An EU regulation sets down principles, rules and standards for the implementation of the European Regional Development Fund (ERDF) and the scope of its investment for growth and jobs and territorial cooperation in 2014-2020.
The ERDF aims to promote the harmonious, balanced and sustainable development of the European Union (EU) by correcting some of the differences in levels of development between its regions.
There will be specific assistance from the ERDF to deal with the problems of naturally disadvantaged regions (island, mountainous or sparsely populated) and outermost areas as a result of their remoteness.
All Member States’ regions are eligible but the aid granted will depend on EU priorities and the type of region.
The ERDF will concentrate its investments on four key themes:
- innovation and research;
information and communication technologies (ICT);
support for small and medium-sized enterprises (SMEs);
promoting a low-carbon economy.
Types of investment
- in SMEs to create and safeguard sustainable jobs
- in all types of enterprise in the fields of innovation and research, the low-carbon economy, as well as ICT where SMEs are involved
- in infrastructure providing basic services in energy, environment, transport, and ICT, but also in social, health and educational infrastructure, and
- in development of endogenous potential.
The budget for 2014-2020 is over EUR 185 billion.
Policy and budget priorities
The four key themes listed above are very significant for the allocation of ERDF funding which will vary depending on the category of region.
The regions are defined in terms of their GDP expressed as a percentage of an EU average:
More developed regions: GDP more than 90 %
Transition regions: GDP 75 %-90 %
Less developed regions: GDP less than 75 %
In more developed regions, (transition regions), (less developed regions), at least 80 % (60 %) (50 %) of total ERDF funds in each country must be allocated to two or more of the four key themes, namely innovation and research, SMEs, ICT and a low-carbon economy; because of its importance, at least 20 % (15 %) (12 %) of total ERDF funds in each country must be channelled specifically towards low-carbon economy projects.
A minimum of 5 % of ERDF funding is earmarked for sustainable urban development. An urban development network is to be set up at EU level to promote networking and exchange of experience on sustainable urban development.
ERDF is implemented at a national level by means of 7-year programmes as part of a Partnership Agreement with the EU which involves the five European Structural and Investment Funds (ESI Funds): ERDF, European Social Fund (ESF), Cohesion Fund, European Maritime and Fisheries Fund (EMFF) and European Agricultural Fund for Rural Development (EAFRD). This agreement is prepared by the Member State with the involvement of partners representing regional and local public authorities as well as a wide range of social, economic, environmental and other interests.