Working for the regions : EU regional policy 2007-2013.
Date: 2008-02-18
Institutions: Directorate-General for Regional and Urban Policy
Subjects: EU regional policy, Structural Funds, competitiveness, cooperation policy, economic and social cohesion, regional development, research and development, sustainable development

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Working for the Regions

EU Cohesion Policy puts the principle of solidarity in the EU into practice. Strengthening 
economic, social and territorial cohesion by reducing developmental disparities between 
the regions is a fundamental objective of the EU and is laid down in its Treaty. Although 
cohesion policy investments focus on the poorer regions of the EU, helping them to catch 
up with the richer areas, they have a positive impact on all regions and inhabitants – boosting 
competitiveness and living conditions across the EU. This brochure explains how the EU’s 
Cohesion Policy works, what it can achieve and where to get more information. 

Glossary

Cohesion Fund: applying to Member States with a gross national income of less than 
90% of the EU average, the Cohesion Fund co-fi nances projects in the fi eld of transport 
and  environment,  including  trans-European  networks  (TENs),  energy  effi  ciency  and 
renewable  energy.  For  the  2007-13  period,  €69.6  billion  will  be  available  for  the  fund 
within the framework of programmes managed by Member States.

CSG (Community Strategic Guidelines for Cohesion): these provide a framework for 
Structural Fund interventions. 

ERDF  (European  Regional  Development  Fund):  together  with  the  Cohesion  Fund 
and the European Social Fund, this is one of three fi nancial instruments of EU cohesion 
policy  and  the  major  source  of  fi nancing  to  develop  the  internal  potential  of  regions. 
Set  up  in  1975,  the  ERDF  can  contribute  to  the  fi nancing  of  productive  investment, 
entrepreneurship,  transport  and  environment  infrastructure,  research  and  technology, 
innovation, information society, sustainable development and other activities. 

ESF  (European  Social  Fund):  created  in  1957,  this  is  one  of  the  EU’s  three  cohesion 
instruments and the main EU source of fi nancial support to develop employability and 
human resources.

GDP (gross domestic product): the economic value of all goods and services produced 
within  a  given  area  over  a  given  period  of  time.  It  is  equal  to  the  sum  of  the  gross 
value added of economic activities in an area, plus any taxes, and minus any subsidies. 
When comparing EU regions, GDP is usually expressed as a percentage of the EU average 
(the  average  =  100%).  Expressing  GDP  per  capita  in  purchasing  power  parities  (PPPs) 
makes diff erent prices comparable across Member States.

NUTS (nomenclature of territorial units for statistics): the classifi cation system used 
by the EU to collect statistics at regional level. All regions in the EU are classifi ed into three 
NUTS levels. Currently, there are 268 NUTS 2 regions across EU-27. Level 2 is used to defi ne 
areas eligible for support from the Structural Funds. 

NSRF  (national  strategic  reference  framework):  when  programming  the  Structural 
and Cohesion Funds’ interventions for 2007-13, Member States have to present an NSRF 
which ensures that the interventions are in line with the EU guidelines on cohesion.

Operational Programme: this is a document setting out a Member State’s or region’s devel-
opment strategy, with a coherent set of priorities to be carried out with the aid of one of the 
Structural or Cohesion Fund instruments. It is submitted to the European Commission.

Inforegio
Consult the Inforegio website for an overview of EU Regional Policy: 
http://ec.europa.eu/regional_policy
regio-info@ec.europa.eu

Working 
for the regions

EU Regional Policy 2007-2013

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Contents

Foreword  ...................................................................................................................................................................................................................................................................................   1

In a nutshell: a policy for Europe’s regions  .......................................................................................   2

Why European regional policy matters  .........................................................................................................   4

How it works  ..............................................................................................................................................................................................................................................................    6

Who receives how much and for what?  ......................................................................................................   8

Attracting investors  ........................................................................................................................................................................................................................  10

Getting there: enhancing accessibility  .............................................................................................................  12

Innovating regions  .............................................................................................................................................................................................................................  14

Green light for sustainable growth ..................................................................................................................................  16

A better life in Europe’s cities  ...................................................................................................................................................................  18

Investing in people  ...........................................................................................................................................................................................................................  20

Spending it wisely  ................................................................................................................................................................................................................................  22

Cooperation without borders  ...............................................................................................................................................................  24

Does it make a diff erence?  .................................................................................................................................................................................  26

Controlling taxpayers’ money  ...............................................................................................................................................................  28

Telling the story: your right to know  .........................................................................................................................  30

At your service  .....................................................................................................................................................................................................................................................  32

Glossary  ...........................................................................................................................................................................................................................................................................................  33

Cover: GPS Surveying by an Engineering technology centre in Nördlingen, Germany. 
© CEC: DG REGIO / Mike St Maur Sheil 
Editor: Ana-Paula Laissy, European Commission, Directorate-General for Regional Policy 
This magazine is printed on recycled paper. 
The opinions expressed in this publication are those of the author and do not necessarily refl ect the views of the European Commission.

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15/01/2008   12:33:42
15/01/2008   12:33:42

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Danuta Hübner 
Member of the European Commission 
responsible for Regional Policy

Dear Reader,

I would like to invite you to discover the new regional policy of the European Union which 
builds on the diversity, challenges and opportunities of Europe’s regions. Today, 43% of the 
economic output and 75% of investments in research and innovation are concentrated on 
just 14% of the European territory, the so-called pentagon between London, Hamburg, 
Munich, Milan and Paris. Disparities between Europe’s regions have signiﬁ cantly deepened 
with recent enlargements. The wealthiest member state, Luxembourg, is now seven times 
richer than the poorest one, Romania. At the regional level, the diﬀ erence is even more 
important. Such a pattern can only be observed in emerging economies like China and 
India while disparities in the US and Japan are much less signiﬁ cant. 

European  regional  policy  puts  into  practice  solidarity  between  the  peoples  of  Europe. 
Strengthening economic, social and territorial cohesion by reducing developmental dis-
parities between its regions is a fundamental objective of the EU and laid down in its Treaty. 
The ﬁ nancial means set aside to achieve this objective represent more than one third of 
the EU budget between 2007 and 2013. While concentrated on the poorer regions and 
helping them to catch up faster, cohesion policy investments have a signiﬁ cant impact on 
the competitiveness of all regions and on the living conditions of their inhabitants.

Globalisation,  climate  change,  population  ageing,  external  immigration  and  the  need 
for sustainable energy supply are challenges for the European territory which transcend 
national,  institutional  or  policy  borders.  Europe  has  to  ﬁ nd  common  solutions  to  these 
challenges in partnership with national, regional and local levels. They impact directly on 
regional and local communities and they require that public and private partners work 
together and ﬁ nd practical and integrated solutions.

The policy’s added value extends beyond growth and jobs. Cohesion policy “levers in” and 
safeguards compliance with other Community policies – be it in the ﬁ eld of state aids, 
environment,  transport,  support  for  innovation  or  the  information  society.  Last  but  not 
least, it improves and modernises public administrations, to enhance transparency and 
foster good governance. 

Mapping Europe’s needs and challenges is not enough. European regional policy has the 
potential  to  turn  common  challenges  into  opportunities.  It  becomes  visible  in  tens  of 
thousands of projects realised by the EU and the Member States and regions together. 
Such projects may be just around the corner. I hope this brochure will help to persuade 
you that Europe works. 

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In a nutshell: 
a policy for Europe’s regions 

More growth and jobs for all regions 
and cities of the European Union – this 
message  is  at  the  heart  of  cohesion 
policy  and  its  instruments  between 
2007 and 2013. 

The greatest investment ever made by the 
EU through cohesion policy will be worth 
€347.4  billion  over  the  seven-year  period, 
supporting regional growth and stimulat-
ing job creation. It is estimated that cohe-
sion instruments could boost growth in the 
new Member States by 6% on average and 
create as many as two million new jobs.

Eighty-two percent of total funds will focus 
on ‘Convergence’ regions – home to 35% 
of the Union’s population. In the remaining 
regions,  some  €55  billion  are  being  allo-
cated  under  the  Regional  Competitive-
ness and Employment objective. Another 
€8.7 billion are  available for cross-border, 
transnational  and  interregional  coopera-
tion  under  the  European  Territorial 
Cooperation objective.

The three objectives are supported by three 
funds,  namely  the  European  Regional 
the 
Development  Fund 
Cohesion Fund and the European Social 
Fund (ESF).

(ERDF), 

The  ERDF  will  support  programmes  on 
regional development, economic change, 
enhanced  competitiveness  and  territorial 
cooperation throughout the EU, while the 
Cohesion  Fund  will  focus  on  transport 
and  environment  infrastructure,  as  well 
as  on  energy  eﬃ  ciency  and  renewable 
energy  in  Member  States  with  a  Gross 
National Income (GNI) lower than 90% of 
the EU average.

Under  the  Convergence  objective,  ERDF 
actions will concentrate on strengthening 
infrastructure, economic competitive-
ness, research, innovation and sustainable 
regional development. Under the Compet-
itiveness objective, the ERDF will focus on 
three priorities: innovation and the knowl-
edge economy, the environment and risk 
prevention, and access – away from urban 
centres  –  to  transport  and  telecommuni-
cation.

Throughout  the  EU,  under  both  the 
Convergence  and  the  Regional  Com-
petitiveness  and  Employment  objec-
tives, the ESF will provide support to antic-
ipate  and  manage  economic  and  social 
change. There are four key areas for action: 
increasing  adaptability  of  workers  and 
enterprises; enhancing access to employ-
ment and participation in the labour mar-

2

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ket; reinforcing social inclusion by combat-
ing  discrimination  and  facilitating  access 
to  the  labour  market  for  disadvantaged 
people; promoting reform in employment 
and inclusion.

Under the Convergence objective, the ESF 
will also support eﬀ orts to improve educa-
tion and training, and help develop institu-
tional capacity and the eﬃ  ciency of public 
administrations.

Across  all  cohesion  policy  programmes, 
the main ﬁ elds of investment1 and their 
relative shares of funding are:

technology 

 ■  Knowledge  and  innovation:  almost 
€83  billion  (24%)  will  be  spent  on,  for 
example,  research  centres  and  infra-
structure, 
transfer  and 
innovation in firms, and the develop-
ment  and  diffusion  of  information 
and communication technologies.
 ■  Transport: about €76 billion (22%) have 
been allocated to improving the acces-
sibility  of  regions,  supporting  Trans-
European  Networks,  and  investing  in 
environmentally  sustainable  transport 
facilities in urban areas in particular.

 ■  Environmental  protection  and  risk 
prevention: 
investments  of  around 
€51 billion (19%) will ﬁ nance water and 

waste-treatment infrastructures, decon-
tamination of land in order to prepare it 
for new economic use, and protection 
against environmental risks.

 ■  Human  resources:  €76  billion  (22%) 
will  be  spent  on  education,  training, 
employment  and  social  inclusion 
schemes ﬁ nanced by the ESF. 

interventions  concern 

the 
Other 
promotion  of  entrepreneurship,  energy 
networks  and  eﬃ  ciency,  urban  and 
rural  regeneration,  tourism,  culture  and 
strengthening the institutional capacity of 
public administrations.

The  ﬁ nancial  instruments  have  their  legal 
basis  in  EU  regulations. The  instruments 
co-ﬁ nance  national,  regional  and  cross-
border  programmes  which  are  managed 
by  national  and  regional  authorities.  The 
Commission  and  national  and  regional 
authorities  share  responsibility  for  pro-
gramme control, publicity and evaluation.

Brief  descriptions  of  the  423  programmes 
ﬁ nanced  between  2007  and  2013  can  be 
found on the European Commission website 
at http://ec.europa.eu/regional_policy. 

1  Please note that the ﬁ gures on investment through cohesion policy are based on information provided by the Member States 

in autumn 2007. They represent planned expenditure and may be subject to change over the period until 2013.

3

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The new airport in Soﬁ a, Bulgaria 

Why European regional 
policy matters

The European Union generates 43% of 
its economic output in just 14% of its 
territory – the geographical pentagon 
formed by London, Hamburg, Munich, 
Milan  and  Paris,  home  to  about 
one-third of its population.

Economic  and 
social  disparities 
in  Europe  are  substantial  and  they 
have  significantly  deepened  with 
recent  enlargements.  Luxembourg,  the 
wealthiest  Member  State  in  terms  of  
per-capita  income,  is  now  seven  times 
richer than the poorest one, Romania.

At  the  regional  level,  the  diﬀ erence  is 
even  bigger:  the  richest  region  is  Inner 
London with 290% of EU-27’s average gross 
domestic product (GDP) per capita, while 
the poorest region is Nord-Est in Roma-
nia with 23% of the EU average. Although 
GDP is not a completely accurate reﬂ ec-
tion of living standards as it does not fac-
tor in the relative cost of living, it gives an 
indication of the diﬀ erences that exist.

This is reminiscent of patterns observed 
in China and India: in both countries the 
region  with  the  highest  GDP  per  capita 
has  a  level  seven  times  higher  than  the 
least-developed  region.  In  the  US,  this 
diﬀ erence  is  only  two  and  a  half  times 
and in Japan just two times. 

Being  more  than  a  common  market,  the 
European  Union  is  based  on  common 
values and policies agreed by its Member 
States  for  the  beneﬁ t  of  their  people.  EU 
regional policy puts into practice solidar-
ity  between  the  peoples  of  Europe,  while 
strengthening the competitiveness of the 
EU economy as a whole.

It  helps  attain  one  of  the  fundamental 
objectives  laid  down  in  the  EC  Treaty: 
achieving  economic  and  social  cohesion 
by  reducing  disparities  between  regions 
and  by  spreading  the  advantages  of  the 
common  market  more  equally  across  the 
EU territory.

More than one-third of the EU budget is 
currently allocated to the ﬁ nancial instru-
ments  of  EU  cohesion  policy:  the  Euro-
pean  Regional  Development  Fund,  the 
Cohesion  Fund  and  the  European  Social 
Fund. These instruments will amount to a 
total  of  €347.4  billion  between  2007  and 
2013, with about 82% to be invested in the 
EU’s poorest regions. The added value of 
EU cohesion policy is considerable:  

 ■  Cohesion  policy  supports  much  needed 
investment  in  infrastructure,  human 
resources  and  the  modernisation  and 
diversiﬁ cation of regional economies, and 
it contributes to more growth and jobs 
in the poorer Member States and regions.  

Bulgaria

Allocated funds 2007-13
Total: €6.9 billion
Convergence: €6.7 billion
European Territorial 
Cooperation: €179 million 

Focus of programmes
Improving infrastructure, 
human capital and 
employment; fostering 
entrepreneurship in 
a favourable business 
environment and under good 
governance; supporting 
balanced territorial 
development

Targets
Increase real GDP growth rate 
by 0.27% 
Create around 36 700 jobs

4

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New roads in Estonia: the Via Baltica motorway

 ■  Member States and regions beneﬁ ting 
from such investments achieve above- 
average growth and employment per-
formance  and  are  better  equipped  to 
catch up faster with the EU level than 
they would be without cohesion policy 
investments.

However,  the  European  territory  as  a 
whole  faces  new  challenges.  Globalisa-
tion, climate change and population age-
ing  do  not  stop  at  national,  institutional 
or policy borders. Instead, they impact on 
regional  and  local  communities  directly 
and to varying degrees.

 ■  Cohesion  policy ‘levers  in’  and safe-
guards compliance with other EU pol-
icies – state aid, environment, transport, 
support for innovation, the information 
society.  It  also  improves  and  modern-
ises  public  administrations,  enhances 
transparency and fosters good govern-
ance. 

In  the  past,  Member  States  and  regions 
beneﬁ ting  most  from  European  regional 
policy  have  been  able  to  catch  up  faster 
and  even  grow  beyond  the  average  EU 
level.  In  the  years  to  come,  this  success 
story  will  continue  in  Member  States 
which have joined the EU since 2004.

Europe’s  competitiveness  cannot  be 
achieved  through  EU  policies,  individual 
Member States or regions alone. Economic 
success is a social process that requires close 
cooperation. European regional policy has 
the potential to turn common challenges 
into opportunities. It is designed in such 
a  way  that  EU  responses  involve  people 
in  designing  and  implementing  regional 
development strategies and local projects 
for the beneﬁ t of Europe as a whole.

Estonia

Allocated funds 2007-13
Total: €3.45 billion
Convergence: €3.4 billion
European Territorial 
Cooperation: €52 million 

Focus of programmes
Investment in education, 
research and innovation; 
better connection 
opportunities; sustainable 
use of the environment; 
balanced development 
of regions and their 
administrative capacity

Targets
Increase employment to 72% 
(from 64.4% in 2005)
More research 
investment by companies 
(from 0.42% to 1.6% of GDP)
Raise internet-connected 
households to 70% 
(from 36% in 2005)
Improved recycling rate 
of 60% of solid waste 
(from 36.6% in 2005)
Keep primary energy 
consumption at the 2003 
level until 2010

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Urban renewal in Nicosia, Cyprus

How it works

Partnerships  throughout  all  regions 
of  the  European  Union,  planning 
and  good  governance  are  the  key 
elements  for  ensuring  that  regional 
development  remains  as  dynamic 
and as eﬀ ective as possible.

European  regional  policy,  its  instruments 
and programmes, are largely managed in 
a decentralised way by the national and 
regional  governments  concerned.  Within 
a  common  framework  set  by  the  EU, 
the  Member  States  and  regions  choose 
the  priority  objectives  in  their  territories 
that will beneﬁ t from EU funds.

However,  each  programme  is  developed 
in  a  collective  process  involving  authorities 
at European, regional and local level, social 
partners and organisations from civil soci-
ety.  The  process  ensures  that  each  part-
ner  has  ownership  of  the  development 
 programmes and that they are best adapted 
to  each  particular  region.  Committees 
involving  these  partners  in  the  design, 
management and monitoring of each pro-
gramme accompany EU interventions. 

For  the  2007-13  period,  Member  States 
and  regions  must  prepare 
‘National 
Strategic  Reference  Frameworks’ 
and  national  and 
‘Opera-
regulations 
tional  Programmes’.  EU 
and ‘Community  Strategic  Guidelines  on 
Cohesion’  lay  down  common  rules  for 
the  funds’  management,  while  taking 
into  account  the  overarching   priorities 

regional 

of  the  EU’s  Growth  and  Jobs  Agenda 
– to become a zone of high growth, creat-
ing new and better jobs. 

Overall, there will be 423 Operational Pro-
grammes  and  some  900  major  projects. 
Project selection on the ground is decided 
ultimately by national and regional author-
ities, working together with the European 
Commission  on  issues  such  as  decision-
making on major projects, and on ensuring 
control,  publicity  and  evaluation  stand-
ards. 

Making such programmes work in practice 
is  not  always  easy,  which  means  eﬀ ective 
planning is essential. Strategic guidelines 
on cohesion policy have been developed 
to aid this process. These set common tar-
gets  to  be  achieved  by  all  programmes. 
Expenditure  needs  to  be  ‘earmarked’  for 
interventions  supporting 
research  and 
innovation,  the  information  society,  sus-
tainable  development,  energy  eﬃ  ciency 
and  development  of  human  resources.  In 
‘Convergence’ regions, these priorities must 
receive  60%  of  the  total  available  funding, 
and 75% in all other regions.

The  guidelines  also  outline  a  number  of 
issues.  Programmes  should 
important 
investment 
concentrate 
in  high-growth 
in  drivers  of  growth  and 
invest 
areas; 
employment  such  as 
innovation  and 
education;  establish  comprehensive, 
medium-term  development 
strategies; 
contribute to trans-European infrastructure 

Cyprus

Allocated funds 2007-13
Total: €640 million
Convergence: €213 million
Regional Competitiveness and 
Employment: €399 million
European Territorial 
Cooperation: €28 million 

Focus of programmes
Strengthening the 
economy; business support; 
the knowledge society and 
promotion of research and 
innovation; human resources, 
employment and social 
cohesion; modernising 
environment, transport 
and energy infrastructure; 
developing sustainable 
communities

Targets
Increase annual GDP growth 
from 3.8% to 4.2%
Raise the employment rate 
from 68.5% to 71% 
Increase spending on R&D 
to 1% of national GDP by 2010
Increase public transport 
journeys from 2% to 
10% of total

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New pipes for the water/sewage infrastructure, Lithuania

and  environmental  sustainability;  mobilise 
additional resources; and develop part-
nerships  between  diﬀ erent  levels  of  gov-
ernment and others. 

Each Operational Programme has several 
priorities,  with  related  targets,  depending 
on  the  development  objectives  of  the 
individual  Member  State  or  region. These 
priorities  group  together  operations  and 
deﬁ ne criteria for the selection of projects. 
Potential beneﬁ ciaries, as well as the gen-
eral public, have a right to know the crite-
ria and which projects are selected. 

EU  Structural  and  Cohesion  Funds  ‘co-
ﬁ nance’  Operational  Programmes.  The 
funds  can  provide  between  50%  and 
85% of the total ﬁ nancing, depending on 
which  cohesion  policy  objective  applies 
to a particular region or Member State. The 
remaining ﬁ nancing can come from public 
(national and regional) or private sources. 
Detailed rules on eligibility and co-ﬁ nanc-
ing rates are laid down in each Operational 
Programme. 

After  a  ﬁ rst  advance  payment,  the  EU 
carries  out  interim  payments  based  on 
accounts  certiﬁ ed  by  the  national  or 
regional  authorities.  If  accounts  cannot 
be  veriﬁ ed,  or  proper  ﬁ nancial  manage-
ment procedures are not followed, the EU 
can  stop  its  funding  or  recover  amounts 
already paid out. 

For  the  current  programming  period, 
regular  payments  can  be  made  until  the 
end of 2015. 

Strategic  and  coherent  planning  at  all 
levels  is  a  vital  ﬁ rst  step,  but  even  the 
best  plans  are  worth  little  without  good 
governance. In order to achieve this, it is 
necessary  to  strengthen  the  institutional 
capacities, performance and transparency 
of public administrations in Member States 
and regions. Cohesion policy instruments 
can support capacity building – particularly 
in  ‘Convergence’  regions.  The  European 
Commission  facilitates  the  exchange  of 
best practice in the management of funds 
through  information,  seminars  and  net-
working. 

Lithuania

Allocated funds 2007-13
Total: €6.9 billion
Convergence: €6.78 billion
European Territorial 
Cooperation: €109 million

Focus of programmes
Creating higher productivity 
through an economy 
based on knowledge and 
innovation; enhancing 
competitiveness; creating a 
better quality of life

Targets
Increase the employment rate 
from 61.2 to 70%
Increase research expenditure 
from 0.76 to 2.2% of GDP

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7

The new Riga airport access in Latvia

Who receives how much 
and for what?

EU  cohesion  policy  funding  is  very 
much linked to the idea of solidarity 
between the more and less prosperous 
Member States.

Helping poorer European regions to catch 
up means, of course, that the richer ones 
have to pay more towards the EU budget 
than they receive back. On the other hand, 
solidarity is not a one-way street. Modern 
infrastructure and production, sustainable 
use of resources and better education and 
training of people living in poorer regions 
is  also  for  the  beneﬁ t  of  the  people  and 
economies in richer countries.

During  the  2007-13  period,  the  ERDF,  the 
Cohesion  Fund  and  the  ESF  will  contribute 
to  three  objectives:  Convergence  (ERDF, 
ESF,  Cohesion  Fund),  Regional  Competi-
tiveness and Employment (ERDF, ESF) and 
European Territorial Cooperation (ERDF).

Based  on  a  regional  GDP  below  75%  of 
the  EU  average,  regions  are  eligible  for 
the 
‘Convergence’  objective  while  all 
other  regions have access to the ‘Regional 
Competitiveness  and  Employment’ 
objective. Geographic eligibility of regions 
 under  the  ‘European  Territorial  Cooperation’ 
 objective  concerns  either  cross-border 
regions or those  belonging to transnational 
 cooperation areas.

The objectives, eligible regions and alloca-
tions are as follows:

 ■  Convergence: within EU-27, this objec-
tive concerns 84 regions – in 17 Mem-
ber  States  –  with  a  population  of  154 
million,  whose  per  capita  GDP  is  less 
than  75%  of  the  Community  average. 
In  addition  there  are  –  on  a  phasing-
out  basis  –  another  16  regions  with 
16.4  million  inhabitants  and  a  GDP 
only  slightly  above  the  threshold  due 
to  the  statistical  eﬀ ect  of  EU  enlarge-
ment. The amount available under the 
‘Convergence’ objective is €282.8 billion, 
representing 81.5% of the total, and it is 
split  between  allocations  for  the ‘Con-
vergence’ regions worth €199.3 billion, 
while €13.9 billion are reserved for the 
phasing-out  regions  and  €69.6  billion 
for the Cohesion Fund, the latter apply-
ing to 15 Member States.

 ■  Regional  competitiveness  and 
employment: a total of 168 regions in 
19  Member  States  are  eligible,  repre-
senting 314 million inhabitants. Within 
these,  13  regions,  home  to  19  million 
inhabitants,  represent  so-called  phas-
ing-in areas and are subject to special 
ﬁ nancial allocations due to their former 
status as Objective 1 regions. 

Latvia

Allocated funds 2007-13
Total: €4.6 billion
Convergence: €4.5 billion
European Territorial 
Cooperation: €90 million

Focus of programmes
Development and eﬃ  cient 
use of human resources; 
strengthening competitiveness 
and progress towards 
a knowledge-based economy; 
improvements in public 
services and infrastructure as 
a precondition for balanced 
national and territorial 
development

Targets
Maintain an annual GDP 
growth rate of 6-8% (11.9% 
in 2006)
Increase the employment rate 
to 70% (66.3% for 2006) and 
lower the unemployment rate 
to below 6% (6.5% in 2006)
Raise research and 
development spending to 1.5% 
of GDP from 0.57% in 2005
Increase the percentage 
of 20- to 24-year-olds 
completing upper secondary 
education to 85% (2005: 79.9%)
Increase the proportion of 
citizens with wastewater 
management services to 62% 
(2004: 9%)

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Road construction and improvement, Poland

The  amount  of  €54.9  billion  –  of  which 
€11. 4 billion are for the phasing-in regions 
–  represents  just  below  16%  of  the  total 
allocation. 

 ■   European Territorial Cooperation: the 
population living in cross-border areas 
is  181.7  million  (37.5%  of  the  total  EU 
population),  while  all  EU 
regions 
and citizens are covered by at least one 
of  the  existing  13  transnational  coop-
eration  areas. The  €8.7  billion  (2.5%  of 
the total) available for this objective are 
split  as  follows:  €6.44  billion  for  cross-

border,  €1.83   billion  for  transnational, 
and €445 million for interregional coop-
eration and networks.

The  calculation  method  of  allocations 
is  laid  down  in  EU  regulations  governing 
cohesion policy instruments. It distinguishes 
between  the  three  objectives  and  ﬁ nal 
shares depend mainly on relative regional 
and  national  prosperity,  population  ﬁ gures 
and  unemployment  rates.  Funding  does 
not exceed 4% or so of the gross domestic 
product of an individual Member State.

Objectives, Structural Funds and instruments 2007-2013

Objectives

Convergence

Regional Competitiveness and Employment

ERDF

European Territorial Cooperation

ERDF

Structural Funds and instruments

ERDF

Cohesion Fund

ESF

ESF

Poland

Allocated funds 2007-13
Total: €67.3 billion
Convergence: €66.55 billion
European Territorial 
Cooperation: €731 million

Focus of programmes
Improving public 
administration; increasing 
quality of human capital; 
modernising infrastructure; 
supporting competitive 
and innovative enterprises; 
increasing regional 
competitiveness; developing 
rural areas

Targets
Create 3.5 million jobs to 
bring the employment 
rate up to 60% by 2013 
(52.8% in 2005)
Increase expenditure on 
research and innovation 
to 1.5% of GDP (compared 
to 0.57% currently)
Triple the length of motorway 
and railway infrastructure
Increase the share of 
renewable energy use to 
8.5% (2.9% in 2005)
Increase GDP per head from 
51% in 2006 to 65% of the 
EU average

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Telecommunications park in Valencia, Spain

Attracting investors

Supporting  small  and  medium-sized 
enterprises 
(SMEs)  and  attracting 
outside  investment  are  key  ways  in 
which cohesion policy helps to boost 
regional economies. 

Attracting  investors  and  enhancing  the 
productive  capacity  of  regions  is  vital  for 
improving  their  economic  performances 
and helping those that are lagging behind 
to catch up. Around 1.2 million enterprises 
are  created  in  the  EU  every  year  –  some 
10%  of  the  total  number  of  businesses. 
Yet only half of them survive the ﬁ rst ﬁ ve 
years.  And  there  are  big  diﬀ erences  across 
the  EU  –  for  example,  in  Italy,  Spain  and 
the United Kingdom, new enterprises are 
created  twice  as  often  compared  to  the 
EU average.

EU  cohesion  policy  is  a  major  contribu-
tor to total investment,  particularly  in 
‘Convergence’  Member  States  where  it  can 
account  for  up  to  20%  of  the  total  gross 
ﬁ xed  capital.  Structural  and  cohesion  funds 
place  particular  emphasis  on  supporting 
the  creation  or  modernisation  of  SMEs  – 
those with fewer than 250 employees and 
with  an  annual  turnover  not  exceeding 
€50 million.

SMEs  are  the  real  giants  of  the  Euro-
pean economy, accounting for 99% of 
businesses  in  the  European  Union.  They 

provide  two-thirds  of  all  private-sector 
jobs.  Businesses  with  fewer  than  ten 
employees dominate the labour market in 
countries  such  as  Italy  (47%)  and  Poland 
(41%), whilst the share of large enterprises 
in  total  employment  in  the  United  King-
dom is just 46%. 

However,  SMEs  often  have  diﬃ  culty  in 
accessing capital and knowledge and fre-
quently  lack  experience.  EU  regional  and 
cohesion policy is aimed at tackling these 
diﬃ  culties through a combination of ‘hard’ 
measures,  such  as  direct  investment,  and 
‘soft’ ones, notably the provision of business 
support  services,  training,  an  innovative 
environment,  ﬁ nancial  engineering  and 
technology transfer, as well as the creation 
of networks and clusters.

EU  Member  States,  particularly  those 
countries that joined in 2004, are relatively 
successful 
in  attracting  investments 
from  foreign  countries.  However,  there 
are  considerable  diﬀ erences  in  national 
performances.  For  example,  in  Estonia, 
foreign  direct  investment  (FDI)  was  around 
11%  of  gross  domestic  product  between 
1998 and 2005, whereas the ﬁ gure was 9% in 
Bulgaria and the Czech Republic, 6 to 7% 
in Hungary and Slovakia, 4 to 5% in Latvia, 
Lithuania,  Poland  and  Romania,  and  2% 
in  Slovenia.  Another  concern  is  that  FDI 

Spain

Allocated funds 2007-13
Total: €35.2 billion
Convergence: €26.2 billion
Regional Competitiveness 
and Employment: €8.5 billion
European Territorial 
Cooperation: €559 million 

Focus of programmes
Creating a more attractive 
place in which to invest and 
work; improving knowledge 
and innovation to strengthen 
growth; contributing to more 
and better jobs

Targets
Raise the employment rate 
from 63.3% in 2005 to 70% 
by 2013
Increase expenditure for 
research and innovation from 
1.06 to 2% of GDP
Help reduce CO2 emissions 
by 15%

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Innovation in the graphics industry in Brobygraﬁ ska, Sweden

is  often  heavily  concentrated  in  capital  cit-
ies and their surrounding regions, which can 
reinforce  regional  disparities  rather  than 
reduce them.

The  potential  reasons  why 
investors 
should  choose  to  invest  in  a  certain 
region  include  access  to  new  markets, 
proximity to the country from which the 
investment  originates,  a  common  lan-
guage,  low  corporate  taxation  and  the 
availability  of  skilled  workers.  Regional 
policy cannot inﬂ uence all of these factors, 
but it can make a diﬀ erence in other areas 
that  improve  the  region’s  attractiveness  – 
accessibility,  education  of  the  workforce, 
information and communication tech-
nologies,  infrastructure,  and  spending  on 
research and innovation. 

Between  2007  and  2013,  cohesion  policy 
programmes will support:

 ■  Direct investments in ﬁ rms, in par-
ticular  those  linked  to  research  and 
innovation,  technology  transfer  and 
eco-friendly  production.  About  €42.8 
billion (12% of the total allocation) are 
geared towards such activities.

 ■  Entrepreneurship through the pro-
vision  of  services,  adaptation  of  work-
ers,  enterprises  and  entrepreneurs, 
information  and  communication 
technologies. Some €44.7 billion (13% 
of the total allocation) are planned for 
this.

 ■  Human capital and access to employ-
ment.  €48.8  billion  (14%  of  the  total) 
will contribute to increasing the quali-
ﬁ cation  level  of  the  regional  and  local 
workforces.

Sweden

Allocated funds 2007-13
Total: €1.9 billion
Regional Competitiveness 
and Employment: €1.6 billion
European Territorial 
Cooperation: €265 million

Focus of programmes
Encouraging innovation and 
entrepreneurship; increasing 
skills and labour supply; 
facilitating accessibility; 
cross-border cooperation

Targets
Create at least 33 800 new jobs
Create 12 800 
new enterprises
Establish training for more 
than 300 000 people

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11

Bridge linking Spain and Portugal over the Guadiana River in the Algarve

Getting there: 
enhancing accessibility

Transport infrastructure is one of the 
most visible examples of what can be 
achieved with aid from the EU Struc-
tural and Cohesion Funds. 

Enhancing  accessibility  is  of  key  importance 
to  strengthening 
regional  economies 
and  achieving  cohesion  and  competi-
tiveness.  The  European  Union’s  transport 
policy  promotes  sustainable  mobility 
for people and goods, ensuring eﬃ  ciency, 
safety and minimising the negative eﬀ ects 
on  the  environment. There  are  a  number 
of  actions  covering  trans-European  trans-
port networks (TEN-T), air, road, rail, mari-
time and urban transport as well as inland 
waterways,  multimodal  transport,  safety 
and state aid rules.

The  Cohesion  Fund  and  the  European 
Regional  Development  Fund  (ERDF),  in 
particular,  have  contributed  signiﬁ cantly 
to  modern  transport 
in 
the  less-developed  Member  States  and 
regions  and  will  continue  to  do  so  in  the 
2007-13 period. 

infrastructure 

About  €76  billion  (22.2%  of  the  total 
allocation)  will  be  spent  on  transport, 
with a priority for TEN-T projects, up from 
€38  billion  (15%  of  the  total)  in  2000-2006. 
Investments will cover transport strategies 
at EU, national and regional levels that strike 
a  balance  between  road,  rail  and  sustain-

able  transport  modes. The  links  between 
cohesion  and  transport  policy  are  trans-
lated  into  guidelines,  which  ensure  the 
quality  of  the  projects,  and  a  number  of 
priorities:

 ■  30 TEN-T projects of European inter-
est,  located  in  Member  States  and 
regions  eligible  under  the ‘Convergence’ 
objective.  Special  attention  will  go  to 
cross-border projects.

 ■  Investment  in  secondary  connections 
in the context of an integrated regional 
transport and communications strategy.

 ■  Rail infrastructure.

 ■  Environmentally  sustainable  trans-

port networks.

 ■  Improved  connectivity  of  landlocked 
territories to the trans-European net-
works.

 ■  ‘Motorways of the sea’.

Cohesion  policy  investment  in  transport 
between  2007  and  2013  will  be  concen-
trated on the ‘Convergence’ regions. It is split 
as follows:

 ■  TEN-T  projects  across  all  transport 
modes  receive  €38  billion  (11%  of  the 
total  of  cohesion  policy  investments). 
About  half  will  be  for  road  infrastruc-
ture and half for rail.

Portugal

Allocated funds 2007-13
Total: €21.5 billion
Convergence: €20.47 billion
Regional Competitiveness 
and Employment: €938 million
European Territorial 
Cooperation: €99 million

Focus of programmes
Developing workers’ skills; 
promoting sustainable 
growth; guaranteeing social 
cohesion; ensuring territorial 
and urban development; 
improving the eﬃ  ciency of 
governance

Targets
Increase the share of 
vocational courses available 
at secondary level to 50% to 
reduce very high school drop-
out rates (38% in 2005)
Increase the share of 
medium- and high-
technology companies in 
the industry sector from 
3.4% today to 6.2% in 2010
Raise private and public 
investment in research and 
technology as a proportion of 
GDP (to 0.8% and 1% in 2010, 
respectively)

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The Belfast railway, Dublin, Ireland

 ■  Almost €41 billion (12% of the total) will 
be  available  for  road  infrastructure, 
including TEN-T  and  national,  regional 
and local roads.

established  guidelines  in  1996  deﬁ ning 
objectives, priorities and projects of com-
mon  interest  as  well  as  ﬁ nancial  instru-
ments. 

 ■  For  rail 

infrastructure,  a  total  of 
€23.6 billion (6.8%) will be spent, includ-
ing TEN-T projects.

 ■  Other  allocations  include:  ports  and 
inland  waterways:  €4.1  billion  (1.2%), 
multimodal transport and intelligent 
transport  systems:  €3.3  billion  (1%); 
airports:  €1.9  billion  (0.5%);  urban 
transport: €1.9 billion (0.5%).

TEN-T aims to ensure that national networks 
for  all  modes  of  transport  are  accessible, 
interconnected and interoperable. The EU 

The  number  of  priority  projects  was 
raised from 14 to 30 following recent EU 
enlargements,  and  rules  for  granting  aid 
were modiﬁ ed to allow for a higher maxi-
mum co-funding rate for priority projects 
that  cross  borders  and  natural  barriers. 
Completing the networks will considerably 
reduce  journey  times  for  passengers  and 
goods,  through  an  estimated  14%  reduc-
tion in road congestion and improved rail 
performance. Reductions in CO2 emissions 
are expected to be of the order of 6.3 mil-
lion tonnes per year.

Ireland

Allocated funds 2007-13
Total: €901 million
Regional Competitiveness 
and Employment: €751 million
European Territorial 
Cooperation: €151 million

Focus of programmes
Improving economic 
infrastructure; enterprise, 
science and innovation; 
human capital; 
social infrastructure and 
social inclusion

Targets
Contribute to expanding 
the economy by 4 to 4.5% 
per annum in a favourable 
international economic 
climate

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INTECHMER: research into biological contamination of marine environments, Cherbourg, Normandy, France

Innovating regions

is 
Sustainable  economic  growth 
increasingly related to the capacity of 
regional economies to change and to 
innovate. This means that far greater 
eﬀ orts  need  to  be  channelled  into 
creating an environment that encour-
ages  research,  development  and 
innovation. Cohesion policy reﬂ ects 
this with a major increase in the fund-
ing available for this priority.

The  latest  statistics  conﬁ rm  large  dis-
parities between EU Member States and 
regions in the ﬁ eld of research and devel-
opment (R&D) and innovation. Expenditure 
on R&D amounted to an average of 1.84% of  
EU-27  gross  domestic  product  (GDP)  in 
2005,  comparing  unfavourably  to  the 
USA  (2.67%)  and  Japan  (3.2%).  Finland 
and  Sweden  are  the  only  Member  States 
that spend more than 3% of their GDP on 
R&D and only 27 of the 268 regions in the 
EU  currently  reach  this  level.  More  than 
100 regions spend less than 1%, the major-
ity  of  which  are  in  southern  Europe  and 
new Member States. 

Three  Member  States  –  Germany,  France 
and  the  United  Kingdom  –  account  for 
two-thirds  of  the  EU’s  total  R&D  expendi-
ture. The top ten R&D expenditure regions 
spent  €52.5  billion  in  2003  –  more  than 
25%  of  total  EU  expenditure.  However, 
on  the  positive  side  the  most  signiﬁ cant 
increases  in  R&D  expenditure  over  the 

period 2001-2004 were in Estonia (+19%), 
Cyprus 
(+14%)  and 
Spain (+13%).

(+18%),  Lithuania 

Examples  of  the  type  of  actions  at  a 
regional  level  that  can  facilitate  innova-
tion  are:  investments  in  infrastructure, 
equipment  and  facilities;  strengthening 
the links between industrial development 
zones  and  research  institutions;  support 
for clusters, centres of excellence, science 
and  technology  parks;  encouraging  the 
mobility  of  researchers;  and  partnerships 
between training institutes and local tech-
nology enterprises.

Cohesion  policy  instruments  emphasise 
research and innovation in 2007-13, with 
total funding of almost €60 billion (17.3% of 
the  total)  which  represents  respectively  a 
doubling and tripling of ﬁ nancial resources 
earmarked for R&D and innovation under 
the  Convergence  and  the  Regional  Com-
petitiveness  and  Employment  objectives 
compared to the previous period.

Of this total, €15.6 billion will go on research 
centres and infrastructure, €26.5 billion on 
technology transfer and R&D and innova-
tion  support  to  ﬁ rms,  and  €15  billion  on 
information and communication technol-
ogies. 

Actions will focus on four areas. Strength-
ening  cooperation,  both  among  busi-
nesses and between businesses and pub-
lic  research  institutions,  will  be  achieved 

France

Allocated funds 2007-13
Total: €14.3 billion
Convergence: €3.2 billion
Regional Competitiveness 
and Employment: €10.2 billion
European Territorial 
Cooperation: €872 million  

Focus of programmes
Improving competitiveness; 
promoting and sustaining 
employment; human capital; 
regional attractiveness 
and investment in 
employment; ensuring 
social inclusion; territorial 
development and sustainable 
development; innovation 
and the knowledge 
economy; training; 
developing information 
and communications 
technologies; 
the environment; risk 
avoidance; energy policy

Targets
Increase the share of private 
research (1.25% of GNP in 2006) 
and approach Community 
standards in innovation
Reduce energy intensity by 
2% a year until 2015 and 
reduce greenhouse gas 
emissions by an average of 
3% until 2050

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Phileas: innovating in the transport sector, the Netherlands

through transregional clusters. The second 
priority is to support research and innova-
tion in small and medium-sized enterprises. 
The  third  is  to  boost  regional  cross-bor-
der  and  transnational  collaboration,  and 
the ﬁ nal priority is to strengthen capacity-
building infra      structure and human capital 
in areas with signiﬁ cant growth potential.

Substantial  funding  for  innovation  pro-
grammes  will  be  provided  in  countries 
such as Spain, Poland, Greece, the Czech 
Republic,  Hungary,  Portugal  and  Slovakia. 
In  Poland,  for  example,  support  for  the 
‘innovative  economy’  national  programme 
from  the  Structural  Funds  amounts  to 
€8.3 billion – more than 12% of the total 
national allocation. 

Meanwhile, in France and the Netherlands, 
innovation is the main priority of all regional 
programmes, accounting for around half of 

their total spend. In Finland, the emphasis 
on innovation in all regional programmes 
reﬂ ects  the  explicit  aim  of  decentralising 
the  EU’s  Lisbon  Strategy  to  boost  growth 
and jobs. 

In  many  of  the  smaller  Member  States, 
programmes  include  innovation  along-
side other priorities, such as infrastructure 
development. This is typically the case for 
the  ‘Convergence’  countries,  such  as  the 
Baltic  States,  Malta  and  Slovenia,  but  is 
also true of Denmark. However, it does not 
imply less emphasis on innovation. Lithua-
nia,  for  example,  plans  to  allocate  8%  of 
total  resources  to  its  research  infrastruc-
ture  and  a  further  8%  to  the  information 
society.

The Netherlands

Allocated funds 2007-13
Total: €1.9 billion
Regional Competitiveness 
and Employment: €1.6 billion
European Territorial 
Cooperation: €247 million

Focus of programmes
Strengthening 
competitiveness by 
focusing on innovation; 
entrepreneurship; 
attractiveness of regions, 
cities; labour market 
supply; investing in human 
capital; cooperation with 
neighbouring countries

Targets
Contribute to output in 
research and technological 
development, innovation, 
entrepreneurship and 
the information society, 
in particular in small and 
medium-sized enterprises 
and for citizens services
Contribute to improving 
access to employment and 
to increasing the adaptability 
of workers and labour 
productivity

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Technology resource centre for the environment: Esch-sur-Alzette, Luxembourg

Green light for 
sustainable growth

initiatives 

Regional policies need to be sustain-
able,  and  more  funding  than  ever  is 
being  allocated  to  environmentally 
friendly 
in  the  2007-13 
period.  The  environment  can  be  a 
source  of  economic  growth,  either 
by encouraging innovative and clean 
technologies, 
fostering  eﬃ  cient 
energy  use,  building  up   eco-tourism, 
or  simply  through  natural  habitats 
enhancing 
the  attractiveness  of 
areas.

Ensuring  sustainable  development  and 
a  high  level  of  environmental  protection 
are required in all European Union policies. 
Likewise,  the  legal  bases  and  guidelines 
of  regional  policy  state  that  economic, 
social and environmental objectives must 
be 
integrated.  Regional  development 
can  only  be  sustainable  if  it  respects  the 
environment.

infrastructure 

EU  regional  policy  can  contribute  to 
sustainability  by  promoting  environ-
mentally friendly technologies; transport, 
energy  and 
initiatives 
ensuring high water, air and soil quality. 
In addition, Member States have to carry 
out  environmental  impact  assessments 
and  consult  environmental  authorities 
and  the  public  when  they  implement 
cohesion policy programmes. 

The  total  amount  of  Structural  and 
Cohesion Funds allocated to environmen-
tal  programmes  has  doubled  since  the 
previous period to around €100 billion – 
30% of the total. Half of this investment will 
be devoted to infrastructure investments 
related  to  water  and  waste  treatment, 
renewal of contaminated sites, pollution 
reduction, and support for nature protec-
tion and risk prevention. The other half will 
go on investments with an environmental 
impact  in  areas  such  as  transport  and 
energy  systems,  eco-innovation,  envi-
for  bus-
ronmental  management 
inesses,  urban  and  rural  regeneration, 
and  eco-tourism.  For  example,  over 
€7  billion  are  earmarked  to  support 
energy  eﬃ  ciency  and  renewable  ener-
gies. 

The  Cohesion  Fund  (operating  in  Bulgaria, 
Cyprus, the Czech Republic, Estonia, Greece, 
Hungary,  Latvia,  Lithuania,  Malta,  Poland, 
Portugal, Romania, Slovakia, Slovenia, and 
Spain)  is  the  major  source  of  ﬁ nance  for 
environment-related infrastructure projects 
(especially in energy eﬃ  ciency, renewable 
energy,  rail  transport  and  intermodal  or 
public transport systems). It provides fund-
ing  for  investment-intensive  projects  and 
helps  these  countries  to  meet  the  Euro-
pean Union’s environmental standards. 

Luxembourg

Allocated funds 2007-13
Total: €65 million
Regional Competitiveness 
and Employment: €50 million
European Territorial 
Cooperation: €15 million

Focus of programmes
Promoting the establishment 
of small and medium-sized 
enterprises
Development of urban 
centres that have undergone 
economic change
Improve knowledge and 
innovation, in particular at 
public and private research 
centres
Increase the employment 
rate, in particular among 
female and older workers

Targets
Contribute to achieving 
the expenditure target of 
3% of GDP for research and 
development, in particular 
in the private sector, and to 
reducing CO2 emissions in 
view of the Kyoto targets

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Promoting energy-eﬃ  cient sources: solar panels in Marstal, Fyns amt, Denmark

Regions 
throughout  Europe  will  be 
increasingly  confronted  with  the  impacts 
of  climate  change,  as  well  as  with  new 
challenges  in  terms  of  energy  provision 
and  eﬃ  ciency. These  will  vary  depending 
on the region. While 7% of the Union’s pop-
ulation  live  in  ﬂ ood-prone  areas,  around 
9% live in areas where there are over 120 
days  a  year  without  rain.  The  combined 
impacts  of  climate  change  will  pose  seri-
ous  problems  for  quality  of  life,  tourism 
and agriculture in some EU regions. 

Cohesion policy can play an important role 
in supporting eﬀ orts to adapt to future cli-
mate  change  and  minimise  the  negative 
impacts  at  regional  level.  It  can  support 
eco-innovation, environmental risk protec-
tion  measures  and  clean  enterprises,  and 
create market opportunities for businesses 
in these areas.

The new regional policy programmes give 
more  support  than  ever  to  the  develop-
ment  of  renewable  and  alter native 

energies,  meaning  that  there  are  oppor-
tunities for European businesses to bene-
ﬁ t. Developing technologies, such as wind, 
solar and biomass, can give the EU a lead-
ing  edge  and  strengthen  its  competitive 
position.

Europe’s increasing dependency on energy 
imports  and  the  continuous  growth  of 
congestion aﬀ ecting road and air transport 
reduce  the  competitiveness  of  European 
industry.  Therefore,  renewable  energy 
applications and networks, cleaner modes 
of  transport  and  environmentally  friendly 
technologies  are  key  priorities  in  terms 
of  modernising  production  and  reducing 
emissions.  In  the  area  of  transport,  rebal-
ancing allocations between air and roads, 
on  the  one  hand,  and  railways,  inland 
waterways and short-sea shipping, on the 
other,  should  respect  the  diﬀ erent  situa-
tions that exist in Member States.

Denmark

Allocated funds 2007-13
Total: €613 million
Regional Competitiveness 
and Employment: €510 million
European Territorial 
Cooperation: €103 million 

Focus of programmes
Human resources; 
innovation; enhanced use 
of information technology; 
entrepreneurship; attractive 
regions; improving labour 
force adaptability and 
qualiﬁ cations

Targets
Higher percentage of 
trained people
Increase the number of 
innovative enterprises
Raise the penetration 
rate of information and 
communication technologies 
in companies from 56% 
(2005) to 75%

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Restoring Malta’s cultural heritage

A better life in Europe’s cities

Cities symbolise the two-pronged 
challenge  currently 
facing  the 
European  Union:  how  to  improve 
competitiveness while meeting social 
and environmental demands.

are for the rehabilitation of industrial sites 
and  contaminated  land,  €9.8  billion  for 
urban  and  rural  regeneration  projects, 
€7  billion  for  clean  urban  transport,  and 
€917 million for housing.

Europe’s cities are its centres of economic 
activity, 
innovation  and  employment, 
yet they face a number of challenges. The 
trend  towards  suburbanisation,  the  concen-
tration  of  deprivation  and  unemployment 
in urban neighbourhoods, increasing con-
gestion – complex problems such as these 
require  integrated  answers  in  transport, 
housing,  and  training  and  employment 
schemes,  which  must  be  tailored  to  local 
needs.  European  regional  and  cohesion 
policies address these challenges.

entrepreneurship, 

Policies  are  designed  to  support  cities 
as  drivers  of  regional  development. 
Promoting 
innova-
tion  and  the  development  of  services 
Improv-
boosts 
their  attractiveness. 
in  crisis,  notably 
ing  neighbourhoods 
by  rehabilitating  the  physical  environ-
ment,  redeveloping  brownfield  sites 
and  preserving  and  developing  the  his-
torical  and  cultural  heritage,  contributes  to 
a balanced urban development. Support for 
clean  urban  transport  enhances  the  sus-
tainability of cities.

Some  €21.1  billion  have  been  earmarked 
for  urban  development  between  2007 
and 2013, representing 6.1% of the total EU 
cohesion policy budget. Of this, €3.4  billion 

infrastructure 

investments  for 

Other 
in 
research  and  innovation,  transport,  the 
environment,  education,  health  and  cul-
ture also have a signiﬁ cant impact in cities.

With  an  integrated  approach,  cohesion 
policy  can  exploit  the  synergies  between 
diﬀ erent policy domains, and also encour-
age  dialogue  between  administrations, 
social  and  economic  partners  and  civil 
society organisations.

The  new  cohesion  policy  regulations 
for  2007-13  provide  instruments  for  the 
strengthening  of  the  urban  dimension  in 
the new generation of programmes. They 
emphasise  the  need  to  involve  local  and 
regional  authorities  in  the  planning  and 
implementation of programmes.

National and regional authorities can sub-
delegate  programme  management,  or 
parts of it, to local authorities, whilst other 
private  organisations  should  be  involved 
as partners.

During the 2007-13 period, European cities 
will  beneﬁ t  in  many  ways  from  cohesion 
policy instruments, initiatives and tools: 

Malta

Allocated funds 2007-13
Total: €855 million
Convergence: €840 million
European Territorial 
Cooperation: €15 million  

Focus of programmes
Sustaining a growing, 
knowledge-based, 
competitive economy; 
improving attractiveness 
and quality of life; 
investing in human capital; 
addressing Gozo’s regional 
distinctiveness

Targets
Increase GDP per capita in 
relation to the EU average 
from 69.2% in 2005 to 
74% by 2013
Increase nominal exports of 
goods and services between 
2007 and 2013 by 4% to 
measure achievements in 
competitiveness
Increase the employment 
rate from 54.3% in 2005 to 
57% by 2013

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The old city centre in Telc, Czech Republic is a tourist attraction

 ■  The  Urban  Audit  provides  statistical 
data and information on living condi-
tions  in  357  European  cities  in  the  27 
EU  Member  States  and  Norway,  Swit-
zerland  and  Turkey.  Over  330  indica-
tors  of  urban  life  in  Europe  present 
ﬁ ndings  on  demography,  housing, 
health, crime, the labour market, eco-
nomic activity, income disparity, local 
administration,  civic  involvement, 
educational  qualiﬁ cations,  cultural 
infrastructure and tourism.

 ■  Urban  development  issues  have  been 
integrated  to  a  large  extent  in  all 
regional  and  national  programmes 
supported by the Structural and Cohe-
sion Funds.

 ■  Exchanges  of  best  practices  and  net-
working  between  urban  planners  and 
other  local  experts  come  under  the 
URBACT II programme.

 ■  JESSICA  (Joint  European  Support  for 
Sustainable Investment in City Areas) is 
a new initiative of the European Com-
mission, in cooperation with the Euro-
pean Investment Bank and the Council 
of  Europe  Development  Bank.  It  pro-
motes ﬁ nancial engineering for sustain-
able investment, economic growth and 
employment in Europe’s urban areas.

Czech Republic

Allocated funds 2007-13
Total: €26.7 billion
Convergence: €25.9 billion
Regional Competitiveness 
and Employment: €419 million
European Territorial 
Cooperation: €389 million 

Focus of programmes
Increasing competitiveness; 
support for research and 
development; innovation; 
developing sustainable 
tourism; education; 
employment; social cohesion; 
developing the information 
society; reducing the 
administrative burden; 
improving accessibility to 
transport; sustainable rural 
and urban development

Targets
Attain the economic 
level for EU-25
Raise the employment rate 
from 64.8% in 2005 to 66.8%
Increase the GDP share of 
research and development 
from 1.42% to 2.2% by 2015

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On-the-job training in Italy

Investing in people

The EU needs 24 million more jobs to 
achieve its target employment rate of 
70%. With  ageing  populations  across 
Europe,  employment  and  training 
of the workforce have become even 
more crucial.

Employment  rates,  the  level  of  skills  and 
the  impact  of  demographic  change  vary 
considerably  between  EU  regions  and 
require  tailored  answers.  How  to  achieve 
more  and  better  jobs  and  an  educated 
workforce able to meet future challenges 
is therefore a crucial question for the suc-
cess of cohesion policy.

Between  2007  and  2013,  the  cohesion 
policy  will  invest  €95  billion  in  people  – 
€76  billion  through  the  European  Social 
Fund  (ESF)  and  €19  billion  through  the 
European  Regional  Development  Fund 
(ERDF).

recent  years,  employment  has 
In 
rates 
in creased  and  unemployment 
have  fallen.  Employment  growth  across 
the  EU  has  averaged  around  1%,  bring-
ing  the  employment  rate  up  to  63.8%  in 
2005.  In  the  same  year,  the  unemploy-
ment rate fell to 8.7%, down from 9.1% the 
year before.

In  less-developed  EU  regions,  regional 
employment  rates  converged  between 
2000  and  2005  and  unemployment  fell 

from  13.4%  to  12.4%.  However,  in  2005 
employment  rates  in  these  regions  were 
still some 11% lower than those in the rest 
of the EU. 

Regions have to cope with the skills needed 
to remain competitive in a global, knowl-
edge-based economy. Variations in educa-
tion levels are more pronounced between 
regions  than  between  countries:  in  the 
less-developed  regions  of  EU-27  only 
14%  of  the  working  age  population  had 
tertiary  qualiﬁ cations  in  2005,  compared 
to 25% in the more developed regions.

Europe’s  population 
is  predicted  to 
start  declining  by  around  2020.  Between 
2000  and  2005,  the  total  population 
growth  rate  was  0.4%,  and  86%  of  that 
growth  was  due  to  migration.  Already 
today, 85 EU regions – mainly in the new 
Member  States  –  are  experiencing  abso-
lute  population  decline,  and  another  76 
maintain population growth only thanks to 
migration. These trends will limit the scope 
for future employment growth.

Although total employment is expected to 
continue to grow until 2017, due to rising 
labour force participation, it is likely that it 
will start declining after this date. Accord-
ing to United Nations estimates, the popu-
lation of Europe will decrease by 70 million 
by 2050; at the same time, the population 
of Asia will increase by 1.3 billion and the 

Italy

Allocated funds 2007-13
Total: €28.8 billion
Convergence: €21.6 billion
Regional Competitiveness 
and Employment: €6.3 billion
European Territorial 
Cooperation: €846 million 

Focus of programmes
Developing knowledge 
networks; increasing 
living standards; security 
and social inclusion; 
fostering business clusters, 
services and competition; 
internationalising and 
modernising the economy

Targets
Contribute to average annual 
GDP growth of between 2.4 
and 3.1% in the ‘Convergence’ 
regions
Increase employment 
from roughly 45% to 50% in 
these regions

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Investing in people: new childcare centre in a Roma kindergarten, Slovakia

population  of  Africa  by  1  billion.  Demo-
graphic  change  of  this  magnitude  will 
have an impact on the distribution of eco-
nomic activities.

For  the  2007-13  period,  cohesion  policy 
investment  priorities  allocate  important 
resources to improve the adaptability of 
the  labour  force.  More  than  €70  billion 
of  the  ESF  allocation  should  be  invested 
in  training,  employment  and  actions  to 
improve social inclusion. Furthermore, the 
ERDF in particular invests in infrastructure 
related  to  employment,  education  and 
training,  such  as  schools,  hospitals  and 
childcare facilities.

Acknowledging  the  considerable  return 
on  investment  from  education  in  the 
early stages of life, all Member States have 
allocated a signiﬁ cant amount of resources 
to  the  modernisation  and  reform  of  edu-
cation and training systems. For example, 
Denmark  aims  to  have  45%  of  unskilled 
workers  participating  in  training  activi-
ties within a year. Several Member States, 
including  Germany,  Spain,  Latvia,  Lithua-
nia, Cyprus, Denmark and Estonia, have set 
an ambitious target for employment rates 
of 70%, while the United Kingdom has set 
80% as its benchmark.

Slovakia

Allocated funds 2007-13
Total: €11.6 billion
Convergence: €10.9 billion
Regional Competitiveness 
and Employment: €449 million
European Territorial 
Cooperation: €227 million

Focus of programmes
Infrastructure and regional 
accessibility; innovation; 
information society and 
knowledge economy; human 
resources and education

Targets
Attain the economic level of 
60% of EU-15
Raise the employment rate 
from 57.7% in 2005 to 63.4% 
by 2013

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Renew North: Northern Energy Initiative, Northumberland, United Kingdom

Spending it wisely

There  are  several  new  tools  and  ini-
tiatives  to  enable  the  most  eﬃ  cient 
and  sustainable  use  of  Structural 
and  Cohesion  Funds  in  the  2007-13 
period.  They  pool  expertise  in  the 
management  of  projects  or  ﬁ nancial 
engineering, ensuring that the invest-
ments maintain their impact and con-
tribute to the long-term development 
of regions.

Sound  ﬁ nancial  management  of  cohe-
sion policy instruments can enhance pub-
lic investments. In order to achieve this,  the 
European  Commission  has  developed 
three 
instruments  with  the  European 
Investment Bank (EIB), the European Bank 
for  Reconstruction  and  Development 
(EBRD)  and  the  Council  of  Europe  Bank 
(CEB). They help with the technical aspects 
of  large  infrastructure  projects,  public-
private partnerships, or financial engi-
neering between ﬁ nancial institutions and 
Member States and regions.

Closer cooperation between the European 
Commission and ﬁ nancial institutions will 
strengthen  capacity-building  in  national 
and regional administrations. 

The three new instruments are: 

 ■  JASPERS (Joint Assistance in Supporting 
Projects  in  European  Regions),  which 
develops  cooperation  between  the 
European  Commission,  the  EIB  and 

(including 

the EBRD, pooling expertise and assist-
ing  Member  States  and  regions  with 
major projects. Key areas for assistance 
are: transport and energy infrastructure 
trans-European 
projects 
networks),  and  energy  eﬃ  ciency  and 
initiatives,  par-
renewable  energy 
ticularly  in  the  assessment  of  public-
private partnerships. There is a JASPERS 
team  of  experts  managed  from  the 
EIB’s headquarters in Luxembourg.

 ■  JEREMIE  (Joint  European  Resources 
for  Micro  to  Medium  Enterprises),  an 
initiative of the European Commission, 
the  EIB  and  the  European  Investment 
Fund  (EIF),  enhances  access  for  small 
and medium-sized enterprises (SMEs) to 
ﬁ nance.  JEREMIE  allows  Member  States 
and regions to outsource to the EIF the 
management  of  ﬁ nancial  engineering 
and  SME  ﬁ nance  programmes.  Prod-
ucts  include  equity,  venture  capital, 
guarantees,  loans  and  technical  assist-
ance which will allow a multiplier eﬀ ect 
of the EU funds by using revolving ﬁ nan-
cial  products  instead  of  grants. The  EIF, 
and national and regional authorities, will 
design tailored schemes for SMEs in all 
sectors.  JEREMIE  is  expected  to  con-
tribute substantially towards improving 
access  to  ﬁ nance  for  SMEs  in  about  20 
Member States involving ERDF resources 
of the order of €2.5 billion.

United Kingdom

Allocated funds 2007-13
Total: €10.6 billion
Convergence: €2.9 billion
Regional Competitiveness 
and Employment: €6.9 billion
European Territorial 
Cooperation: €722 million 

Focus of programmes
Enterprise and innovation; 
skills and employment; 
environmental and 
community
sustainability; focusing on 
market failures; equality; 
partnerships with local 
authorities; higher education; 
the voluntary and private 
sectors; support for the 
Lisbon Agenda

Targets
Improve skills
Improve investment in 
research and development, 
particularly in the 
private sector
Foster innovation and 
entrepreneurship

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Investing in research: Minerve Centre for biotechnology research in Charleroi, Wallonia, Belgium 

 ■  JESSICA  (Joint  European  Support  for 
Sustainable  Investment  in  City  Areas), 
an initiative of the Commission, the EIB 
and  the  CEB  to  promote  sustainable 
investment in urban projects and pro-
grammes.  It  connects  Member  States, 
regions  and  cities  with  the  European 
banking  and  ﬁ nancial  sector  for  more 
and  better  investment  in  cities.  The 
managing authorities of Structural Fund 

programmes can take advantage of out-
side  expertise  in  order  to  have  greater 
access  to 
loan  capital  for  promot-
ing  urban  development.  Re sourc es 
from  operational  prog rammes  to 
be  invested  under  JESSICA  can  be 
transferred 
to  urban  development 
funds, and co-ﬁ nancing can come from 
municipalities, banks, pension funds or 
investment funds.

Belgium

Allocated funds 2007-13
Total: €2.3 billion
Convergence: €638 million
Regional Competitiveness 
and Employment: €1.4 billion
European Territorial 
Cooperation: €194 million 

Focus of programmes
Reinforcing sustainable 
territorial cohesion and 
competitiveness; promoting 
the economy of knowledge 
and innovation; urban 
development; human and 
business development; 
research; training; reducing 
unemployment; ﬁ ghting 
discrimination and 
promoting equality

Targets
Contribute to achieving the 
level of 3% of GDP spent on 
research and development
Increase the employment 
rate to 70% (60% for female 
workers and 50% for older 
workers between 55 and 64 
years old)

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Railway tracks are being renewed in Slovenia

Cooperation without borders

Cohesion  policy  encourages  regions 
and  cities  from  diﬀ erent  EU  Mem-
ber  States  and  further  aﬁ eld  to  work 
together and learn from each other 
through  sharing  common  pro-
grammes,  projects  and  networks. 
There  are  a  number  of  initiatives  for 
the 2007-13 period.

The  European  Territorial  Coopera-
tion  objective,  ﬁ nanced  by  the  European 
Regional  Development  Fund 
(ERDF), 
supports  cross-border,  transnational,  and 
interregional  cooperation  programmes. 
The  budget  of  €8.7  billion  for  this  objec-
tive accounts for 2.5% of the total 2007-13 
allocation for cohesion policy.

legal 

is  also  a 

There 
instrument  to 
strengthen  cooperation  across  borders, 
and a number of new instruments to support 
regional development along the EU’s external 
borders with candidate and potential can-
didate countries and third countries. 

The diﬀ erent strands of the European Ter-
ritorial Cooperation objective are:

 ■   53  cross-border  programmes  along 
internal  EU  borders. They  help  develop 
entrepreneurship and small to medium-
sized  enterprises;  cross-border  trade; 
tourism  and  culture;  environmental 
management;  transport, 
information 
and  communication  networks;  water, 
waste  and  energy  management;  joint 
use  of  health,  culture  and  education 

infrastructure;  and  judicial  and  admin-
istrative co-operation. 

  ERDF contribution: €5.6 billion. 

 ■  13  transnational  cooperation  pro-
grammes  cover 
larger  areas  of 
 cooperation  such  as  the  Baltic  Sea, 
Alpine  and  Mediterranean 
regions. 
They focus on projects between regions 
related to innovation, environment and 
risk  prevention,  accessibility  and  sus-
tainable urban development. 
  ERDF contribution: €1.8 billion

 ■  The 

interregional  cooperation  pro-
gramme  (INTERREG  IVC)  provides  a 
framework for the exchange of experiences 
between regional and local institutions in 
diﬀ erent countries. There are two priorities: 
innovation and the knowledge economy, 
and  environment  and  risk  prevention. 
Together with the URBACT II programme, 
this  programme  is  the  main  vehicle  for 
the  EU ‘Regions  for  Economic  Change’ 
initiative  which  is  designed  to  support 
regional and urban networks developing 
and spreading best practices in economic 
modernisation. 
ERDF contribution: €321 million 
 Countries:  EU-27,  Norway 
Switzerland

and 

 ■   The  URBACT  II  programme  brings 
together  actors  at  local  and  regional 
level in order to exchange experiences 
and  facilitate  learning  on  urban  policy 
themes.  The  programme  supports 

Slovenia

Allocated funds 2007-13
Total: €4.2 billion
Convergence: €4.1 billion
European Territorial 
Cooperation: €104 million

Focus of programmes
Promoting entrepreneurship, 
innovation and technological 
development; strengthening 
human capital; job 
creation; balanced regional 
development

Targets
Contribute 0.75% to the 
annual increase of GDP
Stimulate an increase of 
1.7% in the employment rate

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Connecting countries: the new train link between Hungary and Slovenia

 thematic   networks  and  working  groups 
between  cities,  conferences,  and  the 
development of tools.  
ERDF contribution: €53 million 
 Countries:  EU-27,  Norway  and 
Switzerland

 ■  The 

‘European  Spatial  Planning 
(ESPON) 
Observation  Network’ 
provides  scientiﬁ c  information  for  the 
development of regions and larger terri-
tories through applied research, analysis 
and tools. 
ERDF contribution: €34 million  
 Countries: EU-27, Norway, Switzerland, 
Iceland and Liechtenstein

 ■  The  INTERACT  II  programme  oﬀ ers 
services and tools on the management 
of cooperation programmes  
ERDF contribution: €34 million

Regional  cooperation  projects  can  face 
diﬃ  culties  due  to  diﬀ erent  national  taxa-
tion,  labour  or  planning  laws.  The  Euro-
pean Grouping for Territorial Coopera-
tion  (EGTC)  is  a  new  instrument  enabling 
regional and local authorities from diﬀ erent 
countries to set up cooperation groupings 
with a legal personality. Areas where it can 
be used include cross-border transport or 
health  services  and  common  studies  and 
projects.  Members  of  the  EGTC  can  be 
national or regional public bodies.

There  are  two  instruments  for  regional 
development 
in  candidate,  potential 
 candidate and third countries in 2007-13:

 ■  The Instrument for Pre-Accession Assist-
ance (IPA) is based on partnerships with 
the EU candidate countries – the former 
Yugoslav Republic of Macedonia, Croatia, 
and  Turkey  –  and  potential  candidate 
countries – Albania, Bosnia and Herze-
govina, Montenegro, and Serbia includ-
ing  Kosovo.  It  supports  administrative, 
social and economic reforms, as well as 
regional and cross-border cooperation.  
EU allocation: €11.47 billion 

Instrument 

 ■  The  European  Neighbourhood  and 
(ENPI) 
Partnership 
promotes  cooperation  and  economic 
integration  between  the  EU  and  part-
ner  countries  –  Algeria,  Armenia, 
Azerbaijan,  Belarus,  Egypt,  Georgia, 
Israel, Jordan, Lebanon, Libya, Moldova, 
Morocco, the Palestinian Authority, the 
Russian  Federation,  Syria,  Tunisia,  and 
Ukraine. It supports partnerships which 
encourage good governance and social 
and economic development. Included 
are  15  genuine  cross-border  coopera-
tion (CBC) programmes which operate 
along EU external borders.  
 EU allocation: €11.18 billion, of which 
for 
ENPI-CBC  programmes  account 
€1.18 billion

Since 2006, the European Commission has 
also engaged in a structured dialogue on 
regional policy with China, and since 2007 
with Russia. 

Hungary

Allocated funds 2007-13
Total: €25.3 billion
Convergence: €22.9 billion
Regional Competitiveness 
and Employment: €2 billion
European Territorial 
Cooperation: €386 million 

Focus of programmes
Improving competitiveness 
and the knowledge 
economy; improving the 
business environment and 
contributing to active labour 
market policies; human 
resource development

Targets
Increase new jobs by 4% 
Raise the production levels 
of enterprises by 10% by 2015

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Turning industrial heritage into an asset for the region: Völklinger Hütte, Saarland, Germany

Does it make a diﬀ erence?

According  to  the  latest  evaluations, 
cohesion policy is having a big impact, 
helping  to  spur  growth  and  create 
jobs in those Member States that most 
need them, and playing an important 
role in improving standards of living 
across Europe.

Each  programme  under  the  Structural 
Funds  incorporates  evaluation  activities 
whereby Member States, regions and the 
European Commission undertake regular 
assessments  of  cohesion  policy.  Success 
is  measured  against  indicators  such  as 
additional growth, jobs created and pol-
lution reductions. 

The European Commission’s 2007 cohesion 
report shows  that  the  programmes  have 
helped  to  shift  Member  States’  policies 
towards  growth-enhancing  investments, 
and  support  much-needed  investment 
in  infrastructure,  human  resources  and 
the  modernisation  and  diversiﬁ cation  of 
regional  economies. They  have  contributed 
to  reducing  social  exclusion  and  poverty 
by  providing  skills  for  the  knowledge 
economy  and  reinforcing  labour  market 
policies.  At  national  level,  Greece,  Spain, 
Ireland  and  Portugal  –  the  largest  ben-
eﬁ ciaries  of  cohesion  policy  in  the  years 
before the recent EU enlargement – have 
achieved impressive growth performances 
since 1995. 

Greece  reduced  the  gap  with  the  rest  of 
EU-27,  moving  from  74%  of  average  GDP 
per head in 1995 to reach 88% in 2005. Dur-
ing  the  same  time  frame,  Spain  moved 
from  91%  to  102%,  and  Ireland  reached 
145% from 102%. 

The situation is diﬀ erent in the new Mem-
ber  States,  where  cohesion  policy  is  just 
beginning to have an eﬀ ect. Starting from 
very low levels, all of them are experienc-
ing  rapid  growth,  often  concentrated  in 
the  capital  regions  and  major  cities.  GDP 
in  the  three  Baltic  States  almost  doubled 
in the decade from 1995 to 2005. Poland, 
Hungary and Slovakia have also performed 
well, with growth rates more than double 
the EU average. However, assuming current 
growth rates continue, it will still take more 
than 15 years before Poland, Bulgaria and 
Romania reach a GDP per head of 75% of 
the EU-27 average.

At  the  regional  level,  relatively  strong 
economic  growth  over  the  past  decade 
in  countries  with  low  GDP  per  head  has 
meant that EU regions have been converg-
ing. Between 1995 and 2004, the number 
of regions with GDP per head below 75% of 
the EU average fell from 78 to 70, while the 
number of those below 50% dropped from 
39 to 32. The regions in EU-15 that are lag-
ging behind, and which were major recipi-
ents  of  cohesion  support  in  the  2000-2006 
period, showed a signiﬁ cant increase in GDP 

Germany

Allocated funds 2007-13
Total: €26.3 billion
Convergence: €16.1 billion
Regional Competitiveness 
and Employment: €9.4 billion
European Territorial 
Cooperation: €851 million 

Focus of programmes
Fostering innovation; 
strengthening 
competitiveness; improving 
regional attractiveness; 
creating more and better jobs

Targets
Increase spending on 
research and innovation 
to 3% of GDP (from 2.5%)
Raise the employment rate 
to 70% (from 65.4%)

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Danutoni’s new water-treatment plant, near Petrosani, Romania

per head. Between 1995 and 2004, GDP per 
head in a quarter of them had risen above 
the 75% threshold. 

2005,  employment  rates  in  these  regions 
were  still  some  11%  lower  than  those  in 
the rest of the Union.

The  2000-2006  period  has  seen  an  extra 
850  km  of  railway  constructed  in  Spain 
for high-speed trains. In addition, improve-
ments to roads have led to savings of some 
1.2 million hours – both are signiﬁ cant con-
tributions to sustainable transport. Over a 
similar  period,  the  Structural  Funds  have 
brought  diﬀ erentiated  waste  collection 
to around 6.4 million people in Italy. Spain 
saw  around  €4  billion  invested  in  some 
13  000  research  projects,  involving  nearly 
100  000  researchers,  and  256  000  British 
SMEs  received  ﬁ nancial  assistance,  advice 
and coaching in managerial and organisa-
tional skills.

Similar  developments  can  be  observed 
in  the  creation  of  jobs.  Between  2000 
and  2005,  regional  employment  rates 
converged  within  the  EU  and  unemploy-
ment in the EU-15 regions that are lagging 
behind  fell  from  13.4%  to  12.4%.  Yet  in 

Looking  to  the  2007-13  period,  stud-
ies estimate that cohesion policy will add 
some 6% to GDP in most of the new Mem-
ber States on top of baseline scenarios. For 
example, an additional 9% of GDP growth 
is  predicted 
for  Lithuania,  the  Czech 
Republic  and  Slovakia;  5.5  to  6%  for  Bul-
garia, Poland and Romania; 3.5% for Greece 
and around 1 to 1.5% for Spain, the former 
East German Länder and the Mezzogiorno. 
By 2015, cohesion investment could have 
created up to two million additional jobs.

The eﬀ ect of the cohesion policies extends 
beyond growth and jobs. They safeguard 
compliance  with  other  Community  poli-
cies  –  whether  they  deal  with  state  aid, 
the  environment,  transport,  support  for 
innovation  or  the 
information  society. 
Moreover,  they  help  improve  and  mod-
ernise  public  administrations,  enhancing 
trans parency and good governance. 

Romania

Allocated funds 2007-13
Total: €19.7 billion
Convergence: €19.2 billion
European Territorial 
Cooperation: €455 million 

Focus of programmes
Developing basic 
infrastructure according 
to European standards; 
increasing long-term 
competitiveness; developing 
and using human capital 
more eﬃ  ciently; building 
administrative capacity; 
promoting balanced 
territorial development

Targets
Contribute to 15-20% growth 
in GDP by 2015
Increase the employment rate 
from 57.4 to 64%
Invest in 1,400 km of new or 
renovated roads

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Supporting sustainable tourism: cycle paths in the Salzburg region, Austria

Controlling taxpayers’ money

Spending  Structural  and  Cohesion 
Funds annually involves about €50 bil-
lion from the EU budget, plus national, 
regional  and  private  co-ﬁ nancing.  In 
all, there are more than 400 national 
and  regional  programmes  managed 
by  Member  States,  including  tens  of 
thousands of projects selected every 
year.  How  does  the  European  Com-
mission ensure that taxpayers’ money 
is managed correctly and eﬃ  ciently?

The answer lies in the system of controls 
and  audits  at  EU,  national  and  regional 
levels.  Member  States  and  regions  must 
fulﬁ l  a  number  of  minimal  requirements 
before  a  single  euro  from  the  Structural 
and Cohesion Funds is spent on a project.

Three authorities and their functions have 
to be deﬁ ned for each programme:

 ■  The  managing  authority  ensures 
 compliance  of  projects  with  selection 
criteria  and  the  beneficiary’s  under-
standing  of  terms  and  conditions.  It 
 veriﬁ es compliance with grant condi-
tions  and  regularly  conducts  on-the-
spot inspections to determine progress 
and the accuracy of projected expendi-
ture. The  managing  authority  corrects 
or recovers EU funds should irregulari-
ties  occur.  Finally,  it  draws  up  annual 
reports on implementation and a final 
report summarising  implementation 
of  the  entire  programme.  These  are 
checked by the European Commission.

 ■  The  certifying  authority  submits 
periodic  statements  of  expenditure 
and  applications  for  payments  to  the 
Commission.  It  veriﬁ es  that  claims  for 
reimbursement  are  accurate,  result 
from  reliable  accounting  systems,  and 
are  compliant  with  applicable  EU  and 
national rules. It carries out checks and, 
if  necessary,  on-the-spot  inspections. 
The  certifying  authority  also  monitors 
and reports on irregularities and on the 
recovery  or  withdrawal  of  funds  from 
beneﬁ ciaries as a result.

 ■  The  audit  authority  performs  system 
audits  and  carries  out  project  tests.  It 
reports its ﬁ ndings of system weaknesses 
and  irregular  expenditure  to  the  man-
aging  authority  and  certifying  author-
ity. For the 2007-13 period, the respon-
sibilities  of  national  audit  bodies  have 
been increased. First, they must give an 
opinion on the compliance of the man-
agement and control system. Secondly, 
for  each  programme  an  audit  author-
ity  must  be  designated  to  take  formal 
responsibility  for  audit  work.  It  must 
submit  an  audit  strategy  within  nine 
months  of  the  programme’s  approval 
and  give  an  annual  audit  opinion  on 
the functioning of systems. It must also 
review  all  auditing  work  at  the  end  of 
the  programme  period.  The  European 
Commission  scrutinises  these  declara-
tions.

Austria

Allocated funds 2007-13
Total: €1.46 billion
Convergence: €177 million
Regional Competitiveness 
and Employment: €1.03 billion
European Territorial 
Cooperation: €257 million 

Focus of programmes
Regional competitiveness and 
innovation; attractive regions; 
improving the adaptability 
and qualiﬁ cations of the 
labour force; territorial 
cooperation; governance

Targets
Enhance competitiveness by 
strengthening the knowledge 
base and the ability of 
enterprises to innovate
Research and development 
support
Balanced regional 
development improving 
accessibility of the regions 
and promoting employment

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Community services: afternoon centre for primary school children, Lastenkaari, Finland

The European Commission’s audit serv-
ices exercise supervisory controls, mainly 
through  auditing  of  the  Member  States’ 
and  regions’  management  and  control 
systems,  including  transaction  tests  at 
beneﬁ ciary level, and control the ﬂ ow of 
funds to Member States. Thematic audits 
are  also  carried  out  and,  where  major 
weaknesses are found in the systems, the 
Commission  and  Member  States  agree 
action plans to remedy these. 

If  corrective  measures  are  not  taken 
promptly  by  a  Member  State,  the  Euro-
pean  Commission  may  interrupt  or  sus-
pend payments and may apply ﬁ nancial 
corrections to recover previous payments 
aﬀ ected  by  system  weaknesses.  Financial 
corrections  are  then  applied  at  a  ﬂ at  rate 
to all the payments at risk. 

For  the  2007-13  period,  the  European 
Commission  has  adopted  an  action  plan 
to  further  integrate  the  control  and  audit 
activities at EU, national and regional levels. 
This includes improvements in the coordi-
nation of audit work and the exchange of 
audit results between the Member States’ 
audit  authorities  and  the  Commission,  as 
well  as  dissemination  of  guidance  and 
good practice.

The  Commission  also  applies  corrections 
for  individual  errors  found  in  its  own  or 
the European Court of Auditors’ audits. 
Member  States  are  given  an  opportunity 
to  rebut  proposed  ﬁ nancial  corrections 
and  they  can  replace  corrected  expendi-
ture by other eligible expenditure to avoid 
a net reduction in the funding of the pro-
gramme concerned. 

Finland

Allocated funds 2007-13
Total: €1.7 billion
Regional Competitiveness 
and Employment: €1.6 billion
European Territorial 
Cooperation: €120 million

Focus of programmes
Promoting business; 
support for innovation; 
networking and 
strengthening of knowledge 
structures; competence; 
employment; employment 
and entrepreneurship; 
improvement of regional 
accessibility; the environment

Targets
Create new enterprises and 
jobs to increase employment
Develop the regional 
economy
Increase the productivity, 
competitiveness and exports 
of enterprises
Raise the education level
Increase research and 
innovation to 4% of GDP 
by 2010

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Saving cultural heritage in Athens, Greece 

Telling the story: 
your right to know 

Publicity  and 
information  about 
the  activities  co-ﬁ nanced  by  the  EU 
Structural  and  Cohesion  Funds  are 
essential to increase the public aware-
ness and the transparency of these pro-
grammes. 

‘Telling  the  story’  of  Structural  and  Cohe-
sion  Funds  means 
in  practical  terms 
that  publications,  websites,  databases 
on  best  practices  and  other  sources  are 
coordinated  between  EU  authorities  and 
Member  States  and  regions  in  order  to 
guarantee  the  best  possible  access  to 
relevant information. National authorities 
are primarily responsible for informing their 
citizens  about  those  activities  which  are 
co-ﬁ nanced by the EU.

The  emphasis  on  proper  information  and 
communication  at  all  levels  of  the  funds 
will  be  strengthened  during  2007-13. 
Member States and regions have an obli-
gation to provide information on the pro-
grammes co-ﬁ nanced by the funds and to 
publish all ﬁ nal beneﬁ ciaries, projects and 
the amounts granted. 

EU rules state that:

 ■  There must be a communication plan 
for  every  Operational  Programme, 
comprising  a  strategy,  the  deﬁ nition 
of  target  groups,  planned  information 

and  communication  measures  and  an 
indicative  budget.  Authorities  must 
name the departments responsible for 
the plan and how it will be assessed.

 ■  Minimum  requirements  are  deﬁ ned 
for  the  managing  authorities  and  end 
beneﬁ ciaries in order to brief the gen-
eral  public.  Examples  of  such  require-
ments  are:  one  major 
information 
compaign when the programme starts 
and one in each year of its subsequent 
implementation; the publication of a list 
of  ﬁ nal  beneﬁ ciaries  by  the  managing 
authority; the erection of billboards and 
displays on project sites. 

 ■  There should be networking between 
Member  States  and  regions  on  infor-
mation  and  communication  actions  in 
order to achieve better integration and 
to learn from best practices.

Information  and  communication  are  an 
integral part of cohesion policy that add 
value  to  the  quality  of  programmes  and 
projects  on  the  ground.  This  is  put  into 
practice  by  national  and  regional  admin-
istrations,  ﬁ nal  beneﬁ ciaries  and  by  the 
European  Commission  services.  It  is  also 
important  to  evaluate  and  follow  up  the 
information and communication strategies 
and  how  they  relate  to  the  overall  objec-
tives of Operational Programmes.

Greece

Allocated funds 2007-13
Total: €20.4 billion
Convergence: €19.6 billion
Regional Competitiveness 
and Employment: €635 million
European Territorial 
Cooperation: €210 million 

Focus of programmes
Enhancing competitiveness; 
improving accessibility; 
achieving digital 
convergence; supporting 
human resource 
development; education and 
lifelong learning 

Targets
Increase GDP by around 3.5% 
and create up to 95 000 new 
jobs by 2015
Raise R&D spending to 1.5% 
of GDP (from 0.6% currently) 

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The  European  Commission  services 
inform  the  general  public  about  how 
the  funds  operate  in  each  Member  State 
through publications, the internet, audio-
visual media and conferences. Made avail-
able  in  all  oﬃ  cial  EU  languages,  these 
activities  are  aimed  at  increasing  aware-
ness of the impact of the funds and ensur-
ing that coherent and relevant information 
is widely available.

The  Commission  also  coordinates  a  net-
work  of  communication  oﬃ  cers  from  all 
27 Member States to bring together those 
responsible  for  promoting  the  EU  Struc-
tural  and  Cohesion  Funds.  The  objective 
is to share experiences and best practices, 
identify  ways  of  improving  the  quality  of 
communication  activities  and  link  up  with 
existing national networks. 

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31

At your service

Should you wish to ﬁ nd out more about how the European Union supports the regions 
and also how much funding is available for which projects in your region, or if you are 
looking for news, publications, Power-Point presentations, photos, or videos, please visit 
the website of the European Commission’s Regional Policy Directorate-General:

http://ec.europa.eu/regional_policy

If you have a question or would like to receive our publications, please send us an email: 

regio-info@ec.europa.eu

Finally, the Regional Policy Directorate-General has an information and visitors’ centre 
which is open for individual or group visits between Monday and Friday (09:30 - 12:30 and 
14:00 - 17:00 hrs).

European Commission, Regional Policy DG
Avenue de Tervuren/Tervurenlaan 41
B-1049 Brussels 
Phone: +32 (0)2 296 06 34 
Fax: +32 (0)2 296 60 03 

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