European Parliament Fact Sheets

4.8.2.     The European Social Fund

LEGAL BASIS

Articles 146-148 and 158-162 (123-125 and 130a-130e) EC.

OBJECTIVES

The ESF has a dual role. It has the task of improving employment opportunities for workers in the internal market by increasing their mobility and facilitating their adaptation to industrial changes, in particular through vocational training and retraining, and contributing thereby to raising the standard of living (Art. 146). But it is also intended to contribute to strengthening economic and social cohesion in the Community (Art. 159).

ACHIEVEMENTS - ESF 1994-1999

Both the relevant provisions of the EC Treaty and the regulations enacted to implement the Funds have been amended several times, most recently in July 1993, as a result of which the objectives of the Funds were reformulated to reflect changed political priorities and the implementing provisions were clarified.

1. Basic structure

a. The individual Structural Funds are subsumed in an overall strategy to combat unemployment and stimulate growth in the poorest regions. This strategy is described in seven objectives (only the five of interest for ESF are mentioned):

  • Objective 1: promoting the development and structural adjustment of the regions whose development is lagging behind;
  • Objective 2: redevelopment of regions, border regions or parts of regions;
  • Objective 3: combatting long-term unemployment and facilitating the entry into working life of young people and of people exposed to exclusion from the labour market;
  • Objective 4: facilitating the adaptation of workers to industrial change and to changes in production systems;
  • Objective 5: encouraging rural development by:
    -   speeding up the adjustment of agricultural structures as part of the reform of the common agricultural policy;
    -   facilitating development and structural adjustment in rural areas.

The ESF has the task primarily of contributing to the implementation of objectives 3 and 4 throughout the Community and also of supporting the implementation of objectives 1, 2 and 5b.

b. The structural intervention approach is characterized by six basic rules:

  • Concentration: the resources deployed should be concentrated geographically.
  • Programme planning: resources are deployed as part of programmes which are basically drawn up by the Member States and approved by the Commission.
  • Additionality: Community measures should contribute to the corresponding national measures. Under ESF objectives 3 and 4, this contribution is a maximum of 50% of the overall costs, and 75% in objective 1 regions (80% in exceptional cases).
  • Partnership: in carrying out intervention, all the parties pursue a common objective as partners: the Commission, the Member States, the regional and local authorities designated by the Member States and the two sides of industry.
  • Monitoring and evaluation: Community measures are subject to continuous monitoring to ensure that the objectives set are met. They are also evaluated so that the effectiveness of intervention can be assessed.
  • Consistency and complementarity with other policies: all measures must be consistent with the provisions of the EC Treaty and with other Community policies.

2. Types of measure

The ESF can provide support for the following measures:

a. Objective 3
 Facilitating the integration of the long-term unemployed into the world of work, particularly through vocational education and preparatory training and re-training, which may be accompanied by vocational counselling and guidance measures.

b. Objective 4
 Measures to help workers adapt to industrial change and changes in production systems, particularly through projections of changes in the labour market and the need for vocational skills; and vocational education and re-training, guidance and counselling.

3. Planning

The Structural Fund regulations include detailed rules about how the planning and implementation of intervention should be carried out in practice.

4. Community initiatives

The Commission may take the initiative in proposing measures which are of special concern to the Community. Such Community measures should have an innovative and trans-national dimension. The Commission has set up the following initiatives under objectives 3 and 4: Employment is concerned with the development of human resources and has four strands: NOW (promoting opportunities for women), HORIZON (promoting opportunities for the disabled), YOUTHSTART (the integration of young people) and INTEGRA (promoting opportunities for marginalized groups). ADAPT addresses the issue of adaptation by workers to industrial change; it includes the strand ADAPT-BIS, which covers the transition to the information society.

5. Future outlook - ESF 2000-2006

In March 1998, the European Commission approved proposals for new Council regulations laying down general provisions on the Structural Funds as well as separate regulations for each Fund (COM(98)0131) for the period 2000-2006. The revised ESF which should be seen in the context of the new European Employment Strategy (EES) which began at the Essen Summit in 1994, further developed by the inclusion of the new Employment Title in the Amsterdam Treaty and reinforced in December 1997 by the Employment Guidelines (* 4.8.3), is supposed to become a key instrument and financial support for the EES. The main objectives are 1) greater simplicity; 2) clarification of responsibilities and 3) concentration of resources on regions most in need.

a. Basic structure
 The objectives shall be reduced to the following three:

  • Objective 1: regions whose development is lagging behind
    The purpose of the first objective will continue to be to help those regions whose level of development is less than 75% of the Community average to close their development gap. Assistance for objective 1 regions will be available from all four of the Structural Funds, and will account for approximately two-thirds of the total spend.
  • Objective 2: regions undergoing economic and social conversion (new)
    It is designed to cover regions whose economies are not sufficiently diversified. Assistance will be strictly focused on those regions that are most seriously affected by economic and social conversion. Not more than 18% of the total EU population should be covered by this objective, of which two-thirds should come from industrial or urban areas, and the remainder from rural or fisheries-dependent regions. Objective 2 will be financed by the ERDF, the ESF, the FIFG and the Guarantee section of the EAGGF.
  • Objective 3: human resources (new)
    Objective 3, which will be financed by the ESF, will be horizontal in nature, focusing primarily on the adaptation and modernisation of national and EU policies and systems for employment, education and training. It will serve as a reference framework for all human resources operations in the Member States, and for ESF assistance in particular, taking account of the Employment Title in the Amsterdam Treaty and the Union's new Employment Strategy, including the co-ordination of Member States' employment plans. Objective 3 will be implemented with sufficient flexibility to take account of the wide variety of policies, practices and needs that exist in the different Member States. Taking account also of the seven-year lifespan of the new regulations, eligible measures under objective 3 have been quite broadly defined, e.g. active labour market policies to fight unemployment; the promotion of social inclusion and equal opportunities for men and women; employability via lifelong education and training systems, and the anticipation and facilitation of economic and social change.

b. Community initiatives
 In line with the general commitment to concentrate resources, it is envisaged that the number of Community initiatives will be reduced to just three: one for inter-regional and trans-national co-operation, one for rural development and one which concentrates on all forms of equality of opportunity. To ensure simplification, each Community initiative should only be eligible for assistance from a single Structural Fund. ECU 10.5 billion - approximately 5% of the total Structural Funds budget of ECU 210 billion - will be allocated to the Community initiatives during the period 2000-2006. A further 1% of the total Structural Funds budget will be allocated by the Commission to innovative measures such as studies, pilot projects and other initiatives involving exchange of experience.

c. Other changes
 Management of the ESF will be decentralised and simplified, notably through an improved partnership between the Commission and the regional and local authorities, as well as non-governmental organisations. The financial management will be simpler but more stringent, and improved procedures for effective control will be introduced.

d. Financial resources
 The ESF is likely to account for about 35% of the entire Structural Funds budget in the new programming period, i.e. approximately ECU 70 billion.

e. Changes brought about by the Maastricht and Amsterdam Treaties
 The EP gained influence on the ESF by the two last reforms of the Treaties. Adoption of the Council Regulation laying down the general provisions on the Structural Funds must be transmitted to the EP for its assent. The adoption of implementing decisions relating to the ESF is taken in co-operation with the EP according to the Maastricht Treaty; this procedure will be extended to the co-decision procedure when the Amsterdam Treaty is in force.

ROLE OF THE EUROPEAN PARLIAMENT

The EP takes the view that the ESF is the Union's most important instrument for combatting unemployment. It has therefore always advocated the efficient operation of the Fund. The EP played an active part in the 1993 reform of the Structural Funds. In order to influence the Commission in its preparation on the new Structural Funds and particularly the ESF, the EP adopted a resolution on 21 November 1997 on the future of the ESF based on an own-initiative report. The EP criticised the complexity of the Funds involving too many objectives and too many Community initiatives. According to the EP there is a need for a simplification of the ESF administration both at EU level and at national level. The slow transfer of ESF appropriations to the recipient should be speeded up and simplified. The renewed ESF must accord with the employment objectives of the Amsterdam Treaty. The two sides of industry should be more actively involved in planning and assessing ESF measures. Measures in favour of the young unemployed, women, long-term unemployed, disabled persons and the socially excluded should be retained. The innovative nature of ESF intervention should be strengthened and the support measures should be extended to embrace new spheres of action, such as:

  • support for the development of new models for the organisation of working time;
  • support for measures which open up opportunities in the 'third sector', such as social, cultural and environmental services;
  • stepping up on-the-job retraining, particularly for workers with a low level of qualifications;
  • promotion of retraining and vocational reorientation of workers over the age of 45, who are at particular risk of long-term unemployment, and measures to maintain their employability;
  • flanking measures which promote the mainstreaming of Social Fund initiatives in favour of women, such as child and dependent relative care;
  • support for opportunities to obtain environmental protection qualifications which may offer a good chance of employment;
  • fixed-term accompanying social education measures which will serve, after starting work, to consolidate the reintegration into working life of the socially marginalised groups.

01/12/2000