European Social Funds (ESF)

1. European Social Funds (ESF) Petros Christodoulou Therapon Andreou Giannis Agathokleous

2. HISTORY The European Social Fund was created in the founding Treaty of Rome in 1957 it is the oldest of the structural funds. While the ESF has always taken higher employment as its objective, it has adapted its focus over the years to meet the challenges of the time. In the early post-war years, it concentrated on managing the migration of workers within Europe; later it moved on to combating unemployment among the young and poorly qualified. In the current funding period, 2007-2013, as well as targeting support at those with particular difficulties in finding work, such as women, young people, older workers, migrants and people with disabilities, ESF funding is also helping businesses and workers adapt to change. It does this by supporting innovation in the workplace, lifelong learning and the mobility of workers.

3. INTRODUCTION The European Social Fund (ESF) is the European Union’s main financial instrument for supporting employment in the Member States as well as promoting economic and social cohesion. ESF spending amounts to around 10% of the EU’s total budget. The ESF is one of the EU structural funds, which are dedicated to improving social cohesion and economic well-being across the regions of the Union. The structural funds  are redistributive financial instruments that support cohesion within Europe by concentrating spending on the less-developed regions. The particular aim of ESF spending is to support the creation of more and better jobs in the EU, which it does by co-funding national, regional and local projects that improve the levels of employment, the quality of jobs, and the inclusiveness of the labor market in the Member States and their regions.

4. MAIN BODY • First of all ,the overarching strategy of the European Union is the Lisbon Agenda  which aims to make Europe the most dynamic and competitive knowledge-based economy in the world, capable of sustainable economic growth with more and better jobs and greater social cohesion, and respect for the environment, by 2010. The objectives of the Lisbon Agenda shape the priorities of the ESF. • Many EU financial and policy instruments operate in support of the Lisbon Agenda. Among these, Cohesion Policy aims to reduce the economic and social disparities between the countries and regions of the EU. To do this it uses financial resources (Structural Funds) from the EU budget – including the ESF – to support the economic and social development of the less-developed regions.

5. In the light of the need to increase competitiveness and employment against a background of globalization and ageing populations, the European Employment Strategy provides a coordinating framework for the EU Member States to agree common priorities and goals in the field of employment. These common priorities are then taken up in the Employment Guidelines and incorporated into the National Reform Programmes prepared by the individual Member States. ESF funding is deployed by the Member States in support of their National Reform Programmes as well as their National Strategic Reference Frameworks (NSRF) which establish a Member State’s main priorities for spending the EU Structural Funds it receives.

6. The European Social Agenda also plays a role in shaping the priorities of ESF spending. The Social Agenda seeks to update the ‘European social model’ by modernising labour markets and social protection systems so that workers and businesses can benefit from the opportunities created by international competition, technological advances and changing population patterns while protecting the most vulnerable in society. In addition, the concept of ‘flexicurity’ contributes to current ESF initiatives. Flexicurity can be defined as a policy strategy to enhance the flexibility of labour markets, work organisations and labour relations, on the one hand, and employment security and income security on the other.  • The term flexicurity encompasses a new approach to employment involving ‘work for life’ rather than the ‘job for life’ model of the past. It encourages workers to take charge of their working lives through lifelong training, adapting to change and mobility.

7. The ESF strategy is defined by a seven-year programming cycle. ESF strategy and budget is negotiated between the EU Member States, the European Parliament and the EU Commission. The strategy defines the objectives of ESF funding, which it shares partly or wholly with other structural funding. For the current ESF funding cycle these objectives are: • The regional competitiveness and employment objective: to reinforce regional competitiveness, employment and attractiveness for investment. • The convergence objective: to stimulate growth and employment in the least-developed regions. This objective receives more than 80% of total ESF funding. • The strategy also lays down broad ‘priority axes’ – the actions required to achieve the objectives and which are eligible for funding.

8. ESF IMPLEMENTATION • Once the strategy and budget allocation have been agreed, a shared approach to programming is taken. Seven-year Operational Programmes are planned by Member States and their regions together with the European Commission. These Operational Programmes describe the fields of activity that will be funded, which can be geographical or thematic. • The Member States designate national ESF management authorities that are responsible for selecting projects, disbursing funds, and evaluating the progress and results of projects. Certification and auditing authorities are also appointed to monitor and ensure compliance of expenditure to the ESF regulation. • Until 2007, approximately 5% of ESF funds were allocated to 'Community Initiatives' to support transnational and innovative actions. They have addressed such issues as employment for women (NOW), disabled people (INTEGRA) and young people, new professions and qualifications(EUROFORM) and adaptability (ADAPT). The most recent of these, the EQUAL Community Initiative, saw in the admission of 10 new Member States in 2004 but ended in 2008 .

9. The European Social Fund 2007-2013 The current programming cycle of the ESF runs from 2007 to 2013 under the banner ‘Investing in People’. Over this period, it is investing around €75 billion – close to 10% of the EU budget – on employment-enhancing projects. Funding is given to six specific priority area: • Improving human capital (34% of total funding) • Improving access to employment and sustainability (30%) • Increasing the adaptability of workers and firms, enterprises and entrepreneurs (18%) • Improving the social inclusion of less-favoured persons (14%) • Strengthening institutional capacity at national, regional and local levels (3%) • Mobilisation for reforms in the fields of employment and inclusion (1%)

10. EUROPEAN SOCIAL FUND REGULATION The European Social Fund Regulation defines the areas of intervention of that specific instrument: increasing the adaptability of workers and enterprises, enhancing access to employment and participation in the labor market, reinforcing social inclusion by combating discrimination and facilitating access to the labor market for disadvantaged people and promoting partnership for reform in the fields of employment and inclusion.

11. OBJECTIVES OF THE EUROPEAN SOCIAL FUND (ESF) • The relative wealth of a country or region – measured by GDP per capita – determines whether it falls under the Convergence or Regional Competitiveness objective. There is a higher ESF contribution – up to 80% of co-funding – for Convergence regions. • Convergence objective spending aims to improve job creation and employment opportunities, thus bringing the wealth and employment in a region closer to the EU average. Regional Competitiveness objective spending aims to give countries and regions the workforce and labour markets they need to build successful, competitive economies, able to compete globally.

12. WAYS THE ESF SUPPORTS ITS OBJECTIVES • To achieve its objectives, the ESF funds projects and programmes in six specific fields relevant to creating jobs and helping workers to fill them. For example, a project under ‘improving social inclusion of less favoured persons’ might directly address the training needs of female immigrant workers, while another under ‘increasing the adaptability of workers and firms, enterprises and entrepreneurs’ might encourage job sharing in companies. • The share of funding indicated for the different fields can vary between regions and countries depending on priorities, although Convergence regions will usually place an emphasis on ‘improving human capital’.

13. Who becomes Beneficial from the ESF • While unemployment can hit everyone, some groups are more vulnerable than others. For a variety of reasons, some people can find it more difficult to get a job and to keep it. • For example, older workers whose long experience is underestimated, the young who have yet to acquire experience, and mothers who want to return to the labour market yet find their skills are out of date.ESF funding targets people in society who are more vulnerable to unemployment and social exclusion.

14. EUROPEAN SOCIAL FUND SPENDING • The share of the ESF budget that each Member State receives depends on several factors. Larger Member States, with greater populations, receive more funding. Less-wealthy Member States also receive proportionally more funding, as do those with higher unemployment. Within each Member State, more funding can be given to regions that fall under the Convergence objective.

15. CONCLUSION The ESF should be the preferred instrument for implementing the goals of the strategy, particularly with regard to employment, education, and poverty, in all regions of the EU. In every Member State, there should be at least a satisfactory percentage of all ESF resources intended for the thematic objective promoting employment and supporting labor mobility. Finally the budget allocated to the European Social Fund must at least be maintained at the same level as for the last planning period. The ESF must also support involvement of citizens, civil society and a greater awareness of the common values of Europe.