Economic and social cohesion

At European level, the origins of economic and social cohesion policy go back to the Treaty of Rome (1957) where a reference is made in the preamble to reducing regional disparities. In the 1970s, Community action was taken to coordinate the national instruments and provide additional financial resources. Subsequently these measures proved inadequate given the situation in the Community where the establishment of the internal market, contrary to forecasts, had failed to even out the differences between regions.

With the adoption of the Single European Act in 1986, economic and social cohesion proper was made an objective alongside completing the single market.

The Maastricht Treaty (1992), finally, incorporated the policy into the EC Treaty itself (Articles 158 to 162). Economic and social cohesion is an expression of solidarity between the Member States and regions of the European Union. The aim is balanced development throughout the EU, reducing structural disparities between regions and promoting equal opportunities for all individuals. In practical terms this is achieved by means of a variety of financing operations, principally through the Structural Funds and the Cohesion Fund.

Besides the reform of the common agricultural policy and enlargement to the Central and Eastern European countries, regional policy was one of the major issues discussed in Agenda 2000, largely because of the financial implications. It is the Community's second largest budget item, with an allocation of EUR 213 billion for the period 2000-06. Every three years the European Commission presents a report on progress made in achieving economic and social cohesion and on how Community policies have contributed to it. The main criteria used for analysis are gross domestic product (GDP), employment and factors promoting sustainable development.

The EU's planned enlargement in May 2004 will involve a 13% fall in average per capital GDP and a widening of regional disparities on a scale without precedent in any previous enlargement. Since 60% of the regions whose development is lagging behind are in the future Member States, economic and social cohesion policy will inevitably shift eastwards. After 2006 it will have to concentrate on crucial development concerns while continuing to support regions which have not completed the process of convergence in real terms (particularly in Spain, Greece and Portugal) and on geographical areas facing specific structural problems (areas undergoing industrial restructuring, urban areas, rural areas, areas dependent on fishing, and areas suffering from natural or demographic handicaps). Simplification of the transfer and management mechanisms for the Structural Funds will moreover be the watchword of the next reform.

See:

•Agenda 2000
•Enlargement
•European Investment Bank (EIB)
•Objectives 1,2 and 3
•Structural Funds and Cohesion Fund
•Sustainable development
•Trans-European Networks (TENs)