What are Regional Development Programs?

The European Union's regional development programmes represent priorities selected by national and regional authorities within member states. These operational programmes are provided during a specific programming period, the current of which is from 2007 to 2013. Regional development programmes are financed through the European Regional Development Fund (ERDF or FEDER) and the Cohesion Fund. Funding is also provided through the European Social Fund (ESF). Regional development programmes support a wide variety of projects, from improved transport and telecommunications to assistance for small and medium sized businesses.

About the EU's Regional Development Policy

The European Union's regional policy is investment-focused. It supports job creation, economic growth, competitiveness, sustainable development, and overall improvement in quality of life. Regional development programmes are delivered as part of the Europe 2020 strategy, which is a growth strategy focused on smart, sustainable and inclusive growth. A central theme of the EU's regional policy is solidarity with less developed countries and regions. Structural funds, such as the ERDF/FEDER, are concentrated on specific areas and sectors with the aim of reducing socio-economic gaps between member states and regions. During 2007-2013, the EU is investing approximately €347 billion in regional development.

Common principles are found within the EU's regional development programmes. The first is concentration, including the concentration of resources, effort and spending on the poorest regions and countries. In 2007-13, European regional development funding also concentrated on the knowledge economy. Regional development programmes fund multi-year national programmes rather than individual programs. They also focus on partnership. Each programme supported through the EU's territorial cohesion or regional policy is developed in cooperation with European, regional and local authorities, as well as other partner organisations and stakeholders. Partnerships may be found at any stage of a programme, from design to delivery to evaluation. Regional development programmes are not a replacement for national spending, but rather in addition to similar supports from member states.

Main Regional Development Programmes

Three main funds finance the EU's regional policy. These programmes help address one or more of the EU's regional policy objectives, namely convergence, regional competitiveness and employment, and European territorial cooperation. Convergence is the aim to reduce regional disparities within Europe by providing support to regions with a per capita gross domestic product (GDP) under 75 percent of the EU average. Regional competitiveness and employment is an objective for all regions not covered by the convergence objective. The aim is to assist relatively richer regions in order to bring broader benefits to the European economy, while eliminating any remaining poverty in more prosperous areas. Finally, the aim of European territorial cooperation objective is to increase cooperation across borders that normally would not happen. While the ERDF aims to address all three objectives, the ESF only supports convergence and regional competitiveness and employment and the Cohesion Fund supports the convergence objective.

European Regional Development Fund

The main objective of ERDF is to increase economic and social cohesion in the EU. This is achieved by reducing gaps and imbalances between regions. The ERDF provides funding through investments in companies to create sustainable jobs, especially in small and medium sized enterprises. The Fund also provides financing for infrastructure, particularly those related to research and innovation, the environment, transportation, energy and telecommunications. The ERDF also finances technical assistance measures and financial instruments that support regional or local development through cooperation.

European Social Fund

The ESF aims to improve employment and job opportunities in regions. The ESF does this by supporting member states in their efforts to help citizens adapt to the workforce and access employment. The Fund also provides funding for social integration of disadvantages groups, including the unemployed, women, migrants and people facing discrimination in the job market. It also supports human capital programmes related to education and teaching.

Cohesion Fund

The Cohesion Fund benefits member states that have a per capita gross national income (GNI) of below 90 percent of the EU average. The Fund helps stabilise economies and reduce socio-economic disparities. The Cohesion Fund provides financing for trans-European transportation networks and the environment. With respect to the environment, funding is available for energy and transportation projects if there is an environmental benefit, such as renewable energy and public transport.

Other Instruments

In addition to the three main structural funds for regional development, there are a range of instruments that support the EU's regional policy. Joint initiatives developed by the European Commission and the European Investment Bank and other financial institutions include the Joint Assistance to Support Projects in European Regions (JASPERS), Joint European Resources for Micro to medium Enterprises (JEREMIE), Joint European Support for Sustainable Investment in City Areas (JESSICA), and Joint Action to Support Micro-finance Institutions in Europe (JASMINE). These programmes were established in 2007 and provide technical assistance, help small and medium sized enterprises access to microfinance, and support urban development.

The European Union Solidarity Fund (EUSF) provides regional development funding when there is a major natural disaster. It was created in 2002 and helps regions that are recovering from a disaster, such as flooding, forest fires, earthquakes and drought. The EU also provides financing for regional development in candidate and potential candidate countries through the Instrument for Pre-Accession Assistance (IPA). With respect to regional development, the IPA supports transportation, environment, and regional and economic development initiatives. In addition to regional development, the IPA is also available for transition and institution building, cross-border cooperation, human resources and rural development.

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