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EU Structural Funds
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Ireland is a predominantly rural, island nation (70,282 square km) at the extreme north-west of the continent of Europe. It has a population of 3.4 million and a mainly agricultural economy. Of the total area of approximately 7 million hectares, some 6 million hectares is given over to agricultural land. Its industrial sector has until recently been un-competitive and small, relying on capital from abroad rather than fostering local enterprise.
Some 13 % of the national workforce is still employed in agriculture, but this proportion is much higher in the agricultural and rural sub-regions in the west and north-west. These sub-regions are faced with an unfavourable agricultural and demographic structure, insufficient employment opportunities in industry and services, and inadequate infrastructure. They experience significant out-migration and depopulation.
Ireland joined the European Community on 1 January 1973 . Since becoming a member, Ireland has been a major beneficiary of European Community Regional Policy aid. Its peripheral location, low capital GDP (Gross Domestic Product) and poorly developed infrastructure have made it a prime candidate for such assistance. In 1989, the Community took the decision to re-focus its efforts to improve Ireland's economic and social cohesion so that it may have an equal chance to enjoy the benefits of the Single European Market, i.e. the removal of trade barriers. The Structural Funds were set up to assist the weaker regions in the advent of a frontier-free internal market which was set up at the end of 1992. The Structural Funds in particular gave priority to promoting the development of less prosperous regions by doubling the level of EU funding for those regions in the period 1989-93.
The Structural Funds are grants administered by the European Commission to help fund measures or projects within the EU having common objectives. They comprise of the following:
EUROPEAN REGIONAL DEVELOPMENT FUND (ERDF): this goes towards major infrastructural projects such as roads and ports, and will also support direct grant-aid to industry from bodies such as Forbairt
EUROPEAN SOCIAL FUND (ESF): supports investment in education and training.
EUROPEAN AGRICULTURAL GUIDANCE AND GUARANTEE FUND (EAGGF): designed to help the agricultural and farming sector to become more competitive. One of the policies designed to assist poorer regions is the Common Agriculture Policy (CAP). There are two elements in it:
1. GUARANTEE SECTION which is there to guarantee the prices of a range of agricultural products, and
2. GUIDANCE SECTION which aims to bring about improvements in the structure of agriculture and to increase productivity. The 1992 reform of the CAP is designed to control production by reducing guaranteed prices coupled with compensation payments to farmers. Further, the EU is committed under the recent GATT agreement to reducing the volume of subsidised exports.
There are also a number of loan instruments, the more significant of which in the Irish context come through the European Investment Bank.
The Structural Funds were reformed and expanded in 1988 to provide a greater share of the funds for the less developed regions, with the ultimate aim of achieving economic and social cohesion between the different Member States.
Five key objectives were identified. Objectives 1, 2 and 5b refer to specific geographical areas; Objectives 3 and 4 refer to groups in need. Objective 1 is the most important - its aim is to promote development and adjustment of regions whose development is lagging behind.
Regions to be covered by Objective 1 are those whose per capital GDP is less than 75% of the EU average. Included are Ireland, Greece, Portugal, South and West Spain, Southern Italy, former East Germany, the Mersey region (UK) and the Highlands and Islands (Scotland).
Objective 2 regions include areas undergoing industrial conversion, whose percentage share of industrial employment and average rate of unemployment both exceed the EU average.
Objective 5b covers rural areas in need of economic diversification, which are dependent on extremely vulnerable agricultural activities
Objective 3 covers long-term unemployment.
Objective 4 deals with vocational training for young people.
A National Plan is submitted by Government to the European Commission in support of its request for aid from the Structural Funds. For the purpose of consultation the country is divided into seven sub-regions:
In order to assist in the formulation of policy and later, the implementation of the Community Support Framework (CSF) under which the bulk of the Structural Funds comes to Ireland, two committees were established in each of the seven sub-regions:
- a working group with representatives from the European Commission, relevant government departments and state agencies, and the local authorities;
- an advisory group consisting of representatives from all the main representative bodies with an interest in development.
The two sets of sub-regional committees merge to form Review Committees which are obliged to review the operation of the Structural Funds expenditure in each sub-region. The Committees have no power to influence policy. The National Development Plan, 1994-1999, prepared by the Government for the next phase of Structural Funds, places a major emphasis on:
1. Increasing output, economic potential and the provision of new viable employment opportunities.
2. Reintegrating the long-term unemployed into the job market.
The Plan proposes action to improve the productive capacity of the economy; to encourage competitiveness and efficiency; to exploit the development potential of local initiatives, including area-based approaches targeted at disadvantaged areas; to develop skills and aptitudes of those seeking work; and to integrate those who are marginalised and disadvantaged into the workforce. EU funding for the period of the Plan will be about £6.2 billion to be spent between 1994-1999.
The official agreement between the Commission and the Irish Government on the amount and form of EU assistance for the National Development Plan takes the form of a Community Support Framework (CSF). In 1989 and again in 1993, specific priority is given to agriculture, fisheries, forestry, tourism and rural development; industry and services; measures to offset the effects of peripherality, and human resource measures. The total public expenditure up to the end of 1993 was approximately £4.77 billion, of which the EU Structural Funds contributed 60%.
The CSF contains a clause on environmental policy which states that all activities receiving EU funds must be in keeping with EU law and policies, including those on environmental protection. Member States are also obliged to supply the Commission with the appropriate information to enable them to evaluate the impact of operations or measures likely to have a significant impact on the environment.
The individual strategies outlined in the CSF, which in turn were based on the strategies outlined in the National Development Plan, are given practical expression by eight Operational Programmes which set out in more detail the particular measures which are assisted by the Structural Funds. The programmes are approved by the Commission and form the legal basis for the draw-down of assistance from the EU. Each programme is drawn up by the relevant Government Department or official agency, e.g. Bord Fáilte, the Irish National Tourist Board put together the Tourism Operational Programme, while that dealing with measures to offset peripherality was drawn up by the Department of the Environment.
The Operational Programmes include a wide variety of measures aimed at providing the structural adjustments necessary for the Irish economy to compete successfully in a Single European Market. These measures aim to increase per capita incomes, reduce unemployment and provide the basis for further growth and development. Some positive benefits for the environment have resulted from some of these measures, including:
- investment in sewage treatment works under the sanitary services programme;
- investment in farmyard pollution control;
- reduction of traffic in larger towns with the provision of by-passes;
- increasing broadleaved and mixed afforestation;
- investment in some beneficial aquaculture projects such as shellfish;
- community initiatives under LEADER, which have the potential to assist rural social and economic development while at the same time avoiding significant environmental damage.
Monitoring committees were established at three levels, national, programme and regional, to oversee the implementation of the CSF. The national or CSF monitoring committee consists of all Government departments involved and Commission services. This committee meets twice a year. Reports are sent to the social partners (e.g. the Confederation of Irish Industry, the Construction Industry Federation, Irish Congress of Trade Unions and Irish Farmers Association). The role of these committees is to ensure that the stated objectives of the programmes are carried out and to provide a financial check on monies spent and allocation of funds within particular programmes. They have little or no input in relation to other aspects of the implementation of programmes and projects funded under the CSF.
These committees consist of representatives of the elected members of the local authority, the County Manager, representatives of the social partners and of the main government departments. Regional Review Committees were established in an effort to improve the consultation process between the central administration and the local level, which will be Òregularly informed and consulted concerning the implementation of operational measures in, or significantly affecting, the sub-regions concerned" (Department of Finance 1989). The committees receive financial returns twice yearly and also supplementary information on individual programmes. Their role is to understand how the system works and identify problems in the implementation of programmes. The committees have no power to influence policy.
All of the Operational Programmes stress the role and function of the environmental impact assessment procedures and state that all projects for funding coming under the terms of the EC Directive on EIA will be required to produce an Environmental Impact Statement in compliance.
In addition to the Community Support Framework drawn up between the Irish Government and the Commission, Ireland is also in receipt of other forms of assistance from the Structural Funds which are available through various Community Initiatives. These complement the operational programmes but they are distinct because the Commission, rather than the Member State, is responsible for their initiation and for drawing up funding priorities and criteria. Community Initiatives, ENVIREG, INTEREG and LEADER are the most relevant to the environment.
ENVIREG: the aim of ENVIREG is to improve the environment and foster economic development. Under this initiative, £21m was provided for measures to reduce pollution in coastal areas of the EU regions whose development is lagging behind. The entire country of Ireland has been designated as such a region. In Ireland a range of projects were implemented to improve of protect the quality of bays, estuaries and coastal waters, especially those associated with tourism amenity and the cultivation of shellfish.
LEADER: the aim of LEADER is to assist rural communities to develop their own ideas in accordance with their own priorities. Financial assistance is given towards the cost of implementing business plans drawn up by the groups themselves and aimed at the development of their own areas. Sixteen local groups have received EU funding, amounting to a total of £20,803 million, with a Government contribution of £13,869 million. The level of combined EU/State funding will in general not exceed 50% of the cost of implementing local area business plans. Activities funded under LEADER include technical supports such as surveys and assessments, vocational training, rural tourism enterprises, small firms and local services, and development and marketing of farm, forestry and fishery products.
INTEREG: this initiative is concerned with cross-border projects. A total of £58m was provided to assist cross-border enterprises such as road developments. It has also provided some assistance towards the Ballinamore-Ballyconnell Canal restoration project which links the River Erne in County Fermanagh (in Northern Ireland) with the River Shannon in County Leitrim, and towards cross-border forestry projects.
EAGGF / FEOGA Funds: the agricultural sector is funded through specific measures agreed in the CSF but is also in receipt of direct payments through the European Agricultural Guidance and Guarantee Fund which includes headage payments for sheep and cattle and other measures.
This was set up alongside the Structural Funds to help finance environmental protection projects and major transport links in the prosperous member states. Those that qualify are Ireland, Spain, Portugal and Greece. The fund resulted from the Maastricht Treaty. Its purpose is to increase the growth rate of the four countries so that they can meet the conditions laid down for taking part in Economic and Monetary Union (EMU). It applies to large-scale projects e.g. sewage treatment plants, land drainage projects, drinking water supplies and major road developments. Ireland is set to receive about £1 billion from the Cohesion Fund by 1999.
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