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History and evolution of

EU Regional and Cohesion Policy

DG Regional Policy European Commission

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Cohesion Policy: an EU success story

• It is a policy of solidarity - the vehicle for delivering regional aid

• Through this policy, the EU seeks to ensure that:

- benefits of integration are as widely spread as possible

- development is as balanced as possible in geographical terms

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Origins of EU Cohesion Policy

• The EU founding fathers – representing the original 6 Member States - already had the vision, set out in the Treaty, that:

"the Community shall aim at reducing the disparities between the levels of

development of the various regions“

• This set the tone for subsequent policy…

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The need for a coordinated Community solution to regional imbalances also recognised in Commission reports:

1965: First Communication on Regional Policy: conclusions of three groups of experts

•The Assembly (today’s EP) expressed support in resolutions during the 1960s

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1970s: idea of structural aid for deprived regions starts taking shape

• 1968: creation of the Directorate General for Regional Policy

Jean Rey (1968) “Regional Policy in the Community should be as the heart is in the

human body…and should aim to reanimate human life in the regions which have been denied it”

• 1971: Council Resolutions: incentives to regional development in CAP and co-ordination of financial aids

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Start of real action with real resources

• 1973: “Thompson Report”...although the objective of continuous expansion (…) has been achieved, its balanced and harmonious nature has not…

• 1975: European Regional Development Fund (ERDF) set up for a 3-year test period. Aim was to correct regional imbalances due to:

– predominance of agriculture– industrial change– structural unemployment

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ERDF in the early days: eligible actions

1)investments in small enterprises creating at least 10 new jobs;

2) investments in infrastructure related to point 1;

3) infrastructure investments in mountainous areas, which also had to be eligible under the agriculture guidance fund.

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ERDF in the early days: initial operations

• Operations were purely national - financing predetermined projects in the Member States - little European influence

• MSs had to apply for ERDF support at project level

• Annual system of selecting and refinancing existing projects applied

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Regional Policy in the 1980s

• Key events: impetus for a more genuine ‘European’ Cohesion Policy:

- Single European Act- Accession of Greece, Spain and Portugal - Adoption of single market programme

• New countries brought increased regional disparities - funding became key means of bringing wealth up to EU average

• Set the basis for genuine cohesion policy designed to offset the burden of the single market for the less-favoured regions of the Community

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Regional Policy in the 1980s – strengthening Community action1988: European Council allocated ECU 64 billion to

Structural Funds over 5 years The Council adopted first regulation integrating

on the Structural Funds

• Introduced 4 key principles: - CONCENTRATION: focusing on poorest regions - PARTNERSHIP: involvement of regional and local partners - PROGRAMMING: multi-annual programming - ADDITIONALITY: EU expenditure must not substitute national

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1988 Reform: projects to programmes

• Major shift from annual project selection by Member States

• Moves towards a more strategic and multi-annual programming

• ……built on a wide partnership between regions, MSs and the EC

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Summary: 1989 – 1993

Integration of the structural funds

5 priority objectives

Standardised rules

Decentralised management

Increase of the structural fund budget from ECU 6.4 billion p.a. in 1988 to ECU 20.5 billion p.a. in 1993 (relative share jumping from 16% to nearly 31% of EU budget)

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1994 Reform: doubling the effort

• ECU 168 billion over 5 yrs for Structural and Cohesion Funds

• Community Support Frameworks (CSFs), Operational Programmes (OPs), Single Programming Documents (SPDs)

• 9% for 13 Community Initiatives: KONVER, RETEX, PYMES, URBAN…1% for innovative actions for first time

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Summary: 1994 - 1999

Introduction of objective 4

Simplification of procedures

New Cohesion Fund and Fisheries instruments

Increase of structural fund budget to ECU 32 billion p.a. (ca. 30% of EU budget)

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2000-2006: making a success of enlargement

• 2 key themes:i) Efficiency: simplification design and proceduresii) Preparation for enlargement

• ‘Agenda 2000’ paved the way for biggest ever enlargement of the EU - 10 new Member States joining in May 2004

• This historic enlargement brought 20% increase in the EU population, but only 5% increase in GDP

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2000-2006: making a success of enlargement

• €195 billion over 7 years for the 3 Structural Funds

• €18 billion over 7 years for the Cohesion Fund

• Other pre-accession instruments

- Phare: €10.9 billion (capacity building)- SAPARD: €3.6 billion (rural development)- ISPA: €7.3 billion (environment +

transport)

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Summary: 2000 - 2006

phasing-out of some objective 1,2 and 5b regions

3 common objectives

Introduction of pre-accession instruments for candidates (ISPA)

Increase of the structural fund budget to €38 billion p.a. (ca. 33% of EU budget)

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Cohesion Policy today: focus on growth and jobs

3 objectives

Community initiatives mainstreamed

All regions eligible

Increase to €50 bn p.a. (ca. 36% of EU budget)

Rural development and fisheries funds outside cohesion policy