Structural funds – Investing in people [What is Europe doing for its citizens?]

Written by Christiaan van Lierop,

Accounting for over one third of the EU’s budget, structural funds (ESIF) have helped to transform Europe. From motorways to wind farms, airports to urban regeneration schemes, structural fund investments are a tangible expression of the EU’s promise to develop infrastructure and generate economic growth. Yet beyond these very visible construction projects, the EU is also building bridges of a different kind, too: among people, helping to break down barriers and promote social inclusion.

Delivering the Europe 2020 strategy

During the 2014-2020 period, the five EU structural funds (see box) have been closely aligned to the headline targets of the Europe 2020 Strategy for smart, sustainable and inclusive growth, focusing action on 11 goals, the thematic objectives. A blueprint for EU growth, this strategy also has a social dimension, aiming among other things to take at least 20 million people out of poverty and raise the employment rate of people aged 20 to 64 to 75 %. As structural funds account for as much as 40 % of the public investment budget in half of all Member States, they are contributing significantly to improving the wellbeing and quality of life of EU citizens.

The five ESI funds – European Regional Development Fund (ERDF), European Social Fund (ESF), Cohesion Fund (CF), European Agricultural Fund for Rural Development (EARDF), and European Maritime and Fisheries Fund (EMFF) – provide a total EU budget of €454 billion of funding for projects in the Member States, with countries drawing up partnership agreements and operational programmes that identify how the structural funds will be allocated to the thematic objectives. Member States must earmark at least 20 % of their ESF allocation to thematic objective 9 (TO9) on promoting social inclusion, while ESF should account for at least 23.1 % of each country’s total ESIF allocation. The total amount of structural funds allocated to TO9 is €44.5 billion for 2014-2020, with Poland the largest recipient (€6.87 billion), followed by Germany, Italy and Spain, whose combined total is over €12 billion.

Using structural funds to invest in people

Funded by the European Regional Development Fund, European territorial cooperation is helping to build bridges by bringing Europeans closer together, with a total of €10.1 billion being invested in cross-border, trans-national and inter-regional cooperation projects such as the operation of joint cross-border facilities or the rollout of common environmental programmes. Yet structural funds are not only helping to break down barriers between different nations but also within society at large by supporting groups in need. During 2014-2020, people with disabilities are a specific target group for ESF support, with operational programmes focusing on promoting deinstitutionalisation or improving access to social and health services. Marginalised communities such as Roma are given new attention thanks to a specific ESF investment priority allocating €1.5 billion to promote their integration, while migrants are also a priority, with the ESF funding many projects to support their inclusion within society. Tackling social exclusion is a key focus, with ESF helping to combat poverty by funding active inclusion programmes and training schemes to get people back to work.

Challenges to the effective use of structural funds

Stakeholders have highlighted several obstacles to the effective use of ESIF for promoting social inclusion, including the existence of overly complex procedures for accessing funding, a focus on indicators rather than on results, a failure to identify key target groups and a lack of coordination between ESIF measures and national strategies. Similarly, numerous obstacles to closer European territorial cooperation remain, such as divergent national rules on employment, healthcare and social security, with stakeholders also drawing attention to the low level of funding for European territorial cooperation. Current discussions on cohesion policy post-2020 provide an opportunity to address these questions, but in a context of increasing budgetary pressure, questions remain as to whether future funding will be sufficient.

This note has been prepared by EPRS for the European Parliament’s Open Days in May 2017.