Drawing Funds from the European Union Essay
Drawing Funds from the European Union
Drawing Funds from the European Union
European Union funds are an instrument for implementing its economic and social cohesion policies whose objective is to eliminate the disparities in development levels amongst the EU member states and the relative primitiveness of the most disadvantaged states. The EU funds provide funding for a wide range of projects covering areas such as urban and regional development, employment and social inclusion. The funds also cover agricultural and rural development, maritime developments, innovation and research ventures, and humanitarian aid. It means that municipalities, businesses, ministries, non-profit organizations, learning institutions, the transport industry, and research institutions are eligible to apply for the funds.
Management of Funds
Funding, the sole purpose of the EU funds, is supervised in accordance with a set strict rules to ensure that there is total control over how to spend the funds; in a transparent and accountable manner. Twenty-Eight EU commissioners have the definitive responsibility of ensuring that beneficiaries use the funds accordingly. Nonetheless, performing checks and annual audits is a responsibility that lies with the national governments. It is because the funds are mostly managed within the beneficiary states. Management of seventy-six percent of the whole EU budget happens in collaboration with state and regional authorities via a system of shared management.
Allotment of Funds
- The EU provides funds from five categories:
- The European Regional Development Fund (ERDF).
- European Social Fund (ESF).
- Cohesion Fund (CF).
- European Agricultural Fund for Rural Development (EAFRD).
- The European Maritime and Fisheries Fund (EMFF).
These major funds are referred to as Structural Funds. There are other funds that the EU manages directly. These other funds are usually in the form of grants and contracts. There is a common fallacy that ‘money from Brussels’ is available for free and for any purpose. Reality check proves it otherwise because grants from the EU are usually made available for supporting specific objectives. A big chunk of the funds is not given to beneficiaries directly, but through state and regional authorities who are responsible for transparent management of the funds (Council, 2007).
The European Regional Development Fund (ERDF): The aim of the ERDF is strengthening economic and social cohesion in the EU through adjusting imbalances amongst its regions. The ERDF usually centers its attention on some key priority areas known as ‘thematic concentration’:
- Low-carbon economy
- Research and innovation
- Assisting small and medium-sized enterprises (SMEs) and
- The digital agenda
The resource allocation to the priorities usually depends on the category of the region in question. More developed regions focus at least eighty percent of these funds on at least two of these priorities. Transition regions’ focus is for sixty percent of the funds and fifty percent for less developed regions. Additionally, some of the ERDF resources are directed specifically towards low-carbon economy projects; twenty percent for more developed regions, fifteen percent for transition regions and twelve percent for less developed regions. The ERDF also gives special attention to specific territorial attributes. Disadvantaged areas from a geographical point of view, for example, mountainous or sparsely populated areas, gain from this special treatment.
The European Social Fund (ESF): The most important focus of the ESF is improving the job market and education opportunities across member states of the European Union. Improving the social statuses of vulnerable people is also an important aim for the fund. The earmarking of more than €80 billion for investment in human capital in EU member states for the period 2014-2020 attests to it. Other objectives of the fund include: retraining unemployed people, starting special programmes for the disabled and other disadvantaged groups of citizens. In addition: supporting self-employed people who are just starting their businesses, developing employment service institutions and improving the quality of education in learning institutions.
Cohesion Fund (CF): The CF is mostly aimed at member states whose Gross National Income (GNI) per inhabitant is less than 90% of that of EU’s average. Its main aim is to minimize social and economic disparities and promoting sustainable development. The CF is also subject to the same regulations as the ERDF and ESF via the Common Provisions Regulation. For the programming period, 2014-2020, the CF concerns states such as the Czech Republic, Croatia, Latvia, Malta, Hungary, Slovakia and Slovenia. The CF allocates approximately €63.4 billion to various economic and social welfare projects. The Cohesion Fund is used to fund trans-European transport networks especially those identified as priorities by the EU. The funds can additionally be used to fund environment-friendly projects. These projects include those that benefit the environment in terms of renewable energy, supporting an inter-modality, and energy efficiency. If audits reveal that a member state has excessive public deficit and they are not taking steps to resolve the situation, the Cohesion Fund can be suspended by a Council Decision.
The European Agricultural Fund for Rural Development (EAFRD): The EAFRD covers; bio-energy, organic farming, forest resources, food safety, animal welfare, plant health and rural development programmes (RDPs). The EU requires its member states to build their RDPs upon not less than six set EU priorities. They include:
- Advancing knowledge transfer and innovation in the agricultural sector, forestry and rural areas.
- Improving the viability of all types of agriculture, and endorsing innovative farming technologies and sustainable forest management.
- Encouraging food chain organization, management of risk in agriculture and animal welfare.
- Protecting and developing ecosystems allied to agriculture and forestry.
- Shifting towards a low-carbon and climate-conscious economy in the food and agriculture sectors.
Each RDP identifies focus areas to set quantified targets for funds needed. Measures to achieve these targets and their individual fund allocations are paramount. RDPs’ also gets funding from private sectors that share the same ideologies. The implementation of funds is monitored and evaluated in detail.
European Maritime and Fisheries Fund (EMFF): The EMFF, formerly European Fisheries Fund (EFF), is used to fund the Common Fisheries Policy (CFP). The EMFF gives funding for the fishing industry and communities in the coastal regions. The CFP endeavors to make sure that fishing and aquaculture are sustainable; environmentally, economically and socially. Healthy fish and seafood is also paramount. Though important to maximize catches for business purposes, limits must be put in place. The CFP stipulates that limits should be set such that fish stocks are sustainable in the long-term. The CFP allows EU member states access to its waters and fishing grounds.
To enhance transparency in funding, the European Transparency Initiative was set up. A central web portal was created to collect and show data from all beneficiaries of EU funding; funds received and how the funds are being used. There is also an inventory of EU funding that shows the evaluations done and released by the Evaluation Services of all Twenty-Five EU member states.
Applying for Funding in Selected Areas
Enterprise: small and medium-sized enterprises (SMEs) can obtain funding via grants, loans and guarantees. It is mostly through financial intermediaries in their member states. Grants usually account for fifty percent of project costs. Loan guarantees are given to microcredit organizations for loans of up to €25,000.
Non-profit organizations: they include non-governmental and civil society organizations. These organizations are eligible for funding as long as they are active in EU policy regions and a strictly non-profit basis (Council, 2007).
Young people: they are eligible for two types of funding; education and training, and youth funding. The former includes study opportunities through Erasmus+, scholarships for high school graduates, and occupational training in other countries. The latter includes co-funding youth projects that encourage civic involvement, charity work and a wider multicultural outlook.
Researchers: individuals and institutions involved in innovation and research projects are qualified to request for the funds. The European Union will provide roughly €80 billion in its quest to fund research. The funding typically takes the form of grants to finance partly a wide range of research and innovation projects.
Agriculture and fisheries: acquiring funds for such projects involves giving a general introduction, presenting financial reports, and giving information on the planned use of the funds. Direct funding is the most important and common type of funding in the EU member states.
Cultural and audiovisual sector: the main programme in this segment is culture: it has three main goals. They include promoting cross-border mobility of people working in the cultural sector, encouraging circulation of cultural, artistic output, and fostering intercultural dialogue (Evans & Foord, 1999).
Energy: funding is available for a number of sectors including solar and wind energies, bioenergy, renewable energy, clean coal projects and energy efficiency. Funds are also available for Trans-European Energy Networks (TEN-E), whose aim is to enhance transportation networks for electricity and gas across the European member states.
The structural funds and grants from the European Union Funds have impacted the lives of the citizens of its member states immensely. The standards of living of many citizens have risen noticeably due to the array of new employment opportunities created by the funds’ projects. Some of the projects’ success stories are noteworthy and have had a great impact to states and individuals. We will take a look at some examples of projects carried out using the funds so as to take note of their effects to their beneficiaries.
ESF in the Czech Republic
The Czech Republic is among the less wealthy nations in the European Union member states. According to regulations, Czech could have drawn approximately €26.7 billion from the ESF in the programming period 2007-2013 in order to raise the standards of living of its people. However, the amount received from the ESF for that period is €3.8 billion. Together with national funding, the tally adds up to over €4.4 billion.
ESF funds help in three activities. The first is advancing education at all levels and enhancing its relevance to the job market. Secondly, the funds are used to enable many people to get employment, especially the disadvantaged. Lastly, they have helped build competitiveness of the Prague region.
The Czech Republic is using the funds to do away with obstacles that; for one reason or another, prevent people from getting a job. These people include; mothers with young children, older people, and the disabled and disadvantaged groups, like those with little or no professional skills. Many ESF projects across the nation are making access to training facilities easier and reducing some practical obstacles to work. Consequently, this is bringing a positive impact by lifting its citizens out of poverty (Fagan, 2005).
ESF funding is also helping improve the quality of education by scrutinizing standards, employing more competent teachers, and teaching job seekers only the needed skills by employers. Events such as science documentary film festivals and meetings with top Czech scientists are being used as platforms to encourage students to consider careers in science and technology. Just like other member states, the Czech Republic is struggling with the unemployment crisis. The ESF fund, however, has gone a long way in helping Czech citizens find jobs attributed to the various employment and educational projects initiated by the funds.
Saving Lives: EU Funded Cancer Research Project
Physicians mostly wait for several months to assess whether cancer treatments that they are administering to their patients are actually working. By discovering a new technique that quickly reveals a tumor by checking consumption of glucose, an EU-funded project has reduced the delay. This discovery enables doctors to get more ‘precious’ time to switch to more effective forms of treatment if crucial; potentially saving many lives.
All cancer treatments do not work in every patient’s case. A tumor might reduce rapidly after a treatment, yet its assessment is complex. Several therapies may eliminate the cancer without reducing the size of the tumor. A delay in confirmation by a doctor may mean that by the next treatment, the patient may be a lot weaker, and the cancer advanced further (Eckhouse & Sullivan, 2006). Physicians want to assess immediately if the cancer is affected by a treatment, not just by measuring its size but through metabolic indicators. The EU-funded project, Imaging Lymphoma, has developed such an assessment. The innovation will be important in future cancer treatments as it makes it easier for doctors to treat their patients.
Turning Food Waste into Animal Feed
The European Union is the source of 18% of food exports worldwide and with it comes a huge chunk of agricultural waste. This waste costs farmers and taxpayers’ money (Kraemer, Wilkinson, Klasing & Homeyer, 2002). An EU-funded research project NOSHAN wants to convert food waste into animal feed. The objective of the research is to open up new opportunities for farmers and reducing Europe’s dependence on animal feed imports. Additionally, new green jobs in agricultural waste collection and feed manufacturing will be created.
The NOSHAN project aims particularly at turning fruits, vegetables and dairy wastes into animal feed, and at low energy costs. The project is expected to conclude its research in 2016, and by that time, the research team will be able to have the best waste extraction and upgrading techniques. The NOSHAN project presents Europe’s agricultural sector with a prospect of attaining greater agricultural sustainability. The project has been awarded just under €3 million in the programming period 2007-2013. It brings together a University, small and medium-sized enterprises (SMEs), research institutes and other industries. The NOSHAN project could also reduce the ever-increasing competition between food and feed sectors, both of which require water and land (Wolz, Hubbard, Möllers, Gorton & Buchenrieder, 2012).
Revolutionizing the Transport Sector
EU-funded researchers have come up with groundbreaking proposals to prevent railway suicides and decrease disruption of services. If adopted, the proposals could save lives, money and time for railway companies and their passengers. Waiting for a train, and suddenly the service is called off or delayed indefinitely is something that train passengers have become accustomed to in the long run. Perhaps an accident; somebody fell onto the track, or they purposefully stepped in front of the track.
The EU-funded project, RESTRAIL, collected and analyzed the measures put in place by different EU member states to curb suicides and accidental deaths. The outcome of the research was that proposals that can save a lot of lives. Decision makers such as station managers or railway companies should have a set of the most efficient mitigation measures for every event. The tests they have conducted have created a toolbox for consultation on the best practices on each country. RESTRAIL guidelines could help reduce direct and indirect costs linked to railway suicides and accidents.
ESF Fund in Slovakia
Slovakia is one of the fastest growing economies in the EU, but it faces several challenges such as high long-term unemployment levels. Nonetheless, Slovakia plans to increase the country’s employment rate to 72% by 2020. Slovakia has received €1.5 billion ESF funding for the period ended 2007-2013. In combination with national co-funding, they have raised a total of €1.76 billion. A variety of projects’ is being supported via the funding. Public employment facilities and services are being improved so as to reach as many slovaks as possible. Since 2007-2011, approximately 24,000 employment opportunities have been created and around 26,000 people have found employment via ESF supported measures.
Projects are also being implemented in the form of flood-dependence-programmes that offer up to 4,500 new jobs in 200 villages. ESF funding is helping reform the education system in Slovakia by ensuring that education is tailored to align with the evolving needs of the society. An example is a project that investigates the interests of young people and matches them to career guidance. ESF funded projects are facilitating the establishment of life-long-learning culture that natures skills of the Slovak citizens throughout their lives. For instance, a Slovak packaging company has used ESF funding to facilitate professional training of new skills, such as in quality and environmental standards, making them more adaptable and well equipped for their future careers.
The Roma people in Slovakia tend to live in segregated settlements and are more exposed to long-term unemployment compared to the average population, and also live in conditions of poverty. Thanks to ESF funding, social workers and assistants have been employed to work closely with them to help improve their circumstances (Guy & Kovats 2006).
Setbacks and Doubts on the efficient use of EU Funds
One of the problems with EU funds is that in some cases, the money is allocated to projects that are neither necessary nor productive (Šumpíková, Pavel & Klazar, 2004). For instance, if a village wants to repair sidewalks in its region and would like to use EU funding for it, it is imperative that they formulate a supporting story. Let’s say, expansion of regional tourism. It means that, in addition to repairing the sidewalk, the money will also be spent to put up some signs with a map of village’s streets, which in the first place is not necessary. Some smart villages can even use the funds to renovate an old library and rename it to the Tourist Information Center, and stow some pamphlets there, in case some tourists do show up.
Another predicament is deformation of industrial and consumer environment. When a firm receives funding to build, say, a grocery store, its neighbors who have the similar business plans receive nothing.
A further problem is that national ministries of some states like say, Slovakia, are reluctant to delegate control of EU funds to lower governance levels. The central governments do not trust the ability of their municipalities and regional authorities to implement the funds timely and effectively. There have been cases where regional authorities have mixed implementation of policies, to say the least. Nevertheless, Slovakia has not been able to create any efficient mechanisms for decision-making and management of public funds (Guy & Kovats, 2006).
Funds drawn from the European Union have increased employment opportunities, bolstered the education sectors of beneficiaries and led to the growth of economies. Additionally, funding the transport sector, research and innovation projects have led to groundbreaking discoveries in the agricultural, health and transport sectors among others. The number of lives saved and projected to save by some of these discoveries is amazing. Nonetheless, the funding has not been without a few controversies. Some parties have tried to take advantage of corrupt officials to leverage some money for themselves leading to misuse and undertaking of dubious projects. An honest culture should be created to ensure appropriate use of funds. The European Union funding goal is to ensure that beneficiaries spend money in a transparent, accountable manner. It is thus the duty of all beneficiaries to make it a reality.
Council, T. R. D. (2007). European Union Funding.Eckhouse, S., & Sullivan, R. (2006). A survey of public funding of cancer research in the European Union. PLoS Medicine, 3(7), e267.
Evans, G., & Foord, J. (1999). European funding of culture: promoting common culture or regional growth?. Cultural Trends, 9(36), 53-87.
Fagan, A. (2005). Taking stock of civil-society development in post-communist Europe: Evidence from the Czech Republic. Democratization, 12(4), 528-547.
Guy, W., & Kovats, M. (2006). EU-funded Roma programmes: Lessons from Hungary, Slovakia and the Czech Republic. London: Minority Rights Group International.
Kraemer, R. A., Wilkinson, D. G., Klasing, A., & von Homeyer, I. (2002). EU Environmental Governance: A Benchmark of Policy Instruments. With a focus on Agriculture, Energy and Transport. Study commissioned by the Belgian Federal Department of the Environment. No. ECOLOGIC, Berlin.Šumpíková, M., Pavel, J., & Klazar, S. (2004, May). EU funds: absorption capacity and effectiveness of their use, with focus on regional level in the Czech Republic. In Conference proceedings of the 12 th NISPAcee Conference.
Wolz, A., Hubbard, C., Möllers, J., Gorton, M., & Buchenrieder, G. (2012). Patterns behind rural success stories in the European Union: Major lessons of former enlargements (No. 68). Studies on the agricultural and food sector in Central and Eastern Europe.
Subject: Business & Economy,
University/College: University of Chicago
Type of paper: Thesis/Dissertation Chapter
Date: 12 November 2015
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