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Regional policy

The EU may be one of the richest parts of the world, but there are large differences in prosperity levels both between countries and inside individual countries. The wealthiest country, Luxembourg, is more than seven times richer than Romania and Bulgaria, the poorest and newest EU members.

However, the dynamic effects of EU membership, coupled with a vigorous and targeted investment policy, can bring results.

Solidarity and cohesion

Regional fund spending by activity © EU

EU regional policy aims to:

  • help each region achieve its full potential
  • improve competitiveness and employment by investing at regional level in areas of high growth potential, with an added value for the EU as a whole
  • bring living standards in the countries that have joined the EU since 2004 up to the EU average as quickly as possible.

The causes of inequality

Regional inequalities can be due to many factors, including:

  • longstanding handicaps imposed by geographic remoteness or sparse population
  • more recent social and economic change
  • the legacy of formerly centrally-planned economic systems
  • combinations of these and other things.

The impact of these disadvantages is frequently evident in:

  • social deprivation
  • poor-quality schools
  • higher levels of unemployment
  • inadequate infrastructure.

Creating growth and jobs

Romanians benefiting from regional funding © DG REGIO

Regional policy is about investing in people.

The idea is for regional policy to dove-tail with the EU’s agenda to promote growth and jobs by:

  • making countries and regions more attractive for investments by improving accessibility, providing quality services (such as high-speed internet) and preserving environmental potential
  • encouraging innovation, entrepreneurship and the knowledge economy, pushing regions to capitalise on their strengths and make a more effective and better combined use of European national and regional public funds, developing 'smart specialisation' strategies for growth
  • creating more and better jobs by attracting more people into employment, reversing the ‘brain-drain’, improving workers’ adaptability and increasing investment in human capital.

Available funding

Regional spending for 2007-13 accounts for over one-third of the EU budget – some €347 billion.

Depending on what is being funded, and in which country or region, the money comes from three different sources:

  • European Regional Development Fund (ERDF) – general infrastructure, innovation, and investments
  • European Social Fund (ESF) – vocational training projects, other kinds of employment assistance, and job-creation programmes.
  • Cohesion Fund – environmental and transport infrastructure projects and the development of renewable energy. This funding is for 15 countries whose economic outputs are less than 90% of the EU average (13 newest EU members plus Portugal, Greece and Spain).

Where and how it is spent

Regional policy is investing in all EU regions, in line with the Europe 2020 goals.

Particular efforts are being made in Central and Eastern European member countries and in other EU countries, regions with special development needs. The Policy aims to counter the crisis and ensure a quicker delivery of available funding.

There is a strong focus on support for innovation and research, sustainable development, and creating a friendly environment for small businesses - the backbone of the European economy. Some funding is also provided for cross-border and inter-regional cooperation projects.





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