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EU continues growth in regional spending

The share of the EU-budget put aside for regional development has grown from less than five percent some thirty years ago to almost 40 percent for the coming budgetary period. On the other hand, money earmarked for agriculture and rural development has fallen, from around 70 percent to just above 43 percent, in the same time-span.

In the 2000-2006 EU-budget regional and structural policies had an allocation of 195 billion euros. This can be compared to 307.6 billion euros earmarked for Cohesion for growth and employment in the 2007-2013 EU-budget.

The 2007-2013 EU-budget operates with different headings incorporating different activities. This is explained below.

The Common Agricultural Policy (CAP) and Rural development and environment, now under the common heading Preservation and management of natural resources (includes also fisheries) still constitutes the largest sum. For the 2007-2013 the sum is 371.2 billion euros.

So far, only allocations for Cohesion for growth and employment (see table on page 14) and for Rural Development, with a total of 77.7 billion euros 2007-2013, have been made available on a country-by-country basis. The division for rural development is shown on page 19.

Here are the headings as defined by the EU-Commission:
"1. Heading 1 (Sustainable growth) is divided into two separate, but interlinked components:
1a. Competitiveness for growth and employment, encompassing expenditure on research and innovation, education and training, EU networks, social policy, the internal market and accompanying policies.
1b. Cohesion for growth and employment, designed to enhance convergence of the least developed Member States and regions, to complement the EU strategy for sustainable development outside the less prosperous regions and to support inter regional cooperation.

2. Heading 2 (Preservation and management of natural resources) includes the common agricultural and fisheries policies, rural development and environmental measures, in particular Natura 2000. The amount earmarked for the common agricultural policy reflects the agreement reached at the Brussels European Council in October 2002.

3. The new heading 3 (Citizenship, freedom, security and justice) reflects the growing importance attached to certain fields where the Union has been assigned new tasks – justice and home affairs, border protection, immigration and asylum policy, public health and consumer protection, culture, youth, information anddialogue with citizens. It is split in two components:
3a. Freedom, Security and Justice
3b. Citizenship

4. Heading 4 (The European Union as a global player) covers all external action, including pre-accession instruments. Whereas the Commission had proposed to integrate the European Development Fund (EDF) into the financial framework, the European Council and the European Parliament agreed to leave it
outside.

5. Heading 5 (Administration) covers administrative expenditure for all institutions, pensions and the European Schools.

6. Heading 6 (Compensation) is temporary and includes some compensation amounts related to the latest enlargement of the Union.

Whereas Agenda 2000 contained 8 headings (11 counting subheadings), the framework for 2007-2013 as adopted counts 6 headings (8 including sub-headings or sub-ceilings) and is therefore simpler and less rigid.

Distributing resources among a large number of headings makes the system rigid and thwarts more effective use of resources to achieve the Union's policy goals. Having a smaller number of headings not only reflects the broad policy goals, but also creates vital breathing-space to allow for developments that cannot always be precisely predicted ten years in advance."

The EU-budget deal breakdown

Commitment Appropriations by Heading    EUR billion* %
1a. Competitiveness for growth and employment 72.1 8.4
1b. Cohesion for growth and employment  307.6  35.7
2. Preservation and management of natural resources 371.2 43.1
3. Citizenship, freedom, security and justice 10.3 1.2
4. The EU as a global partner 50.0 5.8
5. Total administrative expenditure 50.3 5.3
6. Compensations (Bulgaria and Romania) 0.8 0.1
  Total Commitments 862.4  


* in 2004 prices
Source: European Commission