Regional Policy in European Union

1. Regional Policy in European Union • All regions in the world do not benefit from strong economic and social conditions,they don’t have the same technology or geographical advantages. • Regional policy transfers resources from affluent to poorer regions. It is both an instrument of financial solidarity and a powerful force for economic integration.

2. The European Union was created as “an urgent duty of the nations of Europe to create an economic and political union in order to assure security and social progress’’…so as to secure common political and economic action for the integration and proper development of their common resources.

3. Legislation led to the creation of a Regional Policy, that attempts to aid the most disadvantaged regions through community based assistance. • The current Regional Policy is focused on solidarity between the Member States and the results are tangible.

4. Solidarity and Cohesion • The two words, solidarity and cohesion sum up the values behind regional policy in the EU: • Solidarity because the policy aims to benefit citizens and regions that are economically and socially deprived compared to EU averages. • Cohesion because there are positive benefits for all in narrowing the gaps of income and wealth between the poorer countries and regions and those which are better off.

5. THE CURRENT REGIONAL POLICY • Europe’s Regional Policy is premised on financial solidarity for all Union Member States. • The goal is to reduce disparities of regions and countries through the funding of tangible projects. • The programme attempts to decrease unemployment rates, increase mobility, increase technology and education and assist rural and fishing areas in modernization and environmental preservation. • The Union Commission aspires to have all regions equally competitive in terms of a single market.

6. Structural Funds: • There are four structural funds. 1-European Regional Development Fund (ERDF) 2-European Social Fund (ESF) 3-European Agricultural Guidance and Guarantee Fund (EAGGF, Guidance Section) 4-Financial Instrument for Fisheries Guidance (FIFG)

7. A special Solidarity Fund • Cohesion Fund , helps finance projects relating to the environment and transport networks in those Member States whose GDP is below 90% of the EU average, namely: Spain, Greece, Ireland and Portugal.

8. STRUCTURAL FUNDS The European Regional Development Fund Two main objectives: 1-The development and structural adjustment of regions whose development is lagging behind. 2-The economic redevelopment and development of areas with structural problems, urban areas in difficulty, crisis-hit areas dependent on fisheries and areas heavily dependent on services.

9. This fund gives money in support of financing infrastructure, job creation measures, local development projects and aid for small firms.

10. The European Social Fun(ESF) Two basic roles: Assist employees for adjusting to industrial changes through vocational and retraining initiatives and increasing mobility, this programme promotes improving employment opportunities and job creation. It is anticipated that these changes will both raise the standard of living (Art. 146) and “contribute to strengthening economic and social cohesion in the Community (Art. 159)” This fund therefore assists projects focused on promoting the return of the unemployed and groups that face discrimination to the workforce.

11. The European Agricultural Guidance and Guarantee Fund(EAGGF) • It designed to take into account the Common Agricultural Policy (CAP) and rural development initiatives.

12. The Financial Instrument for Fisheries Guidance(FIFG) It contributes to the provisions of the Regional Development Policy and the Common Fisheries Policy. • Aim of this fund is to provide support in order to promote the modernisation and restructuring of the fishing sector, while supporting objectives of the common fisheries policy. • The goal is to reach a sustainable balance “between fisheries resources and their exploitation”

13. THE COHESION FUND It is unique as it was created specially to assist those member states whose per capita GNP is less than 90% of the community average. It may assist with environmental projects and transport infrastructure projects. Aim of the fund is to reduce disparities in the poorest countries as quickly as possible.

14. THE REGIONAL AND COMMUNITY OBJECTIVESThree main objectives: • Objective 1 focuses on regions whose development is lagging behind. • The purpose of this objective is to close the development gap between the regions. As a result funding for this objective is generally directed toward building a stronger basic infrastructure in terms of transportation, energy, waste treatment, telecommunications, health and education. • Funding is only granted to those areas in which the development level (GDP) is less than 75% of the Community average. Fifty regions are currently assisted and they receive 70% of the funding obtainable through the four Structural Funds. Objective 1 benefits 22% of the Union’s population.

15. Objective 2 is concerned with regions undergoing economic and social conversion. • It is focused on areas that are facing industrial decline, high unemployment and in which rural, urban and fishery areas are suffering structural difficulties. • Funding is granted for activities that produce alternatives to the traditional economic activities that exist in these regions. Objective 2 currently assists 18% of the population with 10.5% of total funding used for this purpose.

16. Objective 3 is aimed at improving Human Resources. • This objective applies to all European Member States and it supports adaptation and modernisation of the education and training systems and employment and promotion policies. It also searches for the creation of employment, attempts to combat the social exclusion and promote equal opportunities for all employees. • Projects under Objective 3 are financed with 11.3% of the funding which is provided totally by the ESF.

17. Six Basic Rulescreated to determine how funding will be distributed. 1-Concentration: the distributed resources should be concentrated geographically. 2-Programme planning: resources are given as part of a programme previously approved by the Member states and the Commission. 3-Additionality: the Community will finance programmes only partially, contributing to the national measures.

18. 4-Partnership:in the intervention, all of the parts must cooperate as partners. 5-Monitoring and evaluation: the Community will make a continuous monitoring of the development of projects to make sure projects are under control and are meeting the main objectives. 6-Consistency and complementarity’s with other policies: the decisions and measures taken must by consistent with conditions established by the EC treaty and with other Community policies.

19. Community Initiatives • The Community Initiatives are comprised of four programmes focused on resolving problems, which are of main concern to the whole Union. Each special programme is resourced by only one Fund, and the four initiatives absorb 5.35% of the Structural Budget. • Each project will focus on a unique aspect so as to help the diverse regions improve in areas where they are lagging behind.

20. The “Interreg II” project • It concentrates on improvements to the national and inter-state cooperation and cross-border issues. • It promotes the elaboration of common strategies for establishing authentic cross-border areas of economic activity making in this way, relations between regions more flexible and profitable. • This programme is fully financed by the ERDF.

21. The “Urban II” • It focuses on aiding areas affected by high unemployment, inadequate social networks, poor housing and ruined buildings. • Regeneration of constructions can be achieved and declining of urban areas can be slowed down. • This assistance tries to introduce new strategies to achieve economic and social re-creation and is totally resourced by the ERDF.

22. “Leader +” • It aims to integrate the active rural societies and the economies with strategies directed toward sustainable improvement. • This objective includes investment in agricultural companies and helping to promote their local products. • The EAGGF Guidance section finances the Leader programme.

23. “Equal”, • It tries to diminish possible situations that can lead to inequalities and discrimination in the work place. • There are people that because of gender, race, religion, age, ethnic origin or any other characteristics are excluded from a job or position. • In order to promote a globalised, modern economy this initiative attempts to combat these factors and promotes the integration of different and new ways to surpass discrimination.

24. Innovative Actions • The Commission is looking forward to supporting new innovative ideas to improve the development of regional policies. The intent of this programme is to encourage experimentation within regions in order to reach a higher level of competition in their economies and to meet the information society challenges.

25. The Commission, under the ERDF, has established three basic topics for innovative actions in 2000-2006: • Regional economies based on knowledge and technological innovation • e-EuropeRegio/ the information society at the service of regional development • Regional identity and sustainable development

26. With 0.5% of the Structural Funds budget the programmes of Innovative Actions are resourced so as to elaborate new strategies and the experimental phase of projects. • Projects can be included under one of the basic Priority Objectives if they are approved positively in the initial phase.

27. THE BUDGET • The total budget assigned for the Structural Funds and the Cohesion Fund in 2000-2006 is of € 213 billion. • It is distributed among the different Priority Objectives, the Innovative Actions,the Community Initiatives and Fisheries projects outside of the Objective 1.

28. IS THE POLICY WORKING? Examples of initiatives undertaken with Structural Funds:

29. Italy • In Italy the Union contributed almost € 20 million to a € 66 million Rural Development project in the Trentino province. • The project consisted of numerous small projects like the construction of an artificial lake on the slopes of Monte Carno. • Water can now be collected in this lake from the river and distributed throughout the village. It is a delightful pleasure to the apple growers in the village.

30. Lunen • Germany where an old coal mine was converted into a future-oriented centre of technology and innovation. • The creation of LUNTEC cost a total of € 8.5 million with the Union contributing € 2.9 million. • LUNTEC has rented out 70% of its space since 1995 to a variety of interesting and innovative organisations. Such a project is greatly supportive of industrial change.

31. How Successful the Regional Policy • Structural Funds and the Cohesion Fund have already contributed substantially reducing regional disparities • Dynamic regions grow at a faster pace than poorer regions, the results of the Regional Policy have been significant. • The poorest regions in the current EU comprise 10% of the EU population, and they saw a per capita GDP rise from 54.2% of the Community Average in 1987 to 61.1% in 1997.

32. Greece, Portugal, Ireland and Spain, the least prosperous nations, witnessed the national per capita GDP rise from 67.6% in 1988 to 78.8% in 1998.

33. In the Objective 1 regions, the Funds contributed about 1/2 % per year growth between 1989 and 1999. • The cumulative effect added about 10% to GDP in Greece, Ireland, and Portugal and over 4% in Spain. • A third or more of the economic convergence of these countries would not have happened without the Structural Funds.

34. THE FUTURE • If all Member States combine the financial support of the Structural and Cohesion Funds with support for Regional Policy, in time disparities should be reduced and hopefully eliminated. • With many of the Applicant countries physically close to some for the strong EU nations, these Accession states have better potential for their economies to be enhanced and for the goal of solidarity to be realised.