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Structural Funds and Cohesion Funds

Structural Funds and Cohesion Funds are funds allocated by the European Union for two related purposes: support for the poorer regions of Europe and support for integrating European infrastructure especially in the transport sector. Current programmes run from 1 January 2007 to 31 December 2013, with €277bn budget for Structural Funds, and €70bn for the Cohesion Fund.

Together with the Common Agricultural Policy, the structural and cohesion funds make up the great bulk of EU funding, and the majority of total EU spending.

For 2007-2013, new objectives have been defined, with a total budget amounting to €347.41bn in current prices.

Objectives for 2007-13

Convergence Objective (Formerly Objective 1)

This objective covers regions whose GDP per capita is below 75% of the EU average and aims at accelerating their economic development. It is financed by the ERDF, the ESF and the Cohesion fund. The priorities under this objective are human and physical capital, innovation, knowledge society, environment and administrative efficiency. The budget allocated to this instrument is €282.855bn in current prices. The outermost regions benefit from a special ERDF funding.

Regional Competitiveness and Employment Objective (Formerly Objective 2)

This objective covers all regions of the EU territory, except those already covered by the Convergence Objective. It aims at reinforcing competitiveness, employment and attractiveness of these regions. Innovation, the promotion of entrepreneurship and environment protection are the main themes of this objective. The funding – €54.965bn in current prices – comes from the ERDF and the ESF.

Territorial Cooperation Objective (Formerly Objective 3)

This objective builds upon the Interreg initiatives of the previous years, which were originally planned to be fully incorporated into the main objectives of the structural funds. Financed by the ERDF – 7.75 billion euro – its aim is to promote cooperation between European regions, as well as the development of common solutions for issues such as urban, rural and coastal development, economic development and environment management. This objective is divided in 3 strands:

cross-border cooperation
transnational cooperation
interregional cooperation.

The Funds

The European Regional Development Fund (ERDF)

The ERDF will support programmes addressing regional development, economic change, enhanced competitiveness and territorial co-operation throughout the EU. Funding priorities include research, innovation, environmental protection and risk prevention, while infrastructure investment retains an important role, especially in the least-developed regions.

The European Social Fund (ESF)

The ESF will focus on four key areas: increasing adaptability of workers and enterprises, enhancing access to employment and participation in the labour market, reinforcing social inclusion by combating discrimination and facilitating access to the labour market for disadvantaged people, and promoting partnership for reform in the fields of employment and inclusion.

The Cohesion Fund

The Cohesion fund funding is for Member States whose gross national income is below 90% of the EU average. The Cohesion Fund contributes to interventions in the field of the environment and trans-European transport networks. It applies to Member States with a Gross National Income (GNI) of less than 90% of the Community average, which means it covers the new Member States as well as Greece and Portugal. Spain will be eligible for the Cohesion Fund on a transitional basis.

A New Strategic Approach

This is the method by which overarching priorities for the Structural Funds are set at an EU level which member States and Regions then transform into national priorities.

At the EU Level the overarching priorities are established in the Community Strategic Guidelines (CSG) setting the framework for all actions that can be taken using the Funds. Within this framework, each Member State has its own National Strategic Reference Framework (NSRF) which sets the priorities for the Member State ensuring linkages with their own National policies. Finally, the Operational Programmes for each regions within the Member state are drawn up to reflect the needs of the regions restrained only by the NSRF.

EU Level - Community Strategic Guidelines
National Level - National Strategic Reference Framework for each Member State
Regional Level - Operational Programme for each region.

Community Strategic Guidelines

Community Strategic Guidelines (CSG) contains the principles and priorities of cohesion policy and suggest ways the European regions can take full advantage of the € 308 billion that has been made available for national and regional aid programmes over the next seven years. There are three priorities:

improving the attractiveness of Member States, regions and cities by improving accessibility, ensuring adequate quality and level of services, and preserving their environmental potential;

encouraging innovation, entrepreneurship and the growth of the knowledge economy by research and innovation capacities, including new information and communication technologies; and

creating more and better jobs by attracting more people into employment entrepreneurial activity, improving adaptability of workers and enterprises and increasing investment in human capital.

National Strategic Reference Framework

National Strategic Reference Framework (NSRF) establishes the main priorities for spending the EU Structural Funds a Member State receives between 2007 and 2013, each Member State has its own NSRF. The National Framework is a requirement of the new Structural Funds Regulations for 2007 to 2013, and will establish the high-level strategy for Structural Funds Operational Programmes in the Member State for that period. The document provides an overview of the economic strengths and weaknesses of the Member States regions, and sets out the approach to future Structural Funds spending across the Member State.

Operational Programmes

An Operational Programme (OP) sets out a Regions priorities for delivering the funds. Although there is Regional flexibility, a region’s priorities must be consistent with their Member States NSRF. There is an Operational Programme for each region in the EU. These OPs, just like the NSRF, have to be adopted by the Commission before any implementation.