Eu Structural Funding As Part Of Eu Regional Policy

The main goal of European Union regional politics is reduction of the economical and social inequalities between the richest and poorest regions. These disproportions are often caused by peripheral geographical position, difficult weather conditions, insufficient infrastructure, disadvantageous structure of economy (with agriculture dominating), low level of qualification among the population etc. The differences in standard of living and economical growth is a barrier for EU integration. (http://www.biurose.sejm.gov.pl )

The problem was named by Western Europe in 30ties of the last century. In post-war period regional politics was limited to redistribution of the financial resources to poorer and underdeveloped regions mainly by supporting infrastructural investments in those areas. These actions were not deemed to be sufficient and resulted in appealing to planning instruments and gradual regionalisation of the state. European Union member states (EEC then) decided to incorporate regional policy into the European Community programme. (http://www.przysiek.pl/~uniawww/ fundusze_strukturalne/fundusze_idea.htm )

Treaty of Rome (1957) among three directions of activity also includes "increasing resources by valorisation of the underdeveloped regions and by using unemployed workforce." (I. Pietrzyk, Warsaw 2002). The report also emphasized the importance of coordinating regional plans of the member states. Likewise it suggested founding of the special investment fund serving a purpose of creating an environment for balanced growth. Unfortunately all those statements were not reflected in practice. Besides the above Treaty of Rome mentioned the reduction of the disproportions and underdevelopment of regions, but in the budget framework was lacking the regional policy (I.Pietrzyk, Warsaw 2002)

The only common institution oriented for the regional development and raised by Treaty of Rome was European Investment Bank (EIB, 1958r). which for almost 20 years was the only common source of regional investments finance.

The first breakthrough in the development of the regional policy was founding of Regional Policy Directorate General in the structure of the European Commission, which was responsible for conception and practical implementation of regional politicy.

Only the founding of European Regional Development Fund (ERDF) in 1975 stimulated European regional politics. It was ERDF that became the main financial instrument of that politics. It suppose to level economical and social differences of the among the European Community members. ERDF resources were assigned to member states in national quotas system and were only used to reinforce the regional policy activities of the member states. The ERDF rules were changed in 1984 when the the system of national quotas were replaced with a new financial distribution mechanism

based on indicative ranges of support determined for each country which guaranteed only the low boundary of the participation (i.e. 88,63%) to particular states. This introduced the rule of programming regional development, which meant withdrawing of the individual project financing in favour of programmes initiated by European Community or national programmes which are significant to the whole European Community (www.ukie.gov.pl).

Single European Act established in 1986 laid the ground of the new structural politics of the European Community but first of all - regional politics. Treaty of Rome was extended with a new part entitled "Economic and Social Cohesion " (Arts. 130a-e) which stated that the ultimate goal of the Community is to level the differences between the richest and the poorest regions and establishing the foundation of the common structural politics. The framework described 6 set of goal categories:

1)supporting the development and structural readjustment of underdeveloped regions,

2)restructuring of the border and industrially declined regions,

3)fighting long-term unemployment and allowing young people and endangered by long-term unemployment to enter the professional career,

4)enabling the employees adoption to the industry changes,

5)undertaking the reform of the common agricultural politics (two additional goals were named: 5a - hastening the modernisation and adjustment in the Union's agricultural structure; 5b - help in development and structural changes of rural regions),

6)facilitating the regional development of the Scandinavian countries (this goal was established after Finland and Sweden joined the EU).

Further consequence was the reform of structural funds prepared in 1988. Later on also the funds budget was increased from 7.2 milliard ECU in 1987 to 14.5 milliard ECU in 1993.

Regional politics was reinforced in 1993 after signing Treaty on European Union in 1992, when so called Cohesion Funds was founded with a budget of 15.15 milliard ECU for seven year period (1993-1999). It was meant as a financial backup for EU countries which Gross Domestic Product is not higher than 90% of an average of all the member states (Greece, Portugal, Spain and Ireland) (www.fundusze.ukie.gov.pl). Main purpose of the fund was to put technical infrastructure and environment investments into motion - especially transeuropean structural networks. ( J. Hausner, M. Maroda, Krakow, 2000 )

The funds for the structural spending quickly increased. The EU summit meeting in Edinburgh (1992 ) raised them to 141,47 milliard ECU for 1994-1999 period. European Investment Bank allocated 90 milliard ECU for structural activities loans. It is also worth mentioning another 15.5 milliard of ECU from Cohesion Fund.

Next European Union summit, which took place in 1999 in Berlin was devoted to general rules of the structural politics for the following years (Agenda 2000). One of the important task was improving the utilisation of the structural funds and Cohesion Fund. The most important goals were deemed to be (decrease from six to three according to rules from 1988):

Objective 1 - supporting development and structural adaptation of underdeveloped regions (GDP per capita below75% of the EU average) and sparsely populated north regions of the Scandinavia with difficult climate conditions (with less than 8p/sq. km.). Additional help may be given to regions endangered with serious unemployment.

For this target in years 2000-2006 EU assigned 70% of the structural funds i.e.135.9 milliard Euro.

Objective 2 - supporting economical and social conversion of regions with structural difficulties. Commission proposes help for every region that suffers from the strong need of social and economical restructuring. It was mainly