Members' Research Service By / August 5, 2015

How the EU budget is spent: the European Structural and Investment Funds

Written by Magdalena Sapała Although the EU budget is small in relation to the EU’s collective gross national income, it…

© tunedin / Fotolia
Written by Magdalena Sapała
House on banknotes
© tunedin / Fotolia

Although the EU budget is small in relation to the EU’s collective gross national income, it is a powerful source of investment. In the period 2014-20, almost 42% of planned spending (approximately €453.2 billion) will be channelled to the regions to enhance their economic, social and territorial development through five EU Structural and Investment Funds (‘the ESI Funds’):

  • The European Regional Development Fund (ERDF)
  • The European Social Fund (ESF)
  • The Cohesion Fund
  • The European Maritime and Fisheries Fund (EMFF)
  • The European Agricultural Fund for Rural Development (EAFRD)

Management and implementation rules for ESI Funds in 2014-20 are set out in Regulation (EU) No 1303/2013, known as the Common Provisions Regulation. This covers a broad range of actions and projects related to economic, social and territorial cohesion, rural development, and the maritime and fisheries sectors. Competence in all these areas is shared between the EU and the Member States, and the ESI Funds are implemented through shared management (Article 59 of the Financial Regulation). Both parties are thus involved at all stages of implementation, and have a responsibility to ensure sound organisational and financial management of the ESI Funds.

The aim of EU decision-makers, including the European Parliament, was to put in place the right conditions and mechanisms for implementing the ESI Funds as part of a reformed Cohesion Policy – one which is not only result-oriented, efficient and closely linked to the priorities of the Europe 2020 strategy, but which also offers innovative and long-term investment tools for those countries and regions across Europe who are grappling with the consequences of the economic crisis. Moreover, it was designed to ensure consistent implementation of the five ESI Funds across different EU policies and levels of management (EU, national, regional and local) and to create synergies between the ESI Funds and other EU instruments. It remains to be seen whether the new rules will yield the expected results, since implementation of the ESI Funds based on the Common Provisions Regulation has only just begun.

Read the complete publication on ‘How the EU budget is spent: The European Structural and Investment Funds‘ in PDF.

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