INFORSE-Europe logo

Search on the site:
 
Facebook INFORSE Facebook INFORSE-Europe CAUSE: 100% RE INFORSE Twitter
EnglishSpanish French Hungarian Slovak Polish German
 
About Us Contact Us Member Database Contact Database Support Us
PortugueseRomanian Turkish Bulgarian Macedonian Russian Danish
ACTIVITIES
  100% Renewables
Seminars & Events
  Projects
  LCS Network
PUBLICATIONS
  Press Releases
  Newsletter
  Reports
POLICY
United Nations
European Union
  Nuclear Energy
  Gender
  Structural Funds
EDUCATION

 

School Resources
  DIERET
  Study tours 
  Success Stories 
  Test yourself Quiz
  Useful Links
VISIT INFORSE.ORG
What are the EU Structural Funds (SF) ?

STRUCTURAL FUNDS
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 groups.
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.

Index of this Page:

· Structural Funds and Cohesion Fund in the period of 2000-2006: Read

· Structural Funds and Cohesion Fund in the period of 2007-2013: Read


Structural Funds and Cohesion Fund in the period of 2000-2006:


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),
the European Social Fund (ESF),
the Guidance Section of the European Agricultural Guidance and Guarantee Fund (EAGGF),
the Financial Instrument for Fisheries Guidance (FIFG).
 

ERDF
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.

ESF
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 labour market.

EAGGF
This fund contributes to the structural reform of the agricultural sector and to the development of rural areas.

FIFG
This is the specific EU Fund for the Structural reform of the fisheries sector.

The four funds work together to support economic and social development across EU.

The Structural Funds concentrate on clearly defined priorities:
69,7 % of the funding goes to regions whose development is lagging behind (Objective 1);
11.5% 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:

INTERREG III: Trans-European co-operation for balanced development (4875 million EUR);
EQUAL: Human resources development (2847 million EUR);
LEADER +: Assistance for rural development (2020 million EUR);
URBAN II: Economic and social regeneration of cities and of urban areas in crisis with a view to promoting sustainable urban development (700 million EUR).

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:
develop infrastructure, such as transport and energy;
extend telecommunications services;
help firms and provide training workers;
disseminate 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 authorities.

COHESION FUND
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,
has 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.

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 action plans.
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 (TEN) guidelines.
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
EUR (in 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):

Greece

Spain

Ireland

Portugal

3 388

12 357

584

3 388

(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:

Czech Rep.

Estonia

Cyprus

Latvia

Lithuania

Hungary

Malta

Poland

Slovakia

Slovenia

936,05

309,03

53,94

515,43

608,17

1 112,67

21,94

4 178,60

188,71

570,50

(million EUR commitments in 2004 price)


Structural Funds 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, comprising 278 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 budget item.

STRUCTURAL FUNDS
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.

ERDF and ESF
(Map pdf file 94 kB)

COHESION FUND

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 EUR 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).

EU Map
(Map pdf file 82 kB)


The Structural Funds and Cohesion Fund will be used to finance regional policy between 2007 and 2013 in the framework of the three new objectives, namely:
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, environmental protection and the development of labour markets which include regions not covered by the Convergence objective. It is financed by the ERDF and the 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 objective 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 in accordance 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.

Return to INFORSE-Europe's Structural Fund Description
More on Structural Fund Project Database