European Regional Development Funds (ERDF)
The European Regional Development Fund (ERDF) is a funding tool of the European Union. Broadly speaking, the objectives of the ERDF include convergence between member states of the European Union, promotion of regional competitiveness and employment, and promotion of European territorial cooperation. Set up in 1975, the ERDF funds a wide range of projects that aim at promoting economic growth in all regions and sectors of the economy. The Fund has become the primary tool used by the EU to implement its regional policy.
About the ERDF
The idea of a European regional fund was first raised in the 1960s by the European Commission. Without support among member states beyond Italy, the concept was shelved until the United Kingdom joined the European Economic Community in 1973. As part of negotiations related to the UK's membership, the idea of a regional fund was revived. The regional fund was seen by the UK as a tangible benefit of becoming a member of the EEC. The creation of the ERDF was championed by the UK and Italy. Although planned for a 1973 start, the European Regional Development Fund was formally established in 1975.
Rules that govern the ERDF are set out in the regulations of the Single European Act (SEA). Current rules were standardised in 2006 within Regulation (EC) No. 1080/2006, which was passed by the European Parliament and Council on 5 July 2006. Current provisions cover the period between 2007 and 2013, including establishing the scope and activities of the ERDF. Funding from the ERDF typically pays for up to 50 percent of eligibly project costs. Remaining funds may be found through other public, private or voluntary sources.
One of the EU's structural funds, the main objective of the ERDF is to support economic and social cohesion between member states of the EU by reducing gaps between regions. The main way this is done is by providing support for the development and structural adjustment of regional economies, including revitalising industrial regions that are in decline. Although the goal of the ERDF is to reduce disparities between regions, any funding must still comply with EU competition law.
Scope and Priorities of the ERDF
The priorities or themes of the ERDF include convergence, regional competiveness and employment, and European territorial cooperation. Specifically, the Fund provides financing for investments that help to create sustainable jobs, infrastructure investments, support for technical assistance, and funding for measures that support regional and local development. Funding for regional and local development may include support or services for businesses, especially small and medium sized enterprises (SMEs).
With respect eliminating gaps between regions, the ERDF offers financing to support sustainable and integrated economic development within the common market. It also supports creating sustainable jobs in all regions. Programmes funded through the ERDF that support convergence include initiatives aimed at modernising and diversifying regional structures, including those related to research and technical development, innovation and entrepreneurship, risk prevention, environment, tourism, culture, transport, information technology, energy, education, and health and social infrastructures. The fund also supports direct assistance for investing in small and medium enterprises.
Regional Competitiveness and Employment
The Fund's objective to promote regional competitiveness and employment is achieved through three main funding priorities. The first is innovation and the knowledge economy, including support for improving regional research and technological development and innovation capacity. Support is also provided for entrepreneurship and creating new financial instruments for businesses. The second funding priority is the environment and risk prevention, including support for restoring contaminated land, promoting energy efficiency, increasing the use of clean technology for public transport, and developing plans that anticipate and manage natural and technology risks. The third priority area is access to transport and telecommunications services, particularly supporting improvements to secondary networks. This third funding stream also supports projects that facilitate access to information and communication technologies for small and medium sized businesses.
European Territorial Cooperation
The ERDF's objective of European territorial cooperation is supported through three areas. The first focuses on the development of cross-border economic, social and environmental cooperation through joint sustainable development strategies. The second is establishing and developing transnational cooperation, including with respect to innovation, the environment, accessibility and sustainable urban development. The third priority area relates to supporting effective regional policy making by encouraging networks and information sharing between regional and local authorities. Member states are responsible for designating one authority to manage the delivery of joint initiatives, as well as a single certifying authority and one audit authority. Member states may delegate these roles to the European grouping of territorial cooperation (EGTC). Projects under this objective must include at least two member states that act jointly in two or more of the following fields: development, implementation, staffing and financing.
Benefits of the ERDF
The ERDF contributes to the creation of new businesses and supports sustainable employment. In England alone, regional competitiveness and employment programmes through the ERDF have supported the creation or retention of 55,400 jobs from 2007 to 2012, according to the Department of Communities and Local Government. The ERDF has supported the creation of 9,565 new businesses during the same period. Between 2000 and 2006, the Fund created 177,391 new jobs and supported 207,662 small and medium sized businesses in England.