Structural Funds (SF) are the European Union's basic instruments for supporting
social and economic development in EU member states. They account for over
a third of the European Union budget. They are the result of the EU's regional
policy which is based on financial solidarity where part of Member States
contributions to the EU budget goes to the less prosperous regions and social
The first period of the Structural Funds was from 2000 to 2006 and the current
programmes run from 1 January 2007 to 31 December 2013.
of this Page:
Funds and Cohesion Fund in the period of 2000-2006: Read
Funds and Cohesion Fund in the period of 2007-2013: Read
Structural Funds and Cohesion Fund in the period
For the 2000-2006 period, the total budget of SF was account for one third
of the EU budget, or 213 billion EUR. (Part of this budget - 18 billion
EUR was spent by the Cohesion Fund.)
Up to 195 billion EUR was spent by the four Structural Funds:
the European Regional Development Fund (ERDF),
European Social Fund (ESF),
Guidance Section of the European Agricultural Guidance and Guarantee
Financial Instrument for Fisheries Guidance (FIFG).
Principal objective of ERDF is to promote economic and social cohesion
within the European Union through the reduction of imbalances between regions
or social groups.
This fund is the EU's financial instrument for investing in people.
Its mission is to help prevent and combat unemployment, to equip Europe's
workforce to face new challenges, and to keep people in touch with the
This fund contributes to the structural reform of the agricultural
sector and to the development of rural areas.
This is the specific EU Fund for the Structural reform of the fisheries
The four funds work together to support economic and social development
The Structural Funds concentrate on clearly defined priorities:
• 69,7 % of the funding goes to regions whose development is lagging behind
of the funding assists economic and social conversion in areas experiencing
structural difficulties (Objective 2);
• 12.3% of the funding promotes the modernisation of training systems and the
creation of employment (Objective 3) outside the Objective 1 regions where
such measures form part of the strategies for catching up.
There is a special
allocation of funds for the adjustment of Financial Instrument
of Guidance in the Fisheries Sector (FIFG) outside the Objective 1 regions (0.5%).
During the 1994-1999 Structural
Funds period there were 13 different Community Initiatives which
were implemented by more than 500 single programmes (5,35%). In line with
the new regulations,
these were reduced to a mere total of four:
III: Trans-European co-operation for balanced development (4875 million
Human resources development (2847 million EUR);
+: Assistance for rural development (2020 million EUR);
II: Economic and social regeneration of cities and of urban areas in crisis
with a view to promoting sustainable urban development (700 million
There are also provisions for innovative actions and technical
assistance to promote and experiment with new ideas on development (0.65%).
The Structural Funds finance multi-annual programmes and they act on economic
and social structures with the aim to:
infrastructure, such as transport and energy;
firms and provide training workers;
the tools and know-how of the information society.
Development activities financed by the SF must meet the specific needs identified
on the ground by regions or member states. All initiatives must respect
the environment and promote equal opportunities. Implementation is decentralised,
which means that it is usually the responsibility of the national and regional
Cohesion Fund (CF) is a structural instrument that helps Member States
to reduce economic and social disparities and to stabilise their economies
since 1994. The Cohesion Fund finances up to 85 % of eligible expenditure
of major projects involving the environment and transport infrastructure.
This strengthens cohesion and solidarity within the EU. Eligible are
the least prosperous member states of the Union whose gross national
product (GNP) per capita is below 90% of the EU-average.
For the Cohesion Fund 15.9 billion EUR (in
2004 prices) are available for the years 2004-2006. More than half of
the funding ( 8.49 billion EUR)
is reserved for the new Member States.
Based on the regulation No 1164/94 of 16 May 1994, a Member States is
eligible for Cohesion Fund, which:
• has a per capita gross national product (GNP), measured in purchasing
power parities, of less than 90 % of the Community average,
a programme leading to the fulfillment of the conditions of economic
convergence as set out in Article 104c of the Treaty establishing the
European Community (avoidance of excessive government deficits).
Four Member States: Spain, Greece, Portugal and Ireland were eligible
under the Cohesion Fund from 1 January 2000. The Commission`s mid-term
review of 2003 deemed Ireland (GNP average of 101 %) as ineligible under
the Cohesion Fund as of 1 January 2004. On 1 May 2004 with the EU enlargement,
all new Member States (Cyprus, Czech Republic, Estonia, Hungary, Latvia,
Lithuania, Malta, Poland, Slovakia and Slovenia) were qualified for the
Cohesion Fund support is conditional. The funding granted to a Member
State is liable to be suspended if the country fails to comply with its
convergence programme for economic and monetary union (stability and
growth pact) running i.e. an excessive public deficit (more than 3% of
GDP for Spain, Portugal and Greece, this threshold is being negotiated
separately for each of the ten new Member States according to their own
public deficit at the moment of the accession). Until the deficit has
been brought back under control, no new projects might be approved.
Projects to be eligible must belong to one of the two categories:
a) Environment projects helping to achieve the objectives of the EC treaty
and in particular projects in line with the priorities conferred on Community
Environmental policy by the relevant Environment and Sustainable Development
The Fund gives priority to drinking-water supply, treatment of wastewater
and disposal of solid waste. Reforestation, erosion control and nature
conservation measures are also eligible.
b) Transport infrastructure projects establishing or developing transport
infrastructure as identified in the Trans-European Transport Network
There has to be an appropriate funding balance between transport infrastructure
projects and environment projects.
For the years 2000-2006 the European Union provides over 28.212 million
2004 prices) for the Cohesion Fund. The funds available for the countries
are as follows:
Cohesion Fund for the four eligible Member States in average, 2000–06
(1) Ireland only until the end of the year 2003 (million
EUR commitments in 2004 price)
Cohesion Fund for the ten new eligible Member States in average, 2004–06:
(million EUR commitments in 2004 price)
and Cohesion Fund in the period of 2007-2013:
For the period 2007-2013, the
budget allocated to regional policy amounts to around 348 billion EUR,
billion EUR for the Structural Funds and 70 billion EUR for the Cohesion
Fund. This represents 35% of the Community budget and is the second largest
There are two Structural Funds:
• the European Regional Development Fund (ERDF) is currently the largest.
Since 1975 it has provided support for the creation of infrastructure and
productive job-creating investment, mainly for businesses;
• the European Social Fund (ESF), set up in 1958, contributes to the integration
into working life of the unemployed and disadvantaged sections of the population,
mainly by funding training measures.
(Map pdf file
Based on the European Commission proposal, the Cohesion Fund will be more
integrated into the operation of the mainstream Structural Funds.
On one hand, the regulation proposal establishing the Cohesion
Fund retains the eligibility criteria (threshold of 90 % GDP), the grant
limit (85 %). Besides this the conditionality of Cohesion Fund assistance
will also continue to apply.
On the other hand, the Commission proposes a switch from project-based support
to programme-based support. The Commission approval will be required only
in the case of major projects (25 million EUR for environmental and 50 million
for transport projects). Therefore, the Cohesion Fund managing authorities
will have increased responsibility in terms of selection, appraisal,
grant award, monitoring, management and ensuring speedy implementation to
avoid loss of assistance as programming spending discipline will apply.
The assistance will not only cover major transport and environmental protection
infrastructures, but also projects in the fields of energy efficiency, renewable
energy and intermodal, urban or collective transport.
The Commission proposal earmarked 26 % of the total allocation for the Structural
Policy instruments to the Cohesion Fund (70 billion EUR).
pdf file 82 kB)
The Structural Funds and Cohesion Fund
will be used to finance regional policy between 2007 and 2013 in the framework
• the "convergence" objective
to accelerate the convergence of the least developed EU Member States
and regions by improving growth and employment
conditions. This objective is financed by the ERDF, the ESF and the Cohesion
Fund. It represents 81.5% of the total resources allocated. The co-financing
ceilings for public expenditure amount to 75% for the ERDF and the ESF
and 85% for the Cohesion Fund;
• the "regional
competitiveness and employment" objective
to anticipate economic and social change, promote innovation, entrepreneurship,
protection and the development of labour markets which include regions
not covered by the Convergence objective. It is financed by the ERDF and
ESF and accounts for 16% of the total allocated resources. Measures under
this objective can receive co-financing of up to 50% of public expenditure;
• the "European
territorial cooperation" objective
to strengthen cooperation at cross-border, transnational and interregional
levels in the
fields of urban, rural and coastal development, and foster the development
of economic relations and networking between small and medium-sized enterprises
(SME's). This objective is financed by the ERDF and represents 2.5% of
the total allocated resources. Measures under the Territorial Cooperation
can receive co-financing of up to 75% of public expenditure.
Structural Funds and Cohesion Fund support for the three objectives
always involves co-financing. The rates of co-financing may be reduced
with the "polluter pays" principle or where a project generates
income. All projects must of course comply with EU legislation, particularly
with regard to competition, the environment and public procurement.
The problem is that although interest and demand in EU funding is on
the rise, the result is that EE and RE projects are
being contracted and spent very slowly. You can find more informations
about the distribution of the Structural Funds and the final evaluation
until 2010 here.
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