Members' Research Service By / February 27, 2017

How the EU budget is spent: European Social Fund

Written by Martin Svášek, The European Social Fund (ESF) was established by the Treaty of Rome in 1957 and is…

© Unbreakable / Fotolia

Written by Martin Svášek,

© Unbreakable / Fotolia

The European Social Fund (ESF) was established by the Treaty of Rome in 1957 and is the oldest EU structural fund still in place. Originally designed to improve employment opportunities for workers in the internal market, the fund aims at raising living standards. For the current 2014-2020 programming period, Regulation (EU) No 1303/2013 lays down common rules (‘provisions’) for implementing the five European Structural and Investment Funds (ESI Funds), the objective of which is to promote the European Union’s economic, social and territorial cohesion. Regulation (EU) No 1304/2013 provides the detailed framework of the European Social Fund, and also includes rules for the Youth Employment Initiative.

The ESF addresses four thematic objectives:

  1. promoting sustainable and quality employment and supporting labour mobility;
  2. promoting social inclusion, combating poverty and discrimination;
  3. investing in education, training and vocational training for skills and lifelong learning; and
  4. enhancing the institutional capacity of public authorities and stakeholders, and efficient public administration.

These four objectives are further translated into 19 investment priorities. The total ESF allocation for 2014-2020 is €86 405.02 million, which represents 7.95 % of the current Multiannual Financial Framework and 19 % of the ESI Funds. The five biggest beneficiaries of ESF funding are: Poland (€13.2 billion), Italy (€10.5 billion), Spain (€7.6 billion), Portugal (€7.5 billion) and Germany (€7.5 billion). Member States couple these amounts from the EU budget with national resources. The standard co-financing rates for the EU’s contribution vary between 50 % and 85 % (95 % in exceptional cases). Portugal is the country with the highest ESF allocation per capita, at more than €700.

According to the European Commission’s ex-post evaluation, the 2007-2013 ESF registered approximately 98.7 million participants. By the end of 2014, at least 9.4 million European residents had found a job, and 8.7 million had gained a qualification or certificate with support from the ESF. There were significant differences in the 2007-2013 ESF project implementation rate: at only 44.1 % in Romania, in Austria, Latvia and Portugal, it was above 90%. The Commission’s report on the implementation of the ESI Funds in 2014-2015 highlights the noticeable progress towards objectives in the areas of employment, education and vocational training, and social inclusion.

Read the complete briefing on ‘How the EU budget is spent: European Social Fund‘.

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