Structural & Cohesion Funds

The European Union comprises 27 Member States which form a community and internal market of 493 million citizens. At the same time, however, the economic and social disparities among these countries and their 268 regions are great. One region in four has a GDP (Gross Domestic Product) per inhabitant under 75% of the average of the European Union of 27.

Policy:

1. The Structural Funds budget and the rules for its use are decided by the Council and the European Parliament on the basis of a proposal from the European Commission.

2. The Commission makes a proposal after having consulted closely with Member States over the Community strategic guidelines on cohesion. This is the pillar of the policy which gives it a strategic dimension. The guidelines guarantee that Member States adjust their programming in line with the priorities of the Union to encourage innovation and entrepreneurship, foster the growth of a knowledge-based economy and create more and better jobs.

3. Each Member State prepares a National Strategic Reference Framework (NSRF), coherent with the Strategic Guidelines, over the course of an ongoing dialogue with the Commission. The rules outline that, after the adoption of the strategic guidelines, a Member State has five months to send its NSRF to the Commission. That document defines the strategy chosen by the Member State and proposes a list of operational programmes that it hopes to implement. The Commission has three months after receipt of the NSRF to make any comments and to request any additional information from the Member State.

4. The Commission validates certain parts of the NSRF that require a decision, as well as each operational programme (OP). The OPs present the priorities of the Member State (and/or regions) as well as the way in which it will lead its programming. An obligation exists however for the countries and the regions concerned by the convergence objective: 60% of expenditure must be allocated to the priorities arising from the Union's strategy for growth and jobs (called the Lisbon strategy). For countries and regions concerned by the competitiveness and employment objective the percentage is 75%. For the 2007-2013 period, around 450 operational programmes will be adopted by the European Commission. Economic and social partners as well as civil society bodies participate in the programming and management of the OPs.

5. After the Commission has taken a decision on the operational programmes, the Member States and its regions then have the task of implementing the programmes, i.e. selecting the thousands of projects, and to monitor and assess them. All this work takes place through what are known as management authorities in each country and/or each region.

6. The Commission commits the expenditure (to allow the Member State to start the programmes)

7. The Commission pays the certified expenditure per Member State

8. The Commission monitors each operational programme alongside the Member State.

9. Strategic reports are submitted by the Commission and by the Member States throughout the 2007-2013 programming period.

Key Objectives:

The European Fund for Regional Development (EFRD), the European Social Fund (ESF) and the Cohesion Fund contribute to three objectives: Convergence, Regional Competitiveness and Employment, and European Territorial Cooperation.

The rationale of the Convergence objective is to promote growth-enhancing conditions and factors leading to real convergence for the least-developed Member States and regions.

Outside the Convergence regions, the Regional Competitiveness and Employment objective aims at strengthening competitiveness and attractiveness, as well as employment, through a two-fold approach.

The European Territorial Co-operation objective will strengthen cross-border co-operation through joint local and regional initiatives, trans-national co-operation aiming at integrated territorial development, and interregional co-operation and exchange of experience.

The whole European Union is covered by one or several objectives of the cohesion policy. To determine geographic eligibility, the Commission bases its decision on statistical data. Europe is divided into various groups of regions corresponding to the classification known by the acronym NUTS (common nomenclature of territorial units for statistics)

Phase-out assistance systems have been set up for regions which benefited from much financial assistance before the enlargement, in order to avoid drastic changes between two programming periods.

Regional competitiveness and employment objective:

All regions which are not covered by the Convergence objective or by the transitional assistance (NUTS 1 or NUTS 2 regions depending on the Member States) are eligible for funding under the competitiveness and employment objective.

Irelands’ Border, Midland and Western region falls under this objective.

A phasing-in system is granted until 2013 to NUTS 2 regions which were covered by the former Objective 1 but whose GDP exceeds 75% of the average GDP of the EU-15.

Funds available:

In the period 2007-2013, cohesion policy will benefit from 35.7% of the total EU budget or 347.41 billion euros (current prices).

Division by objective

81.54% for Convergence
15.95% for Regional Competitiveness and Employment
2.52% for European Territorial Cooperation

Structural & Cohesion Funds

Regional competitiveness and employment objective:

Division by objective

Cohesion Fund

ERDF

ESF

Solidarity Fund

EGTC