European Regional Policy and Funding
The European regional policy plays the key role in the European funding which is why it is crucial to understand the Brussels’s view of the regional development of the EU member states. Over 30 percent of the EU budget is devoted to the Regional Policy of the EU the main goal of which is to stimulate the economic development of all European regions and to reduce the economic disparities between the regions rather than the states. This is due to the fact that there are major disparities between the regions within virtually all member states of the EU.
All European regions are entitled to the European funding, however, the amount of the EU funds that is available to a particular region depends primarily on its economic situation. The current EU regional funding policy which is in effect until 2013 distributes the funds among the European regions according to three goals or criteria: Convergence, Regional competitiveness and employment, and European territorial cooperation.
Over 80 percent of the total EU regional funding is dedicated to the regions that meet the “Convergence criteria” or regions which do not achieve 75 percent of the EU average GDP (gross domestic product) in order to help them catch up with the most developed European regions. The Convergence funds most often cover improvement or construction of the basic infrastructure such as roads, water treatment facilities, communications infrastructure, etc. as well as support to businesses and projects which increase employment. The Convergence programme is mostly funding the new member states of the EU, East Germany, Southern Italy, most regions of Spain, Portugal and Greece as well as some UK’s regions.
Admission of new member states in the EU in 2004 and 2007 has lowered the average European GDP making some regions in the old member states ineligible for funding under the Convergence criteria because they exceed the 75 percent of the EU GDP. However, these regions were not simply “cut off” from the Convergence programme. According to the European regional policy for 2007-2013, the regions that met the Convergence criteria before the admission of the new states in the EU are entitled to the transitional support until 2013.
The funds through the Regional competitiveness and employment are intended to all regions of the EU which do not meet the Convergence criteria. About 16 percent of the total European regional funding is intended for the Regional competitiveness and employment objective and mostly covers projects that promote competitiveness, innovation, green technologies, research centres, small businesses, etc. This type of European funding is managed through the European Regional Development Fund (ERDF) or the European Social Fund (ESF). North East England is entitled to European funding under the Regional competitiveness and employment objective.
European territorial cooperation accounts for less than 3 percent of the European regional funding and is currently given the least attention by the European regional policy as much as financial support is concerned. Its goal is to improve regional and cross-border cooperation, and to reduce the importance of national borders between the member states of the EU.