Guidelines for programmes in 2000-2006

This communication sets out the Commission guidelines to help Member States draft their programming documents for financial assistance from the Structural Funds and coordinate them with the Cohesion Fund for the 2000-06 period.

ACT

Commission Communication of 1 July 1999 concerning the Structural Funds and their coordination with the Cohesion Fund: Guidelines for the programmes in the period 2000-2006 [COM(1999) 344 final - Official Journal C 267 of 22.09.1999].

SUMMARY

The objective of the European Union's structural and cohesion policies is to reduce economic and social disparities within the Community. These policies support national and regional policy in regions facing difficulties and on the labour market. While the Member States are responsible for setting their own development priorities, the Community lays down guidelines that they must take into account since the European Union, as part-financier of their programmes, has a right to examine assistance and wishes to promote the Community dimension of economic and social cohesion.

These general indicative guidelines are provided for by the Regulation laying down general rules on the Structural Funds and their purpose is to help the national and regional authorities define and prepare programming strategies under Objectives 1, 2 and 3 of the Structural Funds and their links with the Cohesion Fund. These development and conversion strategies will be "integrated" in the sense that they will pursue a coherent vision and create a decentralised, effective and broad partnership so as to involve the largest possible number of national, regional and local actors.

The following guidelines are based on three main priorities:

• regional competitiveness;
• economic and social cohesion;
• the development of urban and rural areas (including specific measures for areas dependent on fisheries).

CONDITIONS FOR GROWTH AND EMPLOYMENT: REGIONAL COMPETITIVENESS

Creating the basic conditions for regional competitiveness

To achieve the objective of improved regional competitiveness, adequate all-round conditions and an environment conducive to developing entrepreneurial activity must be promoted in the regions. Firms must have access to a broad range of indirect support in conformity with Community competition rules in areas such as transport, energy, telecommunications, environmental technology and research, development and technological innovation. When assistance is granted to these sectors of activity, account must be taken of the trans-European networks, the operations of the Cohesion Fund, the European Regional Development Fund (ERDF) and the European Investment Bank (EIB) must be coordinated and public/private partnerships encouraged.

Improving transport networks and systems

Transport networks and systems play a vital role in aid for economic development. This is why future regional development programmes must include investment in transport to mitigate factors undermining competitiveness (transport costs, saturation, long journey times) and increase the quality of infrastructure service (ancillary services, safety).

Programmes will have to take account of the following priorities to establish a balance between different modes of transport, accessibility and sustainability:

• improving the effectiveness of transport systems by modernising and repairing infrastructure, fostering better management and encouraging measures to enhance interoperability;
• seeking a balance between the different modes of transport by investing more in modes other than road transport, developing coherent intermodal and combined transport systems and creating transfer hubs;
• improving access to the regions by connecting the main networks to local small-scale transport systems;
• reducing the harmful effects of transport by complying with environmental protection rules.

In the eligible Member States, the Cohesion Fund will concentrate its transport operations on implementing the trans-European networks The ERDF, in coordination with the EIB where necessary, should focus more on regional accessibility, interoperability of infrastructure, creating transfer hubs and supporting urban and regional public transport systems.

Energy: networks, efficiency and renewable resources

Sustainable regional development requires an effective and competitive energy sector in order to increase the security, flexibility and quality of energy supplies and reduce their cost. In the less-developed regions, Structural Fund investments should cover:

• providing efficient infrastructure for gas and electricity distribution to reduce dependence on external suppliers and the effects of isolation;
• more effective use of energy by small and medium-sized firms, households and public buildings by means of technologies that will cut costs and consumption;
• renewable energy resources which create local employment, reduce external dependence and bring down pollution (investment in this field should account for at least 12% of the overall budget of the energy sub-programmes).

Towards the information society

The rapid development of the information society is opening up new possibilities for economic development. However, access to the information society requires an efficient basic telecommunications infrastructure. Telecommunications operators will generally make investments in this field themselves, using their own resources, by borrowing and, if needed, in collaboration with the EIB. Where state aid nevertheless proves necessary, all assistance must comply with Community competition rules.

Information society measures included in the development programmes will aim:

• to promote new services and innovative applications, particularly in electronic commerce, distance working and public services;
• to equip and train potential users in order to increase their skill level.

For a high-quality environment

Europe's environment continues to face threats, primarily from water, air and soil pollution. Moreover, preventive measures are needed in natural areas exposed to disasters like flooding. Assistance from the Structural Funds and the Cohesion Fund should guarantee compliance with environmental standards laid down in the relevant European directives (e.g. the polluter-pays principle).

The following specific priorities have been set for the different sectors:

• Water: guaranteeing supplies of adequate quality and quantity and collecting, treating and disposing of urban waste water (disposal points, sludge elimination);
• Waste management: the compulsory waste management plans covering the entire territory of a Member State must improve the management and disposal of solid urban, industrial and hazardous waste and encourage the safe and definitive recycling, re-use or disposal of waste.

Research, technological development and innovation (RTD)

Structural assistance must give an increasing priority to promoting RTD and innovation activities because of their impact on regional dynamism and the partnership they create between public sector, businesses, higher and further education and business support organisations.

Priority will be given to investment in RTD activities in the following fields:

• promoting innovation through the use, in particular, of new forms of financing such as venture capital in order to broaden the range of targeted activities and encourage start-ups, spin-offs and specialised services to firms;
• industrial networking and cooperation to foster technology transfer and the creation of industrial and commercial clusters;
• developing of human resources by encouraging interaction between firms, higher education/research institutes, lifelong learning and the continuous upgrading of skills and abilities.

Competitive firms that stimulate job creation

Competitive firms help create employment and contribute to regional economic development. The services sector is an expanding source of jobs which must be taken into account in Community programmes. The financial assistance and other benefits granted to firms must comply with Community rules.

Support for firms: priority to SMEs

Without neglecting large firms, structural assistance to stimulate the productive sector must focus rather on small and medium-sized enterprises, in accordance with the following guidelines:

• shifting the traditional emphasis from capital grants towards alternative financing mechanisms such as repayable advances, venture capital, loan capital, revolving funds and mutual guarantee schemes;
• improving the quality and organisational aspects of assistance by targeting the specific needs of SMEs, improving access to business support services, training and information, improving the specialised skills of staff, setting up networks and exchanging experiences;
• involving the private sector in defining strategies through partnership.

Business support services

Business support services not only enable firms to increase their competitiveness and move into new markets but also represent an important source of jobs (10% of total employment in the European Union). Structural Fund assistance to these services should improve support for technology transfer, internationalisation, organisational and management innovation, and the creation of financial tools (seed capital, mutual guarantee companies).

The priorities in this field are as follows:

• identifying the needs of firms in order better to meet their requirements;
• exploiting the synergies between service centres, technology transfer centres, science parks, universities and research centres, in particular by disseminating best practice;
• strengthening international cooperation between firms;
• improving the geographical distribution of the supply of business services.

Three areas with particular potential

Environment, tourism and culture and the social economy are sectors with high job-creation potential which remains under-exploited:

• Environment: Structural Fund assistance must give priority to investments which follow a preventive approach to environmental hazards, use clean technologies and sound management and encourage the restoration of derelict industrial sites and training;
• Tourism and culture: since these two sectors are closely associated and rich in job-creation potential, Structural Fund assistance must seek to modernise infrastructure, improve workers' skills by training them to exploit the possibilities offered by the new information technologies, promote public/private partnerships and safeguard local heritage and identity;
• Social economy: there are many different types of organisations active in the social economy (cooperatives, mutual societies, associations, foundations, firms), all working in wide variety of fields (competitive markets, health services, neighbourhood services, sports activities, entertainment, youth employment and combating social exclusion). They account for some 5% of total employment in the European Union. Priority assistance in this sector should be given to active support for the creation and development of service suppliers, by means of information, training, advice, financial and technical assistance and support to ensure the longer-term survival of newly-created activities.

THE EUROPEAN EMPLOYMENT STRATEGY: A KEY PRIORITY FOR THE COMMUNITY

The European Social Fund (ESF) is the chief financial instrument working to improve the skills and adaptability of human resources. The priorities set out below apply throughout the territory of the European Union, although specific regional features are also taken into account. The Commission is proposing that Objective 3 of the Structural Funds, which supports the adaptation and modernisation of education, training and employment, should act, firstly, as a frame of reference for all human resource measures throughout each Member State and, secondly, as a programming instrument through which the European Social Fund will provide financial assistance throughout the Community.

Frame of reference for human resource development

The European Social Fund is the main financial instrument at European Union level for helping the Member States to implement the employment guidelines under the European employment strategy. Coherence between the strategy in the national plans and the priorities of the European Social Fund in this area is clearly crucial.

In the activities of the European Social Fund, three aspects are of particular importance:

• mainstreaming equal opportunities between men and women;
• harnessing the employment potential of the information society
• promoting local development through the territorial employment pacts.

Active labour market policies to promote employment

The Member States will have to show how they translate the active or preventive strategies recommended in the employment guidelines into specific measures. The first step is to identify the individuals at risk. The planned measures will include diagnostic interviews, training, career counselling and job search assistance, and must enable the unemployed to get training and young people to demonstrate their employability, in particular through apprenticeships. The unemployed and young people must also be helped to adapt to technological and economic change.

Local and regional employment services have a key role to play in adapting human resources to structural change, by auditing the skills available and the levels of young people's professional qualifications, as well as training and re-skilling needs. They will then be in a position to adapt the provision of training to the needs of local and regional firms.

An inclusive society, open to all

A labour market open to all is a priority for Member States in the European employment strategy. When designing preventive and active policies, close attention must be paid to the needs of the disabled, the ethnic minorities and other categories of the population who may be at a disadvantage.

Promoting employability, skills and mobility through life-long learning

To develop a skilled workforce, it is crucial to improve the quality of education and training, so education and training systems must have more resources, with absolute priority being given to young people with learning difficulties. Opportunities for lifelong learning, particularly in the fields of information and communication technologies, should also be improved.

Developing capacity for change and entrepreneurial spirit

In collaboration with the social partners, the Member States will endeavour to modernise work organisation and forms of work and enable the workforce to adapt better to economic change. Two major prerequisites for achieving this objective are supporting entrepreneurship and expanding training opportunities.

In regions undergoing structural conversion, synergy will have to be sought between measures aiming at integration, professional training and re-skilling and activities supporting economic development and conversion.

In order to promote entrepreneurship, a combination of demand-side measures (support for creating new activity) and supply-side measures (targeted information, training and tutoring) should be implemented.

Particular attention to women

After analysing the disparities between men and women, targets should be set to correct imbalances, together with indicators to monitor the implementation of programmes. The objective of balanced participation of men and of women at all levels of society can be achieved by measures to improve professional career profiles, give women greater access to responsible jobs and foster their entrepreneurial spirit.

Specific measures in Objective 1 and 2 regions

The local authorities play a growing role in implementing the employment guidelines within their own sphere of competence. There is therefore room for the regions to take a high profile in implementing the guidelines, this should be reflected in the regional programmes for Objectives 1 and 2.

The main features of such programming will be:

• a "bottom-up" approach based on a local and regional evaluation of needs;
• in the context of structural conversion, training geared to keeping pace with the changing requirements of local and regional firms;
• an innovative approach to developing new activities, products and methods.

URBAN AND RURAL DEVELOPMENT AND THEIR CONTRIBUTION TO BALANCED TERRITORIAL DEVELOPMENT

Harmonious territorial development is taking place against a background of greater economic and monetary integration, increasingly global markets and the integrated approach of Structural Fund assistance. In addition, the guidelines on the long-term development of the European territory (European Spatial Development Perspective, or ESDP) are designed to encourage the emergence of multiple zones of economic integration more evenly distributed across the Union, and progressive evolution towards a multi-centred European area.

Urban development within an integrated regional policy

Urban areas play a vital role in the European economy. Medium-sized towns in particular exert a powerful influence on rural areas. Integrated strategies for development and conversion should have four main aims:

• greater prosperity and increased employment in urban areas;
• support for social integration;
• protection of the environment, urban ecosystems and public health;
• a drive toward better urban and local management (transport, energy, living conditions).

Programming documents for Objective 1 and 2 regions should include urban development measures that embody these objectives. The restoration of disadvantaged urban areas could receive special integrated support similar to that developed by the Urban II Community Initiative. Measures supported by the European Social Fund under Objective 3 should have a major impact in terms of economic and social cohesion even in areas not covered by Objectives 1 and 2.

Rural development for modernisation, diversification and environmental protection

Many rural areas are experiencing problems caused by structural changes such as the shrinking job market in the agricultural sector (nowadays about three-quarters of Europe's farmers work part-time and need additional sources of income).

The multi-functional role of agriculture is increasingly recognised. Indeed, the function of farming, forestry and other productive activities is not only economic but also social (the provision of quality products and the supply of leisure opportunities to town dwellers), environmental (protection of the landscape and ecosystems) and cultural (heritage and identity). As the second pillar of the common agricultural policy (CAP), rural development serves to ensure the sustainability of the European model of agriculture.

In the areas eligible under Objectives 1 and 2, the Structural Funds and the Guarantee Section of the European Agricultural Guidance and Guarantee Fund (EAGGF) should support the diversification of a rural economic structure based on encouraging new activities, giving priority to:

• strengthening the competitiveness of agriculture by granting aid for investments for modernisation, cost-cutting, improved product quality and the maintenance of farms;
• enhancing the attractiveness and competitiveness of rural areas by making them more accessible and helping them diversify towards new activities (tourism), supporting SMEs and innovative sectors like renewable energy sources;
• safeguarding the environment and European rural heritage by protecting the landscape, natural resources and traditional rural areas and promoting farm tourism and the renovation of villages.

The new Leader+ Initiative for rural development will provide additional structural assistance with a view to finding all-round solutions to the problems facing rural areas and helping to define new models of rural development, in particular by networking and cooperation between local actors.

Synergies between urban and rural areas

If the Union is to enjoy the best possible conditions for development, progress in towns and rural areas must be complementary. Exploiting synergies could result in a multi-centred and hence more balanced territorial development of the Community. Moreover, developing the role of medium-sized urban centres is of special importance in thinly populated areas.

The regions covered by Objectives 1 and 2 are of a size which provides an adequate framework for an overall approach in which urban and rural areas are complementary, as they need to be. An integrated approach to programming should help create areas of dynamic integration on an international scale, mainly through highly effective trans-national, national and regional infrastructure. The Interreg III Initiative should supplement this mechanism by supporting trans-European cooperation, particularly across borders.

Specific measures for areas dependent on fisheries

Structural policy in the fisheries sector (including aquaculture and the processing and marketing of products) is a vital component of the common fisheries policy. It seeks to provide a response to the socio-economic difficulties of coastal areas by steering and speeding up restructuring of the sector through rationalisation and modernisation of production.

Programmes will give priority to:

• the guidelines contained in the multi-annual guidance programmes (MGP IV until 2001 and MGP V thereafter) as the basic frame of reference;
• avoiding possible undesirable effects caused by assistance or lack of it (ageing of the fleet, exhaustion of fishery resources);
• greater selectivity of fishing gear and methods;
• improving product quality, working conditions and safety.

RELATED ACTS

Commission Communication of 12 March 2003, "Further indicative guidelines for the candidate countries" [COM(2003) 110 final - Not published in the Official Journal]. This communication seeks to lay down a set of additional strategic guidelines for the candidate countries to help them with their first attempt to devise a structural funding programme.

In view of the particular situation of the regions in the ten new Member States, the Commission has decided to simply publish a set of additional indicative guidelines. For these countries, the first programming period will be very short, covering at most 2004-2006, as opposed to the seven years enjoyed by existing Member States. Thus, as a first stage of a development strategy, the goal of these countries should not be to tackle and solve all their problems within these three years but rather to establish clear priorities so funding can be concentrated on their most pressing needs.

Furthermore, despite substantial progress, the new Member States still have only limited capacity as regards administration, programming, management and monitoring. Adhering to Community rules, particularly as regards public procurement and the environment, still poses enormous difficulties.

Virtually all regions in the ten Member States are on the list of the 25% of regions with the lowest per-capita GDP. The main challenge is thus to promote the growth-enhancing conditions and factors that will help them all enjoy substantial real progress towards convergence with the EU average, and to ensure the strategy focuses on developing the type of investment likely to increase competitiveness while paving the way for greater job creation and sustainable development.

Meeting the challenge of the first programming in 2004-06 in the new Member States therefore depends on three vital conditions:

• anticipation - wherever possible, preparing and negotiating the programming documents with the Commission before accession to give as long an implementing period as possible;
• a quest for simplification - this has seen the Commission and Member States calling on the new countries to take a realistic, pragmatic approach to the implementation of structural funding in their initial programming period.
• limiting the number of projects, priorities and measures - by making hard choices to target structural funding on the areas it is most needed. This should make the financial management of future programmes easier and allow a more flexible response to problems of funding take-up which may be experienced by certain measures.

Last updated: 14.07.2005