IndexIntroductionThe objectives of EU regional policyCreating growth and jobsAttracting investorsThe tools of EU regional policyConclusionIntroductionEU regional policy is a fundamental instrument of financial solidarity and an extremely powerful force for cohesion and economic integrity. By establishing solidarity, tangible benefits are brought to citizens of regions that are not wealthy. Cohesion underpins the fundamental principle that everyone in the European community should benefit from reducing the income and wealth gap between regions. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an original essay There are large differences in levels of prosperity 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 Rome, the EU's newest and poorest member countries. EU membership brings with it 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 the EU average when it joined the EU in 1973. Today, the country has one of the highest GDPs (the standard measure of well-being) in the EU. One of the key 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 quickly as possible. The regional inequalities that exist in the EU are the result of long-standing economic, social and cultural handicaps. These disadvantages are the result of social deprivation, inadequate infrastructure and high levels of unemployment. In some EU member states, handicap is partly a legacy of their previously centrally planned economic systems. EU regional policy mainly involves investments in people. The EU has 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 is allocated to regional spending. In terms of liquidity, this represents an expense of 350 billion euros. This effort is always focused on three main objectives: competitiveness, convergence and cooperation, which constitute what is today defined as cohesion policy. The objectives of the EU's regional policyThe EU, being much more than a common market, is based on policies and values ​​that are agreed upon by its member states for the benefit of its citizens (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 that has been responsible for reducing disparities between regions. 43% 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 set aside for regional policy is always 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 tasked with supporting much-needed investments in human resources, infrastructure, human resources, diversification and modernization of regional economies. It also helps create more jobsjobs and growth in poor Member States and regions. These states end up achieving above-average economic growth and employment performance. They also end up being better equipped to reach the average level of EU GDP more quickly. It would be difficult to reach this level without investment in regional policy. The policy also facilitates the task of 'influence' and ensuring compliance with other EU policies: environment, state aid, information society and innovation support . Furthermore, it improves and modernizes all public administrations, while strengthening transparency. This promotes good governance in 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 and more success stories thanks to the economic development trends of the Union's new members. 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 borders. Instead, they have a direct impact on local and regional communities, directly and at various levels. It is unlikely that Europe's competitiveness can be achieved only through the policies of individual states and regions. Economic success is a crucial social process for which the element of close cooperation is necessary. The European Union's regional policy is designed to ensure the involvement of citizens in the process of designing and implementing the various regional development strategies. This ensures that only local projects that are feasible and significant for the region are financed with cohesion policy funds for the benefit of Europe as a whole. The priority focus for regional policy is on members of Central and Eastern Europe as well as all other regions of all other EU states with special needs. 51% 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 total EU population underlines the commitment part of those who implement policy to ensure that the gap between rich and poor EU member states is closed. The majority of regional spending is always reserved for regions whose GDP is less than 75% of the EU average (Orbie 2008, p. 87). The goal is to help improve their infrastructure and develop their human and economic potential. This category of financing concerns 17 of the 27 EU member countries. Meanwhile, all 27 countries are eligible for funding to support innovation and research, professional training and sustainable development. Each of the 27 countries identifies its own 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 jobs There are many ways in which EU regional policy promotes growth and jobs. One such way is to make regions and countries more attractive and sustainable for investment. This is done by improving accessibility, preserving environmental potential and providing quality services. Growth and jobs are also promoted by encouraging the development of a knowledge economy, innovation and entrepreneurship through the development of effective information technologies. When you create better jobs, morepeople are attracted to employment. This also improves the adaptability of workers and at the same time increases 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). Through attracting investors, the production capacity of various regions is increased. Regions that fall behind are given the opportunity to catch up with their more affluent neighbors. Around 1.2 million businesses are created in the EU every year. This represents a 10% increase in the total number of businesses in the union. However, it is discouraging that only half of them survive for five years. Meanwhile, there are very large differences between different regions of the EU. For example, in Spain, Italy and the UK, new SMEs are created twice as often as the EU average. The EU's foreign policy has contributed significantly to a holistic approach to investment, especially in the “convergence” member states, where it can represent around 20% of the total gross fixed capital of these states. In the Structural and Cohesion Funds the emphasis is always on supporting the ways in which SMEs can be created and modernised. In this regard, the focus is on SMEs with fewer than 250 employees and an annual turnover of no more than 50 million euros. SMEs are considered the true giants of the EU economy, accounting for 99% of all businesses existing in the region. Two thirds of all existing jobs in the private sector are provided by SMEs. In countries like Italy and Poland, businesses with fewer than 10 employees have dominated the job market. However, SMEs face difficulty in accessing capital, knowledge and experience (Becker 2008, p. 16). The EU's regional policy aims to address these difficulties. This is achieved through a combination of different “soft” measures, such as the provision of training services, and “hard” measures, such as direct investments. 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, especially those that joined the Union in 2004, have successfully managed to attract investors from foreign countries. However, there are still notable differences in national performance. For example, in Bulgaria and the Czech Republic, foreign direct investment (FDI) accounted for 9% of GDP. On the other hand, in Estonia, Latvia and Slovenia, they were 11%, 4% and 2% respectively. Another concern is that foreign direct investment tends to be highly concentrated in large capital cities and 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, the cost of labor and corporate taxation. While regional policy cannot influence all of these factors, it can make a significant difference to improving the attractiveness of a region. This attractiveness is driven by workforce education, increased accessibility and information technologies. Furthermore, there is increased spending on research and innovation. To achieve this, cohesion policy programs will be implemented through a specially designed budget whose funding allocation is divided into three areas: direct investment in businesses, entrepreneurship and human resources. capital. 12%of the allocation is used for direct investments in businesses. Priority is given to those enterprises that have links to research and innovation, environmentally friendly production and technology transfer. In the entrepreneurship sector, 13% of the total allocation is dedicated to the adaptation of information and communication technologies; workers, entrepreneurs and businesses. In human capital development, 14% of the total budget allocation is allocated to efforts to help increase the skill level of the local and regional workforce. Instruments of EU regional 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 involving innovation, general infrastructure and investments. ERDF money is provided to the EU's poorest regions. The ESF is intended to finance vocational training projects and many other types of job creation and employment assistance programmes. Just as in the case of the ERDF, all EU member states are eligible for assistance from the ESF. On the other hand, the Cohesion Fund is intended for infrastructure projects in the transport and environmental sectors. It is also responsible for the development of renewable energy. Only countries with less than 90% of the Union average are eligible for this financing. This means that all 12 new countries plus Greece and Portugal, which benefited from Cohesion Fund operations, are excluded from this source of financing. The tools aim to provide complementary assistance to national action, including policy interventions at local and regional level. The European Commission together with the Member States must ensure that assistance from these Funds is always consistent with the policies, activities and priorities of their respective communities. For the instruments to work, the activities must be complementary to other financial instruments at Community level. The strategic approach regulation sets out how a regional policy should be adopted to pursue regional development objectives. In this regard, each Member State is always required to present a "national strategic reference framework" to be used in preparing the programming of all funds. This ensures that all assistance obtained through these funds is consistent with the strategic orientations of the Union. 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 are crucial points of reference in the process of facilitating the correct implementation of the strategic guidelines. The efficient functioning of the various EU regional policy instruments is clearly spelled out in various operational programmes. Each EU Member State is required to draw up an operational program covering the duration between 1 January 2007 and 31 December 2013. These operational programs focus on only one of the three set objectives and receive funding from only one of the three instruments of EU regional policy (Funds). The European Commission evaluates each program to determine whether it contributes to the regional development agenda. The objectives of convergence, regional competitiveness and employment are often emphasized whenever the relevant operational programs are developed. Some of the objectives include a financial plan, justification for priorities, and a list of major related projects. Another key objective is information on sectors.