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Regions for economic change

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Regions for economic change

Outline of the Community (European Union) legislation about Regions for economic change

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Regional policy > Review and the future of regional policy

Regions for economic change

Document or Iniciative

Communication from the Commission of 8 November 2006 – Regions for economic change [COM(2006) 675 – Not published in the Official Journal].

Summary

The Commission is responding to the challenge to create growth and more and better jobs through the partnership for growth and jobs. This partnership has been reformed by the Community Lisbon Programme and national reform programmes (NRPs).

The Community Strategic Guidelines 2007-2013 in the field of cohesion and the guidelines for investments for urban development aim to assist the partnership for growth and jobs by defining areas of intervention where priority should be given in the programmes for cohesion policy for 2007-2013.

The programmes for cohesion policy for 2007-2013 receive 350 billion of Community support and lever a further 150 billion of investment from national public sources. This investment should help make the breakthrough in economic modernisation and increased competitiveness in the context of the partnership for growth and jobs, thus making a connection between regional economic convergence and economic modernisation.

The Regions for Economic Change initiative

From the viewpoint of the European Territorial Cooperation Objective and as part of the urban development programme, this Communication sets out the Regions for Economic Change initiative. The aim of the latter is to test out best practices which help strengthen the link between regional economic convergence and economic modernisation.

With a total budget of around 375 million, the initiative allows volunteer networks of Member States, regions and cities to test best practices for economic modernisation and increased competitiveness.

The Commission offers the volunteer networks a number of themes related to economic modernisation and the revised Lisbon strategy. In this way, those networks which so desire have the possibility of working and cooperating more closely with the Commission on these themes.

Networks participating in the initiative select development themes which interest them and pursue them through joint networks co-financed by the European Regional Development Fund (ERDF). Thanks to the link between thematic development and the cohesion policy programmes, projects which have been tested are rapidly disseminated in the Member States.

Fast track option

There is a fast track option within the Regions For Economic Change initiative. Volunteer networks are established around the themes (linked to economic modernisation and the renewed Lisbon strategy) selected and animated by the Commission. The fast track option therefore gives the Commission the right of initiative and allows it to play an important role in the rapid dissemination of ideas for testing selected by the networks in ERDF-assisted programmes.

Communication

In order to ensure the rapid dissemination of ideas, results and best practice, it is important to introduce effective communication on the Regions For Economic Change initiative. This entails, for example, the organisation of an annual conference on regions for economic change, the launch of a new website and the introduction of annual awards for innovation.

Related Instruments

Council Decision 2006/702/EC of 6 October 2006 on Community strategic guidelines on cohesion [Official Journal L 291 of 21.10.2006].

Communication from the Commission of 5 July 2005 – Cohesion Policy in Support of Growth and Jobs – Community Strategic Guidelines, 2007-2013 [COM(2005) 299 – Not published in the Official Journal].

Third report on economic and social cohesion: the socio-economic situation of the Union and the impact of European and national policies

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Third report on economic and social cohesion: the socio-economic situation of the Union and the impact of European and national policies

Outline of the Community (European Union) legislation about Third report on economic and social cohesion: the socio-economic situation of the Union and the impact of European and national policies

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Regional policy > Review and the future of regional policy

Third report on economic and social cohesion: the socio-economic situation of the Union and the impact of European and national policies

Document or Iniciative

Commission communication – third report on economic and social cohesion [COM(2004) 107 final – Not published in the Official Journal].

Summary

The policy on economic and social cohesion is producing positive effects in those areas of the European Union facing difficulties. However, large socio-economic disparities persist between Member States and between regions. These disparities in levels of wealth and degrees of dynamism arose from structural deficiencies in certain key areas for competitiveness such as investment in physical infrastructure, in innovation and in human resources. Member States and regions therefore need support from Community policies to overcome their handicaps, develop their strong points and evolve in an increasingly competitive environment.

The enlargement of the European Union to 25 Member States on May 1 represents a challenge without precedent for the European Union. In particular, it jeopardises the current balance of regional policy. The third report on economic and social cohesion sets out concrete proposals for regional policy after 2006. The Commission bases its proposals on the socio-economic situation of the Union and on an analysis of the impact of regional policy, other Community policies and national policies.

SOCIO-ECONOMIC SITUATION OF THE EUROPEAN UNION

Economic growth

Since 1994, disparities in income between Member States and between regions have been decreasing. Gross domestic product (GDP) and productivity have been increasing more quickly in the four countries eligible for the Cohesion Fund (Spain, Greece, Ireland and Portugal) than in the rest of the European Union. The increase has been particularly high in Spain and Ireland and more modest in Portugal and Greece. Nevertheless, major differences still exist between States. In Greece and Portugal, the per capita GDP is still around 70 % of the Community average. One thing however is certain: the contribution made by the Structural Funds to growth in the four cohesion countries (1.5 % in Spain, 2 % in Greece, almost 3 % in Ireland and more than 4.5 % in Portugal). Over the last decade, trade between these four countries and the rest of the Union more than doubled. On average, almost a quarter of structural expenditure returns to the rest of the Union in the form of imports, with Germany being the principal beneficiary.

Within Member States, the regions whose development is lagging behind, eligible for Objective 1, have enjoyed annual growth of 3 % compared with slightly more than 2 % for the Union as a whole. However, the catching-up process varies widely from one region to another. Outside the four cohesion countries, weak growth in the national economy is slowing down that of Objective 1 regions. While the growth in GDP in the new German Länder is equal to the Community average, that of the regions of the Italian Mezzogiorno is lower. This is also true for the old industrial regions. Although not Objective 1 regions, the regions of north-east England, the regions of northern Germany and the very sparsely populated regions of northern Sweden have seen their annual per capita GDP increase less than the Community average since 1994.

Employment and social cohesion

There are still wide regional disparities in employment levels. Employment has increased over the past ten years in the cohesion countries, significantly in Spain and Ireland, to a lesser extent in Portugal and in Greece. Only 43 % of those of working age were in work in the regions of southern Italy in 2002. In the ten new Member States, economic restructuring of agriculture and traditional industries is increasing unemployment and 56 % of those of working age are in work as against 64 % in the current Member States of the Union.

In 2000, approximately 55 million people were at risk of poverty, i.e. 15 % of the European population. Poverty particularly affects elderly people (more than 65 years old), single parents, the long-term unemployed, ethnic minorities and the disabled. The countries of southern Europe, the United Kingdom and Ireland are particularly badly affected and the numbers concerned in many of the new Member States are above the Community average.

Over the coming decades, the progressive ageing of the population will gradually reduce the working population, with a serious impact on growth potential. Between now and 2010, this will begin to affect Germany, the four southern Member States and the majority of the new Member States. By 2025, there will be on average less than three people of working age for each elderly person. Faced with the prospects for population structure, steady economic growth, high employment and a reduction in the number of people retiring are vital. Immigration should also provide an important source of additional labour.

Narrowing disparities in regional competitiveness factors

The challenge for cohesion policy is to invest in the competitiveness factors so that Member States and regions can overcome their structural problems. The principal competitiveness factors that have been identified are:

  • physical infrastructure: transport and telecommunication networks.
    Since 1994, transport links both within the cohesion countries and between those countries and the rest of the Union have been improving. In 1991, the density of the motorway network in those countries was 20 % less than the Community average. With Structural Fund support, it has exceeded the average by 10 % since 2001, with Spain and Portugal being the principal beneficiaries. In Objective 1 regions as a whole, the motorway density is only 80 % of the Community average and much less than that (20 % less) in the new Member States. As for the railways, although the network throughout the Union has been modernised, there is still a major discrepancy between the dynamic regions and those whose development is lagging behind. In the new Member States, road construction is accelerating the transfer of passengers from rail to road. Considerable investment will be required to bring railways up to standard.
    In telecommunications, the number of fixed telephone lines in relation to population remains much lower in both the cohesion countries and the new Member States. This is tending to be offset by a rise in mobile phone use. Broadband access, essential for the use of high-speed Internet and the development of new information and communications technologies (NICT), shows wide disparities across the Union. These reflect relative levels of prosperity;
  • human resources: the adaptability and skills of the workforce.
    As regards investments in human resources, large structural weaknesses remain both in the Union of Fifteen and in the new Member States. The proportion of people with education beyond basic schooling remains very low in Objective 1 regions, especially in Spain, Italy and Portugal, the exception being the new German Länder. This proportion is markedly above the European average in the new Member States. On the other hand, in these countries, the average number of young people who complete university studies is below the average in the Union of Fifteen. This is also the case in Objective 1 regions, despite the clear progress that has been made. The situation is similar as regards continuing training;
  • innovative capacity.
    Innovation is one of the keys to regional competitiveness. However, innovative capacity varies greatly from one region to another in the same Member State, within the Union of Fifteen and within the Union of Twenty-five. Eight of the 213 European regions account for a quarter of total R&D expenditure;
  • sustainable development.
    There is a substantial need for investment in the environment in the cohesion countries and the need is even greater in the accession countries. The main areas concerned are water treatment, waste management and the control of emissions.

THE IMPACT AND ADDED VALUE OF STRUCTURAL POLICIES

The budget for regional policy over the period 2000-06 is EUR 215 billion. The sums transferred to Objective 1 regions represent an important proportion of the wealth of the cohesion countries. They amount to 0.9 % of national GDP in Spain and more than 2.5 % in Greece and Portugal. This funding has a genuine leverage effect on public investments. The increase in investment achieved is estimated at 3 % in Spain, 4 % in the new German Länder, 7 % in the Italian Mezzogiorno and 8-9 % in Greece and Portugal. In most cases, there has also been a similar knock-on effect on private financing, as the figures for Austria, Germany, the Netherlands and Belgium testify. Private investment nevertheless remains weak in France, the United Kingdom and the cohesion countries. Structural Fund support is also supplemented by European Investment Bank (EIB) loans, particularly in the areas of transport and the environment. Since 2000, they have totalled EUR 20 billion a year. More than half has gone to Objective 1 regions and EUR 3 billion to the new Member States

Over the period 1994-99, 82 regions in the twelve Member States received aid under Objective 2. This Objective supports the conversion of regions with serious natural or structural handicaps. More than half of the expenditure was concentrated on the conversion of old industrial sites and on business services. To a lesser extent, funds went to developing human resources and providing aid for R&D. Community support permitted the creation of 700 000 jobs, the modernisation of 300 000 small and medium-sized enterprises (SMEs) and the conversion of 115 million square metres of industrial waste land. In ten years, unemployment fell slightly more in Objective 2 regions than in the rest of the European Union.

Several spheres of activity show the value added by regional policy

As regards agriculture and rural development, the Structural Funds have maintained economic activities in the countryside. They have encouraged the economic diversification of rural areas through agritourism and environmental protection activities. The fisheries sector is concentrated in a limited number of regions in the European Union and structural measures aim in particular to stimulate their economic conversion.

During the 1994-99 period, the European Social Fund (ESF) provided support for the development of human resources amounting to a third of overall Structural Fund investment. Assistance under Objective 3 was aimed at integrating young people, the long-term unemployed and other social categories at risk of exclusion into employment. It was also targeted on promoting equal opportunities between women and men. The most successful measures were those combining guidance, training and assistance with finding a job. In addition, the ESF provides finance for adapting employment, education and training systems. Since 2000, it has provided EUR 60 billion for the national plans implemented as part of the European Employment Strategy (EES).

Cooperation and networking – two success stories

The four Community Initiatives allow the adoption of innovative regional development strategies. The cooperation between regions and networking achieved through them represent an important value added of structural policy:

  • over the period 2000-06, INTERREG III is providing EUR 5 billion to support cross-border and trans-national cooperation and the exchange of experience between European regions. Border regions will play an increased role in the enlarged Union;
  • URBAN II is providing support for innovative projects in 70 towns and cities. The emphasis is on boosting the economy of urban areas in crisis;
  • the aim of EQUAL is to combat all forms of discrimination and inequalities in the labour market. A heavy emphasis is placed on cooperation, the exchange of experience and best practice;
  • LEADER+ provides assistance in rural areas. With an annual budget of EUR 300 million, the Initiative provides assistance to SMEs and supports the development of tourism.

New pilot innovative actions were launched in 2001. With a budget of around EUR 400 million, they are increasing regional competitiveness through innovation, disseminating technology and promoting sustainable development. Three quarters of all the regions have now applied for these programmes.

Structural Fund management is improving, but further progress can still be made

The management of regional policy is based on four general principles:

  • programming involves planning expenditure over a number of years. It has brought more stability and consistency but, on the other hand, the time taken to adopt programming documents has increased;
  • the partnership during the drawing up and the implementation of programmes has been strengthened.
    This mobilises a series of players: the regional and local authorities, the private sector, the social partners and civil society. An effective partnership improves the targeting and evaluation of projects and the dissemination of information;
  • the concentration of funding means that financial support is directed towards those regions that need it most. It has been increased, although evaluations show that assistance is too thinly spread;
  • additionality means that Community financing for a project is additional to other public and private financing.
    This rule is generally respected under Objective 1. It is more difficult to verify for Objectives 2 and 3.

Improving the efficiency of programmes remains a major challenge. On the ground, the local players have criticised the delay in adopting rules, which put pressure on the utilisation of financing. Thus, only a third of Objective 1 projects were completed in time and another third were completed over a year late. In addition, two thirds of projects exceeded their budget. By requiring the utilisation of funding within two years of programming, the “N+2” rule tightens discipline. What is more, a financial incentive has been introduced for the 2000-06 period in the form of a mid-term performance reserve. It rewards 90 % of the programmes on the basis of criteria such as the rate of financial absorption and sound management.

Monitoring is an essential part of the system for implementing the Structural Funds, but it has not been as effective as expected because of the difficulty in collecting information. Programme evaluation is carried out in three phases: before implementation, at mid-term and at the end of the period. A greater involvement of all those involved will permit a further improvement in the analyses made.

THE IMPACT OF OTHER COMMUNITY POLICIES

Unlike structural policy, the main aim of the following Community policies is not to combat regional disparities but they do have a strong regional impact:

  • enterprise, innovation and education policies.
    Community enterprise, innovation and education policies are aimed at strengthening the competitiveness of EU producers. Regions are far from having equal innovation capacity, as the disparities in the take-up of Community financing for research testify. To remedy this problem, the Innovation Relay Centres and the Innovating Regions in Europe network aim to disseminate a culture of innovation. In addition, the sixth action programme for R&TD is in part aimed at improving links between research centres in the more dynamic parts of the EU and those in peripheral areas. In the field of education, the ‘Education and Training 2010’ programme aims to ensure a high level of life-long education and training;
  • social and employment policy.
    In March 2001, the Lisbon European Council defined a comprehensive strategy aimed at ensuring long-term economic growth, full employment, social cohesion and sustainable development. The European Employment Strategy provides support to Member States to reform their labour markets. As regards social integration, exclusion must be combated at all levels. The Union’s commitment to equality between men and women is part of a comprehensive approach. Measures aim, in particular, to attract women into employment, encourage them to stay in the labour market and make it easier to reconcile a working career with family responsibilities;
  • transport, energy, telecommunications and the trans-European networks.
    Liberalising the markets for transport, telecommunications and energy has led to increased efficiency and lower prices. It has also, however, brought the risk that particular social groups or regions could be excluded. The European Union has therefore established public service obligations, or ‘ services of general economic interest ‘(SGEI), which guarantee access to essential services of reasonable quality and at affordable prices. At the same time, the trans-European networks (TENs) in transport, energy and telecommunications have increased the accessibility of the more remote regions. The networks planned to link the European Union of Fifteen to the new Member States will have the same effect;
  • the environment, agriculture, rural development and fishing.
    The Sixth Environmental Action Programme aims to combat the negative effects of growth and the exhaustion of natural resources. For the 2000-06 period, aid for rural development is higher for Objective 1 regions (56 % of expenditure) than in the rest of the Union. This aid is supporting the emergence of a European agricultural sector based on quality, the enhancement of the countryside and the rural heritage and the economic diversification of rural areas. After 2007, expenditure under the common agricultural policy (CAP) will decrease, in particular with a fall in price support and an emphasis on rural development. In the fisheries sector, Community policy aims to conserve fish stocks and restructure the industry. The recent emergency measures will have serious economic and social consequences in some Spanish and Portuguese regions. Of the new Member States, Poland and the three Baltic States have a fisheries sector;
  • competition policy.
    If granted in strict compliance with European competition law, state aid contributes to cohesion by influencing the geographical distribution of economic activity. Since 1997, total national expenditure on state aid has decreased sharply. In 2001, state aid in the form of assistance to Objective 1 and Objective 2 regions accounted for 9 % and 6 % respectively of total state aid. It nevertheless remains greater in the relatively prosperous Member States than in the cohesion countries. In the context of enlargement, it will play a major role. Future reforms of the rules will aim at less but better targeted assistance.

THE IMPACT OF NATIONAL POLICIES

Public expenditure by the Member States amounts on average to 47 % of the GDP of the European Union, while the budget allocated to cohesion policy is less than 0.4 %. The policies of the Member States provide, in particular, income support and basic services: education, medical care, social welfare. On the other hand, public investment in human and physical capital accounts for on average only slightly more than 2 % of Community GDP. Expenditure on business support services, higher education, innovation and R&D is even lower. In relation to the sums allocated to structural expenditure by Member States, therefore, the budget for cohesion policy does not seems so small, especially as spending is concentrated in the regions which are most in need of assistance.

In the Member States, public expenditure on income support is in general much higher in the less prosperous regions because of the lower level of income. Government revenue, on the other hand, is proportional to income, in the main because most taxes in the Member States are levied centrally either on income or expenditure. Then redistribution mechanisms reduce disparities in the revenue available to regions. The general trend is now towards devolving responsibility for public services to regional and local level without a similar trend in respect of raising the money to fund these services. The main exception is Italy, where responsibility for raising revenue is being increasingly devolved to the regions without an increase in regional transfers.

Foreign direct investment (FDI) can potentially play a key role in reducing regional economic disparities. It is not only a source of income but facilitates the transfer of technology. However, foreign investors are not necessarily attracted to places where the need is greatest. Berlin apart, only 2 % of FDI in Germany has been in the new Länder and only 4 % of FDI in Italy has benefited the regions of the Mezzogiorno. Foreign investment is mainly concentrated in dynamic urban areas. In the new Member States, most investors are attracted to the capital cities. In 2001, two thirds of FDI in Hungary was in Budapest. The same holds for Prague in the Czech Republic and Bratislava in Slovakia.

For further information, consult the INFOREGIO website of the Directorate-General for Regional Policy:

  • the full text of the third report on economic and social cohesion;

Related Acts

Second progress report on economic and social cohesion [COM(2003) 34 final – Not published in the Official Journal].

See the specific SCADplus web page

First progress report on economic and social cohesion [COM(2002) 46 final – Not published in the Official Journal].

See the specific SCADplus web page

“Unity, solidarity, diversity for Europe, its people and its territory” – Second report on economic and social cohesion [COM(2001) 24 final – Not published in the Official Journal].

See the specific SCADplus web pages: an assessment, conclusions and recommendations, 10 questions for debate

Third Report on economic and social cohesion: proposals for regional policy after 2006

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Third Report on economic and social cohesion: proposals for regional policy after 2006

Outline of the Community (European Union) legislation about Third Report on economic and social cohesion: proposals for regional policy after 2006

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Regional policy > Review and the future of regional policy

Third Report on economic and social cohesion: proposals for regional policy after 2006

Document or Iniciative

Commission Communication – Third Report on economic and social cohesion [COM(2004) 107 final – Not published in the Official Journal].

Summary

The policy on economic and social cohesion has positive effects on the areas of the EU in difficulty but major socio-economic disparities between the Member States and between the regions persist. These gaps in wealth and dynamism arise from structural deficiencies in certain key factors for competitiveness such as investment in physical infrastructure, innovation and human resources. The Member States and the regions therefore require support from the Community policies to overcome their handicaps, build on their comparative advantages and make better progress in an increasingly competitive environment.

PROPOSALS FOR A REFORMED COHESION POLICY

On 10 February 2004, the Commission adopted a budget proposal for the European Union enlarged to 27 Member States (the 15, the 10 new Member States, Bulgaria and Romania) for 2007-2013. In this communication on the financial perspective, it argues that the cohesion policy should have a single budget line with increased resources. The Third Report on cohesion follows this approach, noting the challenge which enlargement represents for cohesion policy. For the first time, the Commission makes concrete proposals derived from the debate on the future of the regional policy after 2006. In financial terms, it proposes a budget for 2007-2013 equivalent to 0.41 % of the Gross Domestic Product (GDP) of the Union of 27, or 336.3 billion for that period. The Commission is basing its proposals on the socio-economic situation of the Union and the study of the impact of the regional policy, the other European policies and national policies.

Enlargement completely changes the Union’s socio-economic situation

Enlargement on 1 May 2004 will increase the population of the European Union by 20 % and its area by about a quarter but GDP by only 5 %. Regional disparities will double. Per capita wealth in a Union of 25 will fall by about 12.5 % and the proportion of the population living in regions whose development is lagging behind will increase from 20 % to 25 %. At the same time, the disadvantaged regions of the present Union will not disappear and will require continuing support.

The European Union has entered a phase of economic restructuring as a result of the globalisation of trade, the introduction of the knowledge economy and an aging population. Furthermore, the economic situation has deteriorated over the last three years and unemployment has increased.

In March 2000, the Lisbon European Council set the European Union the goal of becoming the most competitive and dynamic area of the world. A strong knowledge-based economy will stimulate job creation and promote social and environmental policies offering sustainable development and social cohesion. The European Councils in Nice and Göteborg applied this across-the-board objective through sectoral strategies in the fields of social integration and sustainable development respectively. In addition, cohesion policy helps achieve the Lisbon objective. The reform of this policy should continue this process.

What Community support for the new Member States between 2004 and 2006?

The ten new Member States will receive Community support as soon as they join. Between 2000 and 2006, they will receive 3 billion in structural assistance under the pre-accession financial instruments ISPA (transport and the environment) and SAPARD (agriculture and rural development) and the Phare programme (improving administrative capacity). Following their accession, the new Member States together with Bulgaria and Romania will receive 1.6 billion per year in aid through Phare until 2006.

For the new Member States, 2004-06 will be a transitional period which will allow them to become accustomed to managing the Structural Funds in accordance with the current rules. They will receive support from those Funds totalling 21.8 billion. The measures will concentrate on a limited number of priorities: infrastructure, human resources and productive investment.

A revised cohesion policy for 2006-2013

The future regional policy will have a limited number of key topics: innovation and the knowledge economy, the environment and risk prevention, access and public services. To achieve them there will be three Community priorities replacing the current breakdown among Objective 1, Objective 2 and Objective 3:

  • The “convergence” Objective will support growth and job-creation in regions whose development is lagging behind.
    It will concern NUTS II regions whose per capita GDP is less than 75 % of the average in the Union of 25. It will receive about 78 % of the budget for the future regional policy and until 2013 will also provide transitional support to the regions currently eligible but which will no longer satisfy this criterion for purely statistical reasons. Since the GDP of the Union of 25 will be lower than that of the Union of 15, some regions currently eligible under Objective 1 will no longer meet this eligibility criterion.
    The European Regional Development Fund (ERDF) will part-finance the modernisation of basic infrastructure (transport, telecommunications and energy), the economic diversification of territories and the protection of the environment (treatment of water and waste, prevention of natural and technological hazards). The European Social Fund (ESF) will expand its role as the main Community financial instrument for the European Employment Strategy (EES) which helps the Member States to reform their labour markets.
    Only those Member States with a GDP of less than 90 % of that of the Community will also be able to benefit under the Cohesion Fund for investment in transport and the environment. The relative weight of this Fund will increase because it will distribute one third of the aid for the ten new Member States.
  • The “Regional competitiveness and employment” Objective will help make the economic fabric more dynamic in accordance with the Lisbon and Nice objectives.
    The Commission is proposing a twin-track approach, at both regional and national level. Regional programmes will help anticipate economic change better. Supported exclusively by the ERDF, they will concern the regions currently eligible under Objective 1 and which will naturally cease to be so eligible and the regions which do not come under the convergence programmes.
    National programmes will improve implementation of the EES. Supported exclusively by the ESF, they will concentrate on three priorities: the adjustment of the working population to changes in work (life-long learning), promoting employment and combating early departure from the labour market (active aging, greater participation by women), employment of categories in difficulty (the disabled, ethnic minorities).
    This Objective will have some 18 % of total funding, divided equally between the ERDF and the ESF. The funding will be divided among the Member States using economic, social and territorial criteria fixed at European level.
  • Territorial cooperation will promote the balanced development of the territory.
    Based on the acknowledged experience of the INTERREG III Initiative, the Commission is proposing a new Objective for cross-border, transnational and interregional cooperation which will receive 4 % of the funding for the future regional policy.
    All the NUTS III regions on internal and external frontiers, whether on land or sea, will be able to cooperate with their neighbours, particularly on the key topics of the Lisbon and Göteborg agenda.
    The Commission wants to set up two new legal instruments for cooperation: the “cross-border regional collectivity” on internal frontiers and a “new neighbourhood instrument” on the Union’s external frontiers. These instruments will cope with the legal and administrative problems which this type of cooperation poses.

Natural handicaps exacerbate development problems. The future cohesion policy will therefore pay particular attention to certain areas. Measures for urban areas will be fully incorporated into the regional programmes so that more towns and cities can receive support than did under the URBAN II Community Initiative. Under the future “Convergence” Objective, the Commission will set up a specific programme for the seven outermost regions (Guadeloupe, Martinique, French Guiana, Réunion, the Canary Islands, the Azores and Madeira). Many islands, mountain areas and thinly populated regions suffer from particularly severe access problems, of which account will be taken in the allocation of resources to the “Regional competitiveness and employment” Objective through the determination of regional criteria and an increase in the maximum rate of Community finance. In addition, the instruments providing aid for rural development and fisheries will be simplified and clarified. The LEADER+ Initiative, which supports innovative development strategies in rural areas, will be fully incorporated into general programming.

The complementarity of regional policy with the other Community policies is a key factor in economic and social cohesion. The innovation policy, education and training, equal opportunities for men and women and public procurement all have a territorial impact and coherence between competition and cohesion is a vital element. Regions whose development is lagging behind will remain eligible for state aid, as will the outermost regions for a transitional period. For the other regional programmes, the Commission is proposing to scrap the current system with its detailed map of areas eligible at sub-regional level. There will be consistency at the level of the priorities to be financed.

Reforming the management of the Structural Funds

The procedures for managing regional policy affect its efficiency. They impose uniform and tough rules. Programming, the partnership, part-financing and evaluation will remain the general principles of the future regional policy. Possible improvements to increase the utilisation of appropriations include:

  • A strategy increasingly based on the Union’s priority objectives.
    This strategy will be based entirely on the objectives set at Lisbon, Nice and Göteborg. It will also increase consistency with the main thrusts of economic policy (BEPG 2003). Each year, the European institutions will consider the progress made on the basis of a report from the Commission.
  • Simplified management increasingly based on subsidiarity.
    In programming terms, each Member States will prepare a policy document on its development strategy to serve as a basis for the adoption of the regional and national programmes. The programme complement and management by measures will disappear. The number of Funds is limited to three (ERDF, ESF and the Cohesion Fund) and each programme will be financed by one Fund only. For investments in the fields of transport and the environment, a single programming system will link the ERDF and the Cohesion Fund.
    Expenditure will be governed by rules on eligibility. Payments will be made at the level of each priority and not at the level of the measures. The system of payments on account and reimbursements will continue, as will automatic decommitment under the “N+2 rule”, which requires appropriations to be used within two years of programming.
    The extent to which the Commission is involved in inspections will depend on the Community part-financing. Under certain thresholds, the national system will suffice. However, to discharge its responsibilities for the implementation of the budget, the Commission will apply the closure of accounts procedures and financial correction mechanisms. There will also be heavier penalties and more rapid recovery of funds in the event of irregularities or fraud.
    The principle of additionality, under which Community resources must be over and above national resources, remains one of the key principles of the cohesion policy. The Commission will ensure that it is applied to programmes under the “Convergence” Objective.
    Finally, improved cooperation among the Member States, the local authorities, the social partners and civil society will consolidate the partnership. A greater role for the European Investment Bank (EIB) will improve the mobilisation of modern forms of financing, such as venture capital.
  • The concentration of resources will benefit the poorest Member States and regions, particularly in the new Member States.
    The Commission is proposing to abandon the present system of micro-zoning. For the “Regional competitiveness and employment” Objective, concentration will be at the levels of financial intensity through the introduction of minimum thresholds and of the three priorities announced: innovation and the knowledge economy, access and public services, preservation of the environment and hazard prevention.
  • Higher priority for results and quality.
    Evaluation before, during and after programmes is a vital element of their quality. The Commission is also proposing a Community performance reserve to reward the best performing Member States and regions. It hopes that the Member States will do likewise in order to cope rapidly with sectoral or local crises.
    The communication on the financial perspective proposes the establishment of a special instrument, the growth adjustment fund to permit a rapid reaction to economic recessions and trade crises. The Commission is proposing resources of 1 billion for this instrument from appropriations left unused by the ERDF and the ESF.

The Commission is basing its proposals on the socio-economic situation of the Union and the study of the impact of the regional policy, the other Community policies and the national policies. See the relevant SCADPlus factsheet.

For further information, consult the INFOREGIO website of the Directorate-general for regional policy:

  • the whole of the Third Report on economic and social cohesion;

Related Acts

Second progress report on economic and social cohesion [COM(2003) 34 final – Not published in the Official Journal].

See the relevant SCADPlus factsheet

First progress report on economic and social cohesion [COM(2003) 46 final – Not published in the Official Journal].

See the relevant SCADPlus factsheet

“Unity, solidarity, diversity for Europe, its peoples and its territory” – Second Report on economic and social cohesion [COM(2001) 24 final – Not published in the Official Journal].

See the relevant SCADPlus factsheets: progress and assessment; conclusions and recommendations; 10 questions for discussion.

Third progress report on cohesion – towards a new partnership for growth, jobs and cohesion

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Third progress report on cohesion – towards a new partnership for growth, jobs and cohesion

Outline of the Community (European Union) legislation about Third progress report on cohesion – towards a new partnership for growth, jobs and cohesion

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Regional policy > Review and the future of regional policy

Third progress report on cohesion – towards a new partnership for growth, jobs and cohesion

Last updated: 24.10.2005

General provisions ERDF – ESF – Cohesion Fund

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General provisions ERDF – ESF – Cohesion Fund

Outline of the Community (European Union) legislation about General provisions ERDF – ESF – Cohesion Fund

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These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Agriculture > General framework

General provisions ERDF – ESF – Cohesion Fund (2007-2013)

Document or Iniciative

Council Regulation (EC) No 1083/2006 of 11 July 2006 laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund and repealing Regulation (EC) No 1260/1999 [See amending acts].

Summary

The aim of the Regulation is to strengthen economic and social cohesion in order to promote the harmonious, balanced and sustainable development of the European Union (EU) regions for the period 2007-2013. European cohesion policy aims to respond to the challenges linked to economic, social and territorial inequalities, the acceleration of economic restructuring and the ageing of the population.

This Regulation:

  • defines the context for cohesion policy (including the Community strategic guidelines for cohesion, growth and employment);
  • defines the objectives to which the Structural Funds and the Cohesion Fund (hereinafter referred to as “the Funds”) are to contribute;
  • defines the criteria Member States and regions must meet to be eligible for the Funds;
  • defines the financial resources available and the criteria for allocating them;
  • defines the principles and lays down the rules on partnership, programming, evaluation, management, monitoring and inspection on the basis of responsibilities shared between the Member States and the Commission.

THREE NEW OBJECTIVES

A total of EUR 308.041 billion will be allocated to financing regional policy between 2007 and 2013 to work towards the three new objectives: Convergence, Regional Competitiveness and Employment and Territorial Cooperation. These objectives will supersede the former Objectives 1, 2 and 3 for the 2000-2006 programming period.

Convergence

The Convergence objective is quite close to the previous “Objective 1”. It aims to help the least-developed Member States and regions catch up more quickly with the EU average by improving conditions for growth and employment. It covers the Member States and regions whose development is lagging behind. The fields of action will be physical and human capital, innovation, knowledge-based society, adaptability to change, the environment and administrative effectiveness. It will be financed by the European Regional Development Fund (ERDF), the European Social Fund (ESF) and the Cohesion Fund.

The total resources allocated to this objective are EUR 251.163 billion, equivalent to 81.54 % of the total. The following are eligible:

  • for the Structural Funds (ERDF and ESF):
    1. regions where per capita GDP is below 75 % of the European average. They must be at NUTS II level. They will receive 70.51 % of the funds allocated for this objective;
    2. regions where per capita GDP has risen above 75 % of the European average (due to the statistical effect of EU enlargement including more deprived regions) will benefit from transitional, specific and degressive financing. They will receive 4.99 % of the total allocation;
  • for the Cohesion Fund: Member States whose per capita Gross National Income (GNI) is below 90 % of the European average and which are running economic convergence programmes. They will receive 23.22 % of the resources allocated for this objective. Regions where per capita GNI has risen to above 90 % of the European average (due to the statistical effect of EU enlargement including more deprived regions) will benefit from transitional, specific and degressive financing;
  • for specific financing from the ERDF: the outermost regions. The aim is to facilitate their integration into the internal market and to take account of their specific constraints (such as compensation for excess costs due to their remote location).

For this objective, the following ceilings apply to co-financing rates:

  • 75 % of public expenditure co-financed by the ERDF or the ESF. The ceiling can be raised to 80 % where the eligible regions are located in a Member State covered by the Cohesion Fund, and even to 85 % in the case of the outermost regions;
  • 85 % of public expenditure co-financed by the Cohesion Fund;
  • 50 % of public expenditure co-financed in the outermost regions (a new additional allocation from the ERDF to compensate for excess costs).

Regional Competitiveness and Employment

The Regional Competitiveness and Employment objective aims to strengthen the competitiveness, employment and attractiveness of regions other than those which are the most disadvantaged. It must help to anticipate economic and social changes, promote innovation, entrepreneurship, protection of the environment, accessibility, adaptability and the development of inclusive labour markets. It will be financed by the ERDF and the ESF.

The eligible regions are:

  • regions which fell under Objective 1 during the period 2000-06, which no longer meet the regional eligibility criteria of the Convergence objective, and which consequently benefit from transitional support. The Commission will produce a list of these regions. Once adopted, the list will be valid from 2007 to 2013;
  • all other EU regions not covered by the Convergence objective.

With regard to the programmes financed by the ESF, the Commission proposes four priorities within the European Employment Strategy (EES): to improve the adaptability of workers and businesses, to increase social inclusion, to improve access to employment and to implement reforms in the fields of employment and inclusion.

The resources intended for this objective total EUR 49.13 billion, equivalent to 15.95 % of the total and divided equally between the ERDF and the ESF. Of this amount:

  • 78.86 % is intended for the regions not covered by the Convergence objective.
  • 21.14 % is earmarked for transitional degressive support.

Under this objective, measures can be co-financed up to 50 % of public expenditure. The ceiling is 85 % for the outermost regions.

European Territorial Cooperation

The European Territorial Cooperation objective aims to strengthen cross-border, transnational and inter-regional cooperation. It is based on the old European INTERREG initiative and will be financed by the ERDF. It aims to promote common solutions for neighbouring authorities in the fields of urban, rural and coastal development, the development of economic relations and the creation of networks of small and medium-sized enterprises (SMEs). Cooperation will be based around research, development, information society, the environment, risk prevention and integrated water management.

13 Regions eligible for funding are those regions at NUTS III level which are situated along internal land borders, certain external land borders and certain regions situated along maritime borders separated by a maximum of 150 km. The Commission will adopt a list of eligible regions.

In the case of networks of cooperation and exchange of experience, the entire EU territory is eligible. The ceiling for co-financing is 75 % of public expenditure.

The resources intended for this objective total EUR 7.75 billion, equivalent to 2.52 % of the total, fully covered by the ERDF. This amount will be distributed between the different components as follows:

  • 73.86 % for financing cross-border cooperation;
  • 20.95 % for financing transnational cooperation;
  • 5.19 % for financing interregional cooperation.

PROVISIONS SPECIFIC TO THE THREE OBJECTIVES

Principles of operation

The Funds will provide assistance which complements national action, including action at regional and local levels. The Commission and the Member States will ensure that assistance from the Funds is consistent with the activities, policies and priorities of the EU and complementary to other European financial instruments.

The objectives of the Funds will be pursued according to multiannual programming and close cooperation between the Commission and each Member State.

Strategic approach

The Council adopts the Community strategic guidelines for Cohesion before 1 January 2007. These guidelines define the priorities and objectives of the cohesion policy for the period 2007-2013. They therefore contribute to the coherent and effective implementation of the structural funds

Based on these guidelines, Member States then adopt a national strategic reference framework. This framework therefore serves as the base for programming actions financed by the Funds. It ensures the that interventions of the funds are in-line with the strategic guidelines.

Operational programmes

The Member States’ operational programmes are to cover the period from 1 January 2007 to 31 December 2013.Operational programmes deal with only one of the three objectives and receive financing from a single Fund. The Commission appraises each programme proposed to determine whether it contributes to the objectives and priorities of:

  • the national strategic reference framework;
  • the Community strategic guidelines on cohesion.

Operational programmes relating to the Convergence and Regional Competitiveness and Employment objectives must include:

  • justification for the priorities in view of the strategic guidelines on cohesion and the national strategic reference framework;
  • information on the priority areas and their specific objectives;
  • a financing plan;
  • the implementing provisions for the operational programme;
  • a list of major projects linked to an operation comprising a set of works, activities or services whose total cost exceeds EUR 25 million in the case of the environment and EUR 50 million in the other fields.

Management, monitoring and inspections

Member States will be responsible for the management and control of operational programmes. They will ensure that the management and control systems are set up in accordance with the provisions of this Regulation. They will also prevent, detect and correct irregularities and recover amounts unduly paid.

The management and control systems of operational programmes set up by Member States will provide for:

  • the definition of the functions of the bodies involved in management and control;
  • compliance with the principle of separation of functions between these bodies;
  • procedures for ensuring the correctness and regularity of expenditure declared under the operational programme;
  • reliable accounting, monitoring and financial reporting systems;
  • a system of reporting and monitoring where the responsible body entrusts the execution of tasks to another body;
  • arrangements for auditing the functioning of the systems;
  • systems and procedures to ensure an adequate audit trail;
  • reporting and monitoring procedures for irregularities and the recovery of amounts unduly paid.

For each operational programme, the Member State will designate the following:

  • a managing authority (a national, regional or local public authority or a public or private body which manages the operational programme);
  • a certifying authority (a national, regional or local public authority or body which certifies statements of expenditure and applications for payment before they are sent to the Commission);
  • an audit authority (a national, regional or local public authority or body designated for each operational programme and responsible for verifying the effective functioning of the management and control system).

Information and publicity

The Member States and the managing authority for the operational programme will provide information on and publicise operations and programmes which receive co-financing. The information will be addressed to EU citizens and the beneficiaries, with the aim of highlighting the role of the Community and ensuring that assistance from the Funds is transparent.

BACKGROUND

The other provisions on cohesion policy for the period 2007-2013 are set out in the four specific regulations on:

  • the European Regional Development Fund (ERDF);
  • the European Social Fund (ESF);
  • the Cohesion Fund;
  • the European grouping of cross-border cooperation (EGCC).

Politically speaking, the financial basis of the cohesion policy for 2007-2013 is the Interinstitutional Agreement and the Financial Framework for 2007-2013.

SUMMARY TABLE

Objectives Financial instruments
Convergence ERDF
ESF
Cohesion funds
Regional competitiveness and employment ERDF
ESF
European territorial cooperation ERDF

References

Act Entry into force Deadline for transposition in the Member States Official Journal
Regulation (EC) No 1083/2006

1.8.2006

–

OJ L 210 of 31.7.2006
Amending act(s) Entry into force Deadline for transposition in the Member States Official Journal
Regulation (EC) No 1341/2008

24.12.2008

–

OJ L 348 of 24.12.2008
Regulation (EC) No 85/2009

30.1.2009

–

OJ L 25 of 29.1.2009

Regulation (EC) No 284/2009

9.4.2009

–

OJ L 94 of 8.4.2009

Regulation (EU) No 539/2010

25.6.2010

–

OJ L 158 of 24.6.2010
Regulation (EU) No 1310/2011

23.12.2011

–

OJ L 337 of 20.12.2011
Regulation (EU) No 1311/2011

20.12.2011

–

OJ L 337 of 20.12.2011
Regulation (EU) No 423/2012

23.5.2012

–

OJ L 133 of 23.5.2012

Subsequent amendments and corrections to Regulation No 1083/2006 have been incorporated into the basic text. This consolidated versionis for reference purposes only.

Related Acts

Commission Decision 2010/802/EU of 21 December 2010 exempting certain cases of irregularity arising from operations co-financed by the Structural Funds and by the Cohesion Fund for the 2000-2006 programming period from the special reporting requirements laid down by Article 5(2) of Regulation (EC) No 1681/94 and by Article 5(2) of Regulation (EC) No 1831/94 [Official Journal L 341 of 23.12.2010].

Commission Decision 2007/766/EC of 14 November 2007 drawing up the list of regions and areas eligible for financing under the Cross-border Cooperation Component of the Instrument for Pre-accession Assistance for the purpose of cross-border cooperation between Member States and beneficiary countries for the period 2007 to 2013 [Official Journal L 310 of 28.11.2007].

Commission Decision 2006/769/EC of 31 October 2006 drawing up the list of regions and areas eligible for funding from the European Regional Development Fund under the cross-border and transnational strands of the European Territorial Cooperation objective for the period 2007 to 2013 [Official Journal L 312 of 11.11.2006].

Commission Decision 2006/597/EC of 4 August 2006 drawing up the list of regions eligible for funding from the Structural Funds on a transitional and specific basis under the Regional Competitiveness and Employment objective for the period 2007-2013 [Official Journal L 243 of 6.9.2006].

Commission Decision 2006/596/EC of 4 August 2006 drawing up the list of regions eligible for funding from the Cohesion Fund for the period 2007-2013 [Official Journal L 243 of 6.9.2006].

Commission Decision 2006/595/EC of 4 August 2006 drawing up the list of regions eligible for funding from the Structural Funds under the Convergence objective for the period 2007-2013 [Official Journal L 243 of 6.9.2006].

European Regional Development Fund

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European Regional Development Fund

Outline of the Community (European Union) legislation about European Regional Development Fund

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Agriculture > General framework

European Regional Development Fund (ERDF) (2007-2013)

Document or Iniciative

Regulation (EC) No 1080/2006 of the European Parliament and of the Council of 5 July 2006 on the European Regional Development Fund and repealing Regulation (EC) No 1783/1999 [Official Journal L 210 of 31.7.2006] [See amending act(s)].

Summary

This Regulation establishes the tasks of the ERDF and the scope of its assistance with regard to the “Convergence”, “Regional competitiveness and employment” and “European territorial cooperation” objectives as defined in the general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund.

Objective

The objective of the ERDF is to help reinforce economic and social cohesion by redressing regional imbalances. This is achieved by supporting the development and structural adjustment of regional economies, including the conversion of declining industrial regions.

Scope

The ERDF focuses its assistance on a number of thematic priorities reflecting the nature of the “Convergence”, “Regional competitiveness and employment” and “European territorial cooperation” objectives. In particular, it contributes towards the financing of:

  • investment which contributes to creating sustainable jobs;
  • investment in infrastructure;
  • measures which support regional and local development, including support and services for businesses, in particular small and medium-sized enterprises (SMEs);
  • technical assistance.

Convergence

Under the “Convergence” objective, the ERDF focuses its assistance on supporting sustainable integrated economic development and the creation of sustainable jobs. Operational programmes in the Member States are aimed at modernising and diversifying regional economic structures, particularly in the following fields:

  • research and technological development (R&TD), innovation and entrepreneurship;
  • information society;
  • environment;
  • risk prevention;
  • tourism;
  • investment in culture
  • investment in transport;
  • energy;
  • investment in education;
  • investment in health and social infrastructures;
  • direct assistance for investment in SMEs.

Regional competitiveness and employment

This objective has three main funding priorities:

  • innovation and the knowledge economy, including the improvement of regional R&TD and innovation capacities, entrepreneurship and creation of new financial instruments for businesses;
  • environment and risk prevention, including restoring contaminated land, encouraging energy efficiency, promoting the use of clean technology in public transport and formulating plans to anticipate and manage natural and technology-related risks;
  • access to transport and telecommunications services of general economic interest, especially by improving secondary networks and encouraging access to information and communication technologies (ICT) for SMEs.

European territorial cooperation

ERDF assistance under this objective also targets three key areas:

  • development of cross-border economic, social and environmental activities through joint strategies for sustainable territorial development. This involves, for example, encouraging entrepreneurship, protection and management of natural and cultural resources, and the development of collaboration, capacities and the joint use of infrastructures;
  • establishing and developing transnational cooperation, including bilateral cooperation between maritime regions. The priorities are innovation, the environment, better accessibility and sustainable urban development;
  • reinforcing the effectiveness of regional policy by encouraging regional and local authorities to form networks and exchange experience.

At the request of the Member States, the Commission may propose rules on certain categories of expenditure to replace national rules.

It is the responsibility of the Member States to designate a single managing authority, a single certifying authority and a single audit authority.

As laid down in the general provisions, Member States can also delegate the task of managing authority and joint technical secretariat to the European grouping of territorial cooperation (EGTC), which is the legal cooperation instrument.

For a project to be selected under this objective, it must include beneficiaries in at least two countries which are acting jointly in at least two of these four fields: development, implementation, staffing and financing. In the case of transnational cooperation, a programme may be implemented in a single Member State, provided it has been presented by at least two countries. Networks for cooperation and exchange of experience must consist of at least three beneficiaries in at least three regions and at least two Member States, and these must be acting jointly in all four fields.

The operational programme must contain the following information:

  • an analysis of the strengths and weaknesses of the area covered by the cooperation;
  • justification for the priorities selected;
  • information on the priorities and the specific objectives of each;
  • a breakdown of the spheres of assistance by category;
  • a financing plan;
  • implementing rules;
  • an indicative list of major projects.

Financing conditions depend on the location. Part-financing may be provided up to:

  • 20 % for cross-border cooperation in NUTS III areas adjacent to the EU’s border areas;
  • 20 % for cross-border cooperation for operations including partners outside the area in question;
  • 10 % for cross-border and transnational cooperation to cover expenditure on operations in non-EU countries, if these operations are for the benefit of regions within the EU.

Specific types of area

The ERDF takes particular account of the specific nature of areas. Measures to help urban areas are incorporated in operational programmes, drawing on the experience of the URBAN initiative. ERDF action aims to resolve the economic, environmental and social problems of towns and cities.

As regards rural areasandareas dependent on the fishing industry, ERDF action must concentrate on economic diversification, such as:

  • infrastructure to improve accessibility;
  • telecommunications networks and services in rural areas;
  • development of new economic activities;
  • improving of links between urban and rural areas;
  • development of tourism and regeneration of rural areas.

For areas with natural handicaps, the ERDF helps finance investment in the improvement of accessibility, economic activities linked to cultural heritage, the sustainable use of resources and tourism development.

Finally, the ERDF helps finance the additional costs linked to the geographical situation of the outermost regions by subsidising:

  • freight transport services and the start-up of transport services;
  • operations linked to storage constraints, the maintenance of production tools, and lack of human capital in the local market.

Final provisions

The Regulation does not affect any assistance measures approved before its entry into force. Applications submitted under Regulation No 1783/99 remain valid, even though that Regulation was repealed as of 1 January 2007. The new Regulation applies as of 1 January 2007 and is to be reviewed by 31 December 2013.

References

Act Entry into force Deadline for transposition in the Member States Official Journal

Regulation (EC) No 1080/2006

1.8.2006

–

OJ L 210 of 31.7.2006
Amending Act Entry into force Deadline for transposition in the Member States Official Journal

Regulation (EC) No 397/2009

10.6.2009

–

OJ L 126 of 21.5.2009
Regulation (EC) No 437/2010

18.6.2010

–

OJ L 132 of 29.5.2010

Related Acts

GENERAL PROVISIONS

Council Regulation (EC) No 1083/2006 of 11 July 2006 laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund and repealing Regulation (EC) No 1260/1999.

See consolidated version .

ELIGIBLE REGIONS AND ZONES

Commission Decision 2006/769/EC of 31 October 2006 drawing up the list of regions and areas eligible for funding from the European Regional Development Fund under the cross-border and transnational strands of the European territorial cooperation objective for the period 2007 to 2013 [Official Journal L 312 of 11.11.2006].
See consolidated version .

Commission Decision 2006/597/EC of 4 August 2006 drawing up the list of regions eligible for funding from the Structural Funds on a transitional and specific basis under the Regional competitiveness and employment objective for the period 2007-2013 [Official Journal L 243 of 6.9.2006].

Commission Decision 2006/595/EC of 4 August 2006 drawing up the list of regions eligible for funding from the Structural Funds under the Convergence objective for the period 2007-2013 [Official Journal L 243 of 6.9.2006].

See consolidated version .

INDICATIVE ALLOCATION BY MEMBER STATE

Commission Decision 2006/609/EC of 4 August 2006 fixing an indicative allocation by Member State of the commitment appropriations for the European territorial cooperation objective for the period 2007-2013 [Official Journal L 247 of 9.9.2006].
See consolidated version .

Commission Decision 2006/594/EC of 4 August 2006 fixing an indicative allocation by Member State of the commitment appropriations for the Convergence objective for the period 2007-2013 [Official Journal L 243 of 6.9.2006].
Amended by:

Commission Decision 2010/475/EU [OJ L 232, 2.9.2010].

Commission Decision 2006/593/EC of 4 August 2006 fixing an indicative allocation by Member State of the commitment appropriations for the Regional competitiveness and employment objective for the period 2007-2013 [Official Journal L 243 of 6.9.2006].

Amended by:
Commission Decision 2010/476/EU [OJ L 232, 2.9.2010].

COMMUNITY STRATEGIC GUIDELINES

Council Decision 2006/702/EC of 6 October 2006 on Community strategic guidelines on cohesion [Official Journal L 291 of 21.10.2006].
The draft Community strategic guidelines on cohesion, growth and employment were adopted by the Council on 6 October 2006. They constitute an indicative framework for the establishment of a cohesion policy and the intervention of the Funds during the period 2007–2013.

Communication from the Commission of 5 July 2005, Cohesion Policy in Support of Growth and Jobs – Community Strategic Guidelines, 2007-2013 [COM(2005) 299 – Not published in the Official Journal].

ECONOMIC RECOVERY

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions of 16 December 2008 – Cohesion Policy: investing in the real economy [COM(2008) 876 final -Not published in the Official Journal].
Cohesion policy is the main source of Community funding of the real economy. The Commission presents a series of priorities concerning people, enterprises infrastructures and energy, as well as research and innovation, in order to contribute to the recovery of the European economy and social progress. It provides for an increase in public investment for the period 2007-2013.

Communication from the Commission to the European Council – A European Economic Recovery Plan [COM(2008) 800 final – Not published in the Official Journal].

ENERGY – HOUSING

Regulation (EC) No 397/2009 of the European Parliament and of the Council of 6 May 2009 amending Regulation (EC) No 1080/2006 on the European Regional Development Fund as regards the eligibility of energy efficiency and renewable energy investments in housing.
The European Economic Recovery Plan encourages measures promoting the energy efficiency of buildings. This Regulation offers a framework for public investments in this area. National investment plans should be developed at the most appropriate territorial level (national, regional or local). Cohesion policy funding should support the measures taken by the poorest households.

Thus, concerning housing expenditure related to energy efficiency and renewable energies, the contribution of the ERDF is extended to all Member States. Other expenditure related to housing is to be limited to States which acceded after 1 May 2004. Article 7 of Regulation 1080/2006, which governs the eligibility of this expenditure, is amended accordingly.

Another Normative about European Regional Development Fund

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic

Regional policy > Provisions and instruments of regional policy

European Regional Development Fund (ERDF) (2007-2013)

Document or Iniciative

Regulation (EC) No 1080/2006 of the European Parliament and of the Council of 5 July 2006 on the European Regional Development Fund and repealing Regulation (EC) No 1783/1999 [Official Journal L 210 of 31.7.2006] [See amending act(s)].

Summary

This Regulation establishes the tasks of the ERDF and the scope of its assistance with regard to the “Convergence”, “Regional competitiveness and employment” and “European territorial cooperation” objectives as defined in the general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund.

Objective

The objective of the ERDF is to help reinforce economic and social cohesion by redressing regional imbalances. This is achieved by supporting the development and structural adjustment of regional economies, including the conversion of declining industrial regions.

Scope

The ERDF focuses its assistance on a number of thematic priorities reflecting the nature of the “Convergence”, “Regional competitiveness and employment” and “European territorial cooperation” objectives. In particular, it contributes towards the financing of:

  • investment which contributes to creating sustainable jobs;
  • investment in infrastructure;
  • measures which support regional and local development, including support and services for businesses, in particular small and medium-sized enterprises (SMEs);
  • technical assistance.

Convergence

Under the “Convergence” objective, the ERDF focuses its assistance on supporting sustainable integrated economic development and the creation of sustainable jobs. Operational programmes in the Member States are aimed at modernising and diversifying regional economic structures, particularly in the following fields:

  • research and technological development (R&TD), innovation and entrepreneurship;
  • information society;
  • environment;
  • risk prevention;
  • tourism;
  • investment in culture
  • investment in transport;
  • energy;
  • investment in education;
  • investment in health and social infrastructures;
  • direct assistance for investment in SMEs.

Regional competitiveness and employment

This objective has three main funding priorities:

  • innovation and the knowledge economy, including the improvement of regional R&TD and innovation capacities, entrepreneurship and creation of new financial instruments for businesses;
  • environment and risk prevention, including restoring contaminated land, encouraging energy efficiency, promoting the use of clean technology in public transport and formulating plans to anticipate and manage natural and technology-related risks;
  • access to transport and telecommunications services of general economic interest, especially by improving secondary networks and encouraging access to information and communication technologies (ICT) for SMEs.

European territorial cooperation

ERDF assistance under this objective also targets three key areas:

  • development of cross-border economic, social and environmental activities through joint strategies for sustainable territorial development. This involves, for example, encouraging entrepreneurship, protection and management of natural and cultural resources, and the development of collaboration, capacities and the joint use of infrastructures;
  • establishing and developing transnational cooperation, including bilateral cooperation between maritime regions. The priorities are innovation, the environment, better accessibility and sustainable urban development;
  • reinforcing the effectiveness of regional policy by encouraging regional and local authorities to form networks and exchange experience.

At the request of the Member States, the Commission may propose rules on certain categories of expenditure to replace national rules.

It is the responsibility of the Member States to designate a single managing authority, a single certifying authority and a single audit authority.

As laid down in the general provisions, Member States can also delegate the task of managing authority and joint technical secretariat to the European grouping of territorial cooperation (EGTC), which is the legal cooperation instrument.

For a project to be selected under this objective, it must include beneficiaries in at least two countries which are acting jointly in at least two of these four fields: development, implementation, staffing and financing. In the case of transnational cooperation, a programme may be implemented in a single Member State, provided it has been presented by at least two countries. Networks for cooperation and exchange of experience must consist of at least three beneficiaries in at least three regions and at least two Member States, and these must be acting jointly in all four fields.

The operational programme must contain the following information:

  • an analysis of the strengths and weaknesses of the area covered by the cooperation;
  • justification for the priorities selected;
  • information on the priorities and the specific objectives of each;
  • a breakdown of the spheres of assistance by category;
  • a financing plan;
  • implementing rules;
  • an indicative list of major projects.

Financing conditions depend on the location. Part-financing may be provided up to:

  • 20 % for cross-border cooperation in NUTS III areas adjacent to the EU’s border areas;
  • 20 % for cross-border cooperation for operations including partners outside the area in question;
  • 10 % for cross-border and transnational cooperation to cover expenditure on operations in non-EU countries, if these operations are for the benefit of regions within the EU.

Specific types of area

The ERDF takes particular account of the specific nature of areas. Measures to help urban areas are incorporated in operational programmes, drawing on the experience of the URBAN initiative. ERDF action aims to resolve the economic, environmental and social problems of towns and cities.

As regards rural areasandareas dependent on the fishing industry, ERDF action must concentrate on economic diversification, such as:

  • infrastructure to improve accessibility;
  • telecommunications networks and services in rural areas;
  • development of new economic activities;
  • improving of links between urban and rural areas;
  • development of tourism and regeneration of rural areas.

For areas with natural handicaps, the ERDF helps finance investment in the improvement of accessibility, economic activities linked to cultural heritage, the sustainable use of resources and tourism development.

Finally, the ERDF helps finance the additional costs linked to the geographical situation of the outermost regions by subsidising:

  • freight transport services and the start-up of transport services;
  • operations linked to storage constraints, the maintenance of production tools, and lack of human capital in the local market.

Final provisions

The Regulation does not affect any assistance measures approved before its entry into force. Applications submitted under Regulation No 1783/99 remain valid, even though that Regulation was repealed as of 1 January 2007. The new Regulation applies as of 1 January 2007 and is to be reviewed by 31 December 2013.

References

Act Entry into force Deadline for transposition in the Member States Official Journal

Regulation (EC) No 1080/2006

1.8.2006

–

OJ L 210 of 31.7.2006
Amending Act Entry into force Deadline for transposition in the Member States Official Journal

Regulation (EC) No 397/2009

10.6.2009

–

OJ L 126 of 21.5.2009
Regulation (EC) No 437/2010

18.6.2010

–

OJ L 132 of 29.5.2010

Related Acts

GENERAL PROVISIONS

Council Regulation (EC) No 1083/2006 of 11 July 2006 laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund and repealing Regulation (EC) No 1260/1999.

See consolidated version .

ELIGIBLE REGIONS AND ZONES

Commission Decision 2006/769/EC of 31 October 2006 drawing up the list of regions and areas eligible for funding from the European Regional Development Fund under the cross-border and transnational strands of the European territorial cooperation objective for the period 2007 to 2013 [Official Journal L 312 of 11.11.2006].
See consolidated version .

Commission Decision 2006/597/EC of 4 August 2006 drawing up the list of regions eligible for funding from the Structural Funds on a transitional and specific basis under the Regional competitiveness and employment objective for the period 2007-2013 [Official Journal L 243 of 6.9.2006].

Commission Decision 2006/595/EC of 4 August 2006 drawing up the list of regions eligible for funding from the Structural Funds under the Convergence objective for the period 2007-2013 [Official Journal L 243 of 6.9.2006].

See consolidated version .

INDICATIVE ALLOCATION BY MEMBER STATE

Commission Decision 2006/609/EC of 4 August 2006 fixing an indicative allocation by Member State of the commitment appropriations for the European territorial cooperation objective for the period 2007-2013 [Official Journal L 247 of 9.9.2006].
See consolidated version .

Commission Decision 2006/594/EC of 4 August 2006 fixing an indicative allocation by Member State of the commitment appropriations for the Convergence objective for the period 2007-2013 [Official Journal L 243 of 6.9.2006].
Amended by:

Commission Decision 2010/475/EU [OJ L 232, 2.9.2010].

Commission Decision 2006/593/EC of 4 August 2006 fixing an indicative allocation by Member State of the commitment appropriations for the Regional competitiveness and employment objective for the period 2007-2013 [Official Journal L 243 of 6.9.2006].

Amended by:
Commission Decision 2010/476/EU [OJ L 232, 2.9.2010].

COMMUNITY STRATEGIC GUIDELINES

Council Decision 2006/702/EC of 6 October 2006 on Community strategic guidelines on cohesion [Official Journal L 291 of 21.10.2006].
The draft Community strategic guidelines on cohesion, growth and employment were adopted by the Council on 6 October 2006. They constitute an indicative framework for the establishment of a cohesion policy and the intervention of the Funds during the period 2007–2013.

Communication from the Commission of 5 July 2005, Cohesion Policy in Support of Growth and Jobs – Community Strategic Guidelines, 2007-2013 [COM(2005) 299 – Not published in the Official Journal].

ECONOMIC RECOVERY

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions of 16 December 2008 – Cohesion Policy: investing in the real economy [COM(2008) 876 final -Not published in the Official Journal].
Cohesion policy is the main source of Community funding of the real economy. The Commission presents a series of priorities concerning people, enterprises infrastructures and energy, as well as research and innovation, in order to contribute to the recovery of the European economy and social progress. It provides for an increase in public investment for the period 2007-2013.

Communication from the Commission to the European Council – A European Economic Recovery Plan [COM(2008) 800 final – Not published in the Official Journal].

ENERGY – HOUSING

Regulation (EC) No 397/2009 of the European Parliament and of the Council of 6 May 2009 amending Regulation (EC) No 1080/2006 on the European Regional Development Fund as regards the eligibility of energy efficiency and renewable energy investments in housing.
The European Economic Recovery Plan encourages measures promoting the energy efficiency of buildings. This Regulation offers a framework for public investments in this area. National investment plans should be developed at the most appropriate territorial level (national, regional or local). Cohesion policy funding should support the measures taken by the poorest households.

Thus, concerning housing expenditure related to energy efficiency and renewable energies, the contribution of the ERDF is extended to all Member States. Other expenditure related to housing is to be limited to States which acceded after 1 May 2004. Article 7 of Regulation 1080/2006, which governs the eligibility of this expenditure, is amended accordingly.

Iceland – Regional policy

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Iceland – Regional policy

Outline of the Community (European Union) legislation about Iceland – Regional policy

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Enlargement > Ongoing enlargement > Iceland

Iceland – Regional policy

acquis) and, more specifically, the priorities identified jointly by the Commission and the candidate countries in the analytical assessment (or ‘screening’) of the EU’s political and legislative acquis. Each year, the Commission reviews the progress made by candidates and evaluates the efforts required before their accession. This monitoring is the subject of annual reports presented to the Council and the European Parliament.

Document or Iniciative

Commission Report [COM(2011) 666 final – SEC(2011) 1202 final – Not published in the Official Journal].

Summary

The 2011 Report highlights that Iceland’s participation in the European Economic Area (EEA) has enabled it to achieve a high level of alignment with the European Union (EU) acquis. However, the country must strengthen its capacity to manage and monitor the cohesion policy.

EUROPEAN UNION ACQUIS (according to the Commission’s words)

In the field of regional policy, the acquis essentially comprises framework regulations and implementing regulations which do not require transposition into national law. They define the rules applicable to the development, approval and implementation of the Structural Funds and the Cohesion Fund, which each reflect the territorial organisation of the country. These programmes are negotiated and agreed with the Commission, but their implementation is the responsibility of the Member States. When choosing and implementing projects, Member States must comply with Community legislation in general, for example in the areas of public procurement, competition and the environment. They must have a suitable institutional framework and administrative capacities to ensure that the programming, implementation, monitoring and assessment of projects are carried out in a rational and cost-effective manner with regards to management and financial control.

EVALUATION (according to the Commission’s words)

Iceland has achieved limited progress in the field of regional policy and the coordination of European structural instruments. An overall action plan is being prepared in order to build the administrative capacity of the country. The country must also identify the institutions responsible for implementing the cohesion policy and for developing appropriate management mechanisms for financial control, monitoring actions and for evaluating programmes.