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The Regional policy of the European Union (EU) is a policy with the stated aim of improving the economic well-being of certain regions in the EU. Around one third of the EU's budget is devoted to this policy, the aim of which has been stated to be to remove the disparities in wealth across the EU, restructure declining industrial areas and to diversify rural areas which have declining agriculture.

The most significant enlargement of the European Union took place in May 2004 with ten new member states, mostly from eastern or central Europe, followed by accession of Bulgaria and Romania in January 2007. Most of these states are poorer than the existing members and the impact of this means that the EU's average GDP per capita has been reduced leading to some regions in the earlier EU-15 no longer qualifying for extra financial help. On the other hand, most regions in the new member states do qualify.

Regions needing support with the regional policy are given either objective one or objective two status. Objective three regions cover all regions of the EU which do not have objective one or two status.


Objective One

Objective one regions are (NUTS:2) regions most at need of the regional policy. To qualify for objective one status the GDP per capita for the region must be below 75% of the EU average; areas with very low populations such as much of Sweden and Finland also qualify for objective one status.

The recognition of Objective One status is usually accompanied by structural funds support from the European Community as part of its regional policy.

Achievement of Objective One status is frequently the subject of much political debate and manoeuvring. The current areas were designated in 1999 for the period up until 2006. Some regions in the pre-2004 member states had their objective one status phased out in 2006.

Regions qualifying for objective one status include nearly all the regions of the new member states, most of Southern Italy, East Germany, most of Greece and Portugal, and much of Spain and some of the Republic of Ireland. In the United Kingdom, Cornwall, Merseyside, South Yorkshire and much of Wales qualify under objective one. Scotland's objective one regions are due to be phased out. Northern Ireland, although having a GDP per capita above the qualification threshold, benefits from objective one status because of the peace process.

Objective Two

Objective two regions are at a smaller level than those with objective one status, with NUTS level 3 being used. Objective two status is given to regions which are considered to be less in need of help than those with objective one status.

Industrial areas can qualify for objective two status if unemployment is higher than the EU average, a higher percentage of jobs are in the industrial sector than the EU average and the industrial employment must be declining.

Rural areas qualify for objective two status if the area has a low population density (less than 100 people per km²) or if the agricultural employment rate is double that of the EU-average. The region must also have either a higher unemployment rate than the EU-average or be facing a declining population. Areas dependent on the fishing industry will also qualify if it is in decline in that area.

Urban areas qualify if unemployment is above the EU-average, the crime rate is high, education levels are low, and there is deemed to be a high level of poverty in the area.

The areas with objective two status are entitled to financial support from a fund contributed to by both the ECC and the national government of that area.

Areas with objective two status includes much of Northern England and parts of Devon, most of the remainder of Spain not covered under objective one, much of central France and central Italy, parts of Austria, southern Finland and most of Cyprus.

Objective Three

This objective aims to support the modernisation of education, training and employment policies and systems. Funds to achieve this objective are available to all EU regions except those eligible for Objective 1 funding.[1]

See also



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