Table of contentsIntroductionThe objectives of EU regional policyCreating growth and jobsAttracting investorsEU regional policy instrumentsConclusionIntroductionEU regional policy is an essential instrument of financial solidarity and an extremely powerful force for economic cohesion and integrity. By establishing solidarity, tangible benefits are brought to citizens in less well-off regions. Cohesion is based on the crucial principle that all members of the European community should benefit from reducing income and wealth gaps between different regions. Say no to plagiarism. Get a tailor-made essay on 'Why violent video games should not be banned'?Get the original essayLarge differences in levels of prosperity exist both within and between EU countries. In terms of GDP per capita, the most prosperous regions are all urban: Brussels, London and Hamburg. Luxembourg, the richest country, is seven times richer than Bulgaria and Roman, the EU's newest and poorest members. EU membership brings many dynamic and beneficial effects, especially when combined with a properly planned and executed regional policy. For example, Ireland's GDP was only 64% of that of the EU average when it joined the EU in 1973. Today, the country has one of the highest GDP (the standard measure of well-being) the highest in the EU. One of the main priorities of regional policy is to improve living standards in all countries that have joined the Union since 2004 so that they reach the EU average as soon as possible. The regional inequalities that exist in the EU are also a consequence of long-standing economic, social and cultural disadvantages. These disadvantages result from social deprivation, inadequate infrastructure and high levels of unemployment. In some EU member states, this handicap is partly a legacy of their previously centralized economic systems. EU regional policy is mainly about investing in human resources. The EU used the entry of new countries as an opportunity to reorganize and restructure regional spending systems. Between 2007 and 2013, 36% of the EU budget was allocated to regional spending. In cash terms, this represents an expenditure of 350 billion euros. This effort is always focused on three main objectives: competitiveness, convergence and cooperation, which constitute what is now called cohesion policy. The objectives of EU regional policy The EU, being much more than a common market, is based on policies and values ​​that are agreed by its member states for the benefit of its people (Schout & Jordan 2007, 841). Achieving regional equity in the distribution of income and wealth is one of the fundamental objectives set out in the European Commission Treaty. This objective is pursued through the achievement of economic and social cohesion, a measure which has made it possible to reduce disparities between regions. Forty-three percent of the EU's economic output is generated in just 14% of its regions: Hamburg, London, Munich, Paris and Milan. These territories are home to around a third of the Union's population. Money reserved for regional policy is still channeled through three cohesion policy instruments: the Cohesion Fund, the European Regional Development Fund and the European Social Fund. The added value of EU cohesion policy is considerable. Cohesion policy is responsible for supporting essential investments in human resources,infrastructure, human resources, diversification and modernization of regional economies. It also helps create more jobs and growth in poorer Member States and regions. These states end up achieving above-average economic growth and employment performance. They also end up being better equipped to catch up to the average level of EU GDP more quickly. It would be difficult to reach such a level without the investments injected into regional policy. This policy also makes it easier to "harness" and ensure compliance with other EU policies - environment, state aid, society information and support for innovation. In addition, it improves and modernizes all public administrations while strengthening transparency. This promotes good governance within all Member States and regions. In the past, this policy has been crucial in helping poorer member states develop beyond the EU average. In the years to come, regional policy looks set to continue generating more success stories from the economic development trends of the new members of the union. Regional policy is also an effective tool for transforming emerging challenges into opportunities (Prange 2008, p. 46). ). The challenges of globalization, population aging and climate change do not stop at institutional, national and political boundaries. Instead, they directly impact local and regional communities, directly and to varying degrees. It is difficult to achieve Europe's competitiveness through state and regional policies alone. Economic success is a crucial social process for which close cooperation is necessary. The European Union's regional policy is designed to ensure that citizens are involved in the process of designing and implementing various regional development strategies. This ensures that only viable local projects that are important to the region are funded by cohesion policy, for the benefit of Europe as a whole. Regional policy focuses primarily on the countries of Central and Eastern Europe as well as all other regions of all countries. other EU states with special needs. Fifty-one percent of the Union's regional spending between 2007 and 2013 will be shared between the 12 member states that have joined the EU since 2004. The fact that this represents only a quarter of the EU's total population underlines the commitment of those responsible for implementing the policy to ensure that the gap between rich and poor EU member states is closed. The majority of regional spending is still reserved for regions with GDP below 75% of the EU average (Orbie 2008, p. 87). The objective is to help improve their infrastructure as well as develop their human and economic potential. This category of funding concerns 17 of the 27 EU member countries. At the same time, the 27 countries are eligible for funding for innovation and research, professional training and sustainable development. Each of the 27 countries indicates its least developed areas and directs funds there. A small part of the regional policy fund is used in interregional and cross-border cooperation projects.Creating growth and jobsEU regional policy promotes growth and jobs in many ways. One of these solutions is to make regions and countries more attractive and viable for investments. This is done by improving accessibility, preserving environmental potential and providingquality services. Growth and employment are also promoted by encouraging the development of a knowledge economy, innovation and entrepreneurship through the development of efficient information technologies. When better jobs are created, more people are attracted to employment. It also improves the adaptability of workers while increasing investments in human capital. Attracting investors EU cohesion policy has helped boost regional economies by supporting SMEs (small and medium-sized enterprises) and attracting external investment (Puga 2008, p. 380). By attracting investors, the productive capacity of various regions is increased. Lagging regions have the opportunity to catch up with their well-off neighbors. Every year, around 1.2 million businesses are created in the EU. This represents a 10% increase in the total number of union member companies. However, it is discouraging that only half of them survive five years. At the same time, there are very large differences between different regions of the EU. For example, in Spain, Italy and the United Kingdom, new SMEs are created twice as often as the EU average. EU foreign policy has contributed significantly to a comprehensive approach to investment, particularly in "convergence" member states, whereby it can represent up to 20% of the total gross fixed capital of these states. In the cohesion funds and structural funds, the emphasis is always on supporting the means by which SMEs can be created and modernized. In this regard, attention is paid to SMEs with fewer than 250 employees and whose annual turnover does not exceed 50 million euros. SMEs are considered the true giants of the EU economy, since they represent 99% of all businesses that exist in the region. Two thirds of all existing jobs in the private sector are provided by SMEs. In countries like Italy and Poland, companies with fewer than 10 employees dominate the labor market. However, SMEs face difficulties in accessing capital, knowledge and experience (Becker 2008, p. 16). EU regional policy aims to resolve these difficulties. This objective is achieved through a combination of different “soft” measures such as the provision of training services and “hard” measures such as direct investment. Other “soft” measures undertaken by regional policy include the provision of business support services, financial engineering, an innovative environment and the creation of clusters and networks. EU member countries, particularly those that joined the union in 2004, have been successful in attracting investors from foreign countries. However, considerable differences remain in national performance. For example, in Bulgaria and the Czech Republic, foreign direct investment (FDI) represented 9% of GDP. On the other hand, in Estonia, Latvia and Slovenia they were 11%, 4% and 2% respectively. Another concern is that FDI tends to be heavily concentrated in large capital cities and their surrounding areas. This reinforces regional disparities rather than reducing them. Potential factors that investors consider when choosing to invest their money in a particular region include proximity to the country of origin of the investment, a common language, labor costs and taxation companies. Although regional policy cannot influence all of these factors, it can make a remarkable difference in improving the attractiveness of a region. This attractiveness is due to theworkforce training, improving accessibility and information technology. In addition, spending on research and innovation is increased. To achieve this objective, Cohesion Policy programs will be implemented through a specially designed budget with the allocation of funds divided into three areas: direct investment in businesses, entrepreneurship and development. human. capital. Twelve percent of the allocation is dedicated to direct investment in businesses. Priority is given to companies that have links to research and innovation, environmentally friendly production and technology transfer. In the area of ​​entrepreneurship, 13% of the total allocation is devoted to the adaptation of information and communication technologies; workers, entrepreneurs and businesses. In the area of ​​human capital development, 14% of the total budget is devoted to efforts aimed at contributing to increasing the level of qualification of the local and regional workforce. Instruments of regional human capital policy There are three main instruments of EU regional policy. These include the ERDF (European Regional Development Fund), the ESF (European Social Fund) and the Cohesion Fund. The ERDF covers programs that involve innovation, general infrastructure and investments. ERDF money is allocated to the poorest regions of the EU. The ESF is intended to finance vocational training projects and many other types of job creation and employment assistance programs. Just as in the case of the ERDF, all EU member states are eligible for ESF assistance. On the other hand, the Cohesion Fund is intended for transport and environmental infrastructure projects. She is also responsible for the development of renewable energies. Only countries with less than 90% of the Union average can benefit from this funding. This means that the 12 new arrivals as well as Greece and Portugal, which benefited from Cohesion Fund operations, are excluded from this source of financing. The instruments aim to provide complementary support to national action, including policy interventions at local and regional levels. The European Commission, together with Member States, must ensure that assistance from these funds is always consistent with the policies, activities and priorities of the respective communities. For the instruments to work, activities must be complementary to other Community financial instruments. The Strategic Approach Regulation specifies how a regional policy should be adopted in pursuit of regional development objectives. In this regard, each Member State is still required to present a “national strategic reference framework” to be used to prepare the programming of all funds. This ensures that all assistance obtained through these funds is in line with the Union's strategic guidelines. Many additional measures have been put in place to ensure that regional policy instruments are successful in addressing regional economic imbalances. For example, the European Employment Strategy (EES) and the broad economic policy guidelines constitute essential reference points to facilitate the proper implementation of the strategic guidelines. The effective functioning of the different EU regional policy instruments is clearly set out in various operational programmes. Each EU Member State is required to develop an operational program covering the period from 1 January 2007 to 31 December 2013. These operational programs focus on only one of the three.