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History of the European Union Regional Policy

This article explores the history of the European Union's regional policy, including the creation of the European Regional Development Fund and the impact of enlargement on regional disparities.

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History of the European Union Regional Policy

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  1. History of the European UnionRegional Policy

  2. Giuseppe Caron Vice-Presidentofthe Commission ofthe European Economic Communities 1962-1963, on regional policy (July 1962) (Click forsoundfile)

  3. Since the Rome Treaty of 1957, one of the main tasks of the Community has been to promote an ‘harmonious development of economic activities’. The need for a coordinated community solution to regional problems and the correction of regional imbalances was also recognised in Commission reports, a first communication (1964) and a subsequent recommendation (1969). The Assembly (today’s EP) expressed its support in resolutions during the 1960s. The first enlargement (IRL, DK, UK) and the objective of an Economic and Monetary Union, made the Heads of State and Government decide in October 1972 to create a Regional Development Fund. Based on art. 235 of the Treaty (today’s art. 308), the Council agreed unanimously on the first ERDF regulation in December 1974.

  4. Map of less favorised regions European Community, 1964,

  5. On 18 march 1975, thefirst ERDF regulationenteredintoforce. Following a Council debate in Paris in December 1974, a budgetof 1.4 billion "unitsofaccounts" (thethenbudget's "currency") fortheyears 1975 to 1977 representingsome 4% ofthebudget'shadbeensplitbetweenthethennine Member States. • Threeactionsweredefinedaseligibleupto 50% ofpublicexpenditure, andpreferablytobecarried out in national stateaidareas: • investments in smallenterprisescreatingat least 10 newjobs; • investments in infrastructurerelatedtopoint 1, and • infrastructureinvestments in mountainousareas, whichhadtobeeligibletotheagricultureguidancefund, too. • Member States hadtoapplyfor ERDF supportatprojectlevel. Decisionswerethentaken in a committeeof Member States based on Commission proposals.

  6. George Thomson Regional PolicyCommissionerbetween 1973 and 1977 presentsthereport on theeconomicandsocialdevelopmentofthe EC regions in 1973 (Click forsoundfile)

  7. Bruce Millan Regional PolicyCommissionerbetween 1988 and 1995 on eligibilityunderObjective 2 between 1989 and 1993 andthereformof 1993. (Click forsoundfiles) March 1989 March 1993

  8. History of what ? • regional disparities? • regional devolution ? (institutional framework) • the regional national policies? • the Community regional means?

  9. The 1957 Treaty of Romelittle regional dimension • Enlargement in 1973Its consequences: creation of “ERDF”(European Regional Development Fund), a specific instrument • The 1986 Single ActThe “Internal Market” objective and the accompanying policies, concerning economicand social cohesion policies serviced by the “Structural Funds”

  10. The 1992 Treaty on the European Unionand the pillars of Community construction concerning economic and social cohesion. • The 1999 agreement and the preparation for enlargement.

  11. I - The Treaty of Rome (1957) Community Mission (Art 2) • Internal Market • Promoting the harmonious development of economic communities in the entire Community

  12. I - The Treaty of Rome (1957) (continued) Methods (Art 3) • Elimination of customs laws • Common customs tariff • (Abolition of obstacles to the free circulation of people, services and capital) • Common Agricultural Policy (CAP) • (Common transport policy) • To not distort competition • Creation of a European Social Fund (ESF) • Founding of European Investment Bank (EIB) • Association of non-member countries

  13. I - The Treaty of Rome (1957) (continued) The accompanying instruments: • The ESF (art. 123) - promoting employment possibilities (the “work” factor) by: • professional training • employment support • The EIB (art. 130) - the creation of new resources (the “capital” factor) by: • the improvement of less developed regions • the modernisation/conversion of enterprises • common interest projects for more Member States

  14. I - The Treaty of Rome (1957) (continued) The accompanying instruments: • The framework of STATE AIDS (art. 92) to not distort competition • aid with general aim • aid with a sectorial aim • aid with a regional aim • Sectorial (and non-regional) policies • a success: the CAP and its financial instrument EAGGF • a failure: transport (“harmonious development in the whole Community”)

  15. II - The 1973 Enlargement & its consequences • Particular situation of the United Kingdom with regard to the European budget: • “receipts of the EEC budget” side: UK a traditional importer from non-member countries • “expenses of the EEC budget” side: UK a minor partner of the CAP • Consequence: the creation of ERDF: European Regional Development Fund…a “budgetary”instrument of regional policy

  16. II - The 1973 Enlargement & its consequences • Characteristics of the 1st ERDF • budgetary redistribution : (“quotas”, subsidies) • 2 missions • regions lagging behind (c.f. I) • industrial regions in decline (c.f. U.K.) • 2 interventions • Infrastructures • production investments …. But this does not resolve the UK problem (SMUK; Fontainebleau agreement)

  17. III - The 1986 Single Act • The major objective: THE INTERNAL MARKET(to be completed by 1993) • Abolition of obstacles to the free circulation of • goods • people • services • capital (c.f. obstacles: regulations and norms : technical : fiscal)

  18. III - The 1986 Single Act(continued) • The accompanying policies - Monetary capacity - Social Policy - Economic and social cohesion - Research and technical development - Environment ...“in order to promote a harmonious development in the whole of the Community”!

  19. III - The 1986 Single Act(continued) A - An accompanying policy = “Economic and social cohesion policy” Aim (art. 130a) - Reduce the gap between different regions and the lagging behind of less prosperous regions Methods - Funds with a structural aim or • “Structural Funds” • EAGGF – Guidance • ESF • ERDF • the EIB and other existing instruments

  20. III - The 1986 Single Act(continued) B- The Reform of the Structural Funds To help the cohesion policy • Four basic principles: • Concentration • priority objectives (*) • geographical • Partnership • Programming • Additionality

  21. III - The 1992 European Union Treaty Mission (Art. 2) • Promotion of balanced and harmonious development of activities in the whole of the Community, of durable growth …etc…of economic and social cohesion and solidarity between the member states. Methods (Art.3) • Common Market • Economic and Monetary Union • Common policies and actions • of which, the reinforcement of economic and social cohesion

  22. IV - The 1992 European Union Treaty(continued) Accompanying specific instruments Funds with a structural purpose • a new Fund: the Cohesion Fund • a new institution: the Committee of the Regions • a monitor : the triennial cohesion report

  23. IV - The 1992 European Union Treaty(continued) 1 - The financial perspectives: 1993 - 1999 (Edinburgh Council) Structural Funds 1994 - 1999 • 141 billion ECU’s of which 96.35 billion Ecus(Obj. 1) 1/3 of the EEC budget Cohesion Funds 1993 – 1999 • 15.15 billion Ecus

  24. IV - The 1992 European Union Treaty(continued) 2 -The putting in place of the instruments • The Cohesion Fund • transport infrastructure projects • environmental projects • The “revised” Structural Funds1993 - the six revised regulations

  25. V - The 1999 reform and the preparation for Enlargement 1- The financial perspectives: 2000-2006 (Berlin Council) • Structural Funds: 195 billion Euro • Cohesion Fund: 18 billion Euro • Preaccession instruments • Phare: 10.9 billion (institutional building) • SAPARD: 3.6 billion (rural development) • ISPA: 7.3 billion (env. + tren.)

  26. 1989 - 1993 Integration of the structural funds 5 common objectives Standardised administration rules Decentralised management Increase of the structural funds' budget up to 14 bn ECU p.a. (ca. 20% of EU-Budget)

  27. 1994 - 1999 Introduction of a new objective 4 Simplification of procedures New: Cohesion Fund and fisheries instruments Increase of the structural funds' budget up to 32 bn ECU p.a. (ca. 30% of EU budget)

  28. 2000 - 2006 40% to 49,9% of EU pouplation (155→224 Mio.) in eligibleareas (Obj. 1&2) phasing-out forsomeobjective 1,2 and 5b regions 3 commonobjectives Introductionofpre-accessioninstrumentsforcandidates (ISPA) Increaseofthestructuralfunds' budgetupto 38 bn Euro p.a. (ca. 33% of EU budget)

  29. 2007 - 2013 3 objectives, Community initiatives mainstreamed All regions eligible Budget increase: about Euro 50 bn p.a. (ca. 36% of the EU budget) Rural development and fisheries funds outside cohesion policy

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