Regional Policy Of The European Union
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The regional policy of the European Union (EU), also referred as Cohesion Policy, is a policy with the stated aim of improving the economic well-being of
regions In geography, regions, otherwise referred to as zones, lands or territories, are areas that are broadly divided by physical characteristics (physical geography), human impact characteristics (human geography), and the interaction of humanity and t ...
in the
European Union The European Union (EU) is a supranational political and economic union of member states that are located primarily in Europe. The union has a total area of and an estimated total population of about 447million. The EU has often been de ...
and also to avoid regional disparities. More than one third of the EU's budget is devoted to this policy, which aims to remove economic, social and territorial disparities across the EU, restructure declining industrial areas and diversify rural areas which have declining agriculture. In doing so, EU
regional policy Regional policy is the sum of a series of policies formulated according to regional differences to coordinate regional relations and regional macro operation mechanism, which affects regional development at the macro level. It includes regional ec ...
is geared towards making regions more competitive, fostering economic growth and creating new jobs. The policy also has a role to play in wider challenges for the future, including
climate change In common usage, climate change describes global warming—the ongoing increase in global average temperature—and its effects on Earth's climate system. Climate change in a broader sense also includes previous long-term changes to ...
,
energy supply Energy supply is the delivery of fuels or transformed fuels to point of consumption. It potentially encompasses the extraction, transmission, generation, distribution and storage of fuels. It is also sometimes called energy flow. This supply o ...
and globalisation. The EU's regional policy covers all European regions, although regions across the EU fall in different categories (so-called objectives), depending mostly on their economic situation. Between 2007 and 2013, EU regional policy consisted of three objectives: Convergence, Regional competitiveness and employment, and European territorial cooperation; the previous three objectives (from 2000 to 2006) were simply known as Objectives 1, 2 and 3. The policy constitutes the main investment policy of the EU, and is due to account for around of third of its budget, or EUR 392 billion over the period of 2021-2027.


Notion of territorial cohesion

Territorial cohesion is a
European Union The European Union (EU) is a supranational political and economic union of member states that are located primarily in Europe. The union has a total area of and an estimated total population of about 447million. The EU has often been de ...
concept which builds on the
European Spatial Development Perspective The European Spatial Development Perspective (ESDP) is a document approved by the Informal Council of Ministers of Spatial Planning of European Commission in Potsdam in 1999. It is a legally non-binding document forming a policy framework with 60 ...
(ESDP). The main idea of territorial cohesion is to contribute to European sustainable development and competitiveness. It is intended to strengthen the European regions, promote territorial integration and produce coherence of
European Union The European Union (EU) is a supranational political and economic union of member states that are located primarily in Europe. The union has a total area of and an estimated total population of about 447million. The EU has often been de ...
(EU) policies so as to contribute to the
sustainable development Sustainable development is an organizing principle for meeting human development goals while also sustaining the ability of natural systems to provide the natural resources and ecosystem services on which the economy and society depend. The des ...
and global competitiveness of the EU. Sustainable development is defined as development that "meets the needs of the present without compromising the ability of future generations to meet their own needs". The main aim of the territorial cohesion policy is to contribute to a balanced distribution of economic and social resources among the European regions with the priority on the territorial dimension. This means that resources and opportunities should be equally distributed among the regions and their populations. In order to achieve the goal of territorial cohesion, an integrative approach to other EU policies is required.


Objectives


Less developed regions

By far the largest amount of regional policy funding is dedicated to the regions designated as less developed. This covers Europe's poorest regions whose per capita gross domestic product (GDP) is less than 75% of the EU average. This includes nearly all the regions of the new member states, most of Southern Italy, Greece and Portugal, and some parts of the United Kingdom and Spain. With the addition of the newest member countries in 2004 and 2007, the EU average GDP fell. As a result, some regions in the EU's "old" member states, which used to be eligible for funding under the Convergence objective, became above the 75% threshold. These regions received transitional, "phasing out" support during the previous funding period of 2007–13. Regions that used to be covered under the convergence criteria but got above the 75% threshold even within the EU-15 received "phasing-in" support through the Regional competitiveness and employment objective. Despite the large investment requirements of the EU, cohesion areas continue to have lower investment rates. Only 77% of businesses in transitional regions and 75% of those in less developed regions invested, compared to 79% of businesses in more developed regions. Financial limitations are more common in less developed areas, especially for
small and medium-sized enterprises Small and medium-sized enterprises (SMEs) or small and medium-sized businesses (SMBs) are businesses whose personnel and revenue numbers fall below certain limits. The abbreviation "SME" is used by international organizations such as the World Bank ...
(SMEs). SMEs in these regions are more than twice as likely (11%) than their counterparts in transition (5%) and non-cohesion zones (5%) to report having financial difficulties. Less developed regions also have the lowest percentage of businesses who have made investments to combat climate change or reduce their carbon emissions, at 46%. In less developed regions, bank loans account for 49% of finance. Grants make up a larger portion of the financing in less developed areas, accounting for 13% of external financing.


Areas designated as less developed

* Bulgaria – all (except Southwestern region) * Croatia - all * Czech Republic – all (except
Prague Prague ( ; cs, Praha ; german: Prag, ; la, Praga) is the capital and largest city in the Czech Republic, and the historical capital of Bohemia. On the Vltava river, Prague is home to about 1.3 million people. The city has a temperate ...
) * Estonia – all * France –
French Guiana French Guiana ( or ; french: link=no, Guyane ; gcr, label=French Guianese Creole, Lagwiyann ) is an overseas department/region and single territorial collectivity of France on the northern Atlantic coast of South America in the Guianas. ...
, Guadeloupe,
Martinique Martinique ( , ; gcf, label=Martinican Creole, Matinik or ; Kalinago: or ) is an island and an overseas department/region and single territorial collectivity of France. An integral part of the French Republic, Martinique is located in ...
, Réunion * Greece – Anatoliki Makedonia Thraki, Dytiki Ellada, Ipeiros, Kentriki Makedonia, Thessalia * Hungary – all (except
Central Hungary Central Hungary ( hu, Közép-Magyarország) is one of the seven statistical regions in Hungary (NUTS 1 and NUTS 2). It includes (the capital of the region) and . Administration Central Hungary's subregions (population figures from the ...
) * Italy – Basilicata, Calabria,
Campania (man), it, Campana (woman) , population_note = , population_blank1_title = , population_blank1 = , demographics_type1 = , demographics1_footnotes = , demographics1_title1 = , demographics1_info1 = , demog ...
, Apulia,
Sicily (man) it, Siciliana (woman) , population_note = , population_blank1_title = , population_blank1 = , demographics_type1 = Ethnicity , demographics1_footnotes = , demographi ...
* Latvia – all * Lithuania – all * Poland – all (except the Warsaw Metro NUTS2 Unit carved out of
Masovian Voivodeship The Masovian Voivodeship, also known as the Mazovia Province ( pl, województwo mazowieckie ) is a voivodeship (province) in east-central Poland, with its capital located in the city of Warsaw, which also serves as the capital of the country. Th ...
) * Portugal – Alentejo,
Azores ) , motto =( en, "Rather die free than subjected in peace") , anthem= ( en, "Anthem of the Azores") , image_map=Locator_map_of_Azores_in_EU.svg , map_alt=Location of the Azores within the European Union , map_caption=Location of the Azores wi ...
, Centro, Norte * Romania – all (except
Bucharest Bucharest ( , ; ro, București ) is the capital and largest city of Romania, as well as its cultural, industrial, and financial centre. It is located in the southeast of the country, on the banks of the Dâmbovița River, less than north of ...
) * Slovakia – all (except Bratislava) * Slovenia –
Vzhodna Slovenija Eastern Slovenia ( sl, Vzhodna Slovenija) is one of the two NUTS-2 Regions of Slovenia. The region forms the eastern part of the country and includes the cities of Maribor, Celje and Velenje. It is the poorer of the two regions of Slovenia. Ea ...
* Spain –
Extremadura Extremadura (; ext, Estremaúra; pt, Estremadura; Fala: ''Extremaúra'') is an autonomous community of Spain. Its capital city is Mérida, and its largest city is Badajoz. Located in the central-western part of the Iberian Peninsula, it ...
* United Kingdom –
Cornwall Cornwall (; kw, Kernow ) is a historic county and ceremonial county in South West England. It is recognised as one of the Celtic nations, and is the homeland of the Cornish people. Cornwall is bordered to the north and west by the Atlantic ...
and the Isles of Scilly, West Wales and the Valleys


Transition regions

These are regions whose GDP per capita falls between 75 and 90 percent of the EU average. As such, they receive less funding than the less developed regions but more funding than the more developed regions. In transition regions, bank loans account for 69% of finance. Particularly transitional regions appear to profit from investments in more developed regions. There is a 34% of the impact on GDP and 47% of the impact on employment in some circumstances. In the green transition, 19% of firms in transition regions claim that climate change is significantly affecting their business, while 43% believe climate change has a minor effect. 25% of businesses in transition regions can also be categorized as "green and digital".


Areas designated as transition regions

* Austria –
Burgenland Burgenland (; hu, Őrvidék; hr, Gradišće; Austro-Bavarian: ''Burgnland;'' Slovene: ''Gradiščanska'') is the easternmost and least populous state of Austria. It consists of two statutory cities and seven rural districts, with a total of ...
* Belgium – all of
Wallonia Wallonia (; french: Wallonie ), or ; nl, Wallonië ; wa, Waloneye or officially the Walloon Region (french: link=no, Région wallonne),; nl, link=no, Waals gewest; wa, link=no, Redjon walone is one of the three regions of Belgium—alo ...
(except Walloon Brabant) * Denmark –
Sjælland Zealand ( da, Sjælland ) at 7,031 km2 is the largest and most populous island in Denmark proper (thus excluding Greenland and Disko Island, which are larger in size). Zealand had a population of 2,319,705 on 1 January 2020. It is the 1 ...
* France – Auvergne, Corsica, Franche-Comté, Languedoc-Roussillon, Limousin, Lorraine, Lower Normandy, Nord-Pas-de-Calais, Picardy, Poitou-Charentes * Germany – Lüneburg, all of the former
East Germany East Germany, officially the German Democratic Republic (GDR; german: Deutsche Demokratische Republik, , DDR, ), was a country that existed from its creation on 7 October 1949 until its dissolution on 3 October 1990. In these years the state ...
sans Berlin (except Leipzig) * Greece – Dytiki Makedonia, Ionia Nisia, Kriti, Peloponnisos, Sterea Ellada, Voreio Aigaio * Italy – Abruzzo, Molise, Sardinia * Malta – all * Poland - none * Portugal –
Algarve The Algarve (, , ; from ) is the southernmost NUTS II region of continental Portugal. It has an area of with 467,495 permanent inhabitants and incorporates 16 municipalities ( ''concelhos'' or ''municípios'' in Portuguese). The region has it ...
* Spain – Andalucía, Canarias, Castilla-La Mancha, Melilla, Murcia * United Kingdom – Cumbria, Devon, East Yorkshire and Northern Lincolnshire, Highlands and Islands, Lancashire, Lincolnshire, Merseyside, Northern Ireland, Shropshire and Staffordshire, South Yorkshire, Tees Valley and Durham * Bulgaria – Southwestern region


More developed regions

This covers all European regions that are not covered elsewhere, namely those which have a GDP per capita above 90 percent of the EU average. The main aim of funding for these regions is to create jobs by promoting
competitiveness In economics, competition is a scenario where different economic firmsThis article follows the general economic convention of referring to all actors as firms; examples in include individuals and brands or divisions within the same (legal) firm ...
and making the regions concerned more attractive to businesses and investors. Possible projects include developing clean transport, supporting research centres, universities, small businesses and start-ups, providing training, and creating jobs. Funding is managed through either the ERDF or the ESF. In all regions, bank loans are the most prevalent type of external financing. In more developed regions, they account for 58% of finance.


Areas currently eligible

* Austria – all (except Burgenland) * Belgium – all of
Flanders Flanders (, ; Dutch: ''Vlaanderen'' ) is the Flemish-speaking northern portion of Belgium and one of the communities, regions and language areas of Belgium. However, there are several overlapping definitions, including ones related to cultu ...
,
Brussels Brussels (french: Bruxelles or ; nl, Brussel ), officially the Brussels-Capital Region (All text and all but one graphic show the English name as Brussels-Capital Region.) (french: link=no, Région de Bruxelles-Capitale; nl, link=no, Bruss ...
,
Walloon Brabant Walloon Brabant (french: Brabant wallon ; nl, Waals-Brabant ; wa, Roman Payis) is a province located in Belgium's French-speaking region of Wallonia. It borders on (clockwise from the North) the province of Flemish Brabant (Flemish Region) and ...
* Cyprus – all * Czech Republic –
Prague Prague ( ; cs, Praha ; german: Prag, ; la, Praga) is the capital and largest city in the Czech Republic, and the historical capital of Bohemia. On the Vltava river, Prague is home to about 1.3 million people. The city has a temperate ...
* Denmark – all (except Sjælland) * Finland – all * France – Alsace, Aquitaine, Burgundy, Brittany, Centre, Champagne-Ardenne, Île-de-France, Midi-Pyrénées, Pays de la Loire, Provence-Alpes-Côte d'Azur, Rhône-Alpes, Upper Normandy * Germany – Berlin, Leipzig, all of the former
West Germany West Germany is the colloquial term used to indicate the Federal Republic of Germany (FRG; german: Bundesrepublik Deutschland , BRD) between its formation on 23 May 1949 and the German reunification through the accession of East Germany on 3 O ...
(except Lüneburg) * Greece – Attiki, Notio Aigaio * Hungary – Közép-Magyarország * Ireland – all * Italy –
Emilia-Romagna egl, Emigliàn (man) egl, Emiglièna (woman) rgn, Rumagnòl (man) rgn, Rumagnòla (woman) it, Emiliano (man) it, Emiliana (woman) or it, Romagnolo (man) it, Romagnola (woman) , population_note = , population_blank1_title ...
, Friuli-Venezia Giulia,
Lazio it, Laziale , population_note = , population_blank1_title = , population_blank1 = , demographics_type1 = , demographics1_footnotes = , demographics1_title1 = , demographics1_info1 = , demographics1_title2 ...
,
Liguria it, Ligure , population_note = , population_blank1_title = , population_blank1 = , demographics_type1 = , demographics1_footnotes = , demographics1_title1 = , demographics1_info1 = , demographics1_title2 ...
, Lombardy, Marche,
Piedmont it, Piemontese , population_note = , population_blank1_title = , population_blank1 = , demographics_type1 = , demographics1_footnotes = , demographics1_title1 = , demographics1_info1 = , demographics1_title2 ...
,
South Tyrol it, Provincia Autonoma di Bolzano – Alto Adige lld, Provinzia Autonoma de Balsan/Bulsan – Südtirol , settlement_type = Autonomous area, Autonomous Provinces of Italy, province , image_skyline = ...
,
Trentino Trentino ( lld, Trentin), officially the Autonomous Province of Trento, is an autonomous province of Italy, in the country's far north. The Trentino and South Tyrol constitute the region of Trentino-Alto Adige/Südtirol, an autonomous region ...
,
Tuscany Tuscany ( ; it, Toscana ) is a Regions of Italy, region in central Italy with an area of about and a population of about 3.8 million inhabitants. The regional capital is Florence (''Firenze''). Tuscany is known for its landscapes, history, art ...
,
Umbria it, Umbro (man) it, Umbra (woman) , population_note = , population_blank1_title = , population_blank1 = , demographics_type1 = , demographics1_footnotes = , demographics1_title1 = , demographics1_info1 = , ...
,
Valle d'Aosta , Valdostan or Valdotainian it, Valdostano (man) it, Valdostana (woman)french: Valdôtain (man)french: Valdôtaine (woman) , population_note = , population_blank1_title = Official languages , population_blank1 = Italian French , ...
,
Veneto it, Veneto (man) it, Veneta (woman) , population_note = , population_blank1_title = , population_blank1 = , demographics_type1 = , demographics1_footnotes = , demographics1_title1 = , demographics1_info1 = ...
* Luxembourg – all * Netherlands – all * Poland – the Warsaw Metro NUTS2 Unit carved out of
Masovian Voivodeship The Masovian Voivodeship, also known as the Mazovia Province ( pl, województwo mazowieckie ) is a voivodeship (province) in east-central Poland, with its capital located in the city of Warsaw, which also serves as the capital of the country. Th ...
* Portugal – Lisbon region, Madeira * Romania –
Bucharest Bucharest ( , ; ro, București ) is the capital and largest city of Romania, as well as its cultural, industrial, and financial centre. It is located in the southeast of the country, on the banks of the Dâmbovița River, less than north of ...
* Slovakia – Bratislava * Slovenia - Zahodna Slovenija * Spain –
Aragon Aragon ( , ; Spanish and an, Aragón ; ca, Aragó ) is an autonomous community in Spain, coextensive with the medieval Kingdom of Aragon. In northeastern Spain, the Aragonese autonomous community comprises three provinces (from north to sou ...
,
Asturias Asturias (, ; ast, Asturies ), officially the Principality of Asturias ( es, Principado de Asturias; ast, Principáu d'Asturies; Galician-Asturian: ''Principao d'Asturias''), is an autonomous community in northwest Spain. It is coextensiv ...
, Balearic Islands, Basque Country,
Cantabria Cantabria (, also , , Cantabrian: ) is an autonomous community in northern Spain with Santander as its capital city. It is called a ''comunidad histórica'', a historic community, in its current Statute of Autonomy. It is bordered on the east ...
,
Castilla y León Castile, Castille or Castilla may refer to: Places Spain *Castile (historical region), a vaguely defined historical region of Spain covering most of Castile and León, all of the Community of Madrid and most of Castilla–La Mancha *Kingdom of ...
,
Catalonia Catalonia (; ca, Catalunya ; Aranese Occitan: ''Catalonha'' ; es, Cataluña ) is an autonomous community of Spain, designated as a '' nationality'' by its Statute of Autonomy. Most of the territory (except the Val d'Aran) lies on the nort ...
,
Ceuta Ceuta (, , ; ar, سَبْتَة, Sabtah) is a Spanish autonomous city on the north coast of Africa. Bordered by Morocco, it lies along the boundary between the Mediterranean Sea and the Atlantic Ocean. It is one of several Spanish territorie ...
, Galicia,
La Rioja La Rioja () is an autonomous community and province in Spain, in the north of the Iberian Peninsula. Its capital is Logroño. Other cities and towns in the province include Calahorra, Arnedo, Alfaro, Haro, Santo Domingo de la Calzada, an ...
,
Madrid Region The Community of Madrid (; es, Comunidad de Madrid ) is one of the seventeen autonomous communities of Spain. It is located in the centre of the Iberian Peninsula, and of the Central Plateau (''Meseta Central''). Its capital and largest munici ...
, Navarre,
Valencian Community The Valencian Community ( ca-valencia, Comunitat Valenciana, es, Comunidad Valenciana) is an autonomous community of Spain. It is the fourth most populous Spanish autonomous community after Andalusia, Catalonia and the Community of Madrid wi ...
* Sweden – all * United Kingdom – all of London, South East England, and the East of England, plus Dorset, Somerset, Gloucestershire, Wiltshire, Herefordshire, Worcestershire, Warwickshire, West Midlands, Leicestershire, Rutland, Northamptonshire, Derbyshire, Nottinghamshire, Cheshire, Greater Manchester, West Yorkshire, North Yorkshire, Tyne and Wear, Northumberland, South Western Scotland, Eastern Scotland, North Eastern Scotland and East Wales


European territorial cooperation

This objective aims to reduce the importance of borders within Europe – both between and within countries – by improving regional cooperation. It allows for three different types of cooperation: cross-border, transnational and interregional cooperation. The objective is currently by far the least important in pure financial terms, accounting for only 2.5% of the EU's regional policy budget. It is funded exclusively through the ERDF.


Instruments and funding

The cohesion policy accounts for almost one third of the EU's budget, equivalent to almost EUR 352 billion over seven years in 2014-2020, and EUR 392 billion in 2021-2027, dedicated to the promotion of economic development and job creation, and for helping communities and nations get ready for the European Union's transition to a more sustainable and digital economy. The main resource of EU's territorial cohesion policy is EU's structural funds. There are two structural funds available to all EU regions: the
European Regional Development Fund The European Regional Development Fund (ERDF) is one of the European Structural and Investment Funds allocated by the European Union. Its purpose is to transfer money from richer regions (not countries), and invest it in the infrastructure and s ...
(ERDF) and the
European Social Fund The European Social Fund Plus (ESF+) is one of the European Structural and Investment Funds (ESIFs), which are dedicated to improving social cohesion and economic well-being across the regions of the Union. The funds are redistributive financ ...
(ESF). The ERDF is intended to be used for the creation of infrastructure and productive job-creating investment and it is mainly for the businesses, while the ESF is meant to contribute to the integration of the unemployed populations into the work life via training measurements. The funds are managed and delivered in partnership between the European Commission, the Member States and stakeholders at the local and regional level. In the 2014–2020 funding period, money is allocated differently between regions that are deemed to be "more developed" (with GDP per capita over 90% of the EU average), "transition" (between 75% and 90%), and "less developed" (less than 75%), and additional funds are set aside for member states with
GNI per capita This is a list of countries by gross national income per capita in 2020 at nominal values, according to the Atlas method, an indicator of income developed by the World Bank. Methodology The GNI per capita is the dollar value of a country's ...
under 90 percent of the EU average in the Cohesion Fund.Cohesion policy
/ref> Funding for less developed regions, like the Convergence objective before it, aims to allow the regions affected to catch up with the EU's more prosperous regions, thereby reducing economic disparity within the European Union. Examples of types of projects funded under this objective include improving basic
infrastructure Infrastructure is the set of facilities and systems that serve a country, city, or other area, and encompasses the services and facilities necessary for its economy, households and firms to function. Infrastructure is composed of public and priv ...
, helping businesses, building or modernising
waste Waste (or wastes) are unwanted or unusable materials. Waste is any substance discarded after primary use, or is worthless, defective and of no use. A by-product, by contrast is a joint product of relatively minor economic value. A waste prod ...
and
water treatment Water treatment is any process that improves the quality of water to make it appropriate for a specific end-use. The end use may be drinking, industrial water supply, irrigation, river flow maintenance, water recreation or many other uses, inc ...
facilities, and improving access to high-speed Internet connections. Regional policy projects in less developed regions are supported by three European funds: the
European Regional Development Fund The European Regional Development Fund (ERDF) is one of the European Structural and Investment Funds allocated by the European Union. Its purpose is to transfer money from richer regions (not countries), and invest it in the infrastructure and s ...
(ERDF), the
European Social Fund The European Social Fund Plus (ESF+) is one of the European Structural and Investment Funds (ESIFs), which are dedicated to improving social cohesion and economic well-being across the regions of the Union. The funds are redistributive financ ...
(ESF) and the
Cohesion Fund The Cohesion Fund (CF), one of the five European Structural and Investment Funds of the European Union, provides support to Member States with a gross national income (GNI) per capita below 90% EU-27 average to strengthen the economic, social and ...
.


See also

*
Assisted areas (United Kingdom) Assisted areas in the United Kingdom are those areas selected for the application of regional policy to support employment. They date back to depressed ''special areas'' identified before WWII for specific assistance. Over time the support system ...
*
Council of European Municipalities and Regions The Council of European Municipalities and Regions (CEMR) is the largest organisation of local and regional governments in Europe. Its members are 60 national associations of towns, municipalities and regions from 41 countries that are part of th ...
*
European Grouping for Territorial Cooperation European, or Europeans, or Europeneans, may refer to: In general * ''European'', an adjective referring to something of, from, or related to Europe ** Ethnic groups in Europe ** Demographics of Europe ** European cuisine, the cuisines of Europe a ...
*
European Structural and Investment Funds The European Structural and Investment Funds (ESI Funds, ESIFs) are financial tools governed by a common rulebook, set up to implement the regional policy of the European Union, as well as the structural policy pillars of the Common Agricultural ...
* Euroregion *
List of micro-regional organizations This is a list of local government organizations i.e. associations or groupings of local governments and municipalities. Australia * Australian Local Government Association ** Local Government NSW ** Local Government Association of Northern Ter ...
* Nomenclature of Territorial Units for Statistics – for how the EU defines regions


Further reading

*


References


External links


Overview of EU regional policy on the European Union's website


*

*

*


The Council of European Municipalities and Regions
{{European Union topics