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   Instruments of Cohesion Policy are the following:

  • European Regional Development Fund (ERDF),
  • European Social Fund (ESF), and
  • Cohesion Fund, in the Financial Perspective 2007-2013

Total financial allocation for the instruments is amounts to EUR 308 billion. 
Common legal base is the Council Regulation 1083/2006.

Objectives of the instruments are the following:

  • convergence
  • regional competitiveness and employment and
  • territorial cooperation.

European regional development fund -ERDF aims to strengthen economic and social cohesion and reduce differences in development among regions within EU. It is principally focused on the infrastructural investments, production investments with the objective of opening work posts and on the local development and development of small and medium enterprises.

The assistance under this fund is directed towards statistical regions according to the EU classification, the so-called NUTS regions. In the framework of the cohesion policy of the EU, these regions serve in order to define the level and type of assistance through which the EU finances the cohesion policy, i.e. development activities of the member states, in accordance with strategic guidelines adopted at the level of the EU. Objectives – categories of interventions of the EU assistance in the programming period 2007 – 2013 comprise “convergence”, “regional competitiveness and employment” and “European territorial cooperation”. According to the NUTS methodology, Croatia is divided in three NUTS II regions which are expected to utilize mostly the category of interventions from the objective “convergence”.

The objective “convergence” encompasses regions which correspond to the level of NUTS II and regions in which GDP per capita is under 75% of EU average. The task of this objective is to accelerate the approximation of the least developed member states and regions by improving the conditions for growth and employment, through increasing and improving the quality of investing in material and human resources, development of innovations and society of knowledge, adaptability of economic and social changes, protection and improvement of environment and administrative effectiveness. The level of co-financing for this objective is up to 75% of overall costs eligible for co-financing (eligibility expenditure).
The Fund is governed by the Directorate General for Regional and Urban Policy, and it was established by the Council Regulations No. 1083/2006, and 1084/2006.

Objectives of the European Social Fund are reduction of differences in life standard and welfare in the EU member states and their regions, and accordingly the promotion of economic and social cohesion. It stresses the promotion of employment in the EU, and assistance to European companies and the work force in successful dealing with global challenges through the following activities:   

  • funds are allocated to the overall Community and in all regions, particularly the ones where economic development is slow.
  • Improvement of the quality of life of the citizens in EU by enabling their acquisition of skills and better possibilities of employment.
  • In order to achieve the mentioned objectives for the period 2010-2013 the amount allocated to the EU member states totals EUR 75 billion.

Eligible investment areas within ESF are the following:

  • Attracting and retaining employees and modernization of the system of social protection.
  • Improving adaptability of the workers and companies and flexibility of the labour market.
  • Increasing investments in human resources through better training and acquisition of skills
  • Enhancing administrative capacity
  • Assistance in retaining healthy work force

Cohesion Fund is a financial mechanism for financing great infrastructural projects in the EU in the area of transport and environment protection for the purpose of attaining economic and social cohesion of the European Union and encouraging sustainable development.

In financial perspective 2007-2013 its value is EUR 55 billion. Co-financing of projects in the amount of the maximum 85% is allocated to the member states whose gross domestic product totals under 90% of the average of the European Community and which apply national convergence programme according to the economic and monetary union. Cohesion Fund is open for Greece, Portugal and Spain, and after May 2004 to new member states of the EU.

Cohesion Fund finances the interventions in the area of:

  • Environmental infrastructure aiming to take over the EU standards of the environment protection;
  • Effective usage of energy and usage of renewable energy sources;
  • Trans-European Transport Networks
  • Transport infrastructures (outside TEN-T network) which contribute to environmentally sustainable urban and public transport, inter-operability of transport networks throughout the EU and encourages inter-modal transport systems.