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Regional Policy

2. Structural and Cohesion Funds

During the 2000-2006 period, Regional Policy was administered via three “Objectives” that roughly correlated to the three NUTS statistical regions.

For the 2007-2013 period, these Objectives have altered to reflect the goals of the Lisbon Strategy, although they have kept some of the function of the original Objectives. They draw from the current three Structural Funds.

• Convergence (formerly Objective I) – Covers regions with below 75% per-capita EU average GDP. For growth and job-creation initiatives
• Competitiveness (formerly Objective II) for wealthier member states to cope with economic and social change, globalisation and the transition to an information society
• Territorial Cooperation – for stimulating cross-border cooperation to find solutions for problems of urban, coastal and rural development

The Regional and Cohesion policies are implemented through a series of European funds: (1) Structural Funds and Cohesion Funds and (2) Pre-Accession Funds.

The Treaty of the European Union, Articles 158-162, established the precedent of reducing economic disparities between regions. In the 2000-2006 period, there were four funds administered under the Structural Funds. Two of these, the European Agriculture Guidance and Guarantee Fund Guidance Section (EAGGF) and the Financial Instrument of Fishing Guidance (FIFG) are no longer a part of Structural Funds. In July 2006, the Council and the Parliament created a new set of five regulations for application of Structural Funds, including a revision of the two remaining Structural Funds + Cohesion Funds, and two others.

Three Funds:

• European Regional Development Fund (ERDF) for investment in reducing regional disparities in the Union, it supports programmes for regional development, economic growth, competition, and territorial cooperation by funding research, innovation, environmental protection, infrastructure and risk prevention.
• European Social Fund (ESF) operates in line with the European Employment Strategy (EES) and focuses on increasing economic adaptability, employment, equal opportunities and social inclusion.
• Cohesion Fund for environmental protection and for Trans-European Networks. Applicable to member states with a Gross National Income of less than 90% of EU average, covering the new, Eastern states and Greece and Portugal.

Two Regulations:

• European Grouping and Territorial Cooperation (EGTC) facilitates cross-border and inter-regional cooperation between regional and local authorities.
• General Regulation is designed to provide a simpler and more decentralised method of managing Structural and Cohesion Funds.

In July 2006, in preparation for the implementation of these new objectives, the Commission passed two proposals:

I.Community Strategic Guidelines – For helping National and Regional authorities efficiently use EU money, stressing the information society, innovation, the environment and the creation of more and better jobs.

II.Communication: Cohesion Policy and Cities – For strengthening city involvement in new programmes early in the funding process to assist in decentralising the application of EU policies.

Three new policies have been created in association with the European Investment Group and other financial institutions to provide support for investment in business and enterprise, especially in accordance with the European Regional Development Fund. These policies are:

• JASPERS The “Joint Assistance in Supporting Projects in European Regions” partnered with the European Investment Bank, the European Bank for Reconstruction and Development and the DG Regio. It offers technical assistance to member states in preparing developmental project applications for Commission approval.
• JEREMIE “Joint European Resources for Micro to Medium Enterprises” coordinates efforts by the Commission, the European Investment Bank and the European Investment Funds to develop small to medium sized enterprises in EU regions.
• JESSICA “Joint European Support for Sustainable Investment in City Areas” is a joint project of the Commission, the European Investment Bank and the Council of Europe Development Bank to invest in sustainable economic growth and jobs in European urban areas.