I. Solidarity policies

The main purpose of the solidarity policies is to support the completion of the single market (see Chapter 6, ‘The single market’), and to correct any imbalances by means of structural measures to help regions lagging behind or industrial sectors encountering difficulties. The need for solidarity between EU countries and between regions became even more acute following the recent entry of 12 newcomers with incomes well below the EU average. The EU must also play its part in helping to restructure sectors of the economy which have been badly affected by fast-growing international competition.

(a) Regional aid

The EU’s regional policy is based on transfers of funds from rich to poor countries. The money is used to boost development in regions lagging behind, to rejuvenate industrial regions in decline, to help young people and the long-term unemployed find work, to modernise farming and to help less-favoured rural areas.

The funds earmarked for regional activities in the 2007–13 budget are targeted at three objectives.

• Convergence. The aim here is to help the least-developed countries and regions catch up more quickly with the EU average by improving conditions for growth and employment. This is done by investing in physical and human capital, innovation, the knowledge society, adaptation to change, the environment and administrative efficiency.
• Regional competitiveness and employment. The objective is to increase the competitiveness, employment levels and attractiveness of regions other than the least-developed ones. The way to make this happen is to anticipate economic and social changes and promote innovation, entrepreneurship, environmental protection, accessibility, adaptability and the development of inclusive job markets.
• European territorial cooperation. The aim of this new objective is to increase cross-border, transnational and interregional cooperation. It aims to promote joint solutions to problems that are shared by neighbouring authorities in sectors such as urban, rural and coastal development, the cultivation of economic relations, and networking between small and medium-sized enterprises (SMEs).

These objectives will be financed by specific EU funds, which will top up or stimulate investment by the private sector and by national and regional government. These funds are known as the Structural Funds and the Cohesion Fund.

• The European Regional Development Fund (ERDF) is the first Structural Fund and provides funding to strengthen economic, social and territorial cohesion by reducing differences between regions and supporting the structural development and adjustment of regional economies, including the redevelopment of declining industrial regions.
• The European Social Fund (ESF), the second Structural Fund, provides funding for vocational training and job-creation initiatives.
• In addition to the Structural Funds, there is a Cohesion Fund, which is used to finance transport infrastructure and environmental projects in EU countries whose GDP per capita is lower than 90 % of the EU average.

(b) The common agricultural policy (CAP)

The aims of the CAP, as set out in the original Treaty of Rome from 1957, have largely been achieved: a fair standard of living has been ensured for the farming community; markets have been stabilised; supplies reach consumers at reasonable prices; farming infrastructure has been modernised. Other principles adopted over the course of time have also worked well. Consumers enjoy security of supply and the prices of agricultural products are kept stable, protected from fluctuations on the world market.

However, the CAP has been a victim of its own success. Production grew far faster than consumption, placing a heavy burden on the EU budget. In order to resolve this problem, agriculture policy had to be redefined. This reform is beginning to show results. Production has been curbed. Farmers are being encouraged to use sustainable farming practices that safeguard the environment, preserve the countryside and contribute to improving food quality and safety.

Producing the food that you eat: quality is as important
as quantity.

The new role of the farming community is to ensure a certain amount of economic activity in every rural area and to protect the diversity of Europe’s countryside. This diversity and the recognition of a ‘rural way of life’ — people living in harmony with the land — are an important part of Europe’s identity.

The European Union wants the World Trade Organisation (WTO) to put more emphasis on food quality, the precautionary principle and animal welfare. The European Union has also begun reforming its fisheries policy. The aim here is to reduce the overcapacity in fishing fleets, to preserve fish stocks and to provide financial assistance to allow fishing communities to develop other economic activities.

(c) The social dimension

The aim of the EU’s social policy is to correct the most glaring inequalities in European society. The European Social Fund (ESF) was established in 1961 to promote job creation and help workers move from one type of work and/or one geographical area to another.

Financial aid is not the only way in which the EU seeks to improve social conditions in Europe. Aid alone could never solve all the problems caused by economic recession or by regional under-development. The dynamic effects of growth must, above all, encourage social progress. This goes hand in hand with legislation that guarantees a solid set of minimum rights. Some of these rights are enshrined in the Treaties, e.g. the right of women and men to equal pay for equal work. Others are set out in directives concerning the protection of workers (health and safety at work) and essential safety standards.

In 1991, the Maastricht European Council adopted the Community Charter of Basic Social Rights, setting out the rights that all workers in the EU should enjoy: free movement; fair pay; improved working conditions; social protection; the right to form associations and to undertake collective bargaining; the right to vocational training; equal treatment of women and men; worker information, consultation and participation; health protection and safety at the workplace; protection for children, the elderly and the disabled. At Amsterdam in June 1997, this Charter became an integral part of the Treaty and is now applicable in all the member states.

Throughout the period covered by this programme and the five programmes preceding it, and in more than 30 years of setting standards, the EU has put in place a comprehensive system of environmental protection.

The problems being tackled are extremely varied: noise, waste, the protection of natural habitats, exhaust gases, chemicals, industrial accidents, the cleanliness of bathing water and the creation of a European information and assistance network for emergencies, which would take action in the event of environmental disasters such as oil spills or forest fires.

More recently, concerns about the health effects of pollution have been examined in an environment and health action plan for the 2004–10 period. This plan establishes the link between health, the environment and research policy.

Harnessing the planet’s natural sources of energy is one way of combating
climate change.

European regulation provides the same level of protection throughout the EU, but is flexible enough to take account of local circumstances. It is also constantly being updated. For example, it has been decided to rework the legislation concerning chemicals and replace earlier rules, which were developed on a piecemeal basis, with a single system for the registration, evaluation and authorisation of chemicals (REACH).

This system is based on a central database being run by a new European Chemicals Agency, located in Helsinki. The aim is to avoid contamination of the air, water, soil or buildings, to preserve biodiversity and to improve the health and safety of EU citizens while at the same time maintaining the competitiveness of European industry.

(b) Technological innovation

The founders of the European Union rightly saw that Europe’s future prosperity would depend on its ability to remain a world leader in technology. They saw the advantages to be gained from joint European research. So, in 1958, alongside the EEC, they established Euratom — the European Atomic Energy Community. Its aim was for EU countries together to exploit nuclear energy for peaceful purposes. As part of this, the Joint Research Centre (JRC) was created consisting of nine institutes at four locations: Ispra (Italy), Karlsruhe (Germany), Petten (the Netherlands) and Geel (Belgium).

However, as innovation gathered pace, European research had to diversify, bringing together as wide a variety of scientists and research workers as possible. The EU had to find new ways of funding their work and new industrial applications for their discoveries.

Joint research at EU level is designed to complement national research programmes. It focuses on projects that bring together a number of laboratories in several EU countries. It also supports fundamental research in fields such as controlled thermonuclear fusion (a potentially inexhaustible source of energy for the 21st century). Moreover, it encourages research and technological development in key industries such as electronics and computers, which face stiff competition from outside Europe.

Research fuels economic growth.

The main vehicle for funding EU research is a series of framework programmes. The seventh research and technological development framework programme covers the 2007–13 period. The biggest share of the €50 billion plus budget will go on areas like health, food and agriculture, information and communications technology, nanosciences, energy, the environment, transport, security and space and socioeconomic sciences. Additional programmes will promote ideas, people and capacities, via research work at the frontiers of knowledge, support for researchers and their career development and international cooperation.

(c) Energy

Fossil fuels — oil, natural gas and coal — account for 80 % of energy consumption in the EU. A large and growing proportion of these fossil fuels are imported from outside the EU. At present, 50 % of gas and oil is imported, and this dependence could grow to 70 % by 2030. The EU will thus be more vulnerable to cuts in supply or price hikes caused by international crises. Another reason to reduce its consumption of fossil fuels is to reverse the process of global warming.

Various steps will have to be taken in future, such as saving energy by using it more intelligently, developing alternative energy sources(particularly renewable energy sources in Europe), and increasing international cooperation. Energy consumption could fall by one fifth by 2020 if consumers changed their behaviour and if technologies that improve energy efficiency were fully used.