Cohesion Fund

Definition

The Cohesion Fund is a financial instrument of the European Union that aims to reduce economic and social disparities among member states and promote sustainable development. Specifically, it targets less economically developed EU countries, providing funding for infrastructure projects, environmental initiatives, and other projects that contribute to economic growth and cohesion within the union.

5 Must Know Facts For Your Next Test

1. The Cohesion Fund primarily supports EU member states with a Gross National Income (GNI) per capita of less than 90% of the EU average.
2. It focuses on funding large-scale projects in the areas of transport, energy, and environmental protection to promote connectivity and sustainability.
3. The fund plays a crucial role in helping to integrate new member states into the EU by providing them with necessary resources for development.
4. Allocations from the Cohesion Fund are determined through multiannual financial frameworks that outline the EU's budgetary priorities over several years.
5. Since its establishment in 1994, the Cohesion Fund has contributed significantly to the economic transformation of less developed regions within the EU.

Review Questions

• How does the Cohesion Fund contribute to reducing economic disparities among EU member states?
  • The Cohesion Fund contributes to reducing economic disparities by providing targeted financial assistance to less economically developed member states. By focusing on infrastructure and sustainable development projects, it helps these countries improve their economic performance and living standards. This funding aims to promote cohesion across the EU, ensuring that all member states can benefit from integration into the single market.
• Discuss the types of projects funded by the Cohesion Fund and their significance for sustainable development within the EU.
  • The Cohesion Fund primarily finances large-scale projects in transport, energy, and environmental sectors. These projects are significant for sustainable development as they aim to enhance infrastructure connectivity, promote renewable energy usage, and address environmental challenges. By investing in these areas, the fund not only aids economic growth but also ensures that development aligns with sustainability goals set by the European Union.
• Evaluate the impact of the Cohesion Fund on new EU member states since its establishment in 1994, considering both economic growth and integration into the EU.
  • Since its establishment in 1994, the Cohesion Fund has had a profound impact on new EU member states by facilitating significant economic growth through infrastructure development and investment. This financial support has helped these countries improve their competitiveness and quality of life for citizens. Furthermore, it has played a vital role in integrating these nations into the EU framework, fostering a sense of unity while addressing regional disparities that previously existed before their accession.

Related terms

European Regional Development Fund: A fund established to strengthen economic and social cohesion by supporting regional development projects across EU member states.

Structural Funds: Financial tools used by the EU to support projects aimed at improving economic performance and reducing disparities among regions.

EU Budget: The annual financial plan of the European Union that allocates funds for various programs and initiatives, including the Cohesion Fund.