EU Regional Policy & Cohesion Policy Local and Global Development Regional Economic Policies 2014/2015 Prof. Cristina Brasili Local and Global Development Regional Economic Policies 2014/2015 Prof. Cristina Brasili

Why a EU Regional Policy? Social cohesion and solidarity EU regional policy is an investment policy. It supports job creation, competitiveness, economic growth, improved quality of life and sustainable development. These investments support the delivery of the Europe 2020 strategy. Regional policy is also the expression of the EU’s solidarity with less developed countries and regions, concentrating funds on the areas and sectors where they can make the most difference. Regional policy aims to reduce the significant economic, social and territorial disparities that still exist between Europe's regions. Among the wealthiest regions are the urban conglomerates of London, Bruxelles and Hamburg. The richest country is Luxemburg, whose GDP per capita is 7 times higher than that of Romania and Bulgaria – the EU poorest countries. Leaving these disparities in place would undermine some of the cornerstones of the EU, including its large single market and its currency, the euro. Positive outcomes derive from the access to EU. An example is the case of Ireland: in1973 when entering the EU its GDP per capita was 64% of the EU average, while now the country has turned to be one of the wealthiest of the EU.

Evolution of the EU Regional Policy Programming Strategy ( ) StrategyEvolution & 1958 Trends ObjectivesSectorialTerritorial Geographic FocusNationalRegional/local Programming Approach SectorialIntegrated Reference PeriodShortMedium StakeholdersNationalRegional/Local Type of Impact CompensatorySynergic Source: Le istituzioni del federalismo - La nuova programmazione dei Fondi strutturali in Italia ( ), a cura di R. Leonardi e A. Ciaffi Maggioli Editore

History of the European Union Regional Policy Milestones 1957 In the preamble of Treaty of Rome EU Member States expressed the need for a coordinated community solution to regional problems and the correction of regional imbalances Two structural funds were created: the European Social Fund and the European Agricultural Guarantee Fund (EAGF) The European Regional Development Fund (ERDF) was established. The ERDF aims to strengthen economic and social cohesion in the European Union by correcting imbalances between its regions.

History of the European Union Regional Policy Milestones 1986 The Single European Act expressed the objective of economic and social cohesion that became reality in 1988 with the adoption of the first regulation which gave birth to the EU Cohesion Policy. “Cohesion Policy is the market’s 'visible hand’ which aims at balanced and sustainable development while fostering economic integration throughout the EU as a whole.” The Summit of the EU Council in Bruxelles on February 1988 modified the functioning of the solidarity funds – taking the name of Structural Funds – that received a budget of 68 billion ECU (based on 1997 price levels).

History of the European Union Regional Policy Milestones 1992 The 1992 European Union Treaty, entered into force in 1993, set cohesion among the priorities of the EU. In its art. 2 defined the mission of the EU as “Promotion of balanced and harmonious development of activities in the whole of the Community, of durable growth …etc…of economic and social cohesion and solidarity between the member states”. A cohesion Fund was also created in order to support environmental and infrastructural projects in the poorest Member States The Summit of the EU Council in Edinburgh in december 1993 decided to allocate about 177 billion ECU (based on 1999 price levels) to the Structural Funds, i.e. 1/3 of the EU budget. European Maritime and Fisheries Fund (EMFF)

History of the European Union Regional Policy Milestones 1997 The treaty of Amsterdam stressed the importance of Cohesion and included a paragraph on Employment, expressing the need of a common action to increase its level within the whole EU The Summit of the EU Council in Berlin (March 1999) issued a large reform of the Structural Funds and changed the mechanism of functioning of the Cohesion Fund that was endowed of more than 30 billion euros per year (a total of 213 billion euro in the seven year period). The candidate countries from Central and Eastern Europe accessing the EU are supported through a special programme PHARE, whose objective is to improve social and economic development of those countries. PHARE works through two instruments: the Instrument for Pre- Accession Assistance (IPA) and the Special Accession Programme for Agriculture and Rural Development (SAPARD).

The 1988 Reform of the European Structural Funds The 1988 reform marked an important change for the ESF in several respects: A new, more extensive vision of European solidarity was established: ESF support was extended to embrace the dimension of social cohesion in order to support poorer regions with high unemployment; Multi-annual programmes planning made it possible to concentrate on long-term objectives; The principle of partnership was born and has been developed steadily since. Instead of administering thousands of projects itself, the Commission now shares the programming and administration of ESF resources with the Member States and the regions.

The 1988 Reform of the European Structural Funds (ESF) The Four guiding principles 1.Concentration on a limited number of objectives with the focus on the least developed regions; 1.Multi-annual programming based on analysis, strategic planning and evaluation; 1.Additionality ensuring that Member States do not substitute national with EU expenditure; 1.Partnership in the design and implementation of programmes involving national, subnational and EU actors, including the social partners and non- government organisations, ensuring ownership and transparency of the interventions.

Obj. 1 and Obj. 2 Regions ( ) Programmi speciali Regioni dell’obiettivo 1 Regioni prossime ad uscire dall’obiettivo 1

Priority Regions under the programming period Obj. 1 Obj. 2 Obj. 5b Obj. 6

The European Structural Funds (ESF) European Structural and Investment Funds Five main Funds work together to support economic development across all EU countries, in line with the objectives of the Europe 2020 strategy: European Regional Development Fund (ERDF) European Regional Development Fund European Social Fund (ESF) European Social Fund Cohesion Fund (CF) Cohesion Fund European Agricultural Fund for Rural Development (EAFRD) European Agricultural Fund for Rural Development European Maritime and Fisheries Fund (EMFF) European Maritime and Fisheries Fund Every EU region may benefit from the ERDF and ESF. However, only the less developed regions may receive support from the Cohesion Fund.

The European Structural Funds (ESF) The European Regional Development Fund The ERDF aims to strengthen economic and social cohesion in the European Union by correcting imbalances between its regions. The ERDF focuses its investments on several key priority areas. This is known as ‘thematic concentration’: Innovation and research; The digital agenda; Support for small and medium-sized enterprises (SMEs); The low-carbon economy. The ERDF resources allocated to these priorities will depend on the category of region. In more developed regions, at least 80 % of funds must focus on at least two of these priorities; In transition regions, this focus is for 60 % of the funds; This is 50 % in less developed regions. Furthermore, some ERDF resources must be channelled specifically towards low-carbon economy projects: More developed regions: 20%; Transition regions: 15%; and Less developed regions: 12%.

The European Structural Funds (ESF) The European Social Fund The ESF invests in people, with a focus on improving employment and education opportunities across the European Union. It also aims to improve the situation of the most vulnerable people at risk of poverty. The ESF investments cover all EU regions. More than € 80 billion is earmarked for human capital investment in Member States between 2014 and 2020, with an extra of at least € 3.2 billion allocated to the Youth Employment Initiative. For the period, the ESF will focus on four of the cohesion policy’s thematic objectives: 1.promoting employment and supporting labour mobility 2.promoting social inclusion and combating poverty 3.investing in education, skills and lifelong learning 4.enhancing institutional capacity and an efficient public administration In addition, 20 % of ESF investments will be committed to activities improving social inclusion and combating poverty. This is known as thematic concentration.

The European Cohesion Fund The Cohesion Fund is aimed at Member States whose Gross National Income (GNI) per inhabitant is less than 90 % of the EU average. It aims to reduce economic and social disparities and to promote sustainable development. In the the budget of the EU Cohesion Fund was 2,5 billion euros per year (18 billion in the whole period). Geographic Distribution of the funds* of the Cohesion Fund in the period (based on 1999 price levels) * in million € The European Structural Funds (ESF)

EU Cohesion Policy Sources: - Bollettino d’informazione Settembre N. 149 inforegio Commissione europea

EU Cohesion Policy For the period, the Cohesion Fund concerns Bulgaria, Croatia, Cyprus, the Czech Republic, Estonia, Greece, Hungary, Latvia, Lithuania, Malta, Poland, Portugal, Romania, Slovakia and Slovenia. The Cohesion Fund allocates a total of € 63.4 billion to activities under the following categories: 1.trans-European transport networks, notably priority projects of European interest as identified by the EU. The Cohesion Fund will support infrastructure projects under the Connecting Europe Facility;priority projects of European interestConnecting Europe Facility 2.environment: here, the Cohesion Fund can also support projects related to energy or transport, as long as they clearly benefit the environment in terms of energy efficiency, use of renewable energy, developing rail transport, supporting intermodality, strengthening public transport, etc.

Structural Funds : eligible regions and disbursements s/docoffic/official/deci_it.htm

To study EU, INFOREGIO, No 26 June 2008, EU Cohesion Policy : Investing in Europe’s future Le istituzioni del federalismo Regione e Governo locale La nuova programmazione dei fondi strutturali in Italia ( ) N. 2 anno 2001 Maggioli Editore Da pag. 325 a pag 359 A reformed cohesion policy for Europe: the main investment policy for jobs and growth History of the European Union Regional policy