lisbon. The Treaty Reform of the EU, hvgorac, Chapter 8., The Union’s policies, pp. 241-243. - Zoltán Horváth – Bálint Ódor (2010): The Union after Lisbon. The Treaty Reform of the EU, hvgorac, Chapter 8., The Union’s policies, pp. 247-248. - European Commission: Regional Policy – Inforegio. Future of Cohesion Policy. In: http://ec.europa.eu/regional_policy/what/cohesion/index_en.cfm Downloaded on 25 February 2012.