The target of the EU funding is strictly related to the adopted development strategy. The current strategy has been established in the Europe 2020 document. A detailed EU funds spending plan – the so-called Multiannual Financial Framework – should be prepared at least once every 5 years, but in practice it is prepared once every seven years. The current financing plan is valid until 2020.
European Funds structure
European Union spends money via different funds, programmes and financial instruments. Five main funds support the economic development of all EU Member States in line with the objectives of the Europe 2020 strategy. They are:
European Regional Development Fund – its objective is to reduce the differences in the level of development of the Union’s regions and to strengthen the economic, social and territorial cohesion of the EU as a whole.
European Social Fund – its main objective is to combat unemployment in Member States. The funding provided under the European Social Fund contributes to improving the employment and educational opportunities.
Cohesion Fund – its objective is to reduce the economic and social differences and to promote sustainable development primarily by carrying out large investments in the field of transport infrastructure and environmental protection.
European Agricultural Fund for Rural Development – this fund supports the transformation of the structure of agriculture and contributes to the development of rural areas.
European Maritime and Fisheries Fund – this fund supports the restructuring of the Member States’ fisheries sectors.
Overall, by 2020 the European Union plans to transfer nearly half of its entire budget (more than EUR 453 billion) via the above-mentioned funds in the form of support for Member States.
In addition, the Union introduced four financial instruments:
- JASPERS and JASMINE – they are used to finance technical support during the preparation of major infrastructure projects,
- JEREMIE – makes it easier for small and medium-sized enterprises (SMEs) to obtain access to microfinance,
- JESSICA – supports urban development.
The rules governing the functioning of European Funds
The rules governing the functioning of European Funds stem from the rules governing the regional policy of the European Union:
- partnership principle – according to this principle all interested partners should be involved in activities taken at each stage of the implementation of the funds.
- principle of additionality (co-financing and complementarity) – according to this principle European funds should supplement, not substitute, the funding provided by individual Member States.
- principle of subsidiarity – according to this principle authorities at higher levels of government should take action only if particular objectives cannot be sufficiently achieved by authorities at lower levels of government.
- decentralisation principle – stems from the principle of subsidiarity and aims at strengthening the role of regional and local authorities in the implementation and use of European Funds.
- concentration principle – according to this principle the EU funds should be used to support those activities which have the greatest significance for the development of the Union and for increasing its economic, social or territorial cohesion.
- programming principle – it aims at developing multiannual development programmes, in line with the partnership decision-making process.
- territorial dimension of regional policy – the European Funds aim at supporting the development of territories defined not only in administrative terms, but also linked functionally, i.e. having similar social, economic and spatial characteristics and uniform development objectives.
On what are the funds spent?
In the Europe 2020 strategy the European Union has established its strategic objectives and development priorities. They served as the basis for developing the so-called horizontal policies. Every project which is to obtain support from the European Funds is assessed in terms of its compliance with three basic policies:
Sustainable development: The Union strives to ensure that Europe’s economic development does not come at the expense of the environment. Furthermore, the Union promotes rational and economic use of natural resources and environmental protection by reducing emissions of gases or by diffusing environmentally-friendly technologies.
Equal opportunities: Projects co-financed from European funds should comply with the equal opportunities policy. This means the need to ensure equal treatment of men and women. Any discrimination on grounds of age, beliefs, origin, religion or disability is prohibited.
Information society: Implementation of the information society policy consists in promoting the use of modern information technologies in everyday lives of citizens, enterprises and public administration authorities.
The importance of the spatial development policy as the area of interest of the European Union also gradually increases. Its main objective is to ensure diversity and to maintain cultural distinctiveness of individual regions.
How much and for what?
During the 2014–2020 financing period the European Union plans to invest nearly EUR 960 billion.In addition to the existing funds, the Union has provided special funding during the 2014–2020 period for new programmes providing additional support in different areas:
- Horizon 2020 programme is meant to stimulate research work at the highest level, support international cooperation, innovative enterprises, etc. (EUR 80 billion),
- COSME programme is meant to facilitate access to Community markets and to markets outside of the Community to small and medium-sized enterprises, as well as to make it easier for them to obtain financing by providing them with loan guarantees and capital (EUR 2.3 billion),
- Connecting Europe Facility will constitute the most important instrument for the financing of strategic infrastructural investments related to the construction of roads, railway lines, energy networks, as well as the development of information and communication technologies (EUR 33 billion),
- Erasmus+ programme is meant to make it easier for young people to obtain a traineeship abroad, which in turn will contribute to raising their skills and will improve their employment opportunities (EUR 15 billion),
- Creative Europe programme is meant to provide additional funding for European culture, cinema, television, music, literature, theatre, cultural heritage and related fields (EUR 1.5 billion). In order to be eligible for EU assistance, individual Member States have to sign a Partnership Agreement with the European Commission. This Agreement is the most important document setting out the funds allocation strategy in every country. The Partnership Agreement for Poland can be viewed under the Law and documents tab.
European funds distribution among Member States
The total amount of funding allocated to Member States during the 2014–2020 period for regional policy will exceed EUR 351 billion, i.e. will constitute more than one third of the entire European Union’s expenditure.
Allocation of European Union funding during the 2014–2020 period (in euros, current prices) :
- Austria – 1.24 billion
- Belgium – 2.28 billion
- Bulgaria – 7.59 billion
- Cyprus – 0.735 billion
- Czech Republic – 21.98 billion
- Germany – 19.23 billion
- Denmark – 0.553 billion
- Estonia – 3.59 billion
- Greece – 15.52 billion
- Spain – 28.56 billion
- Finland – 1.47 billion
- France – 15.85 billion
- Croatia – 8.61 billion
- Hungary – 21.91 billion
- Ireland – 1.19 billion
- Italy – 32.82 billion
- Lithuania – 6.82 billion
- Luxembourg – 0.059 billion
- Latvia – 4.51 billion
- Malta – 0.725 billion
- the Netherlands – 1.4 billion
- Poland – 82.5 billion
- Portugal – 21.47 billion
- Romania – 22.99 billion
- Sweden – 2.11 billion
- Slovenia – 3.07 billion
- Slovakia – 12.99 billion
- United Kingdom – 11.84 billion