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FINANCIAL RESOURCES

1. Structural Funds and Cohesion Fund 2000-2006

A. Summary
B. Three main Structural Funds
C. Three priority objectives
D. Supplementary initiatives

2. Structural Funds 2007-2013

A. Summary
B. The financial instruments
C. New key objectives
D.The four fundamental principles remain

3. Rural development

4. National information

Germany
Austria
Belgium
Bulgaria
Denmark
Spain
Finland
France
Greece
Hungary
Italy
Lithuania
The Netherlands
Poland
Portugal
Czech Republic
Romania
United Kingdom
Slovakia
Sweden

1. Structural Funds and Cohesion Fund 2000-2006 (1)

A. Summary

The Structural Funds and the Cohesion Fund form part of the Community’s structural policy, which aims to reduce the disparities in development between European Union (EU) Member States and regions. The funds participate, therefore, in pursuing the goal of social and economic cohesion. For the period 2000-2006, the budget allocated to the Community’s regional policy stood at €213 billion: €195 billion for the Structural Funds and €18 billion for the Cohesion Fund, representing 35% of the Community’s budget.

B. Three main Structural Funds

  • ERDF: created in 1975, the European Regional Development Fund (ERDF) is the largest of the Structural Funds. It provides support for the creation of infrastructure and productive job-creating investment, mainly for businesses and local development projects;
  • ESF: established in 1958, the European Social Fund (ESF) contributes to the integration into working life of the unemployed and disadvantaged sections of the population, mainly by funding training measures;
  • EAGGF: also established in 1958 as the financial instrument of the Common Agricultural Policy, the European Agricultural Guidance and Guarantee Fund (EAGGF), comprises two sections: the “guidance” section supports rural development programmes and provides assistance to farmers in regions whose development is lagging behind; the “guarantee” section finances expenditure on the agricultural market organisations, in addition to rural development measures in other areas of the Community

C. Three priority objectives

  • Objective 1 promotes the development and structural adjustment of regions whose development is lagging behind, i.e. whose average gross domestic product (GDP) per capita is less than 75% of the European Union average;
  • Objective 2 contributes to the economic and social conversion of regions in structural difficulties, such as areas undergoing economic change, declining rural areas or areas dependent on fishing, urban areas in difficulty, and geographic areas suffering from significant natural or demographic handicaps ;
  • Objective 3 supports the adaptation and modernisation of education, training and employment policies and systems in regions not eligible under Objective 1.

D. Supplementary initiatives

In addition, four Community Initiatives were introduced in order to experiment with new paths of development in response to specific problems. The initiatives received 5.35% of the budget allocated to the Structural Funds:

  • Interreg III: aims to stimulate cross-border, transnational and inter-regional cooperation;
  • Leader +: promotes the socio-economic development of rural areas;
  • Equal: provides for the development of new ways of combating all forms of discrimination and inequality in access to the labour market;
  • Urban II: encourages the economic and social regeneration of declining towns, cities and suburbs.

In order to further reinforce structural policy, a Cohesion Fund was introduced in 1994. It was intended for countries whose per capita gross national product (GNP) is less than 90% of the Community average – Greece, Spain, Ireland and Portugal. The aim of this fund is to provide balanced financing for infrastructure projects in the fields of the environment and transport.

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2. Structural Funds 2007-2013 (2)

A. Summary

In July 2004, following the accession of 10 new Member States, and in anticipation of the accession of Romania and Bulgaria, the European Commission presented its proposals for a new cohesion policy for the programming period 2007-2013. Two main principles lay at the heart of the Commission’s proposals:

  • simplifying procedures
  • concentrating assistance on the least developed areas

The Cohesion Policy was designed to target resources in accordance with the following three priorities:

  • improving the attractiveness of Member States, regions and cities by improving accessibility, ensuring adequate quality and level of services, and preserving their environmental potential;
  • encouraging innovation, entrepreneurship and the growth of the knowledge economy by promoting research and innovation capacities, including new information and communication technologies;
  • creating more and better jobs by attracting more people into employment and entrepreneurial activity, improving adaptability of workers and enterprises and increasing investment in human capital.

B. The financial instruments

For the programming period 2007-2013, the Cohesion Policy has a budget of €308 billion and is the largest budget item, ahead of the Common Agricultural Policy (CAP). The ERDF, ESF and Cohesion Fund remain as Structural Funds.

The ERDF finances:
  • direct aid to investments in companies (in particular SMEs) to create sustainable jobs;
  • infrastructures linked notably to research and innovation, telecommunications, environment, energy and transport;
  • financial instruments (capital risk funds, local development funds, etc.) to support regional and local development and to foster cooperation between towns and regions;
  • technical assistance measures

The ESF sets out to improve employment and job opportunities in the European Union. It supports actions by Member States in the following areas:

  • adapting workers and enterprises: lifelong learning schemes, designing and spreading innovative working organisations;
  • access to employment for job seekers, the unemployed, women and migrants;
  • social integration of disadvantaged people and combating discrimination in the job market;
  • strengthening human capital by reforming education systems and setting up a network of teaching establishments

The Cohesion Fund is aimed at Member States whose Gross National Income (GNI) per inhabitant is less than 90% of the Community average. It serves to reduce their economic and social shortfall, as well as to stabilise their economy. It supports actions in the framework of the Convergence objective. It is now subject to the same rules of programming, management and monitoring as the ESF and the ERDF. For the 2007-2013 period the Cohesion Fund concerns Bulgaria, Cyprus, the Czech Republic, Estonia, Greece, Hungary, Latvia, Lithuania, Malta, Poland, Portugal, Romania, Slovakia and Slovenia. Spain is eligible for a phase-out fund only as its GNI per inhabitant is less than the average of the EU-15.

The Cohesion Fund finances activities under the following categories:
  • trans-European transport networks
  • environment. Here, the Cohesion Fund can intervene in projects related to energy, as long as they clearly present a benefit to the environment: energy efficiency, use of renewable energy etc

The “guidance” section of the European Agricultural Guidance and Guarantee Fund (EAGGF) has become the European Agricultural Fund for Rural Development (EAFRD). For information, the “guarantee” section is now the EAGF. Both are managed by the Directorate-General for Agriculture.

Three initiatives jointly launched by the European Commission, the European Investment Bank and other financial institutions help Member States and regions to establish sound and efficient management of the Funds and to better utilise financial engineering instruments:
  • JASPERS will help Member States and regions prepare major projects.
  • JEREMIE will enhance access to financing for the development of SMEs.
  • JESSICA will encourage sustainable investment in urban areas

C. New key objectives

The rationale of the Convergence objective is to promote growth-enhancing conditions and factors leading to real convergence for the least-developed Member States and regions. In EU-27, this objective concerns – within 18 Member States – 84 regions with a total population of 154 million and per capita GDP at less than 75 % of the Community average.

The Union’s Cohesion Policy is based on “strategic guidelines”.
The Community Strategic Guidelines for Cohesion contain the principles and priorities of cohesion policy and suggest ways the European regions can take full advantage of the European funds that have been made available for national and regional aid programmes over the next seven years. National authorities will use the guidelines as the basis for drafting their national strategic priorities and planning for 2007-2013, the so-called National Strategic Reference Frameworks (NSRFs).

Outside the Convergence regions, the Regional Competitiveness and Employment objective aims at strengthening competitiveness and attractiveness, as well as employment, through a two-fold approach. First, development programmes will help regions to anticipate and promote economic change through innovation and the promotion of the knowledge society, entrepreneurship, the protection of the environment, and the improvement of their accessibility. Second, more and better jobs will be supported by adapting the workforce and by investing in human resources.

The European Territorial Cooperation objective will strengthen cross-border cooperation through joint local and regional initiatives, trans-national cooperation aiming at integrated territorial development, and interregional cooperation and exchange of experience.

Objectives Structural Funds and instruments
Convergence ERDF ESF Cohesion Fund
Regional Competitiveness and Employment ERDF ESF  
European Territorial Cooperation ERDF    

http://ec.europa.eu/regional_policy/policy/object/index_en.htm

D. The four fundamental principles remain (3)

1- Programming :

The objectives of the Funds shall be pursued in the framework of a multiannual programming system organised in several stages comprising the identification of the priorities, the financing, and a system of management and control.

2- Partnership :

The objectives of the Funds shall be pursued in the framework of close cooperation (…) between the Commission and each Member State. Each Member State shall organise, where appropriate and in accordance with current national rules and practices, a partnership with authorities and bodies such as:
a) the competent regional, local, urban and other public authorities;
b) the economic and social partners;
c) any other appropriate body representing civil society

3 - Additionality
1. Contributions from the Structural Funds shall not replace public or equivalent structural expenditure by a Member State.
2. For regions covered by the Convergence objective, the Commission and the Member State shall determine the level of public or equivalent structural expenditure which the Member State shall maintain in all the regions concerned during the programming period.

Furthermore, the level of expenditure shall be determined with reference to the general macroeconomic conditions in which the financing is carried out and taking into account certain specific or exceptional economic situations, such as privatisations as well as an exceptional level of public or equivalent structural expenditure by the Member State during the previous programming period.
The Commission shall, in cooperation with each Member State, verify additionality mid-term in 2011 for the Convergence objective.

4 - Complementarity, consistency, coordination and compliance
1. The Funds shall provide assistance which complements national actions, including actions at the regional and local levels, integrating into them the priorities of the Community.
2. The Commission and the Member States shall ensure that assistance from the Funds is consistent with the activities, policies and priorities of the Community and complementary to other financial instruments of the Community.
3. The assistance co-financed by the Funds shall target the European Union priorities of promoting competitiveness and creating jobs.  
 
SUMMARY (4)
Structural Funds: 2000-2006 vs. 2007-2013

Key principles that remain

The main principles concerning regional policy are unchanged:
- Complementarity
- Multiannual programming
- Partnership
- Subsidiarity and proportionality
- Shared management
- Additionality

New objectives
In order to simplify the allocation of funds and render it easier to understand, convergence policy will be based on three new objectives:
Convergence: This objective supersedes the former Objective 1. It aims to accelerate convergence for the least developed Member States and regions (GDP ≤ 75 % of the Community average) by improving the conditions for growth and employment. It mainly concerns the new Member States.
Regional Competitiveness and Employment: This objective merges the former Objectives 2 and 3, in addition to the Community Initiative programmes. It concerns all Member States and aims to strengthen regions’ competitiveness and attractiveness as well as employment.
European Territorial Cooperation: This objective supersedes the former INTERREG programme, and is structured around the three strands of cooperation (geographical basis, strategic priorities and assistance to regions).

Fewer funds
From now on, only three funds will contribute to financing the objectives: the ERDF, the ESF and the Cohesion Fund. In addition, since 1st January 2007, the EAGGF has been replaced by the European Agricultural Guarantee Fund (EAGF) and the European Agricultural Fund for Rural Development (EAFRD).



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3. Rural development

Why have a rural development policy?
The EU's rural areas are a vital part of its physical make-up and its identity. According to a standard definition, more than 91% of the territory of the EU is "rural", and this area is home to more than 56% of the EU's population. The EU's Lisbon Strategy for jobs and growth and its Göteborg strategy for sustainable development are just as relevant to our countryside as to our towns and cities. The EU has a common rural development policy, which nonetheless places considerable control in the hands of individual Member States and regions. The policy is funded partly from the central EU budget and partly from individual Member States' national or regional budgets.

Structure of rural development policy
The essential rules governing rural development policy for the period 2007 to 2013, as well as the policy measures available to Member States and regions, are set out in Council Regulation (EC) No. 1698/2005.

Under this Regulation, rural development policy for 2007 to 2013 is focused on three themes (known as "thematic axes"). These are:
  • improving the competitiveness of the agricultural and forestry sector;
  • improving the environment and the countryside;
  • improving the quality of life in rural areas and encouraging diversification of the rural economy.

To help ensure a balanced approach to policy, Member States and regions are obliged to spread their rural development funding between all three of these thematic axes.

A further requirement is that some of the funding must support projects based on experience with the Leader Community Initiatives. The "Leader approach" to rural development involves highly individual projects designed and executed by local partnerships to address specific local problems.

As before 2007, every Member State (or region, in cases where powers are delegated to regional level) must set out a rural development programme, which specifies what funding will be spent on which measures in the period 2007 to 2013.

A new feature for 2007 to 2013 is a greater emphasis on coherent strategy for rural development across the EU as a whole. This is being achieved through the use of National Strategy Plans which must be based on EU Strategic Guidelines.

This approach should help to:
  • identify the areas where the use of EU support for rural development adds the most value at EU level;
  • make the link with the main EU priorities (for example, those set out under the Lisbon and Göteborg agendas);
  • ensure consistency with other EU policies, in particular those for economic cohesion and the environment;
  • assist the implementation of the new market-oriented CAP and the necessary restructuring it will entail in the old and new Member States.


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4. National information

USER’S GUIDE

  • The country reports contain information on each objective: Convergence, and Regional Competitiveness and Employment, as well as a section on rural development policy.
  • The “Convergence” regions are not covered by the Regional Competitiveness and Employment objective. This is the case for the eight sugar-producing countries that have joined the European Union since 2004.

IN SUMMARY

  • If you are covered by the “Convergence” objective, please ignore the Regional Competitiveness and Employment objective (except for the Community Initiatives)
  • If you are covered by the “Regional Competitiveness and Employment” objective, consult your regional plans and the programming documents.

In addition to direct access to the plans for your region, you will find the contact details of the relevant local/regional authorities, as well as the contact details for the national ERDF, ESF and regional programme authorities.

Reminder: it is useful to contact the authorities at both local/regional and national levels.

Germany
Austria
Belgium
Bulgaria
Denmark
Spain
Finland
France
Greece
Hungary
Italy
Lithuania
The Netherlands
Poland
Portugal
Czech Republic
Romania
United Kingdom
Slovakia
Sweden
(1)
http://europa.eu/legislation_summaries/regional_policy/provisions_and_instruments/l60014_fr.htm
http://europa.eu/legislation_summaries/regional_policy/provisions_and_instruments/l60014_en.htm
http://europa.eu/legislation_summaries/regional_policy/provisions_and_instruments/l60014_de.htm

(2)
http://ec.europa.eu/regional_policy/sources/docoffic/official/regulation/pdf/2007/publications/guide2007_fr.pdf
http://ec.europa.eu/regional_policy/sources/docoffic/official/regulation/pdf/2007/publications/guide2007_en.pdf
http://ec.europa.eu/regional_policy/sources/docoffic/official/regulation/pdf/2007/publications/guide2007_de.pdf

(3)
http://ec.europa.eu/regional_policy/sources/docoffic/official/regulation/pdf/2007/general/ce_1083(2006)_fr.pdf
http://ec.europa.eu/regional_policy/sources/docoffic/official/regulation/pdf/2007/general/ce_1083(2006)_en.pdf
http://ec.europa.eu/regional_policy/sources/docoffic/official/regulation/pdf/2007/general/ce_1083(2006)_de.pdf

(4)
http://www.touteleurope.fr/fr/actions/economie/aide-au-developpement-des-regions/presentation/la-politique-de-cohesion-2007-2013.html

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