European Regional Funds: Objectives, Impact, and Spanish Integration
European Regional Funds and Policy Objectives
The objective of European regional funds is to address territorial disparities within the EU. Significant differences exist between regions and countries, stemming from historical economic development patterns. Regions that developed based on maritime trade along the North and Mediterranean Seas, and these differences were accentuated by the Industrial Revolution and the division after the Second World War.
These regions now have diverse impacts and capacities to react to economic crises. Some have a greater ability to adopt technological innovation, while others struggle. Regional and development policies aim to alleviate these imbalances and encourage regional development. In Spain, these policies began in the 1960s with development plans focused on building industry in backward areas.
After 1986, a new regional policy emerged, marked by:
- The principle of inter-regional solidarity established by the constitution.
- The setting and development of the autonomous state.
- Accession to the European Community.
Spain and European Regional Policy
After joining the EU in 1986, Spain integrated into European regional policy and received community funding. The objectives of this policy are to coordinate member states’ regional policies and correct imbalances between European regions. It also aims to strengthen the competitiveness of all regions in the face of increasing global competition.
The Lisbon Strategy (2000) proposed to boost the knowledge economy (R&D) and improve the social model by creating more and better jobs and preventing social exclusion. This strategy has three main objectives:
Convergence
To approximate the least developed regions with the more advanced ones. Convergence regions include those with a GDP below 75% (e.g., Extremadura and Galicia) and those with transient aid (phasing-out) such as Asturias and Murcia.
Regional Competitiveness and Employment
Regions with a GDP per head more than 75% of the Community average (e.g., Navarre and Cantabria) and regions with transitional assistance (e.g., Castilla y León and Valencia).
European Territorial Cooperation
Projects involving cross-border, transnational, and interregional cooperation. Spanish regions participate in border cooperation projects with Portugal and France, as well as transnational projects in the Atlantic Space, all within the INTERREG IVC program.
Funding Instruments
The instruments that fund European regional policy in the 2007/2013 period are the Structural Funds:
- FEDER (European Fund for Regional Development): Finances investments to reduce territorial imbalances.
- ESF (European Social Fund): Finances actions to develop human resources and combat discrimination.
- Cohesion Fund: Funds public investment in the environment and trans-European transport networks in countries with a GDP per head less than 90% of the Community average.
Impact on Spain
After the 2004 enlargement, Spain no longer met the requirements to receive Cohesion Fund contributions, although it maintained them for a transitional period. Spain’s integration into EU regional policy has had several repercussions:
- Transfer of sovereignty to the European Union.
- Receipt of aid that has favored convergence with Europe.
- Reduction of imbalances between areas by concentrating aid in disadvantaged regions.
Spanish demographic indicators are evolving more favorably than the EU average, and Spain has good transportation infrastructure. However, economic indicators, training, and R&D are below the Community average.