No C 185/20 Official Journal of the European Communities 27. 7. 81 
Opinion on the revision of the ERDF Regulation 
The opinion of the Committee is not based on any text. 
A. LEGAL BASIS FOR THE OPINION 
At its 182th plenary session held on 29 and 30 October 1980 the Committee, acting on a 
proposal from the Bureau, decided to deliver an opinion on the abovementioned subject 
on its own initiative. 
B. OPINION OF THE ECONOMIC AND SOCIAL COMMITTEE 
The Economic and Social Committee prepared its opinion on the above matter at its 
187th plenary session held in Brussels on 29 and 30 April 1981. 
The full text of the opinion is as follows: 
THE ECONOMIC AND SOCIAL COMMITTEE, 
Having regard to Article 20 (4) of the Rules of 
Procedure, 
Having regard to Article 22 of the updated Council 
Regulation (EEC) No 724/75 establishing a 
European Regional Development Fund which 
provided for a re-examination of the Fund rules in 
1981, 
Having regard to the Committee's decision on 
29 October 1980 authorizing the Section for Regional 
Development to prepare an opinion on the revision 
of the ERDF Regulation, 
Having regard to the Section's decision at its meeting 
on 14 November 1980 to entrust the preparation of 
this opinion to a Study Group with Mr Hall as 
rapporteur, 
Having regard to the deliberations of the Section at 
its 39 th meeting on 13 March 1981 and on 29 April 
1981, 
Having regard to the oral report presented by Mr 
Hall, rapporteur during its 187th plenary session held 
on 29 April 1981, 
Having regard to the discussions of the assembly at 
this same plenary session, 
Whereas it is important that the Committee should 
formulate its own views on the revision of the ERDF Regulation at a time when the future of the regional 
policy is being discussed at several levels; 
Whereas it is therefore necessary to assess the 
problems currently facing regional policy as a whole 
and then suggest a certain number of reforms desired 
by the representatives of economic and social interest 
groups, bearing in mind the concerns of 
representatives of local authorities but without, 
however, entering into a detailed legal commentary 
on each of the articles in the ERDF Regulation, 
HAS ADOPTED THE FOLLOWING OPINION 
by 70 votes to six with 16 abstentions: 
I. The role of the ERDF in Community regional 
policy 
1.1. Before discussing the specific role of the Fund 
it is necessary to outline briefly the purpose of 
Community regional policy. It is to ensure that the 
existence of the common market as foreseen in 
Article 2 of the Treaty and the progressive deepening 
of economic integration leading, eventually, to 
economic and monetary union, do not work in such a 
manner that the prosperous regions of the 
Community enjoy higher levels of employment and 
increasing prosperity, while the less advanced 
peripheral regions are normally subject to higher 
levels of unemployment, and emigration and income 
levels which fall increasingly below those in the 
richer regions. 
27. 7. 81 Official Journal of the European Communities No C 185/21 
1.2. If this divergent pattern of economic 
development is not halted and reversed certain 
disadvantaged regions will be effectively excluded 
from the gains of economic union and those Member 
States in which they are located may be compelled to 
renounce or resist the disciplines necessary for the 
creation of economic and monetary union and 
indeed the continued existence of the common 
market may be threatened. 
1.3. An active regional policy is one of the principal 
means for counteracting such trends and for tackling 
the main regional problems in the Community which 
are the under-development of a number of mainly 
agricultural areas, the serious decline in other regions 
heavily dependent on certain basic industries in 
difficulty and the special situation of certain frontier 
regions. 
1.4. The regional divergencies have, despite the 
regional policy actions taken by member countries 
and the Community, become greater since the 
Community was established. The first periodic report 
prepared by the Commission on the social and 
economic situation of the regions indicates that while 
regional disparities in GDP per head within Member 
States have remained unchanged or declined, the gap 
between the 10 strongest and the 10 weakest regions 
in the Community has widened in the 1970's. 
Expressed as a ratio it has increased from 2-9:1 in 
1970 to 4-:1 in 1977. 
1.4.1. In a free market, such disparities can be 
partially corrected by migration, but the halting, and 
in some cases in the present recession the reversal, of 
migration into the stronger regions means that the 
economies of the weaker regions have, in relative 
terms, declined in strength at the very time when they 
have an increased population to sustain. 
1.4.2. If this situation is not corrected, not only are 
living standards in the weaker regions bound to fall 
further, but an opportunity will have been lost to 
make fuller use of the manpower and other resources 
in these regions. In addition certain developments in 
world economic activity have had adverse effects in 
regions hitherto relatively free from problems. 
1.5. Moreover, looking to the future, it must be 
expected that these regional problems will become 
more intense. 
1.5.1. The enlargement of the Community, with the 
increase in the importance to it of Mediterranean areas, will result in a further widening of regional 
disparities. At the same time, slower or zero 
economic growth in the Community has not only hit 
the weaker regions with particular severity, it has 
reduced the number of jobs which can be transferred 
to them from the relatively prosperous regions. 
Moreover, the present world economic situation has 
reduced the number of jobs available from outside 
the Community. 
1.6. The increase in energy costs, the increasing 
competitiveness of newly industrializing countries, 
the rapid changes in technology leading to 
increasingly serious structural problems and to more 
capital intensive methods of production and the 
demographic changes of the last decade are all likely 
to have a proportionally greater impact on the 
weaker regions of the Community. Community 
policies to promote the restructuring of declining 
sectors can in themselves have a serious impact on 
the weaker regions in which these industries are 
heavily concentrated. 
1.7. The need for a Community regional policy has 
become more urgent whilst at the same time the 
difficulties of its effective implementation have 
increased. 
1.8. The solution to these increasingly serious 
regional problems cannot be achieved merely by 
transferring income from the more prosperous to the 
weaker regions. What is necessary is appropriate 
national and Community measures which will 
stimulate self-sustained development in the weaker 
regions and will increase their ability to compete 
more effectively in an increasingly difficult 
environment. In order to attack these problems 
effectively an overall Community regional policy has 
to be developed. This must contain the following 
elements: 
— a strengthening and an increased frequency of the 
analysis of economic and social structures and 
trends in all the regions of the Community. This is 
necessary to enable a definition of those regions 
likely to face problems which threaten the 
Community and to assess the effects of all 
measures, both at national and Community level, 
which influence regional development. In this 
connection an advance warning system would be 
particularly useful; 
— an assessment of the regional impact of all major 
Community policies and financial instruments; 
— the ability to progressively coordinate all aspects 
of national regional policies in the context of an 
overall Community regional policy; 
No C 185/22 Official Journal of the European Communities 27. 7. 81 
— the provision of financial assistance from 
Community own resources both to support 
national regional policies and to finance specific 
Community regional development measures. 
Since 1975 this has been the specific task of the 
ERDF. 
1.9. The ERDF has a special and important role to 
play in the development of Community regional 
policy but it has to be seen as one part of an overall 
policy the elements of which have been outlined 
above. 
2. The European Regional Development Fund 
2.1. Since it was established in 1975 the Fund's 
operations have been revised to incorporate the 
following major changes: 
2.1.1. The fixing of the total amount of Fund aid 
within the normal budgetary procedure. 
2.1.2. The creation of a quota-free section. 
2.1.3. Minor changes in the quotas for French 
overseas territories and a revision of the quotas 
consequent upon the accession of Greece to the 
Community. 
2.1.4. A more general definition of infrastructure 
tnvestment qualifying for Fund assistance and a 
higher rate of Fund assistance. 
2.1.5. The introduction of accelerated payments 
from the Fund. 
2.1.6. Certain simplifications of Fund procedures. 
2.2. The endowment of the Fund in nominal terms 
since its establishment has been: 
1975 
1976 
1977 
1978 
1979 
1980 
1981 300 MUA 
500 MUA 
500 MUA 
581 MEUA 
945 MEUA 
1165 MEUA 
1540 MEUA with the need to make a more significant impact on 
the widening regional imbalances within the 
Community. An increase in the endowment must be 
given greater priority in the Community budget. 
3.2. The ERDF endowment must increase 
progressively in real terms, i.e. in such a way as to 
take more than full account of the high rate of 
inflation now facing the Community. 
3.3. The Commission services are at present 
understaffed in relation to the current tasks of ERDF 
administration. Despite proposals set out below, 
which should lead to administrative simplifications, 
(for example under 7.2) and lighten the 
administrative burden, the Commission staff must be 
sufficiently numerous to ensure the effective 
operation of the existing Fund, and of an increased 
Fund in the future, and thus help to avoid 
administrative delays. 
4. Coordination of instruments and regional impact 
assessment 
4.1. It must be emphasized that the Fund cannot be 
the sole instrument of Community regional policy. 
The regional impact assessment of the effect of other 
Community policies must be expanded, and the 
coordination of Community financial instruments in 
terms of their objectives, regulations and procedures 
made more effective so as to maximize the impact on 
the less favoured regions. Where appropriate, other 
Community policies, while pursuing aims no doubt 
excellent in themselves, should also take account 
directly of particularly adverse consequences which 
they may have for the less favoured regions since the 
quota-free section of the ERDF — established 
specifically to help correct and compensate for such 
effects — is still weak and could in any case not be 
left to do this on its own. In addition, there is a need 
to accelerate the introduction of certain policies at 
Community level e.g. transport and transport 
infrastructure, research and A .development and 
energy, in the absence of which an overall 
Community regional policy cannot effectively be 
established. 
2.3. It is proposed to discuss ways in which the rules 
of the Fund may be further altered to allow it to play 
a more effective role in Community regional 
policy. 
3. Future endowment of the Fund 
3.1. The ERDF must have an endowment which 
allows it to provide a level of financing consistent 5. Methods of intervention by the Fund 
5.1. Division between support section (quota) and 
specific Community measures (quota-free) 
5.1.1. The present division of the Fund into a 
section to support Member States' regional policy 
27. 7. 81 Official Journal of the European Communities No C 185/23 
measures and a section which finances specific 
Community regional development measures (the 
quota-free section) should be maintained. This 
division of the Fund reflects the fact that regional 
policy must always be a responsibility to be shared 
between Member States and the Community. 
5.1.2. It is, however, necessary to increase 
substantially the proportion of the total Fund 
allocated to the quota-free section. It is in this section 
of the Fund that a genuinely Community approach 
and response to regional problems is achieved and as 
such it must be given a progressively larger share of 
the Fund's resources. 
5.1.3. The increasing extent and intensity of 
regional problems makes it imperative that the 
Community be endowed with adequate means to 
take the corrective actions needed to reduce the 
adverse consequences of certain Community policies 
— or their absence — for the less favoured regions. 
The Community also needs to react on a more 
appropriate scale to offset the effects on the 
economies of these regions of the widening range of 
sectoral problems facing the Community. The 
present sum allocated to the quota-free section is 
wholly inadequate to allow it to carry out this 
function. 
5.1.4. Whilst it is recognized that the present quota-
free measures are in the nature of an experiment the 
Community cannot afford to delay in providing itself 
with the means to undertake quota-free measures 
related to the wider range of Community 
objectives. 
5.1.5. A substantial increase in the quota-free 
section should not however be obtained by a simple 
transfer of resources from the support section of the 
Fund. The two sections must be regarded as 
complementing each other. 
5.2. Increase in the quota-free section and 
improvements in its operation 
5.2.1. There are also practical arguments for 
enlarging the quota-free section. Since the work 
involved in preparing the quota-free special 
programmes is considerable, the funds available 
must be sufficiently large to justify this effort. 
Moreover, if the new and different types of regional 
policy measures in the quota-free section are to have 
a real impact they must be carried out on a 
reasonable scale. 5.2.2. Similarly, if the special programmes are to 
offer the opportunity for a greater contribution and 
participation by those most directly involved in the 
economic and social life of the regions concerned, 
the financial contribution of the Community must be 
adequate to make such involvement seem 
worthwhile. 
5.2.3. The definition and choice of the areas in 
which the quota-free section measures are to be 
applied must be made on the basis of Community 
criteria which reflect the intensity, in Community 
terms, of the regional problems involved. 
5.2.4. Member States, in cooperation with regional 
and local interests, should however have the right to 
suggest modifications and should be required to 
provide the Community with all the necessary 
information on regional problems with which the 
specific measures are concerned. 
5.2.5. The quota-free section should continue to 
fund novel measures, i.e. measures which are not 
usually funded under classical regional development 
strategies either by Member States or, indeed by the 
quota section. So far as possible, the quota-free 
section should have a direct bearing on short-term 
job creation. In this way, it will complement the 
quota section, which is more suitable for infra­
structure projects and expenditure programmes. 
These, by their nature, cannot be effective except in 
the medium and longer term. 
5.2.6. The present procedures for approving the 
quota-free measures must be altered. The 
requirement of a unanimous decision by the Council 
on all projects within the special programmes limits 
the speed and flexibility of response, and severely 
reduces the genuinely Community character which 
such measures should have. As the quota-free section 
is enlarged such problems will become more 
severe. 
5.2.7. The quota-free section should not be subject 
to greater control by the Council than the support 
section of the Fund: adequate reporting on the 
progress and eventual results of the programmes is all 
that is required. 
5.3. The distribution of the support section 
5.3.1. The section of the Fund designed to support 
Member States' own regional policy measures has to 
be organized differently from the quota-free section. 
No C 185/24 Official Journal of the European Communities 27. 7. 81 
It should be concentrated in those regions of the 
Community where the problems are most deep-
seated and of such a scale as to constitute an 
unacceptable social and economic imbalance within 
the Community. In some cases these problems are 
exacerbated by the centripetal effects of the Common 
Market itself and will be further intensified as 
movement towards economic and monetary union 
creates a situation in which Member States will no 
longer have at their disposal economic measures such 
as exchange rate adjustments and independent 
monetary and fiscal policies to deal with these 
problems. The present world economic situation is 
likely to affect those regions with particular 
severity. 
5.3.2. In the face of these pressures some Member 
States may be unable to mount an adequate effort 
from their own resources to reduce those regional 
disparities which threaten the Community. Despite 
the valuable contribution made by the Commission 
in its first periodic report on the social and economic 
situation of the regions of the Community, it does not 
yet possess the detailed knowledge required to permit 
it to define with sufficient precision the areas of 
operation of the Fund's support section. In such 
circumstances misunderstanding and disagreement 
could understandably result if the Commission alone 
were to make such a choice and this would harm 
rather than reinforce Community solidarity. 
5.3.3. It will be necessary, therefore, to continue to 
distribute the support section of the Fund on the 
basis of national quotas calculated in relation to 
regional needs and the gravity of the situation in all 
Member States. But at the same time Member States 
should be required to give an assurance that their 
quotas will be concentrated mainly in areas where the 
need for extra assistance is most intense, and to 
indicate those areas in their regional development 
programmes. They should also be required to include 
in the regional development programmes fuller 
information on the regional distribution of 
infrastructure expenditure, regional trends in the 
demand for and the supply of labour, and to provide 
the Commission with data which will allow an 
analysis of regional economies on a more 
disaggregated basis than the basic administrative unit 
presently used. The Commission must take 
increasing account of this information in pressing 
Member States to concentrate their efforts on priority 
regions and to adjust their own designation of 
assisted areas in cases where these produce serious 
anomalies at the Community level. Such an 
arrangement would combine a recognition that it is 
Member States who possess the knowledge necessary 
to make such choices with the need to ensure that it is 
Community regional disparities which must be the concern of the Fund. The continued use of pre­
determined national quotas with these conditions 
would give an assurance of the Community's concern 
for the most deprived regions in all Member States 
and its recognition that in such areas long-term 
support is required. 
5.3.4. It should be noted that the progressive 
enlargement of the Community will have the effect of 
reducing to very low levels the quotas assigned to 
some Member States with less serious regional 
problems. This is one of the many calls for an 
increasingly mature view of Community solidarity 
which enlargement is bound to make. It should be 
possible, however, to continue to deploy where 
necessary, the quota-free section to take account of 
any particularly serious consequences of a fall in 
some Member States quotas. 
6. Difficulties in achieving the objective of support 
for Member States policies 
6.1. The policy of convergence and development 
implies that ERDF interventions result in more 
money for regional development. The ERDF 
Regulation provides that projects can only receive a 
financial contribution from the Community if they 
are already assisted by or entirely financed by public 
authorities. These twin features, that Community 
monies should always be supplementary to national 
expenditure, and given to projects in receipt of 
national funds, together make up the so-called 
principal of 'additionally'! However, the 
enforcement of this principle has always met with a 
series of difficulties. 
6.2.1. First, Member States are at present permitted 
to treat the Fund payments wholly as partial 
reimbursement of their own expenditure. If they avail 
themselves of this facility, it could suggest that the 
Member States wished to spend less on regional 
development. On the other hand it must be 
recognized that the Member States at present provide 
by far the greater proportion of regional 
development investment and expenditure and the 
ERDF quota is therefore a relatively small 
percentage. The pressures on national governments 
to avert widening regional disparities within their 
own countries are growing and their concern about 
regional development is, therefore, likely to be as real 
as the Community's although they may be more 
concerned about disparities within their own 
27. 7. 81 Official Journal of the European Communities No C 185/25 
countries than within the Community as a whole. 
This emphasizes the need for greater concentration 
of the Fund's operations in regions whose problems 
affect the Community. favoured regions. Many of the problems of these 
regions are the result of deep-seated structural and 
institutional weaknesses. Extra expenditure alone is 
not sufficient to reduce or remove these obstacles. 
6.2.2. Secondly, some Member States may consider 
that the creation of conditions for economic growth 
and full employment with tolerable rates of inflation 
is an essential objective if their economies are to be 
competitive in an increasingly interdependent world 
economy. To achieve this, there is a risk that they 
may deem it necessary to cut public expenditure 
including regional development expenditure. This 
would have obvious adverse effects in the regions. 
6.2.3. Thirdly, as regards infrastructure expenditure 
by national and regional authorities, it is the practice 
in most Member States to plan capital expenditures 
on a multi-annual basis. If the Fund is to promote 
extra capital expenditures the Community must 
become associated at an early stage in the 
implementation of such plans. Otherwise, its 
contribution must inevitably take the form of partial 
reimbursement of expenditure already approved. 
The Committee therefore urges the Commission 
when reviewing the ERDF Regulation, to enact 
legislation requiring the Member States to forward 
Community funds allocated for regional investments 
directly to the regional bodies which require them 
and which are responsible for administering them. 
Such funds should be forwarded without deduction 
or levy. 
6.2.4. Fourthly, the impact of Fund assistance in 
support of Member States' aid to enterprises in the 
industrial and service sectors is very difficult to 
assess, since it is accepted that it is particularly 
difficult for the Fund to make payments directly to 
enterprises; the Commission can only rely on 
assurances by Member States that their receipts from 
the Fund, used for this purpose, will allow them to 
increase the total amount of aid available to such 
enterprises. 
6.2.5. Finally, although an increased flow of funds 
should generally be insisted upon as a necessary 
objective of the support section of the Fund, such 
increased expenditure must be coordinated with 
other Community financial instruments and with 
Member States' own regional development measures 
to ensure that it is directed towards resolving the 
main obstacles to faster development in the least 6.3. In the light of the above, the Committee 
considers it necessary to reaffirm its full support for 
the principle of 'additionally' and the spirit 
underlying it. The most logical solution would 
appear to be to remove the existing legal base for 
reimbursement. But for valid, economic, political 
and indeed practical reasons given above this would 
seem to be out of the question. However, in order to 
help attain, in a clearly demonstrable way, a higher 
level of total expenditure in the regions as a result of 
ERDF intervention than would otherwise have been 
the case, and to achieve true additionality it should 
be possible to introduce the following methods: 
6.3.1. The total expenditure should be made more 
transparent by appropriate modification of existing 
rules and practices so as to require Member States to 
regionalize expenditure showing the amount 
financed nationally and by the EEC respectively. 
6.3.2. In the same way, the degree of transparency 
would be much greater if ERDF aid were granted 
solely, as ideally it should be, to projects that have 
not yet been started. With the move to programme-
based financing, this should normally become the 
rule. The provision allowing reimbursement of 
payments made up to 12 months previously by 
Member States, might therefore appear redundant. 
However, to take account of possible administrative 
delays and the need for urgency in certain cases, this 
provision could be maintained: nevertheless it is 
possible and desirable to reduce the period from 12 
to 6 months. 
6.3.3. In certain cases it may happen that a project 
which obviously would further the development of a 
region receives no State aid. However, if the investor 
manages to raise 80% of the amount needed 
(industrial, handicrafts or service projects) he ought 
to be eligible for a complementary sum of 20% from 
the ERDF. To this end provision should be made for 
projects not subsidized by the State, but considered 
valuable by the State from the point of view of 
regional development, to be eligible for submission 
to the ERDF. The adoption of such a proposal 
involves the introduction into the ERDF Regulation 
of a broadened version of the meaning of 
No C 185/26 Official Journal of the European Communities 27.7/81 
additionality which at present is based solely on 
matching grants from the State. This in turn could 
imply that it is no longer necessary for the State to 
refund ERDF monies when the initial national aid is 
repaid by the investor. 
7. Method of operation of the support section 
7.1. The objective of the support section of the 
Fund must be to combine with the other financial 
instruments and measures of the Community and 
those of the Member States in order to achieve a 
greater socio-economic impact in the least favoured 
regions. To achieve this objective and to meet as far 
as is possible the difficulties listed above, the 
following improvements are required in the methods 
of intervention employed by the Fund. 
7.2. Investment expenditure Programmes (IEPs) 
7.2.1. The support section must increasingly 
finance, jointly with Member States, programmes 
rather than individual projects. A full statement must 
be made of the total costs of the IEPs and a detailed 
statement of the sources and methods of their 
financing whether national, regional, or sub-
regional. Where infrastructure or public enterprise 
expenditures are involved a regional breakdown of 
the relevant national expenditures on the actions 
must be indicated. Where relevant, details of sectoral 
aids, tax exemptions and abatements, preferential 
terms for supplies etc. should be provided. 
7.2.2. The regional development programmes do 
not yet contain sufficiently detailed information to 
provide for the basis of such a financing framework. 
An immediate step should be to require Member 
States to prepare within the regional development 
programmes planned investment expenditure 
programmes (IEPs) covering groups of projects of a 
similar related nature. The Member States must 
justify the priority nature of IEPs as a means of 
promoting more rapid development in the regions 
covered an in particular the attraction and 
stimulation of new industries. As the regional 
development programmes are improved such IEPs 
would naturally fall within the framework. Such an 
arrangement would associate the Community as a 
financing partner in IEPs which Member States 
themselves consider as priorities. In this way the 
Community will have a degree of assurance that 
Fund assistance is being used to complement Member States' own efforts in a coordinated way. 
The development of IEPs should allow the support 
section of the Fund progressively to make payments 
in terms of programmes rather than for individual 
projects. Payments might be made in tranches as the 
IEPs progress. 
7.2.3. The rates of support should be established but 
should be variable within limits according to the 
intensity of the regional problem, the nature of the 
expenditures in the IEPs and the other sources of 
finance available. 
7.2.4. Such a system of financing should allow a 
considerable simplification in the examination and 
processing of individual projects both by Member 
States and by the Commission. 
7.2.5. Individual projects within the IEPs should be 
examined only when they exceed a certain 
established expenditure limit. 
7.3. Integrated operations 
7.3.1. In the immediate future the IEPs should 
operate separately from the integrated operations 
which have already been approved for the strictly 
defined geographical areas of Naples and Belfast and 
envisaged for a limited number of other areas. The 
purpose of the integrated operations is different from 
the IEPs in that they are directed towards increasing 
the effectiveness of regional development measures 
by improving coordination of both financial 
instruments and administrative procedures at 
Community, national and regional and local levels. 
7.3.2. The Committee is currently examining 
'Integrated operations' in its specific opinion on this 
subject and will set out its comments and 
recommendations on the future development of 
integrated operations in that opinion. 
7.3.3. The ESC urges the Commission to examine 
whether a legal basis for the new integrated 
operations intervention instrument is appropriate 
and even necessary under budgetary law. 
27. 7. 81 Official Journal of the European Communities No C 185/27 
8. Regional development programmes 
8.1. As a means of coordinating regional policies as 
well as Fund interventions 
8.1.1. It is clear that the regional development 
programmes when they contain adequate 
information should serve as the framework within 
which the financial interventions of the Fund are 
coordinated. But the regional development 
programmes have a wider function. 
8.1.2. It is to provide the Commission with 
information concerning all actions undertaken by all 
Member States to promote regional development and 
to assess the socio-economic impact of all these 
corrective actions by Member States and the 
Community. They are also a vital element for 
regional impact assessment. Each Member State's 
regional policy affects every other Member State and 
it is crucial to avoid conflicting priorities and 
wasteful expenditure which would weaken the 
Community's efforts to aid its weakest region, 
particularly at a time when the resources available to 
the Community are likely to be subject to severe 
constraint. Every support must therefore be given to 
the Commission's request for fuller information to be 
provided in the regional development programmes. 
8.2. Improvements in information provided in the 
regional development programmes 
8.2.1. The programmes should indicate all aspects 
of measures taken by Member States throughout 
their territory to achieve a better regional balance 
and those which have regional implications and not 
simply direct regional policy measures. 
— Programmes should refer to a uniform period 
coinciding with the fifth medium-term economic 
programme of the Community, thereby 
associating regional policy within the macro-
economic policies of the Community. 
— Forecasts of job deficits in the regions. 
— More information on the link between 
infrastructure including regionally relevant 
national infrastructure and regional 
development. 
— More information on financial transfers between 
different levels of government. These are 
frequently much larger and more important than specifically defined regional development 
expenditure and knowledge of their extents is 
necessary to assess the real regional development 
effort in the different Member States. 
— Multi-annual financial programmes for 
infrastructure investment in the regions including 
public enterprise investment. 
— More information on the use made of all 
Community financial instruments. 
— Information must be provided on the basis of 
comparable regions, a uniform methodology and 
a common, statistical base. 
— It is extremely important that the returns and 
updating of information be provided within the 
agreed time limits. 
9. Involvement of regional authorities and social 
partners (]) 
9.1. If programmes are to receive increased 
emphasis it is essential to involve local and regional 
authorities and employers and trade unions more 
directly in the formation and implementation of 
Community regional policy. Apart from the need to 
bring the Community efforts much more openly to 
the attention of those in the regions it is seeking to 
aid, such participation will bring a wealth of much 
needed industrial expertise and local knowledge to 
bear on the problems which national government 
officials and, to an inevitably greater extent 
Commission officials, cannot possess. 
9.2. This kind of involvement needs to operate at 
four levels: 
9.2.1. There should be a dialogue at Community 
level between the Commission and representatives of 
local and regional authorities, and of employers and 
trade unions, on the major aspects of regional policy 
— this should involve regular meetings with the 
Consultative Committee of local and regional 
authorities in the Member countries of the European 
Community and involvement of representatives 
appointed by this body in the work of the Regional 
Policy Committee. 
9.2.2. There should be proper liaison at national 
level between the central governments and 
representatives of local and regional interests over 
(i) OJNoC53, 3. 3. 1980, p. 61. 
No C 185/28 Official Journal of the European Communities 27. 7. 81 
the development and operation of regional policy 
including the implementation of Community 
policies. 
9.2.3. Within the regions there should be direct 
involvement by local and regional interests in the 
preparation of regional development programmes 
and in the drawing-up of applications for assistance 
from both the quota and quota-free sections of the 
ERDF; in particular the views of representatives of 
these interests should be enclosed with such 
applications. 
9.2.4. There should be greater opportunities for 
direct contacts between the Commission and the 
local and regional interests concerned in the 
implementation of particular Fund-aided projects 
and programmes. 
9.3. The need to stimulate all the economic 
potential within the regions makes it particularly 
necessary to consult more closely with those who 
appreciate fully the development opportunities in the 
regions. The Social Fund Committee and the 
experience of the working groups in intregrajed 
operations offer useful models for the involvement of 
groups other than the national governments in policy 
formation. Given all this, the ERDF Regulation 
should be amended by attaching to the bodies 
responsible for granting Regional Fund aid a 
Consultative Committee composed of 
representatives of regional authorities, employers 
and trade unions. It is important that Commission 
officials should be given access to such groups and 
should be able to visit and carry out work in the areas 
concerned. 
9.4. The suggested arrangements outlined above 
will enable all parties to discuss priorities, 
programmes and projects when they are being 
planned. It is in this way a Community inflection and 
control can be assured at all relevant stages. The 
working groups would also follow the outworking of 
the programmes. 
10. Increased flexibility and new types of action by 
the Fund 
10.1. The development of a more programme-based 
Fund with adequate reporting should encourage the 
incorporation, in the support section of the Fund, of 
some of the different types of regional assistance and 
more flexible conditions contained in the quota-free section. There is a strong case for a judicious 
widening of the definition of eligible infrastructure in 
a programmed context to include capital expenditure 
on housing, education and training facilities, energy 
and transport facilities not presently qualifying. The 
aid thus provided in cooperation with operational 
expenditure from the European Social Fund on 
training of skilled labour would strengthen one of the 
most valuable indigenous resources of the less 
favoured regions. The present restricted definition of 
services and provision should be widened again in an 
appropriate programme context to allow the Fund to 
help in their financing. 
10.2. Reference has been made above (1.5) to the 
increasing difficulty in finding jobs to transfer into 
the regions: these will more and more have to rely on 
self-generated new growth and on the expansion of 
existing SMEs. The Commission must watch the 
situation closely and be ready to suggest new forms 
of ERDF aid to stimulate and enhance such new 
growth and expansion. It may be necessary, for 
example, to establish procedures to ensure that 
expenditures by small firms, suitably grouped by the 
appropriate national or regional agency, on capital 
equipment, research and development, marketing 
activities including subcontracting and export 
promotion, training and managerial services be 
rendered eligible for Fund assistance, if necessary in 
cooperation with the Social Fund and/or other 
Community instruments, in the most flexible way 
possible. Member States might be asked to present an 
investment expenditure programme involving 
measures to aid small firms which could be co-
financed by the Community. 
10.3. The Commission's proposal for an interest 
rebate scheme on EIB loans to all enterprises and not 
simply to infrastructure projects (see guidelines for 
Community regional policy COM[77] 195 final) and 
provision for a limited exchange rate guarantee 
should be considered. At a time of fluctuating 
exchange rates and high interest rates in many 
Member States this would seem a logical and useful 
form of assistance. It has the additional merit of 
providing access to Community capital markets 
thereby reducing pressure on limited budgetary 
resources. The lack of use of the existing interest rate 
rebate scheme for infrastructure projects is one of the 
weaknesses of current procedures. 
10.4. In some Member States the extra cost to the 
borrower of guarantee schemes provided by Member 
States themselves reduces very considerably the 
benefit of the low rate of interest on EIB loans. 
27. 7. 81 Official Journal of the European Communities No C 185/29 
10.5. Assistance from the Fund in this form will 
obviously be extended over the term of the loan 
concerned, but it-will have a direct impact on the 
beneficiaries. 
10.6. The quota-free section of the Fund already 
allows the Gommunity to participate in financing a 
wider range of regional aids. Local and regional 
authorities have reacted favourably to this initiative. 
They wish, however, to be more fully consulted as 
regards the quota-free measures. In addition they 
have emphasised the need for the management of this 
section of the Fund to be modified to allow it to 
contribute to a wider range of expenditures, e.g. to 
cover the total costs of schemes mainly financed by 
local authorities but involving a contribution by 
private enterprise or a State development agency; in 
exceptional cases projects which do not receive aid 
from the Member States but are of Community 
interest; a wider range of services than is currently 
allowed as eligible; and the possibility of assuring 
Fund assistance in principle to projects to which 
local or national finance has not been fully 
committed. 
10.7. Care must be taken that the increasingly 
complex rules of the Fund are understood by those 
who have to operate within them at the grass roots 
level. 
11. Information and publicity 
11.1 It is important to disseminate as widely as 
possible information about the financing provided 
by the ERDF and all other Community financial 
instruments in order to demonstrate the extent to 
which the less-favoured regions in the Community 
are gaining from being part of a Community which is 
showing a tangible sense of solidarity. Publication of 
information in the Official Journal and the issue of 
Community press releases should be supplemented 
Done at Brussels, 29 April 1981. by a requirement that Member States themselves 
publicise in appropriate ways the financial aid they 
receive from the Community. 
11.2. In particular, all Member States should 
produce an official paper showing the relationship of 
Community aid to all nationally provided aid to the 
less favoured regions, including infrastructure 
expenditure. 
11.3. Hoardings should be made obligatory on all 
major infrastructure projects receiving Fund 
assistance, provided the information is not 
misleading and that the assistance has really been 
used as an additional contribution to the projects. 
ERDF should always be spelt out in full, and 
followed by the words 'of the European 
Community'. 
11.4. As the Fund moves towards an increasingly 
programmebased approach involving expenditure 
schemes, integrated operations and the special 
programmes of the quota-free section of the Fund, 
Member States should be required to publicize these 
efforts as widely as possible. 
11.5. Fuller details of industrial and services 
projects, i.e. productive investments presented for 
Fund assistance should be published in the Official 
Journal indicating the identity of the firm or agency 
concerned at its precise geographical location. This is 
important to indicate the priorities to which Fund 
assistance is directed. But it should be made very 
clear that what the Fund does in respect of these 
activities is to make a contribution to the Member 
States' own capacity to give assistance. It would 
remove misunderstanding and disenchantment if, 
increasingly, Community aid were presented as a co-
financing operation with Member States in 
programmes which will help the less favoured 
regions towards faster growth and fuller 
employment. 
The Chairman 
of the Economic and Social Committee 
Tomas ROSEINGRAVE 
No C 185/30 Official Journal of the European Communities 27. 7. 81 
ANNEX 
CHART 
On links between means available for regional policy as proposed 
in the opinion 
COMMUNITY REGIONAL POLICY 
Coordination 
national 
regional policies ERDF 
Support section 
(quota section) Quota-free 
Section 
Coordination 
Community policies and 
financial instruments 
(regional impact 
assessment: 
integrated operations) 
Investment 
expenditure 
programmes 
(programme, not 
project, approach) Special 
programmes 
REGIONAL DEVELOPMENT 
PROGRAMMES 
27. 7. 81 Official Journal of the European Communities No C 185/31 
ANNEX 
to the opinion of the Economic and Social Committee 
The following amendments have been rejected by the plenary session 
Pages 14 to 19 
Delete Chapter 6. 
Reasons 
The issue of additionality comes up again in the Regional Development Section's opinion on the 
Commission memorandum on the development of Community regional policy. The relevant study 
group has been given the following task: 
1. It has to review the development of all Community structural policies. The general context of 
this review also embraces the issue of how the policies of the Member States are to be supported 
and what difficulties arise in achieving these objectives. 
2. All amendments to Chapter 6 are to be taken into account here. The opinion in the role, 
function and funding of the ERDF can and should be restricted to the urgent, pressing and 
immediately implementable amendment to Regulation (EEC) No 724/75. Steps should be 
taken to ensure that it is submitted in time for the deliberations and decisions of the 
Commission and the Council of Ministers. 
Result of the vote: 
For: 7, against: 70, abstentions: 18. 
Page 15, paragraph 6.3. 
Reword as follows: 
'The ESC therefore proposes that Article 4 (2) (a), which enables the Member States to use ERDF 
contributions as partial reimbursements of aid, should be deleted.' 
Paragraphs 6.3.1 to 6.4.5 should be deleted. 
Reason 
At the present stage of the Commission's proceedings on the review of the Fund Regulation, it is 
premature to develop compromises which undermine the fundamental principle of 'additionality', 
instead of clarifying the drafting to protect against abuse. 
Result of the Vote: 
For: 11, against: 55, abstentions: 19.