European Regional Development Fund (ERDF) (2007-2013)

In order to reduce the gap between the levels of development of Europe’s regions and the extent to which the less-favoured ones are lagging behind, this Regulation defines the types of action eligible for financing from the European Regional Development Fund (ERDF). It also establishes the tasks of the ERDF and the scope of its assistance with regard to the “Convergence”, “Regional competitiveness and employment” and “European territorial cooperation” objectives of the reformed cohesion policy for the period 2007-2013.

ACT

Regulation (EC) No 1080/2006 of the European Parliament and of the Council of 5 July 2006 on the European Regional Development Fund and repealing Regulation (EC) No 1783/1999 [Official Journal L 210 of 31.7.2006] [See amending act(s)].

SUMMARY

This Regulation establishes the tasks of the ERDF and the scope of its assistance with regard to the “Convergence”, “Regional competitiveness and employment” and “European territorial cooperation” objectives as defined in the general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund.

Objective

The objective of the ERDF is to help reinforce economic and social cohesion by redressing regional imbalances. This is achieved by supporting the development and structural adjustment of regional economies, including the conversion of declining industrial regions.

Scope

The ERDF focuses its assistance on a number of thematic priorities reflecting the nature of the “Convergence”, “Regional competitiveness and employment” and “European territorial cooperation” objectives. In particular, it contributes towards the financing of:

• investment which contributes to creating sustainable jobs;
• investment in infrastructure;
• measures which support regional and local development, including support and services for businesses, in particular small and medium-sized enterprises (SMEs);
• technical assistance.

Convergence

Under the “Convergence” objective, the ERDF focuses its assistance on supporting sustainable integrated economic development and the creation of sustainable jobs. Operational programmes in the Member States are aimed at modernising and diversifying regional economic structures, particularly in the following fields:

• research and technological development (R&TD), innovation and entrepreneurship;
• information society;
• environment;
• risk prevention;
• tourism;
• investment in culture
• investment in transport;
• energy;
• investment in education;
• investment in health and social infrastructures;
• direct assistance for investment in SMEs.

Regional competitiveness and employment

This objective has three main funding priorities:

• innovation and the knowledge economy, including the improvement of regional R&TD and innovation capacities, entrepreneurship and creation of new financial instruments for businesses;
• environment and risk prevention, including restoring contaminated land, encouraging energy efficiency, promoting the use of clean technology in public transport and formulating plans to anticipate and manage natural and technology-related risks;
• access to transport and telecommunications services of general economic interest, especially by improving secondary networks and encouraging access to information and communication technologies (ICT) for SMEs.

European territorial cooperation

ERDF assistance under this objective also targets three key areas:

• development of cross-border economic, social and environmental activities through joint strategies for sustainable territorial development. This involves, for example, encouraging entrepreneurship, protection and management of natural and cultural resources, and the development of collaboration, capacities and the joint use of infrastructures;
• establishing and developing transnational cooperation, including bilateral cooperation between maritime regions. The priorities are innovation, the environment, better accessibility and sustainable urban development;
• reinforcing the effectiveness of regional policy by encouraging regional and local authorities to form networks and exchange experience.

At the request of the Member States, the Commission may propose rules on certain categories of expenditure to replace national rules.

It is the responsibility of the Member States to designate a single managing authority, a single certifying authority and a single audit authority.

As laid down in the general provisions, Member States can also delegate the task of managing authority and joint technical secretariat to the European grouping of territorial cooperation (EGTC), which is the legal cooperation instrument.

For a project to be selected under this objective, it must include beneficiaries in at least two countries which are acting jointly in at least two of these four fields: development, implementation, staffing and financing. In the case of transnational cooperation, a programme may be implemented in a single Member State, provided it has been presented by at least two countries. Networks for cooperation and exchange of experience must consist of at least three beneficiaries in at least three regions and at least two Member States, and these must be acting jointly in all four fields.

The operational programme must contain the following information:

• an analysis of the strengths and weaknesses of the area covered by the cooperation;
• justification for the priorities selected;
• information on the priorities and the specific objectives of each;
• a breakdown of the spheres of assistance by category;
• a financing plan;
• implementing rules;
• an indicative list of major projects.

Financing conditions depend on the location. Part-financing may be provided up to:

• 20 % for cross-border cooperation in NUTS III areas adjacent to the EU’s border areas;
• 20 % for cross-border cooperation for operations including partners outside the area in question;
• 10 % for cross-border and transnational cooperation to cover expenditure on operations in non-EU countries, if these operations are for the benefit of regions within the EU.

Specific types of area

The ERDF takes particular account of the specific nature of areas. Measures to help urban areas are incorporated in operational programmes, drawing on the experience of the URBAN initiative. ERDF action aims to resolve the economic, environmental and social problems of towns and cities.

As regards rural areasandareas dependent on the fishing industry, ERDF action must concentrate on economic diversification, such as:

• infrastructure to improve accessibility;
• telecommunications networks and services in rural areas;
• development of new economic activities;
• improving of links between urban and rural areas;
• development of tourism and regeneration of rural areas.

For areas with natural handicaps, the ERDF helps finance investment in the improvement of accessibility, economic activities linked to cultural heritage, the sustainable use of resources and tourism development.

Finally, the ERDF helps finance the additional costs linked to the geographical situation of the outermost regions by subsidising:

• freight transport services and the start-up of transport services;
• operations linked to storage constraints, the maintenance of production tools, and lack of human capital in the local market.

Final provisions

The Regulation does not affect any assistance measures approved before its entry into force. Applications submitted under Regulation No 1783/99 remain valid, even though that Regulation was repealed as of 1 January 2007. The new Regulation applies as of 1 January 2007 and is to be reviewed by 31 December 2013.

RELATED ACTS

GENERAL PROVISIONS

Council Regulation (EC) No 1083/2006 of 11 July 2006 laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund and repealing Regulation (EC) No 1260/1999.

See consolidated version.

ELIGIBLE REGIONS AND ZONES

Commission Decision 2006/769/EC of 31 October 2006 drawing up the list of regions and areas eligible for funding from the European Regional Development Fund under the cross-border and transnational strands of the European territorial cooperation objective for the period 2007 to 2013 [Official Journal L 312 of 11.11.2006].See consolidated version.

Commission Decision 2006/597/EC of 4 August 2006 drawing up the list of regions eligible for funding from the Structural Funds on a transitional and specific basis under the Regional competitiveness and employment objective for the period 2007-2013 [Official Journal L 243 of 6.9.2006].

Commission Decision 2006/595/EC of 4 August 2006 drawing up the list of regions eligible for funding from the Structural Funds under the Convergence objective for the period 2007-2013 [Official Journal L 243 of 6.9.2006].

See consolidated version.

INDICATIVE ALLOCATION BY MEMBER STATE

Commission Decision 2006/609/EC of 4 August 2006 fixing an indicative allocation by Member State of the commitment appropriations for the European territorial cooperation objective for the period 2007-2013 [Official Journal L 247 of 9.9.2006].See consolidated version.

Commission Decision 2006/594/EC of 4 August 2006 fixing an indicative allocation by Member State of the commitment appropriations for the Convergence objective for the period 2007-2013 [Official Journal L 243 of 6.9.2006].Amended by:

Commission Decision 2010/475/EU [OJ L 232, 2.9.2010].

Commission Decision 2006/593/EC of 4 August 2006 fixing an indicative allocation by Member State of the commitment appropriations for the Regional competitiveness and employment objective for the period 2007-2013 [Official Journal L 243 of 6.9.2006].

Amended by:Commission Decision 2010/476/EU [OJ L 232, 2.9.2010].

COMMUNITY STRATEGIC GUIDELINES

Council Decision 2006/702/EC of 6 October 2006 on Community strategic guidelines on cohesion [Official Journal L 291 of 21.10.2006]. The draft Community strategic guidelines on cohesion, growth and employment were adopted by the Council on 6 October 2006. They constitute an indicative framework for the establishment of a cohesion policy and the intervention of the Funds during the period 2007–2013.

Communication from the Commission of 5 July 2005, Cohesion Policy in Support of Growth and Jobs – Community Strategic Guidelines, 2007-2013 [COM(2005) 299 – Not published in the Official Journal].

ECONOMIC RECOVERY

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions of 16 December 2008 – Cohesion Policy: investing in the real economy [COM(2008) 876 final -Not published in the Official Journal]. Cohesion policy is the main source of Community funding of the real economy. The Commission presents a series of priorities concerning people, enterprises infrastructures and energy, as well as research and innovation, in order to contribute to the recovery of the European economy and social progress. It provides for an increase in public investment for the period 2007-2013.

Communication from the Commission to the European Council – A European Economic Recovery Plan [COM(2008) 800 final – Not published in the Official Journal].

ENERGY – HOUSING

Regulation (EC) No 397/2009 of the European Parliament and of the Council of 6 May 2009 amending Regulation (EC) No 1080/2006 on the European Regional Development Fund as regards the eligibility of energy efficiency and renewable energy investments in housing. The European Economic Recovery Plan encourages measures promoting the energy efficiency of buildings. This Regulation offers a framework for public investments in this area. National investment plans should be developed at the most appropriate territorial level (national, regional or local). Cohesion policy funding should support the measures taken by the poorest households.

Thus, concerning housing expenditure related to energy efficiency and renewable energies, the contribution of the ERDF is extended to all Member States. Other expenditure related to housing is to be limited to States which acceded after 1 May 2004. Article 7 of Regulation 1080/2006, which governs the eligibility of this expenditure, is amended accordingly.

Last updated: 17.09.2010