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Cohesion Fund

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The Cohesion Fund, one of the five European Structural and Investment Funds of the European Union, provides support to Member States with a gross national income per capita below 90% EU-27 average to strengthen the economic, social and territorial cohesion of the EU. Common regulatory provisions apply to the five ESIF funds, along with the Just Transition Fund, the Asylum, Migration and Integration Fund, the Internal Security Fund and the Instrument for Financial Support for Border Management and Visa Policy.[1]: Article 1 

The fund's purpose includes support for investments in the environmental field and on Trans-European Networks in the area of transport infrastructure (TEN-T).[1]: Preamble 22 

History

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The European Council meetings held in Lisbon, 26-27 June 1992, and Edinburgh, 11-12 December 1992, agreed the establishment of the Cohesion Fund.[2] This was formalized in 1993, as part of the Delros II package of the Treaty of Maastricht, with the goal of reinforcing the regional policy of the EU.[3] Since then, its goal has been the economic convergence among European regions, by means of public investment in transportation infrastructure and environmental projects.[4] It was a way to compensate, to a certain extent, the strict policies on public debt that were agreed by the European members: these funds allowed to maintain both a controlled deficit and public investment in strategic areas.[5]

Cohesion Funds cover seven-year funding periods:

  • Up to 31 December 2006.[2]
  • 2007-2013
  • 2014-2020
  • 2021-2027

Originally, the traditional recipients of these funds were Greece, Portugal, Spain and Ireland, among others; but since new countries joined the EU in 2004, 2007 and 2014, the funds have been located mainly in Central and Eastern Europe.[6] For the 2021–2027 period, the Cohesion Fund is available to Bulgaria, Croatia, Cyprus, the Czech Republic, Estonia, Greece, Hungary, Latvia, Lithuania, Malta, Poland, Portugal, Romania, Slovakia and Slovenia. 37% of the overall financial allocation of the Cohesion Fund is expected to contribute to climate objectives.[7] Member states with above-average economic output per person, including the United Kingdom before Brexit, are unable to access Cohesion Fund resources.[8]

Effectiveness

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The scientific literature on the topic is ambiguous, certain research projects show a positive impact of the funds on the economy of the recipient countries, while others have ambiguous results; more rarely, they find a negative effect.[9] Some studies point out that the impact depends on the area of investment: funds dedicated to transportation infrastructure and to the energy sector have the biggest positive effect, while allocation to environmental goals are negative in the short-term, but become positive in the medium and long-run .[9]

A weakness often associated to the allocation of the Cohesion Fund between countries is that it is solely determined using the gross national income per capita. Experts have shown that, based on that criterion, some countries are not getting funds although being in a worse socioeconomic situation than some of the actual recipients. This is problematic from the point of view of the EU, since the evidence shows a relation between Euroscepticism and middle-income regions which do not receive enough funds.[10] To better evaluate the socioeconomic situation of the recipient countries, an index that includes more socioeconomic variables has been proposed.[11]

Another concern of the EU institutions and, more specifically, of the European Commission, is the lack of visibility of these funds.[12] The literature on the topic reveals that the citizens' awareness about the Cohesion Fund is not linked to the amount of funds invested in their regions.[13] In this regard, the more vulnerable groups of EU citizens such as the unemployed, the recipients of welfare, and those who live in economic destitution, have the most sceptic view of the European institutions as providers of social security.[14] To address this, the European Commission is stressing the importance of improving the communication with the citizenship and between the differente stakeholders (NGO's, EU institutions and national managing institutions).[14]

References

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  1. ^ a b EUR-Lex, Regulation (EU) 2021/1060 of the European Parliament and of the Council of 24 June 2021 laying down common provisions on the European Regional Development Fund, the European Social Fund Plus, the Cohesion Fund, the Just Transition Fund and the European Maritime, Fisheries and Aquaculture Fund and financial rules for those and for the Asylum, Migration and Integration Fund, the Internal Security Fund and the Instrument for Financial Support for Border Management and Visa Policy, accessed 10 November 2023
  2. ^ a b EUR-Lex, Council Regulation (EC) No 1164/94 of 16 May 1994 establishing a Cohesion Fund, accessed 9 November 2023
  3. ^ Holgado Molina, María del Mar; Salinas Fernández, José Antonio; Rodríguez Martín, José Antonio (2015). "A synthetic indicator to measure the economic and social cohesion of the regions of Spain and Portugal" (PDF). Revista de economía mundial. 39: 223–240.
  4. ^ Medeiros, Eduardo; Zêzere, José Luís; Costa, Nuno (2016). "The EU Cohesion Fund and Spatial Planning Strategies in Transport and Risk Prevention: Portugal (1995-2013)" (PDF). European Structural and Investment Funds Journal. 4 (2): 87–99.
  5. ^ Dicharry, Benoit; Nguyen-Van, Phu; Pham, Thi Kim Cuong (2019). ""The winner takes it all" or a story of the optimal allocation of the European Cohesion Fund". European Journal of Political Economy. 59: 385–399.
  6. ^ Moreno, Rosina (2020). "EU Cohesion Policy Performance: Regional Variation in the Effectiveness of the management of the Structural Funds". Journal of Regional Research. 46: 27–50.
  7. ^ "Cohesion Fund (CF)". European Commission. Retrieved 22 March 2022.  This article incorporates text available under the CC BY 4.0 license.
  8. ^ Nice, A, European structural funds: the UK Shared Prosperity Fund, Institute for Government, published 4 September 2018, accessed 10 November 2023
  9. ^ a b Scotti, Francesco; Flori, Andrea; Pammolli, Fabio (2022). "The economic impact of structural and Cohesion Funds across sectors: immediate, medium-to-long term effects and spillovers". Economic Modelling. 111.
  10. ^ Schraff, Dominik (2019). "Regional redistribution and Eurosceptic voting". Journal of European Public Policy. 26 (1): 83–105.
  11. ^ Rodríguez Martín, José Antonio; Martín Martín, José Antonio; Salinas Fernández, José Antonio; Zermeño Mejía, Karla Aída; Añaños Bedriñana, Karen G. (2019). "A Spatial Analysis of the Achievements, in Terms of Regional Development, Accomplished by the Initial EU-Member Cohesion Fund Beneficiaries Using a Synthetic Indicator". Sustainability. 11 (8).
  12. ^ Madama, Ilaria (2018). "Enhancing the Visibility of Social Europe: A Practical Agenda for 'the Last Mile'". Debating European Citizenship. IMISCOE Research Series: 261–266.
  13. ^ López-Bazo, Enrique (2021). "The Impact of Cohesion Policy on Regional Differences in Support for the European Union". Journal of Common Market Studies. 60 (5): 1219–1236.
  14. ^ a b Natili, Marcello; Ronchi, Stefano; Visconti, Francesco (2023). "Invisible social Europe? Linking citizens' awareness of European cohesion funds, individual power resources, and support for the EU". Journal of European Social Policy. 0 (0): 1–13.
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