Cohesion Fund

Definition

The Cohesion Fund is a financial mechanism established by the European Union to support projects aimed at reducing economic and social disparities among member states. It primarily targets less developed regions, providing funding for infrastructure and environmental initiatives to promote economic growth and cohesion within the EU.

5 Must Know Facts For Your Next Test

1. The Cohesion Fund is available to EU member states with a gross national income (GNI) per capita below 90% of the EU average.
2. It was established in 1994 as part of the EU's strategy to promote economic convergence among its members and is primarily focused on financing large infrastructure projects.
3. The fund supports sectors such as transportation, energy, and environmental protection, helping to address regional inequalities.
4. In the 2014-2020 budget period, the Cohesion Fund allocated around €63 billion to various projects across eligible member states.
5. Projects funded by the Cohesion Fund are expected to contribute significantly to sustainable development and climate action within the EU.

Review Questions

• How does the Cohesion Fund support economic development in less developed regions of the EU?
  • The Cohesion Fund provides financial support specifically for infrastructure and environmental projects in less developed regions of the EU. By targeting areas with lower economic performance, it aims to improve their overall connectivity and sustainability. This funding helps create jobs, boosts local economies, and fosters a more cohesive union by reducing disparities among member states.
• Discuss the relationship between the Cohesion Fund and other financial instruments like the European Regional Development Fund (ERDF).
  • The Cohesion Fund works alongside other financial instruments like the ERDF to enhance regional development across the EU. While the Cohesion Fund focuses on supporting less developed regions through large-scale projects, the ERDF complements this by funding various regional initiatives that may also benefit more developed areas. Together, these funds aim to achieve balanced economic growth and social inclusion throughout Europe.
• Evaluate the impact of the Cohesion Fund on regional inequalities within the European Union and its effectiveness in promoting cohesion among member states.
  • The Cohesion Fund has played a crucial role in addressing regional inequalities within the European Union by channeling financial resources into less developed areas. Its impact can be seen in improved infrastructure and enhanced environmental sustainability in these regions. However, while it has contributed significantly to economic growth and cohesion, challenges remain in fully bridging disparities, as some regions still struggle with persistent socio-economic issues. Analyzing ongoing projects and their outcomes will provide further insights into the fund's overall effectiveness in promoting long-term cohesion among member states.

Related terms

European Regional Development Fund (ERDF): A financial instrument of the EU that supports regional development projects, focusing on economic growth, job creation, and sustainable development across member states.

Structural Funds: Funds allocated by the EU to support various economic development projects, including those aimed at improving infrastructure, promoting employment, and fostering social inclusion in less developed regions.

European Union: A political and economic union of member states located primarily in Europe, which aims to promote peace, stability, and prosperity through collaboration in various policy areas.