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60-628: The European Structural and Investment Funds (ESI Funds, ESIFs) are financial tools governed by a common rulebook, set up to implement the regional policy of the European Union , as well as the structural policy pillars of the Common Agricultural Policy and the Common Fisheries Policy . They aim to reduce regional disparities in income, wealth and opportunities. Europe's poorer regions receive most of

120-410: A budget of 1.4 billion units of account , much less than the original British proposal of 2.4 billion units of account, but has increased rapidly both proportionally and absolutely in the course of time. Since its creation, it has operated under changing set of rules that were standardised with Single European Act and is now in its 2014–2020 period. As part of its task to promote regional development,

180-591: A framework for exchanging experience between regional and local bodies in different countries. The Instrument for Pre-Accession and the European Neighbourhood Policy Instrument are the two financial instruments dedicated to support territorial cooperation between European Member States border regions and their neighbours in accession countries and in other partner countries of the Union. The former currently finances 10 programmes and

240-486: A high-level strategy for the Operational Programmes in the respective member state. The document provides an overview of the economic strengths and weaknesses of the member state's regions, and out the approach to future Structural Funds spending across the member state. An Operational Programme (OP) sets out a region's priorities for delivering the funds. Although there is scope for regional flexibility,

300-591: A region's priorities must be consistent with the member state's NSRF. There is an Operational Programme for each region in the EU. These OPs, just like the NSRF, have to be approved by the European Commission before any implementation. The European Commission has adopted a draft legislative package which will frame cohesion policy for 2014–2020. The new proposals are designed to reinforce the strategic dimension of

360-708: 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 objective is €283.3bn in current prices. 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,

420-577: Is mainly for the businesses, while the ESF is meant to contribute to the integration of the unemployed populations into the work life via training measurements. The funds are managed and delivered in partnership between the European Commission, the Member States and stakeholders at the local and regional level. In the 2014–2020 funding period, money is allocated differently between regions that are deemed to be "more developed" (with GDP per capita over 90% of

480-473: Is required. By far the largest amount of regional policy funding is dedicated to the regions designated as less developed. This covers Europe's poorest regions whose per capita gross domestic product (GDP) is less than 75% of the EU average. This includes nearly all the regions of the new member states, most of Southern Italy , Greece and Portugal, and some parts of the United Kingdom and Spain. With

540-430: Is significantly affecting their business, while 43% believe climate change has a minor effect. 25% of businesses in transition regions can also be categorized as "green and digital". This covers all European regions that are not covered elsewhere, namely those which have a GDP per capita above 90 percent of the EU average. The main aim of funding for these regions is to create jobs by promoting competitiveness and making

600-597: Is the Gross National Product per capita (GNP p.c.) level. This is subject to criticism based on the fact that GDP p.c. is unable to reflect the real socio-economic reality of regions. Some groups (e.g. Beyond GDP) and organisations propose the creation of a set of alternative indicators that could substitute the GDP and its derivates. The way the ESIFs are spent is based on a system of shared responsibility between

660-464: Is the smallest of the three Cohesion Policy objectives (in terms of budget), it gained a critical importance to address the key challenges of the European Union, particularly with some redefinitions of the Treaty of Lisbon ( entered into force on 1 December 2009), and for contributing to achieve the goals of Europe 2020, the EU's growth strategy. In its title on Economic, Social and Territorial Cohesion,

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720-467: Is to contribute to European sustainable development and competitiveness. It is intended to strengthen the European regions, promote territorial integration and produce coherence of European Union (EU) policies so as to contribute to the sustainable development and global competitiveness of the EU. Sustainable development is defined as development that "meets the needs of the present without compromising

780-582: Is €347bn: €201bn for the European Regional Development Fund, €76bn for the European Social Fund, and €70bn for the Cohesion Fund. The objectives setup shapes the main focus of interventions (eligible activities and costs) and the overall allocations of funds from the EU budget. This objective covers regions whose GDP per capita is below 75% of the EU average and aims at accelerating their economic development. It

840-856: The European Parliament and the Council of the European Union to define the tasks, priority objectives and the organisation of the Structural Funds (the Regional Policy framework), through the ordinary legislative procedure and consulting the Economic and Social Committee and the Committee of the Regions (leading to the publication of Regulations). The key indicator for the division of regions under singular objectives

900-807: The European Social Fund (ESF) and the Cohesion Fund . The European Investment Bank (EIB) has pledged to increasing its support for certain regions in its Cohesion Orientation for 2021–2027. Between 2023 and 2024, the Bank plans to allocate at least 40% of the overall finance it provides to projects in cohesion regions, increasing to at least 45% starting in 2025. The less developed areas of Europe will get at least half of this allocation, and increasing regions that receive its climate action and environmental loans. The European Investment Bank has given €44.7 billion to projects in cohesion areas for

960-638: The 1972 summit in Paris. Britain was going to be a large contributor to the CAP and the EEC budget, and sought to offset this deficit by having the ERDF established. They would then be able to show their public some tangible benefits of EEC membership. The ERDF was set to be running by 1973, but the 1973 oil crisis delayed it, and it was only established in 1975 under considerable British and Italian pressure. It started with

1020-410: The 2004–06 Integrated Regional Operational Programme (IROP), and its 2007–13 successor (ROP), are allocated through largely need-based project-selection mechanisms. Regions with low GDP receive more funds. However, within these regions, more funds go to relatively rich local areas with the best institutions. It has been argued that part of this can be explained by the frequent need to co-fund projects, and

1080-838: The 75% threshold even within the EU-15 received "phasing-in" support through the Regional competitiveness and employment objective. Despite the large investment requirements of the EU, cohesion areas continue to have lower investment rates. Only 77% of businesses in transitional regions and 75% of those in less developed regions invested, compared to 79% of businesses in more developed regions. Financial limitations are more common in less developed areas, especially for small and medium-sized enterprises (SMEs). SMEs in these regions are more than twice as likely (11%) than their counterparts in transition (5%) and non-cohesion zones (5%) to report having financial difficulties. Less developed regions also have

1140-528: The African Spanish exclave Melilla , located right next to the border with Morocco where African migrants regularly attempt to enter the territory of the EU by climbing a triple fence with razor wire. In 2009, Ecologists in Action called the location insulting and asked the EU to investigate why more than €1.1m was given to the project by the ERDF. The petition was dismissed, because the objectives of

1200-528: The Cohesion Fund. As with the remaining two objectives, the European Territorial Cooperation Objective is delivered by means of multi-annual programmes aligned on the Union's objectives and priorities, expressed on the multi-annual financial framework. Each programme has a managing authority and a Joint Technical Secretariat, headquartered within the area it serves. They are responsible for the correct implementation of

1260-1058: The Convergence Objective and the Regional Competitiveness and Employment Objective it aims at contributing to reduce regional disparities across Union's territory. The EUR 8.7 billion allocated to the European Territorial Cooperation objective represents 2.5% of the total budget for Cohesion Policy in 2007–2013 and is financed by the European Regional Development Fund (ERDF). It supports cross-border, transnational and interregional cooperation programmes, helping Member States to participate in European Union (EU) external border cooperation programmes supported by other instruments (Instrument for Pre-Accession and European Neighbourhood Policy Instrument). The European Territorial Cooperation Objective replaced

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1320-540: The EIB Group's overall loan in the European Union in 2022—or €28.4 billion—went to projects in cohesion areas. In the same year, projects with a combined investment cost of €146 billion were backed by EIB loans across the EU. For the EU as a whole, the European Investment Bank invested €16.2 billion in climate action and environmental sustainability in 2022 in cohesion areas. This is over half of

1380-519: The ERDF contributes towards financing the following measures: All awards of ERDF must comply with European Union competition law (including State Aid Law and Government procurement in the European Union ). Failure to comply with these legal requirements may result in irregularity rulings which carry financial implications. One project supported by the Fund is the Golf Club Campo de Golf in

1440-430: The EU average), "transition" (between 75% and 90%), and "less developed" (less than 75%), and additional funds are set aside for member states with GNI per capita under 90 percent of the EU average in the Cohesion Fund. Funding for less developed regions, like the Convergence objective before it, aims to allow the regions affected to catch up with the EU's more prosperous regions, thereby reducing economic disparity within

1500-419: The EU fall in different categories (so-called objectives), depending mostly on their economic situation. Between 2007 and 2013, EU regional policy consisted of three objectives: Convergence, Regional competitiveness and employment, and European territorial cooperation; the previous three objectives (from 2000 to 2006) were simply known as Objectives 1, 2 and 3. The policy constitutes the main investment policy of

1560-620: The EU's budget, equivalent to almost EUR 352 billion over seven years in 2014-2020, and EUR 392 billion in 2021-2027, dedicated to the promotion of economic development and job creation, and for helping communities and nations get ready for the European Union's transition to a more sustainable and digital economy . Cohesion lending had a large percentage of contributions to climate and environmental goals in 2021 and 2022. Sustainable energy and natural resources accounted for €10.2 billion, or 34% of overall European Investment Bank cohesion loans, compared to 26% for non-cohesion regions. 52% of loans in

1620-655: The EU's total EIB funding for climate change and environmental sustainability. In 2023, cohesion regions received 83% of the EIB's funding for urban and regional projects, and 65% of the funding for strategic transport projects was allocated to these areas. Also in 2023, the European Investment Fund spent €14.9 billion in cohesion areas, partnering with 300 institutions throughout Europe to provide finance for over 350 000 small firms, infrastructure projects, homes, and individuals. This resulted in €134 billion for

1680-458: The EU, restructure declining industrial areas and diversify rural areas which have declining agriculture. In doing so, EU regional policy is geared towards making regions more competitive, fostering economic growth and creating new jobs. The policy also has a role to play in wider challenges for the future, including climate change , energy supply and globalisation . The EU's regional policy covers all European regions, although regions across

1740-520: The EU, and is due to account for around of third of its budget, or EUR 392 billion over the period of 2021-2027. In its long-term budget, the EU's Cohesion policy gives particular attention to regions where economic development is below the EU average. Territorial cohesion is a European Union concept which builds on the European Spatial Development Perspective (ESDP). The main idea of territorial cohesion

1800-441: The European Commission and the member state authorities: Prior to 1989, funding decisions were taken by the European Commission. This was followed by a period where EU member states tried to maximize control, with little systematic project appraisal and a focus on a small number of large projects. Since 1994 more systematic, co-ordinated and complex methods of allocating resources start to be introduced. For example, most funds within

1860-433: The European Union for sustainability (€19.6 billion) went to projects in cohesion areas. The main resource of EU's territorial cohesion policy is EU's structural funds. There are two structural funds available to all EU regions: the European Regional Development Fund (ERDF) and the European Social Fund (ESF). The ERDF is intended to be used for the creation of infrastructure and productive job-creating investment and it

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1920-585: The European Union since 2021. Included in this is €24.8 billion in 2022 alone, or 46% of all EU signatures. From 2014 - 2020, they contributed a total of €123.8 billion to projects in cohesion areas. Financial instruments from the Bank have so far helped around 6,600 projects in Greece , Italy , Poland , Spain , Portugal , Lithuania , Romania , and Cyprus . In 2022, the EIB Group contributed €28.4 billion to initiatives in cohesion areas and €16.2 billion in climate action and environmental sustainability . 44% of

1980-401: The European Union. Examples of types of projects funded under this objective include improving basic infrastructure , helping businesses, building or modernising waste and water treatment facilities, and improving access to high-speed Internet connections. Regional policy projects in less developed regions are supported by three European funds: the European Regional Development Fund (ERDF),

2040-422: The European Union. fi-compass provides essential information for managing authorities, financial intermediaries, and any stakeholder interested in EU shared management financial instruments. This section explains the interplay between different political levels – European, national and regional – in determining the priorities for the Structural Funds and the guidelines for implementing regional projects. In general,

2100-683: The Treaty on the Functioning of the European Union establishes that 'the Union shall develop and pursue its actions leading to the strengthening of its economic, social and territorial cohesion'. By introducing the concept of territorial cohesion, the Treaty of Lisbon recognised a strong territorial dimension for the cohesion policy. This territorial approach requires a unique and modern governance system, combining different levels of government (European, national, regional and local). Member States thus conduct their economic policies and coordinate them for

2160-475: The ability of future generations to meet their own needs". The main aim of the territorial cohesion policy is to contribute to a balanced distribution of economic and social resources among the European regions with the priority on the territorial dimension. This means that resources and opportunities should be equally distributed among the regions and their populations. In order to achieve the goal of territorial cohesion, an integrative approach to other EU policies

2220-436: The addition of the newest member countries in 2004 and 2007 , the EU average GDP fell. As a result, some regions in the EU's "old" member states, which used to be eligible for funding under the Convergence objective, became above the 75% threshold. These regions received transitional, "phasing out" support during the previous funding period of 2007–13. Regions that used to be covered under the convergence criteria but got above

2280-662: The coherence of EU action. Regional policy of the European Union The Regional Policy of the European Union ( EU ), also referred as Cohesion Policy , is a policy with the stated aim of improving the economic well-being of regions in the European Union and also to avoid regional disparities. More than one third of the EU's budget is devoted to this policy, which aims to remove economic, social and territorial disparities across

2340-436: 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 EU average. As such, it covers the 13 new member states as well as Greece and Portugal. Sections below present information about objectives that have been defined for the programming period, which runs from 1 January 2007 to 31 December 2013. The overall budget for this period

2400-455: The funding that has been made available for national and regional aid programmes for the period 2007–2013. There are three priorities: A National Strategic Reference Framework (NSRF) establishes the main priorities for spending the EU structural funding a member state receives between 2007 and 2013. Each member state has its own NSRF. Adopting an NSRF is a new requirement of the Structural Funds regulations for 2007 to 2013. Each NSRF functions as

2460-551: The goal of completing the internal market with a total borders opening, by 31 December 1992. Regional competition would be tighter and a Cohesion Policy was needed to mitigate the negative side effects of market unification. The "objectives" were then created to discipline the capture of funds in terms of economic and social cohesion across the Union's territory. In the first multiannual financial framework, 1988–1999, there were seven objectives, which have been progressively reduced. Even though European Territorial Cooperation Objective

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2520-514: The importance of borders within Europe – both between and within countries – by improving regional cooperation. It allows for three different types of cooperation: cross-border, transnational and interregional cooperation. The objective is currently by far the least important in pure financial terms, accounting for only 2.5% of the EU's regional policy budget. It is funded exclusively through the ERDF. The cohesion policy accounts for almost one third of

2580-877: The largest items of the budget of the European Union . Apart from them, there are also other EU funds that have the potential to contribute to the regional development, in particular the European Agricultural Guarantee Fund (EAGF), the Just Transition Fund , the Connecting Europe Facility , the LIFE programme , the InvestEU Programme, the Horizon Europe , or the Erasmus+ . It is up to

2640-536: The latter 13 programmes. fi-compass is an advisory service platform provided by the European Commission in collaboration with the European Investment Bank Group. It offers access to publications, learning tools, and tailored advisory services related to financial instruments under the EU shared management funds. These financial instruments, including loans, guarantees, equity, and other risk-sharing mechanisms, support various projects across

2700-455: The least-developed regions. The ESF+ focuses on four key areas: increasing the 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 contributes to interventions in

2760-421: The less developed regions but more funding than the more developed regions. In transition regions, bank loans account for 69% of finance. Particularly transitional regions appear to profit from investments in more developed regions. There is a 34% of the impact on GDP and 47% of the impact on employment in some circumstances. In the green transition, 19% of firms in transition regions claim that climate change

2820-989: The lowest percentage of businesses who have made investments to combat climate change or reduce their carbon emissions , at 46%. In 2022, lending from the EIB Group under the SME/mid-cap financing policy reached €3.5 billion. In less developed regions, bank loans account for 49% of finance. Grants make up a larger portion of the financing in less developed areas, accounting for 13% of external financing. Many regions in Southern Europe and transition regions in higher-income Member States have seen economic downturn and population declines. There has been general growth in GDP per capita and employment, but regional differences within EU nations remain, with considerable discrepancies between capital and non-capital areas, particularly in younger Member States. Women's participation in

2880-453: The needed capacity to prepare applications. The ERDF supports programmes addressing regional development, economic change, enhanced competitiveness and territorial co-operation throughout the EU. Funding priorities include modernising economic structures, creating sustainable jobs and economic growth, research and innovation, environmental protection and risk prevention. Investment in infrastructure also retains an important role, especially in

2940-464: The organisation of European Territorial Cooperation: The European Territorial Cooperation Objective is financed by the European Regional Development Fund, whereas the remaining two objectives of the Cohesion Policy set for the 2007–2013 period are also financed by the European Social Fund (Regional Competitiveness and Employment Objective), and, in the case with the Convergence Objective, also

3000-544: The overarching priorities for the Structural Funds are set at the EU level and then transformed into national priorities by the member states and regions. At the EU level the overarching priorities are established in the Community Strategic Guidelines (CSG). These set the framework for all actions that can be taken using the funds. Within this framework, each member state develops its own National Strategic Reference Framework (NSRF). The NSRF sets out

3060-415: The policy and to ensure that EU investment is targeted on Europe's long-term goals for growth and jobs ("Europe 2020"). Through partnership contracts agreed with the commission, member states will commit to focussing on fewer investment priorities in line with these objectives. The package also harmonises the rules related to different funds, including rural development and maritime and fisheries, to increase

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3120-527: The previous INTERREG Community Initiative (in the period 2000–2006) and thus many European Territorial Cooperation programmes bear the name INTERREG. The "objectives" were introduced with the Single European Act as a criterion to make the Structural Funds spending more effective as Regional Policy started to be rationalised in a perspective of economic and social cohesion. The Single European Act, that entered into force in 1987, institutionalised

3180-438: The priorities for the respective member state, taking specific national policies into account. Finally, Operational Programmes for each region within the member state are drawn up in accordance with the respective NSRF, reflecting the needs of individual regions. The Community Strategic Guidelines (CSG) contain the principles and priorities of the EU's cohesion policy and suggest ways the European regions can take full advantage of

3240-616: The programme, both from a financial and from an operational perspective. Within European Territorial Cooperation, there are three types of programmes: In particular, cross-border actions are encouraged in the fields of entrepreneurship, improving joint management of natural resources, supporting links between urban and rural areas, improving access to transport and communication networks, developing joint use of infrastructure, administrative cooperation and capacity building, employment, community interaction, culture and social affairs. Together and in their specific fields, these programmes provide

3300-539: The promotion of entrepreneurship and environment protection are the main themes of this objective. The funding – €55bn in current prices – comes from the ERDF and the ESF . European Territorial Cooperation is an objective of the European Union 's Cohesion Policy for the period 2007–2013, serving its ultimate goal to strengthen the economic and social cohesion of the Union. Regions and cities from different Member States are encouraged to work together, learning from each other and developing joint projects and networks. With

3360-443: The promotion of the 'economic, social and territorial cohesion'. European Territorial Cooperation is a component of the economic policy framework of the Union. The current Regional Policy framework, sustained by Structural Funds, is set for a period of seven years, from 2007 to 2013. For this period, the following regulations (and the changes in detail made to them by means of subsequent regulations) are especially important in defining

3420-505: The real economy. The European Union invested €14 billion, 49% of which focused on economic and social integration. These funds are intended to raise around €42.7 billion. European Regional Development Fund During the 1960s, the European Commission occasionally tried to establish a regional fund, but only Italy ever supported it. Britain made it an issue for its accession in 1973 , and pushed for its creation at

3480-464: The regions concerned more attractive to businesses and investors. Possible projects include developing clean transport, supporting research centres, universities, small businesses and start-ups, providing training, and creating jobs. Funding is managed through either the ERDF or the ESF. In all regions, bank loans are the most prevalent type of external financing. In more developed regions, they account for 58% of finance. This objective aims to reduce

3540-448: The support, but all European regions are eligible for funding under the policy's various funds and programmes. The current framework is set for a period of seven years, from 2021 to 2027. Five ESIFs currently exist, they are: ESIFs constitute the great bulk of EU funding, the majority of total EU spending (nearly half of all ESIF allocations are realised as expenditure in the " real economy " through third party purchases ), and are among

3600-422: The workforce, including older women, has grown significantly in recent years, though notable regional differences remain. In cohesion regions, women's employment rates are considerably lower than men's, with gender gaps in employment reaching as high as 30% in parts of Southern Europe. These are regions whose GDP per capita falls between 75 and 90 percent of the EU average. As such, they receive less funding than

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