EPIC Publishing Updates: The European Union Explained Chapter 9: Regional Policy and Cohesion
With a new financial perspective covering the years 2014 to 2020, it was only logical, that the member states and the Commission embarked on a reorganisation of the EU’s regional policy. Ever since the big bang enlargement of 2004/2007, some new entrants, such as Poland, Slovenia or Slovakia made remarkable economic transitions, while others, most notably Bulgaria and Romania continued to struggle. As shown in Table 10.2 the overall budget increased from 865 billion€ (2007 – 2013) to the current 987 billion€ (or around 140 billion€ annually).
Table 10.2 The EU’s Budget, (in billion€) Budget Heading Purpose 2014 - 20201A: Competitiveness for Growth and Jobs Research, education, training, energy, telecommunications, Social policy, transport 1251B: Economic, Social and Territorial Cohesion Regional policy 3252. Sustainable Growth Natural resources including agriculture, fisheries, rural development, environment 3733. Security and Citizenship Justice and home affairs, border protection, immigration and asylum, public health, consumer protection, culture, youth, dialogue with citizens 164. Global Europe All external action, humanitarian aid 595. Administration 626. Compensations A concession to Croatia, so that this new member state does not contribute more to the EU budget than it benefits in the first post accession years 27Total 987Source: European Commission, DG Financial Programming and Budget, December 2013 In addition to the largely unchanged budgets heading, the character of two of the three key funds also continues along established lines. As such, the Cohesion Fund’s focus remains on trans-European transport links and environmental infrastructure. The European Social Fund (ESF) still contributes to projects that are designed to improve professional training, life-long learning or social inclusion. Only the European Regional Development Fund (ERDF) now has a slightly changed agenda, given that it prioritizes projects related to innovation and research, a digital agenda, support for small and medium-sized enterprises (SMEs), as well as a low-carbon economy.
Still, some working mechanisms of the EU’s regional policy underwent significant changes: • First, a new category for so-called ‘transition regions’ was introduced, where despite significant prosperity advances, pockets of deprivation can still be found. • Second, the commission announced that funding will concentrate on a smaller number of priorities, which are linked to the five headlines of the Europe 2020 strategy. These five headings are employment rate, investment in research and development, climate change, the reduction in early school leavers, as well as an envisaged decrease in the number of people below the poverty line. • Third, and most strikingly, upon the insistence of Germany, so called ‘macro-conditionality’ was introduced, which allows the commission to suspend payments should a particular member state fail to correct macro-economic imbalances. This policy innovation is a direct consequence of the sovereign debt crises and the message is obvious: If you do not manage to establish stable financial and economic conditions, do not expect the EU Regional Policy to bail you
Table 10.5 lists the individual cohesion allocations for each member state. Despite its economic advances, Poland – as the largest of the new member states – receives the biggest slize of the budge cake with around 23 per cent. On the other hand, established member states such as Italy ((per cent) and Spain (8 per cent) continue to receive substantial contributions. One can also see that the biggest budget allocation is for less developed regions (164 billion€ or 51 per cent overall), followed by the Cohesion Fund (21 per cent), the more developed regions (15 per cent), and the transition regions (10 per cent). Funding for sparsely populated regions (0.4 per cent) and territorial cooperation (2.8 per cent) remains statistically almost insignificant.
Cohesion Fund ERDF and ESF Territorial cooperation Total Less developed Transition regions sparsely populated more developed regions regions regions Austria 66 823 226 1114Belgium 962 868 231 2061Bulgaria 2384 4623 145 7153Croatia 2676 5225 128 8029Cyprus 286 388 29 703Czech Republic 6562 13646 79 298 20585Denmark 64 230 199 494Estonia 1123 2198 49 3369Finland 272 911 142 1325France 3147 3927 395 5862 956 14288Germany 8750 7609 847 17207Greece 3407 6420 2105 2307 203 14443Hungary 6313 13452 416 318 20498Ireland 869 148 1017Italy 20333 1004 7006 998 29341Latvia 1412 2742 82 4236Lithuania 2145 4189 100 6434Luxembourg 39 18 57Malta 228 441 15 684Netherlands 908 342 1250Poland 24274 45917 2017 615 72823Romania 7251 13773 405 397 21826Slovakia 4361 8489 40 196 13086Slovenia 939 1134 763 55 2891Spain 1858 12201 432 10084 542 25116Sweden 184 1355 300 1840UK 2126 2355 5144 760 10364International cooperation 500 500Total 66362 1645279 32085 1387 49271 8948 322332
Less developed regions: < 75 per cent of EU average GDPTransition regions: 75 – 90 per cent of EU average GDPMore developed regions: > 90 per cent of EU average GDPSource: DG Commission, Regional Policy, December 2013