Structural Funds Social policy  a Member States responsbility “Social” policy at EU level = (mainly) Regional Policy

Structural Funds European regional policy is a policy promoting solidarity. It allocates more than a third of the budget of the European Union to the reduction of the gaps in Development among the regions and disparities among the citizens in terms of well-being. The Union seeks to use the policy to help lagging regions to catch up, restructure declining industrial regions, diversify the economies of rural areas with declining agriculture and revitalise declining neighbourhoods in the cities. It sets job creation as its primary concern. In a word, it seeks to strengthen the economic, social and territorial ‘cohesion’ of the Union.

Structural Funds 1957 The countries signing the Treaty of Rome refer in its preamble to the need ‘to strengthen the unity of their economies and to ensure their harmonious development by reducing the differences existing among the various regions and the backwardness of the less-favoured regions’ Setting-up of two sector-based funds: the European Social Fund (ESF) and the European Agricultural Guidance and Guarantee Fund (EAGGF). History

Structural Funds 1975 Creation of the European Regional Development Fund (ERDF) to redistribute part of the Member States’ budget contributions to the poorest regions The Single European Act lays the basis for a genuine cohesion policy designed to offset the burden of the single market for the southern countries and other less-favoured regions. Creation of the Cohesion Fund 1989–93 The European Council in Brussels in February 1988 overhauls the operation of the Solidarity Funds (now referred to as the Structural Funds) and allocates ECU 68 billion to them (at 1997 prices). History

Structural Funds 1992 The Treaty of the European Union, which came into force in 1993, designates cohesion as one of the main objectives of the Union, alongside economic and monetary union and the single market. It also establishes the creation of the Cohesion Fund to support projects in the fields of the environment and transport in the least prosperous Member States. History

Structural Funds 1994–99 Alongside the Structural Funds, a new Financial Instrument for Fisheries Guidance (FIFG) is created. The Berlin European Council (March 1999) reforms the Structural Funds and adjusts the operation of the Cohesion Fund. These funds will receive over EUR 30 billion per year between 2000 and 2006, i.e. EUR 213 billion over seven years. The Instrument for Structural Policies for Pre-accession (ISPA) and the Special Accession Programme for Agriculture and Rural Development (Sapard) complements the Phare programme that has been in existence for seven years to promote economic and social development and environmental protection in the applicant countries in central and eastern Europe. History

Structural Funds 2000–01 The European Council in Lisbon (March 2000) adopts a strategy focused on employment and designed to make the Union ‘the most competitive and dynamic knowledge-based economy in the world by the year 2010’. The Gothenburg Council (June 2001) completed this strategy by linking it with sustainable development On 18 February, the European Commission presents its proposals for the reform of cohesion policy for the period 2007–13: ‘A new partnership for cohesion: convergence, competitiveness, cooperation’. History

Structural Funds Why? Disparities

Structural Funds Why? Disparities

Structural Funds How? billion € for all structural instruments for the 15 Member States billion € in preaccession aid, + 22 billion € in structural interventions for the new Member States

Structural Funds How? The European Regional Development Fund (ERDF) finances infrastructure, job creating investment, local development projects and aid for small firms.

Structural Funds How? 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.

Structural Funds How? The Financial Instrument for Fisheries Guidance (FIFG) helps adapt and modernise the fishing industry.

Structural Funds How? 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.

Structural Funds How? Other financial instruments exist in addition to these Structural Funds, including notably the Cohesion Fund. 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.

Structural Funds How? 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.

Structural Funds How? 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:

Structural Funds How? Objective 1: Helping regions whose development is lagging behind to catch up ,64 M €

Structural Funds How? Objective 2: Supporting economic and social conversion in industrial, rural, urban or fisheries dependent areas facing structural difficulties. 136,49 M €

Structural Funds How? 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. 125,68 M €

Structural Funds How? 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:The Community initiatives absorb 5.35 % of the Structural Funds budget.

Structural Funds How? Interreg III for the development of crossborder, interregional and transnational cooperation; URBAN II to support innovative strategies in cities and urban neighbourhoods;

Structural Funds How? Leader+ to promote rural development initiatives; EQUAL to combat discrimination in the labour market. In addition, programmes for innovative actions receive funding to work as laboratories of ideas for disadvantaged regions.

Structural Funds How? In addition, programmes for innovative actions receive funding to work as laboratories of ideas for disadvantaged regions. (0,75%)

Structural Funds How?

Structural Funds How? Obj,1Obj.2 Obj.3 INTERR EG III EQU AL LEADE R+ URBAN III.A. ERDF ESF EAGGF -G FIFG

Structural Funds: Eligible areas in EU25 for Objective 1 and 2 between 2000 and 2006 Objective 1 Phasing-out (till 31/12/2005) Phasing-out (till 31/12/2006) Special programme Objective 2 Objective 2 (partly) Phasing-out (till 31/12/2005) Phasing-out (partly) (till 31/12/2005) ISPA

¿The future?

below 75% in EU25 statististical effect below 75% in EU15 Above 75% in EU25 "naturally" above 75% because of growth other regions Index EU 25 = 100 Source: Eurostat Art. 5+6 Gen.Reg. GDP/head average Geographical concentration Regions below or close to 75% threshold

New Policies

New Policies

New Policies Activities Total in billion € % share of total Change in % 2006/2013 Cohesion %33% Competitiveness %194% Natural resources %3% Justice & Other %90% The World %40% Committments (proposal) (2004 prices)

New Policies Cohesion Total in billion € % share of total Change in % 2006/2013 Convergence %40% Regional competitiveness & employment %6% European territorial co-operation14.3%1.4%14% Other (incl. admin)2.50.2%63% Total %33% Committments (proposal) (2004 prices)

New Policies Competitiveness Total in billion € % share of total Change in % 2006/2013 Research %166% Transport & Energy %367% Education and training %268% Social Policy(Progress) %3% Competitiveness & innovation3.70.4%92% Customs & FISCALIS0.50.1¨%32% Growth adjustment fund %new Other (incl. admin) %131% Total %194% Committments (proposal) (2004 prices)

New Policies Natural resources Total in billion € % share of total Change in % 2006/2013 Agriculture %-3% Rural development %25% Protection of Environment2.10.2%37% Fisheries7.60.7%24% Other (incl. admin)5.10.5%46% Total %3% Committments (proposal) (2004 prices)

New Policies Justice & Others Total in billion € % share of total Change in % 2006/2013 Freedom, security and Justice8.30.8%228% Health and consumer protection1.80.2%187% Culture, youth, media, citizenship2.50.2%267% Rapid Response Instrument0.1123%0.01% Solidarity Fund6.20.6%-13% Other (incl. admin)5.80.6%127% Total %90% Committments (proposal) (2004 prices)

New Policies The World Total in billion € % share of total Change in % 2006/2013 Pre-accession %-18% Neighbourhood policy %95% Development %261% Stability3.90.4%257% Loan guarantee fund1.20.1%-13% Other (incl. admin) %70% Total %40% Committments (proposal) (2004 prices)

Other policies The 7th Framework Programme for Research and Technological Development a new Competitiveness and Innovation Framework Programme (CIP) The Education & Training 2010 strategy

Other policies The 7th Framework Programme for Research and Technological Development A new Competitiveness and Innovation Framework Programme (CIP) The Education & Training 2010 strategy

below 75% in EU25 statististical effect below 75% in EU15 Above 75% in EU25 "naturally" above 75% because of growth other regions Index EU 25 = 100 Source: Eurostat Art. 5+6 Gen.Reg. GDP/head average Geographical concentration Regions below or close to 75% threshold