European Funds – What Do They Rely On? Credit Loan

 

European funds are one of the most common issues that arise in the context of the European Union. From the beginning of Poland’s membership in this alliance, we are covered by the system of European funds. Within them, numerous investments related to various issues and regions of the country were financed in Poland. What is the financial support and how can you use it?

Poland remains a member of the European Union from May 1, 2004. Membership in this alliance and community is associated with a number of obligations, but also gives the poorer countries of the Union with a short-term opportunity to support. Financial subsidies, which are allocated for a number of purposes. These include co-financing and stimulation of the development of small enterprises as well. In addition, it is the development of urban and road infrastructure. European funds are discussed in the media and everyday conversations quite often, although – despite the information years organized – we do not know enough about them. How do we define European funds, what do they consist of?

 

European funds – definition

 

European funds - definition

European funds, also known as subsidy funds and EU funds, are a set of terms for European Union financial resources. Their goal is to support the economies of the Member States. In particular, they are to affect the development of poorer regions in the Member States and reduce unemployment. In addition, they also serve to improve the quality of road, air and rail communication, including the infrastructure provided for them. Over the years, Poland was the largest beneficiary of these funds. The largest member state among those who joined the community in the 21st century.

EU funds are mainly allocated to the implementation of cohesion policy, often also referred to as structural or regional policy.

What are the cohesion funds about?

Cohesion policy (structural) is related to the functioning of the European Cohesion Fund (Cohesion Fund) and structural funds. The Cohesion Fund is not formally included in the Structural Funds. The main area of ​​its activity are structural changes that are supposed to lead to cohesion in the social and economic aspect. The Cohesion Fund is targeted at nationwide programs. Structural funds are implemented through regional programs operating within individual given regions.

The goal of cohesion policy is to bring about economic and social conditions in all regions of the European Union.

Forms of EU assistance

Financial assistance provided through EU funds is divided into one main core, divided into three categories. This is described in the relevant document on the Cohesion Fund, structural funds, Community initiatives and Community programs.

  • Public aid , for example subsidies and co-financing.
    • Regional aid – this aspect of the funds concerns supporting new investments – factories, enterprises and enterprises. It indirectly contributes to creation of new jobs in given areas, reducing the problem of unemployment.
    • Horizontal aid – part of the funds responsible for the restructuring of enterprises, protection of the natural environment, as well as carrying out research and development works as well as field research.
    • Sectoral aid – an aspect related to specific sectors of the economy, such as the automotive sector, the synthetic fibers sector, the food sector or the shipbuilding sector.

The rules of operation of the structural funds

The rules of operation of the structural funds

  • Subsidiarity principle – every action taken should be performed by the lowest possible to implement a given task.
  • The principle of concentration – in her mind, the funds from EU funds are to be directed mainly to the least-developed areas and help them to develop in an equivalent way.
  • Principle of programming – it consists in controlling and monitoring the manner in which European funds are implemented on a daily basis. The basic goal is to control whether regional development programs are subsidized in full, and not only partially (individual projects).
  • Principle of coordination – devoting attention to the most important priorities in the aspect of social and economic cohesion. It should focus on regions with the greatest difficulties and problems on many levels – for example, economic or social.
  • The partnership principle – EU, national or regional authorities should consult each other’s assistance programs
  • The principle of additionality – EU funds are to be used only as an addition to other public and private funds in a given country
  • Complementarity principle – EU assistance is intended to supplement national measures, both at the local and regional levels

 

Sources of financing EU funds

 

Sources of financing EU funds

  • 0.73% of the national GDP – the following part of the state income is transferred to the budget for the benefit of the European Union. This amounts to a total of 69% of the European Union budget, thus being the most important source of financing. The most affluent member states are obliged to pay more funds to the budget of the European Union than poorer countries with lower GDP. In this way, an interesting phenomenon often appears. Countries that have paid a lower amount often receive a larger amount of funding from the European Union. An example of such a country has been Poland for years.
  • VAT revenues, which each state is obliged to transfer to the European Union a specific part of this tax. The proceeds from this title account for about 15% of the total budget of the European Union.
  • Duties on the import of goods from individual countries that are outside the territory of the European Union. Income from this income is also about 15% of the total budget of the European Union.
  • Other sources, eg income taxes on wages in various EU institutions. In addition, also penalties are imposed on enterprises that break the law (1%, which is the smallest part of the EU budget).

 

Distribution of EU funds

 

Distribution of EU funds

As part of EU funds, programs with a specific strategy for the given years are regularly created. Most often, they are created on average every 6 years, e.g. 2000 – 2006, 2007 – 2013, 2014-2020 and so on.

In the years 2000 – 2006, a total of about EUR 13 billion was allocated to Poland. In the next 6 years, it was over 67 billion euros. In turn, for the implementation of the next program, which fell in the years 2014-2020, Poland received EUR 82.5 billion. This is the highest amount for co-financing among all Member States.

Funds 2000 – 2006

  • European Agricultural Guidance and Guarantee Fund
  • European regional development fund
  • European Social Fund
  • Financial Instrument for Fisheries Guidance

Funds 2007 – 2013

  • European Regional Development Fund – its aim was to contribute to reducing disparities in the regions of the Member States concerned. The assistance was provided especially to those regions that were then particularly slow in development and were experiencing difficulties such as unemployment and demographic decline. The primary goals were:
    • supporting investments that helped in creating new jobs
    • development of transport infrastructure
    • stimulation of the energy sector development
    • supporting the protection and condition of the natural environment
  • European Social Fund – the scope of the aspects covered by this fund consisted of the following five issues:
    • creating active forms of combating unemployment
    • counteracting the phenomenon of social exclusion
    • stimulation of the development of universal lifelong learning
    • actions to improve the human resources of the economy
    • decisive steps for the professional activation of women
  • European Agricultural Fund for Rural Areas – it focused on achieving objectives related to agricultural policy. The most important challenge was to increase agricultural productivity by supporting technical progress and optimal use of all production factors, including labor (employees)
  • European Fisheries Fund – its purpose was to ensure full and continuous continuity in the area of ​​fisheries in the Community and to make optimal use of this activity and its yield. Another important goal of this strategy was also the protection of the terrestrial and marine environment in those years.

Funds 2014-2020

The main funds supporting the economic development of the Member States in line with the objectives of the Europe 2020 strategy (its scope of activities below):

  • European regional development fund
  • European Social Fund
  • Cohesion Fund
  • European Agricultural Fund for Rural Development
  • European Maritime and Fisheries Fund

Objectives for structural funds

 

Based on the reform of the structural funds, which came into force in 1989, the following challenges were recognized as the most important tasks:

  • help for economically underdeveloped regions
  • help for regions affected by the collapse of traditional industries
  • combating long-term unemployment (longer than one year) and including people under the age of 25 in the labor market
  • help for workers in adaptation to technological changes
  • structural reforms in the agricultural sector
  • assistance for agricultural areas

 

Europe 2020 strategy

 

Europe 2020 strategy

The Europe 2020 strategy was introduced 8 years ago and thus replaced the Lisbon strategy implemented in 2000-2010. Its basic goal is to strive for the economic growth of the community. In addition, however, care has been taken that this process is balanced and does not favor the strongest economies. Focused, subject theory of knowledge economy based. In addition, it focuses on promoting environment-friendly technologies, economizing resources, creating new jobs and taking care of social cohesion.

 

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