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 EU Regional Policy
What is Regional Policy?
The aim of the EU's regional policy is to redistribute funds from the wealthier regions of the EU to the poorer ones. This is carried out as the EU's 'Structural Operations' (34% of the EU budget has been earmarked for this in 2003). 'Structural Operations' are divided into the Structural Funds and the Cohesion Fund.
Structural Funds
The Structural Funds focus on regional development in all Member States and consist of four strands:
- The European Regional Development Fund (ERDF) promotes economic and social cohesion within the EU and finances investment leading to the creation of new jobs, infrastructure improvements, local development initiatives and the activities of small and medium-sized businesses.
- The European Social Fund (ESF) focuses on employment policy and aims to prevent unemployment, develop human resources and promote integration of the labour market.
- The European Agricultural Guidance and Guarantee Fund (EAGGF - Guidance Section) supports rural development and the improvement of agricultural structures.
- The Financial Instrument for Fisheries Guidance (FIFG) focuses on the structural reform of the fisheries industry to achieve a sustainable balance between fishery resources and their exploitation.
The Structural Funds have three objectives:
- Objective 1 supports development in the less prosperous regions, and helps areas that are lagging behind to catch up in their development. The economic signals that highlight these areas are low levels of investment, higher than average unemployment rate, lack of services for businesses and individuals and a poor basic infrastructure.
- Objective 2 revitalises areas facing structural difficulties. These areas may be rural, urban or dependent on fisheries and may be facing socio-economic difficulties that are often the source of high unemployment.
- Objective 3 covers the development of human resources, including promoting equal opportunities, modernising systems of training and promoting employment.
The UK will receive £10 billion (approximately 14 billion euro) of Structural Funds in the period 2000-2006. Four areas of the UK qualify for funding under Objective 1 - Merseyside, South Yorkshire, Cornwall, and West Wales and the Valleys. The UK also receives transitional support for Northern Ireland and the Scottish Highlands and Islands. These areas received structural funds in 1994-99 but ceased to qualify in 2000. The transitional funds ensure that a sudden discontinuation of funding does not undo previous work, but consolidates it. Northern Ireland also qualifies for a special programme - PEACE - which supports the Peace Process. The UK also receives funds under Objectives 2 and 3.
Boarded-up shops in Nationalist area of Belfast, N. Ireland. © Paul Savage, Stock.Xchng
Cohesion Fund
The Cohesion Fund was set up to improve the environment and develop transport infrastructure in Member States whose GNP per capita was below 90% of the EU average. Since 1993 it has given funds to the same four countries - Greece, Ireland, Portugal and Spain. The Fund has been critical in ensuring that these four countries were ready for the Single Market and Economic and Monetary Union. The Cohesion Fund for the period 2000-06 amounts to 18 billion euro. This money is divided between the four countries as follows:
| Spain | 61-63.5% |
| Greece | 16-18% |
| Portugal | 16-18% |
| Ireland | 2-6% |
Web sites for further research:
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