Structural Funds
Structural Funds
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Meaning of Structural funds
Here is a very short concept of structural funds in the European Union framework: The collective name given to four (or perhaps more properly five) funds set up to assist underdeveloped, declining or economically stagnant regions of the EU
The European Regional Development Fund (ERDF), created in 1975 and accounting for about half the EU's structural budget, targets underdeveloped regions and areas suffering from industrial decline (see more in the European global legal platform (publication)). The ERDF meets part of the costs of each programme, the balance being provided by the relevant member state, and gives priority to schemes which contribute to Union policy aims (see more in the European global legal platform (publication)). Over the years, the main beneficiaries have been Spain, Portugal,Greece, Ireland and Italy. The UK, which was largely responsible for initiating the ERDF as a counterweight to the subsidy bias in favour of more agricultural countries inherent in the Common Agricultural Policy (CAP), has proved to be a relatively unsuccessful applicant. Ireland, by contrast, despite its sharp rise up the EU's league table of comparative wealth, has remained a magnet for funds
The European Social Fund (ESF), created under the original Treaty of Rome, is designed to combat long-term and youth unemployment through vocational training and retraining, again complementing subsidies made by member states (see more in the European global legal platform (publication)). The ESF accounts for about a quarter of the structural budget and overlaps to a considerable extent with the ERDF, in that around half its appropriations are aimed at the same objectives
The European Agricultural Guidance and Guarantee Fund (FEOGA) is confusingly split into two parts (see more in the European global legal platform (publication)). The (larger) Guarantee section is a central feature of the CAP and is deployed on price support. The Guidance section counts as a structural fund and is designed to assist rural restructuring and non-farm development, as well as subsidising depressed areas and those with special problems, including mountainous and Arctic regions (see more in the European global legal platform (publication)). Like the ESF, it overlaps with the ERDF, spending about half its allocation on similar programmes (see more in the European global legal platform (publication)). The fourth structural fund, the Fisheries Guidance Instrument, is much smaller and focuses on assistance to the fishing industry
The Cohesion Fund was created by the 1992 Maastricht Treaty with the aim of accelerating economic convergence in the run-up to EMU. At the time the Commission wanted to double the amount of aid spent on the four least prosperous states, Spain, Portugal, Ireland and Greece (see more in the European global legal platform (publication)). The Cohesion Fund targets infrastructure, with particular reference to the environment and to transport, energy and telecommunications, and is included in the EU budgetunder the same rubric as the four older funds
From small beginnings, the structural funds had grown by 2000 to some 35% of the EU budget, with between a half and two-thirds of their disbursements going to underdeveloped regions (see more in the European global legal platform (publication)). The ingenuity and determination shown by certain member states in applying for grants meant that there was no close correlation between subsidy and need - not, at least, as measured by national wealth. From a broader perspective, despite a remarkable percentage increase in the amount of the funds, they remained insignificant for all but a few of the recipients (see more in the European global legal platform (publication)).
In total they accounted for about 0.4% of EU-wide GDP, enough to weigh heavily with Ireland, Greece and Portugal, as well as to attract extensive fraud, but not enough to achieve the redistributive or economic adjustment effects advocated by the 1977 MacDougall Report
The forthcoming enlargement of the EU raises the question of the future distribution of the available funds (see more in the European global legal platform (publication)). The favoured candidates for early membership are markedly poorer than the poorest current member states and equally populous (Poland has about the same population as Spain, while the Czech Republic and Hungary have about the same as Greece and Portugal).
In 1985 Greece had threatened to veto the accession of Spain and Portugal at the last minute unless it received additional subsidies (see more in the European global legal platform (publication)). This resulted in the Integrated Mediterranean Programmes (IMPs), of which the beneficiaries were Greece and the most backward regions of southern France and Italy (the IMPs were discontinued in 1992 and effectively replaced by the Cohesion Fund). The next round of enlargement is likely to give rise to even more complex and acrimonious brinkmanship. The Commission's plan to reduce from 50% to 35-40% the proportion of the EU's population classed as living in areas which qualify for assistance is already contentious enough. Germany, the UK, Sweden and The Netherlands will not wish to increase their net contributions.Spain, Ireland, Portugal and Greece will be equally determined not to suffer a reduction in their receipts. France and Italy will be unwilling to step into the breach. Despite much talk about the necessity of reform, the impasse will not be easily resolved
Differences over the allocation and financing of the structural funds may also lead to more fundamental questions (see more in the European global legal platform (publication)). Support for declining industries, although it can help to mitigate social disruption, is ultimately anti-competitive (see more in the European global legal platform (publication)). As long as the EU's structural funds are confined to easing transition, this problem is containable (see more in the European global legal platform (publication))
. But longer-term payments from one set of countries to another will need greater political consensus than presently exists (see more in the European global legal platform (publication)). Modern economies are helped to adjust flexibly to change through automatic counter-cyclical fiscal stabilisers, as prospering sectors pay more tax while struggling regions receive more benefits (see more in the European global legal platform (publication)). The rigid EU system represents an entirely different concept. The advent of EMU may well cause dislocation, the more serious because of Europe's low labour mobility.
In that case the need for a review of the nature and scale of EU transfer payments will become irresistible if the Union is to escape a dependency culture in depressed regions combined with a politically contentious misdirection of taxpayers' money from the wealthiest countries.
Common Agricultural Policy and Structural funds and the European Union
Structural funds and the European Union
Resources
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See Also
Including similar content viewed by others, in case you missed it:
European Social Fund (ESF)
Regional development policy
Cohesion Fund
European Regional Development Fund (ERDF)
Resources
Professional Content and Learning Tools
Lawi offers educational solutions and professional insight, integrating content, tools, and practical technology to promote lifelong learning, personal and professional improvement, and human progress through knowledge. Our collections feature resources and solutions from a wide range of subject areas, from management and finance to law and cybersecurity. This text is only a brief introduction. If you would like us to expand on this content, please let us know in the comments. If you’re finding our platform and publications valuable, share it with a colleague or friend, leave a comment and consider subscribing if you haven’t already (thanks!). There are group discounts, gift options, and referral bonuses available.
See Also
Including similar content viewed by others, in case you missed it:
European Agricultural Guidance and Guarantee Fund (EAGGF or FEOGA)
Resources
Professional Content and Learning Tools
Lawi offers educational solutions and professional insight, integrating content, tools, and practical technology to promote lifelong learning, personal and professional improvement, and human progress through knowledge. Our collections feature resources and solutions from a wide range of subject areas, from management and finance to law and cybersecurity. This text is only a brief introduction. If you would like us to expand on this content, please let us know in the comments. If you’re finding our platform and publications valuable, share it with a colleague or friend, leave a comment and consider subscribing if you haven’t already (thanks!). There are group discounts, gift options, and referral bonuses available.
Notas y References
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Hierarchical Display of Structural Funds
European Union > EU finance > EU financing > EU financial instrument > Fund (EU)
European Union > EU finance > EU financing > Deepening of the European Union > Economic and social cohesion
European Union > EU finance > EU financing > Regional policy > EU regional policy
European Union > EU finance > EU financing > EU expenditure
Economics > Regions and regional policy > Regional policy > EU regional policy > Eligible region
Economics > Economic policy > Economic policy > Structural policy
Economics > Regions and regional policy > Regional policy > EU regional policy > Community support framework
European Union > EU finance > EU expenditure > Operational expenditure (EU) > Structural expenditure
Structural Funds
Concept of Structural Funds
See the dictionary definition of Structural Funds.
Characteristics of Structural Funds
Resources
Professional Content and Learning Tools
Lawi offers educational solutions and professional insight, integrating content, tools, and practical technology to promote lifelong learning, personal and professional improvement, and human progress through knowledge. Our collections feature resources and solutions from a wide range of subject areas, from management and finance to law and cybersecurity. This text is only a brief introduction. If you would like us to expand on this content, please let us know in the comments. If you’re finding our platform and publications valuable, share it with a colleague or friend, leave a comment and consider subscribing if you haven’t already (thanks!). There are group discounts, gift options, and referral bonuses available.
Translation of Structural Funds
Spanish: Fondo Estructural
French: Fonds structurel
German: Strukturfonds
Italian: Fondo strutturale
Portuguese: Fundos estruturais
Polish: Fundusze strukturalne
Thesaurus of Structural Funds
European Union > EU finance > EU financing > EU financial instrument > Fund (EU) > Structural Funds
European Union > EU finance > EU financing > Deepening of the European Union > Economic and social cohesion > Structural Funds
European Union > EU finance > EU financing > Regional policy > EU regional policy > Structural Funds
European Union > EU finance > EU financing > EU expenditure > Structural Funds
Economics > Regions and regional policy > Regional policy > EU regional policy > Eligible region > Structural Funds
Economics > Economic policy > Economic policy > Structural policy > Structural Funds
Economics > Regions and regional policy > Regional policy > EU regional policy > Community support framework > Structural Funds
European Union > EU finance > EU expenditure > Operational expenditure (EU) > Structural expenditure > Structural Funds
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Including similar content viewed by others, in case you missed it:
Reform of the structural funds