Regional policy: Structural Funds and Cohesion Fund

Editor's note 23Apr13: Source D141 (common sections), D241, D341.

History and current status

The EU Regional policy, also known as cohesion policy, originated with the European Social Fund (ESF) at the Treaty of Rome in 1957. The ESF aimed to increase employment and mobility opportunities, covering all sectors except agriculture. The European Regional Development Fund (ERDF) was created in 1975 to improve infrastructure in less developed regions and expanded to a fully fledged Regional policy in 1988, following the Mediterranean expansion. The policy focused on strategic investment and community involvement at the regional and local levels in disadvantaged and peripheral areas. During the 1990s, several additional funds were added, including the Cohesion Fund for Member States with Gross National Income (GNI) per inhabitant of less than 90% of the EU average. In 2000, the Regional policy shifted focus to jobs, growth and innovation as a result of the Lisbon Strategy. The EU Regional policy for 2007-2013 focuses on jobs, growth and, for the first time, sets aside 30% of the funds for infrastructure investments related to the environment and measures to address climate change. Discussions are underway to reform the EU Regional policy to reflect the goals of the Europe 2020 Strategy.

Aims and structure

EU Regional policy aims to reduce the economic and social gaps among regions across Europe. It specifically targets disadvantaged countries and regions to help ensure targets set in the Lisbon Strategy (and new Europe 2020 Strategy) are met across Europe. The key objective is job growth. The policy programme changes every seven years. Between 2007 and 2013, 30% of the total structural and regional funding (approximately 100 billion Euro) is allotted for infrastructure related to the environment and measures to address climate change.

The EU Regional policy is a broad, overarching policy that has been evolving since 1957, and now consists of multiple funding sources. The main actors involved in development of the policy are the EU, its Member States and national and local governments. Structural funding is aimed at achieving three broad objectives:

1. Convergence. This objective aims to reduce regional disparities across Europe and is covered by all three major funds: ERDF, ESF and the Cohesion Fund. Examples of projects include: improving basic infrastructure and water and waste treatment.
2. Regional competitiveness and employment. This objective includes wealthy regions (i.e. all regions that are not included by the convergence objective). It is covered by two of the three major funds: ERDF and ESF. Examples of projects include: development of clean transportation and support for research centres.
3. European territorial cooperation. This objective covers all regions and aims at transboundary cooperation. It is covered by the ERDF fund. Examples of projects include: shared management of natural resources and risk protection.

Implementation process

The EU Regional policy is implemented at the EU, Member State and local level. The seven-year policy framework – including budget – is established by the European Council and European Parliament based on recommendations from the European Commission. Each Member State produces a national strategic reference framework (NSRF) as well as operational programmes, which are ultimately approved by the Commission. Operational programmes are implemented by the Member States, often at the local level. Both the Commission and the Member States report during each period. Examples of operational programmes for the 2007-2013 period are as follows:

• Operational Programme on 'Environment and Sustainable Development' in Greece commits €2.250 million through the ERDF and Cohesion Funds. One of the stated aims of the investment is to combat environmental risks, including desertification, droughts and fires, and other threats to the environment.
• Operational Programme 'Mediterranean Programme' in Cyprus, France, the United Kingdom, Greece, Italy, Malta, Portugal, Slovenia, Spain (with participation from Croatia and Montenegro) commits €193 million through the ERDF (total project budget is €256 million). Approximately 34% of the total funding is allocated for the environment to promote sustainable development, especially with respect to agriculture.

Relevance to LEDD in cropland, grazing land and forests/shrubland

The EU cohesion policy provides ample opportunity for Member States to encourage soil protection in cropland, forests and grazing land. Environmental goals – i.e. soil, biodiversity and water resource protection – are explicitly included. In addition, there is oversight from the European Network of Environmental Authorities, coordinated by DG-Environment.Along with the CAP, the Regional policy's structural funds are a critical funding mechanism for regional development. However, despite implicit recognition of desertification goals through soil and water resource protection, explicit desertification indicator-based targets have not been set. Also because of competing interests some projects funded via structural funds have resulted in environmental net losses.

Although structural and regional funding is provided by the EU Structural and Cohesion Funds for environmental measures, in many cases, such as infrastructure projects they are often associated with negative environmental side-effects. Furthermore, some infrastructure projects (e.g. transportation projects, expansion of irrigation facilities) are in many cases direct drivers of landscape fragmentation, loss of arable land, cropland and grazing land and general land degradation

The economic dimension of Regional policy usually dominates over all other considerations. Measures directly supporting sustainable development and land use are marginal, usually linked with other policies (water, biodiversity etc.) which nevertheless receive low priority either at the national or EU level.

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