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Business 2000E I G H T H e d i t i o n

www.business2000. ie

THE EUROPEAN UNION

In 2004, European Union (EU) membership increased from 15 to 25 Member States. When two more

countries (Bulgaria and Romania) join in 2007, the EU will have a population of approximately half a billion.

All EU countries are committed to peace, democracy, the rule of law,and respect for human rights; and

they work together to promote these values in the wider world. To become more competitive and

prosperous,the EU is creating new and better jobs and giving its citizens new skills.In partnership with

its near neighbours, the EU is also working to spread prosperity and progress beyond its borders.

THE COMMUNITY BUDGET

The EU has to plan its work well in advance and ensure that it has enough money to pay for its objectives.The

main EU institutions (Parliament,Council, and Commission) agree in advance on the priorities for the

next few years and develop a spending plan or financial perspective.A financial perspective states

the maximum amount the EU can spend, what it can spend it on,and where the money will

come from.The current financial perspective runs from 2000-2006. Over the course of

time,the EU budget has changed to reflect different priorities within the EU.

The EU budget is a mix of its own resources and direct contributions by Member

States.The EUs own resources are revenues from levies on agricultural imports,

customs duties on other imports, and a portion of value-added tax (VAT)

income. In 2003, the EUs own resources accounted for one quarter of the

revenue of the overall EU budget.

Contributions from Member States account for three quarters of the EUsrevenue.Member States contribute a percentage of gross national income.

As this is a measure of national wealth,the formula ensures that each country

contributes according to its means.The money is then spent where it is needed

most.

EU money is used to support a whole range of EU policies.The largest portion of

the budget is allocated to agriculture, which now accounts for 45% of EU spending.

Regional Policy which is implemented through investment by the Structural and

Cohesion Funds represents the second largest budget item, taking approximately one

third of total expenditure.The remaining EU money is spread across a wide range of policies

including helping the Third World, emergency aid assistance, educational and training

programmes,research and development,health and consumer protection, to mention a few.

EUROPEAN REGIONALPOLICY - BOOSTING

ECONOMIC DEVELOPMENT

European Regional Policy is a policy of promoting solidarity. It allocates

more than a third of the EU budget to reduce the development gaps

among the regions and the disparities among EU citizens.The EU uses the

policy to help lagging regions to catch up, restructure declining industrial

regions,diversify the economies of rural areas with declining agriculture,

and revitalise declining city neighbourhoods. It sets job creation as its

primary concern. In a word, it seeks to strengthen the economic and

social and territorial cohesion of the EU.

Since 2000, Regional Policy has

provided considerable assistance

to the economic development

of the countries applying for

accession to the EU. On 1

May 2004, 10 new

Member States joined theEU.This major event was a

historic opportunity for

Europe and a challenge for

Regional Policy. On that day,

the range of disparities within the

EU was enlarged. It is necessary for

the EU to respond to the enormous needs

of the new Member States and also to the difficulties that remain in the

rest of the Union.

The monies used for implementing Regional Policy and boosting economic

development are the Structural and Cohesion Funds.

EU Structural Funds

The Structural Funds were created to help those regions within the EUwhose development is lagging behind.

The Structural Funds aim to:

develop infrastructure,such as transport and energy;

aid regions affected by industrial decline;

support the development of rural areas;

extend telecommunications services;

provide training for workers;

combat long-term unemployment;

disseminate the tools and know-how of the information society;and

promote research and development.

The Four Funds

The EU Structural Funds consist of four individual funds.The funds work

together by supporting different aspects of regional development.

1. European Regional Development Fund (ERDF) - Promoteseconomic and social cohesion within the EU by reducing imbalancebetween regions or social groups.I n Ireland,t he ERDF provides supportfor road development, public transport projects such as LUAS andQuality Bus Corridors (QBCs), micro-enterprise development through

the County Enterprise Boards,Tourism Projects,and waste management.2. European Social Fund - Aims to help, prevent, and combat

unemployment; to equip Europe's workforce to face new challenges;and to keep people in contact with the labour market. In Ireland, theESF supports the National Employment Service (FS), SchoolCompletion Initiatives, Early School Leavers,Third Level Access Initiatives,Skills Training and Traineeships, In Company Training and Life-longLearning Initiatives, Promotion and Monitoring of Equal Opportunities,and Childcare Training and S taffing .

3. European Agriculture Guidance and Guarantee Fund -

Contributes to the structural reform of the agricultural sector and thedevelopment of rural areas. In Ireland, the EAGGF supports ruraldevelopment through the LEADER programme. Other initiativessupported include Farm Waste Management, Improvement of DairyHygiene Standards and Forestry.

4. Financial Instrument for Fisheries Guidance - Supports thestructural reform of the fisheries sector.In Ireland, the fund supportsdevelopment of fisheries harbours, aquaculture development,measures

to adjust the fishing fleet, renewal and modernization of the whitefishfleet and smaller scale inshore vessels, support for conservation andstock management, fish processing,and training.

THREE OBJECTIVES

Regions within the EU are classified for financialsupport depending on the economic difficulties

they encounter.There are three types of regions(Objectives) that receive financial supportfrom Structural Funds.The most significantObjective (in terms of resources allocated)is Objective 1.

Objective 1 Helping regions whosedevelopment is lagging behind to catch up,i.e., providing them with the basicinfrastructure or encouraging investments inbusiness economic activity. Some 50 regions,representing 22% of the EUs population areincluded.

E I G H T H e d i t i o n

NDP - EU Structural and Cohesion FundsBusiness 2000

N a t i o n a l D e v e l o p m e n t P l a n

EU STRUCTURAL ANDCOHESION FUNDS

Childcare Centre Drumshambo

Co.Leitrim

Galway-Mayo

Institute of Technology

Cavan Innovation

& Technology Centre

M1 Boyne Bridge

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