Cohesion spending increase

The budgetary constraints currently faced by Member States mean that the EU’s structural funds are an ever more valuable source of growth-enhancing investment especially in the regions that need it most.

The effective use of these funds gathered pace in 2011, with payments to Member States from last year’s cohesion policy budget hitting a record €32.9 billion, an 8% increase on the €30.5 billion paid out in 2010. This higher payment rate from the European Regional Development Fund (ERDF), the European Social Fund (ESF) and the Cohesion Fund for 2011 also reflects the fact that we are well into the second half of the 2007-2013 financial framework, which is when most invoices are submitted. EU structural funds in 2011 helped to further the Single Market through investments in a broad range of strategic and growth-enhancing areas, including broadband connections, research and development infrastructure, innovation projects, new Small- and Medium Sized Enterprises (SMEs) and education.

In addition, the European Commission has taken measures to prioritise growth-enhancing investments. For example, temporary “top-up” payments worth €374 million were made in 2011 to Greece and Romania, following the entry into force of new rules to support the economies of Member States experiencing difficulties in terms of financial stability.

In Greece, a total of €11.5 billion will be invested in around 180 priority projects, leading to the creation of between 90,000 and 108,000 jobs.

For Italy, an action plan for the southern or Mezzogiorno regions will enable €3.1 billion of EU and national funding to be invested rapidly in regional projects in education and school infrastructure, broadband, railways and supporting SMEs. This is the result of a reprogramming of funds, in cooperation with the national and regional authorities, to trigger much-needed growth in crucial sectors.

The Commission has also called on Member States to use €22bn of European Social Fund money not yet committed to projects to improve job opportunities for young people. Today one in five youngsters looking for work cannot find a job. The new ‘Youth Opportunities Initiative’ is pleading for Member State to work on preventing early school leaving; helping youngsters develop skills relevant to the labour market; ensuring work experience and on-the-job training and helping young people find a first good job. The European Commission has also set out concrete actions to be financed directly by EU funds.

Background

At the end of 2011, the average payment rate for all three funds (European Regional Development Fund, European Social Fund and Cohesion Fund) in the EU was 33.4% of the amounts allocated for the 2007-2013 period. These rates vary significantly between countries, from 16.5% to 48.3%; while the analysis per fund reveals that the ERDF payments increased by 55% year-on-year from 22.3% at end 2010 to 34.3% at end 2011. For ESF, the payment rate has increased by 52%, from 23.25% at end 2010 to 35.43% at end 2011 (total advanced and interim payments). There are still differences between countries that vary from18.68% to 60.43%, but in all member states an improvement can be noticed.

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