Europe is one of the highest developed regions of the

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1 Introduction Having become a member of the Union, Poland again takes a prominent place in Europe. The EU policies and the accompanying financial support accelerate its economic modernisation, promoting the development of infrastructure, improvement of the quality of the environment, the development of education and research and stimulating entrepreneurship and regional development Danuta Hübner, EU Commissioner for Regional Policy. Europe is one of the highest developed regions of the world. However, marked disparities between income and quality of life levels between the 268 EU regions may still be seen. These disparities became evident after the two recent enlargements of the EU (in 2004 and 2007) involving the countries of Central and Eastern Europe. The level of wealth of these countries is much lower than the EU average. At the very beginning of the process of European integration it could be seen that marked disparities between the levels of regional development may have a negative political, social and cultural impact. Activities aimed to reduce such disparities were initiated as early as the 1960s. The European Social Fund and the European Agricultural Guidance and Guarantee Fund (EAGGF) were created at that time. In 1975, the European Regional Development Fund was established. The signing of the Uniform European Act in 1986 laid the new foundations for the structural policy of the European Economic Community and, first and foremost, its regional policy. In 1988 the reform of the three structural funds was carried out, which since that time have operated in coordination. The binding rules of regional policy were additionally consolidated and developed in 1993, in line with the entry in force of the European Union s Treaty of Maastricht. The efforts to ensure a balanced economic and social progress have been considered to be among the main challenges for the EU. The new Cohesion Fund was then created for the financing of projects in the field of transport infrastructure and environmental protection in countries in which GDP per capita was lower than 90% of the EU average. Before its accession to the EU, Poland was able to use pre-accession aid under the Phare, ISPA and SAPARD programmes, but much higher amounts of aid became available with the full accession. EUR 12.8 billion have been allocated to Poland for the years , i.e. over a half of the funding available to the 10 new Member States. Under the new Financial Perspective , Poland, with the amount of EUR 67.3 billion, is the largest beneficiary of funding among all EU Member States. Notwithstanding a short period in which EU assistance has been available, we can already say that EU funds have had a positive influence on the economic development and the labour market. So let us take a closer look at Poland as it is using the funds allocated under the Structural Funds and the Cohesion Fund to make an investment into its future. Poland and its funds 1

2 Polish regions in the EU GDP per capita compared to the EU average (in %) In 2004, the highest ranked region in Poland in terms of the economic growth measured by GDP per capita was the Mazowieckie Voivodeship (152.3%). However, it is barely 76.8% of the EU average, approximately corresponding to the level of development of poor regions in old EU countries, e.g. southern Italy (70.6% of the EU average). A high level of development is also shown in the following voivodeships: Śląskie (112.3% of the national average) and Wielkopolskie (107.4% of the national average). The area with the lowest GDP per capita covers 5 voivodeships: Lubelskie (69.3% of the national average), Podkarpackie (69.7%), Warmińsko- Mazurskie (77.6%), Podlaskie (74.6%) and Świętokrzyskie (77.2%). Their development levels range between 35 and 40% of the enlarged EU average. These voivodeships are ranked among the lowest per capita GDP regions in the EU. Zachodniopomorskie Lubuskie Wielkopolskie Pomorskie Kujawsko- -Pomorskie ódzkie Warmiƒsko- -Mazurskie Mazowieckie Podlaskie DolnoÊlàskie Lubelskie Opolskie Âlàskie Âwi tokrzyskie GDP EU-27 = Ma opolskie Podkarpackie 2 Poland and its funds Data as at 2004 Source: Eurostat

3 12 richest and 12 poorest regions of the EU The richest regions (GDP per capita EU-27=100) Inner London (United Kingdom) Luxembourg (Luxembourg) Bruxelles-Capitale (Belgium) Hamburg (Germany) Wien (Austria) Île de France (France) Berkshire. Buckingamshire & Oxfordshire (United Kingdom) Oberbayern (Germany) Stockholm (Sweden) Utrecht (Netherlands) Darmstadt (Germany) Praha (Czech Republic) Europe of regions Rich and poor According to Eurostat data, in 2004, GDP per capita ranged between 23.6% of the EU average in the Nord-Est regions (Romania) to 302.9% in Central London (the United Kingdom). The next richest regions are as follows: Luxemburg (251%), Brussels (248.3%) and Hamburg, Germany (195.2%). The poorest region in old EU Member States is Norte in Portugal (58.8%). The Prague Region (Czech Republic), with GDP per capita 157.1% of the EU average, is the richest region of all new EU Member States. In 70 regions with a total population of 123 million, accounting for 25.2% of the EU population, GDP per capita was lower than 75% of the EU average. Data as at 2004 Source: Eurostat The poorest regions (GDP per capita EU-27=100) Podkarpackie (Poland) 35.4 Lubelskie (Poland) 35.2 Nord-Vest (Romania) 33 Sud-Est (Romania) 30.7 Yugoiztochen (Bulgaria) 29.9 Severoiztochen (Bulgaria) 29.3 Sud-Vest Oltenia (Romania) 28.8 Sud-Muntenia (Romania) 28.4 Severen tsentralen (Bulgaria) 26.4 Yuzhen tsentralen (Bulgaria) 25.6 Severozapaden (Bulgaria) 25.6 Nord-Est (Romania) 23.6 GDP per capita in the richest region of the EU is almost 13 times higher than GDP in the poorest region. Among 268 EU regions, there are still 32 regions, in which GDP per capita is lower than 50% of the EU average. This group includes 5 Polish voivodeships. Poland and its funds 3

4 The European Union has allocated a special pool of money under the Structural Funds and the Cohesion Fund for the years , in order to help new Member States to integrate into the EU and to reduce disparities in development levels. EUR 23 billion from the Structural Funds and the Cohesion Fund have been earmarked for this purpose. Poland received EUR 12.8 billion from this amount. Seven Operational Programmes were created under the National Development Plan , with EUR 8.27 billion allocated for their implementation: Sectoral Operational Programme Improvement of the Competitiveness of Enterprises Sectoral Operational Programme Human Resource Development Sectoral Operational Programme Restructuring and Modernisation of the Food Sector and Rural Development Sectoral Operational Programme Fisheries and Fish Processing Sectoral Operational Programme Transport Integrated Regional Operational Programme Technical Assistance Operational Programme. Over 75,600 projects obtained co-financing of PLN 50 billion until the end of The allocation for the implementation of the National Development Plan also involved the co-financing from two Community Initiatives INTERREG IIIA and EQUAL. The INTERREG initiative focused on cross-border and interregional cooperation. As regards the EQUAL initiative, projects encompassed aid to counteract all instances of discrimination and inequalities in the labour market, as well as the issue of social inclusion and professional integration of immigrants. The funding from the Cohesion Fund, amounting to EUR 4.18 billion, supported the largest projects of supra-regional significance in the area of environmental protection and the development of transport networks. Today it is already known that the possible co-financing from the EU funding enjoyed high interest from the general public and public institutions. The total value of formally correct applications filed by beneficiaries since the start-up of operational programmes to the end of September 2007 exceeded a doubled support from the EU Structural Funds and totalled PLN billion. Of this amount, PLN billion has already been contracted, almost entirely using up the amount of funding available to Poland (98.8%). Nearly 57% of the structural funds available have already been settled. Over PLN billion have already been transferred to businesses and institutions implementing projects. Let us have a closer look at what trends are observed in the spending of the funding from the EU budget in the years and the results of the implementation of programmes so far. 4 Poland and its funds

5 The number and values of contracts signed (absolute and per capita) in terms of EU co-financing* Funds for Support for regions Under 6 operational programmes, the INTERREG and EQUAL Community Initiatives as well as the Cohesion Fund, over 76,500 contracts exceeding PLN 50 billion were signed by the end of The Mazowieckie Voivodeship turned out to be the leader in using EU funding both in terms of the number of projects implemented and the value of co-financing. The Śląskie and Dolnośląskie Voivodeships ranked next in terms of the amount of support obtained. The lowest number of contracts and the lowest amount of co-financing were reported in the Opolskie and Lubuskie Voivodeships. Therefore it can be seen that projects with the highest amount of EU co-financing tend to be implemented in the wealthiest regions, while projects offering low support amounts are provided in the most disadvantaged regions with the smallest populations. 1655,0 982,7 933,2 1025,2 991,1 904,0 1906,3 928,8 890,1 943,3 2008,8 1132,6 968,2 2252,8 1173,6 1804,6 DolnoÊlàskie Kujawsko-Pomorskie Lubelskie Lubuskie ódzkie Ma opolskie Mazowieckie Opolskie Podkarpackie Data as at the end of 2006 without the Technical Assistance component. Source: MRD, CSF Managing Authority *refers to operational programmes, Community Initiatives and the Cohesion Fund Podlaskie Pomorskie Âlàskie Âwi tokrzyskie Warmiƒsko-Mazurskie Wielkopolskie Zachodniopomorskie xxx The number of cofinancing contracts The total value of Community support per region (in PLN) The use of EU funds in voivodeships per capita (in PLN/person) Poland and its funds 5

6 The values of projects implemented by support areas 6% Agriculture and fisheries sector 7% Direct support for businesses 10% Human resources 7% Information society, R&D 5% Social infrastructure 25% Environmental infrastructure 5% Other 35% Transport infrastructure Data as at the end of 2006 Source: MRD, Department of CSF Coordination and Management Who benefits from EU support? Territorial self-government units (TSUs) were the largest EU funds beneficiary group. According to information available at the end of 2006, they used 44% of EU funding for their projects. Communes were the most numerous project promoters among TSUs, with a major portion of the co-financing (95%) allocated for basic infrastructure. Apart from government bodies, EU funding enjoyed high interest of entrepreneurs who signed over 11,600 contracts for co-financing. The lowest benefits from the EU funds were seen in the case of healthcare establishments. The values of projects implemented by main types of beneficiaries How do we spend money from the EU? As at the end of 2006, infrastructural investments enjoyed the highest interest among project promoters. Over 12,000 projects were implemented in this area with the total value exceeding PLN 34.4 billion. A major portion of funds (PLN 17.4 billion) was allocated for transport and communication investments and for environmental projects (PLN 13 billion). Over PLN 2.3 billion was used to support social infrastructure. The remaining amount totalling over PLN 50 billion was fairly evenly distributed to projects in the area of the human resource development, support to enterprises, information society, as well as the agriculture and fisheries sector. 3% NGOs (non-governmental organisations) 1% Healthcare establishments 5% Farmers and fishermen 4% Educational establishments, research and development establishments 12% Businesses 1% Other 30% Government administration, agencies and budgetary units, state-owned companies 44% Territorial self-government units Data as at the end of 2006 Source: MRD, Department of CSF Coordination and Management 6 Poland and its funds

7 The impact of projects implemented on employment Funds for New jobs From the end of 2004 to the end of 2006, the number of employed persons in Poland grew by 853,000 including 317,000 due to EU funds. Each beneficiary surveyed created on average 2.4 jobs as a direct result of projects. In the same period the unemployment rate decreased. At the end of 2006 as much as 64.3% individuals participating in training courses under activities co-financed from the EU budget were unemployed. Interestingly, in regions with the lowest unemployment rate (Mazowieckie (9.5%), Śląskie (9.8%) and Wielkopolskie (8.3%) Voivodeships), the values of projects implemented to combat unemployment are the highest. Value of projects per unemployed DolnoÊlàskie Kujawsko-Pomorskie Lubelskie Lubuskie ódzkie Ma opolskie Mazowieckie Opolskie Podkarpackie Podlaskie Pomorskie Âlàskie Âwi tokrzyskie Warmiƒsko-Mazurskie Wielkopolskie Zachodniopomorskie The value of co-financing per unemployed by regions (in PLN) Source: CAWI-based study by PAG Uniconsult and Pentor Research International, The impact of EU structural funds interventions on employment Data as at October 2007 based on the analysis of Measures 1.2 and 1.3 of the SOP HRD. Source: MRD, Department of CSF Coordination and Management; CSO, Communication on the socio-economic situation of voivodeships from September 2007 Poland and its funds 7

8 The value and the number of education infrastructure projects co-financed The number of projects The value of co-financing in million PLN DolnoÊlàskie Kujawsko-Pomorskie Lubelskie Lubuskie ódzkie Ma opolskie Mazowieckie Data as at the end of October 2007 based on the analysis of Measures and IROP Source: Own study on the basis of data provided by the MRD, Department of CSF Coordination and Management Opolskie Podkarpackie Podlaskie Sports and education Until the end of October 2007, the total of 302 contracts for the EU project co-financing in the area of educational infrastructure were signed in all regions, totalling PLN 878 million. Over 68% of this sum was used by higher schools. The remaining PLN 280 million was allocated for projects implemented by poviats and communes. In addition to the development and modernisation of didactic and educational facilities, a significant proportion of EU support at local level was earmarked for the development of basic sports infrastructure. Pomorskie Âlàskie Âwi tokrzyskie Warmiƒsko-Mazurskie Wielkopolskie Zachodniopomorskie EU grants for health protection Healthcare establishments could seek support from EU funds under measures at regional and local level (1.3.2 and IROP). Until the end of October 2007, 551 contracts for EU co-financing were signed in all voivodeships, totalling PLN 583 million. The main goal of projects implemented was to raise the standards of health services provided. With relation to this, investments focused on the acquisition of specialist surgical and diagnostic equipment, modernisation of healthcare establishments and increasing the number of medical rescue vehicles. Regional analysis of health protection projects DolnoÊlàskie Kujawsko-Pomorskie Lubelskie Lubuskie ódzkie Ma opolskie Mazowieckie Opolskie Podkarpackie Podlaskie Pomorskie Âlàskie Âwi tokrzyskie Warmiƒsko-Mazurskie Wielkopolskie Zachodniopomorskie The total value of projects in million PLN The value of projects (EU contribution) in million PLN Data as at the end of October 2007 based on the analysis of Measures and IROP Source: Own study on the basis of data provided by the MRD, Department of CSF Coordination and Management 8 Poland and its funds

9 Environment protection The amount of PLN 13 billion was allocated to environmental projects. Over a half of these funds was earmarked for integrated projects aimed at the development of environmental infrastructure. Investments involving the construction and modernisation of wastewater treatment plants (PLN 3.3 billion), along with the development of water supply and water piping systems (PLN 1.7 billion), enjoy high interest among project promoters. The number and the value of environmental infrastructure projects by the type of projects implemented (in thousand PLN) ,070.9 Support for large, small and medium-sized enterprises using environment-friendly technologies 113,497.9 Protection, improvement and restoration of the natural environment 32 Funds for The results of implementation of projects in terms of the length of constructed or modernised water supply and sewerage networks The length of built or modernised water supply network in km The length of built or modernised sewerage network in km DolnoÊlàskie Kujawsko-Pomorskie Lubelskie Lubuskie ódzkie Ma opolskie 245 Mazowieckie Opolskie Podkarpackie 207 Podlaskie Pomorskie Âlàskie 247 Âwi tokrzyskie 177 Warmiƒsko-Mazurskie Wielkopolskie 245 Zachodniopomorskie xxx 3,384,319.0 Wastewater treatment 1,774,624.7 Consumption, storage, treatment and distribution of potable water 468,791.0 Disposal and management of communal and industrial waste The number of projects Data as at the end of 2006 Source: MRD, CSF Managing Authority 6,802,247.3 Integrated projects in the environmental infrastructure area 230 Data as at the end of 2006 Source: MRD, CSF Managing Authority Early results Following the analysis of activities carried out under the IROP, until the end of 2006 over 1298 km of water supply network and 1451 km of sewage network were completed. In addition to 67 wastewater treatment plants built or modernised, water supply and sewerage systems developed as visible results of the implementation of environmental infrastructure measures. Poland and its funds 9

10 The number and value of projects implemented in the area of environmental infrastructure in regions (total and per capita values) The value of projects (EU contribution) per capita in PLN The number of projects DolnoÊlàskie 107 The value of projects (EU contribution) in PLN 961,531, Kujawsko-Pomorskie ,817, Lubelskie ,142, Lubuskie ,041, ódzkie ,565, Regions and the environment Ma opolskie Mazowieckie ,807, ,334,959, Large projects which are implemented in voivodeship cities have a major impact on the value of investment co-financed from the Structural Funds and the Cohesion Fund to improve environmental infrastructure in a given region. The Śląskie and Mazowieckie Voivodeships are leading Polish regions in terms of the value of funding allocated for environment protection, with the EU co-financing exceeding PLN 2.5 billion and PLN 2.3 billion respectively. A substantial proportion of funds will also be allocated to the following voivodeships: Zachodniopomorskie, Dolnośląskie and Małopolskie. Decidedly, most of the money from the EU budget will be transferred to eastern regions. The poorest performance is observed in the Lubelskie Voivodeship, where the average amount of EU co-financing per capita is almost four times lower than the average value for all voivodeships Opolskie Podkarpackie Podlaskie Pomorskie Âlàskie Âwi tokrzyskie Warmiƒsko-Mazurskie Wielkopolskie Zachodniopomorskie AVERAGE ,374, ,916, ,121, ,067, ,600, ,382, ,594, ,551,016, ,884, ,434,218, Poland and its funds Data as at the end of 2006 Source: MRD, CSF Managing Authority

11 The length of roads built or modernised (in km) Funds for Faster and safer Projects in the area of transport and communication infrastructure could receive the co-financing under the SOP Transport, IROP and from the funding earmarked to this purpose from the Cohesion Fund. As at the end of 2006, the value of support awarded to transport investments under the above-mentioned programmes and the Cohesion Fund totalled PLN 17.4 billion. Over 67% of this amount was allocated for the road infrastructure, the largest amounts being obtained by projects aimed to build motorways and express roads. Larger road investment projects are complemented by regional and local projects provided under the IROP (voivodeship, poviat and communal roads) DolnoÊlàskie Kujawsko-Pomorskie Lubelskie Lubuskie ódzkie Ma opolskie Mazowieckie Opolskie Podkarpackie Podlaskie Pomorskie Âlàskie Âwi tokrzyskie Warmiƒsko-Mazurskie Wielkopolskie Zachodniopomorskie Until the end of 2006 the following investments were completed : 195 km of motorways built or modernised, 62 km national roads, 1619 km of voivodeship, poviat and communal roads built or modernised. Data as at the end of 2006 based on the analysis of Priorities 1 and 3 IROP Source: MRD, CSF Managing Authority Poland and its funds 11

12 Number and value of projects implemented under the SOP Agri (in million PLN) , , , Aid for agriculture EUR from the European Agricultural Guidance and Guarantee Fund (EAGGF) were allocated for the implementation of the Sectoral Operational Programme Restructuring and Modernisation of the Food Sector and Rural Development (SOP Agri). Following the data as at the end of September 2007, 104% of this amount was contracted, and most of it, i.e. 63.8%, has already been settled. From these percentage values it can easily be seen that the co-financing from the EU funds enjoys a very high interest also among farmers. In total, by the end of June 2007, over 48,900 contracts for the EAGGF co-financing exceeding PLN 4.7 billion were signed The largest number of projects with the highest value of EU support were implemented in the Mazowieckie Voivodeship. Next in terms of the number of contracts ranked the Lubelskie and Wielkopolskie Voivodeships. The smallest voivodeships, Opolskie and Lubuskie, received the smallest amount of EU funding for agriculture development. DolnoÊlàskie Kujawsko-Pomorskie Lubelskie Lubuskie ódzkie Ma opolskie Mazowieckie Data as at June 2007 Source: Ministry of Agriculture and Rural Development, A report on the implementation of the SOP Agri in the first half of 2007 Opolskie Podkarpackie Podlaskie Pomorskie Âlàskie Âwi tokrzyskie Warmiƒsko-Mazurskie Wielkopolskie Zachodniopomorskie XXX The total value of projects The value of projects (EU contribution) The number of projects 12 Poland and its funds

13 The value of projects implemented by the State Fire Service and the Police (EU contribution) Funds for Concern for security PLN 62,880,000 PLN 17,139,000 Transport OP PLN 90,200,000 PLN 48,900,000 Both the Police and the State Fire Service (SFS) showed high interest in possibilities to obtain the co-financing from the Structural Funds; as a result they both signed 74 contracts with the total support PLN 152 million. The funding received was mostly allocated for the acquisition of new equipment, construction and modernisation of telecommunications and IT systems, and investment into infrastructure and training. The State Fire Service has acquired new rescue facilities, including 14 pieces of specialist equipment to remove the effects of flood, 17 specialist rescue vehicles with equipment to contain contamination zones, 14 heavy chemical and technical rescue vehicles, 4 hydraulic platform vehicles and 14 fire and rescue tenders, as well as other equipment. The Police purchased alcotests and narcotests (1000 and 70,000 pieces respectively), 10 cars with video recording equipment, 50 hand-held speed cameras, 1100 pieces of equipment for mobile access for radio cars and 19 of pursuit fleet vehicles. PLN 34,032,000 PLN 11,900,000 INTERREG PLN 29,400,000 PLN 11,322,000 IROP The value of the State Fire Service projects by programmes* The value of the Police projects by programmes Data as at the end of 2006 Source: MRD, Department of CSF Coordination and Management; Central Police Headquarters; own studies * one project under the SOP ICE totalling PLN 385,000 PLN was not taken into account. Poland and its funds 13

14 The value of contracts signed per enterprise DolnoÊlàskie Kujawsko-Pomorskie Lubelskie Lubuskie ódzkie Ma opolskie Mazowieckie Opolskie Podkarpackie Podlaskie Pomorskie Âlàskie Âwi tokrzyskie Warmiƒsko-Mazurskie Wielkopolskie Zachodniopomorskie Businesses expenditure Businesses could seek the co-financing for their projects under two programmes: the SOP Improvement of the Competitiveness of Enterprises (Priority 2) and IROP (Measure 3.4 concerning micro-enterprises). By the end of 2006 over 12,800 enterprises benefited directly from support offered under the structural funds in the form of consultancy, co-financing to new investments and modernisation activities. The largest beneficiary in that group in terms of the level of support received from the European Regional Development Fund were SMEs (67%). Projects aimed at modernising or extending enterprises enjoyed enormous interest. Areas in which co-financing was received The value of project per enterprise in PLN The value of ERDF co-financing per enterprise in PLN EU stakes on entrepreneurship Data as at the end of 2006 Source: MRD, CSF Managing Authority SME: modernisation and extension of enterprises PLN 1,420.1 million As a result of entrepreneurs efforts, over 11,600 contracts totalling PLN 2.3 billion of the ERDF co-financing contracts were signed. The total value of projects covered by these contracts totalled nearly PLN 11.6 billion, which means that the average value of support per project amounted to 20% of the total project value. 14 Poland and its funds SME: consultancy PLN million SME: investments aimed to adjust to environmental protection requirements PLN 67.5 million Data as at the end of 2006 Source: MRD, Department of CSF Coordination and Management

15 The value of projects implemented by ICT and R&D projects Funds for Information society Support from EU funds is addressed to the research and development sector (R&D) and information and communication technologies (ICT), both being extremely important elements of the modern economy and a basis for the development of information society. Until the end of 2006, 243 projects were filed under R&D measures for the total value of co-financing amounting to PLN 580 million. As regards the ICT sector there were 262 projects with the amount of support ca. PLN 900 million. Four voivodeships: Mazowieckie, Małopolskie, Zachodniopomorskie and Dolnośląskie, account for approx. 53% of the total value of R&D investments. In the case of ICT, the distribution of EU support is even more concentrated, with ca. 50% of the co-financing in this sector allocated to the Mazowieckie and Śląskie Voivodeships. DolnoÊlàskie Kujawsko-Pomorskie Lubelskie Lubuskie ódzkie Ma opolskie Mazowieckie Opolskie Podkarpackie Podlaskie Pomorskie Âlàskie Âwi tokrzyskie Warmiƒsko-Mazurskie Wielkopolskie 16,382,188 54,209,975 54,258,010 37,479,140 31,117,665 28,396,147 16,595,104 23,919,170 29,457,224 40,402,680 48,428,872 95,316,045 Zachodniopomorskie 349,836, ,403,955 19,966,688 19,095,231 57,568,682 33,937,875 25,443,935 4,549,989 38,230,134 20,059,973 Support for ICT projects in PLN Support for R&D projects in PLN 106,338,828 46,432,486 31,228, ,971 23,794,319 11,215,118 14,361,523 7,335,304 53,142,396 59,287,376 Data as at the end of 2006 Source: MRD, CSF Managing Authority Poland and its funds 15

16 In connection with new challenges faced by Europe in the years , the European Commission proposed the regional policy budget of EUR 347 billion. This amount is more than three times higher than the amount of the Marshall Plan the United States aid to a Europe destroyed by war. In the years , the total value of assistance granted exceeded 13 billion USD at the time (equivalent to USD 130 billion in 2006). In December 2005, the European Union decided that Poland would receive EUR 67.3 billion in the years from the Structural Funds and the Cohesion Fund. Over a half of the funding (52%) would be allocated for investments in infrastructure and enterprise development (from the European Regional Development Fund). Only one third of the funding (approx. 33%) was to be allocated chiefly for infrastructural investments comprising the development of roads, railways and environmental protection (under the Cohesion Fund), with approx. 15% to be allocated for projects to enhance the human resources (the European Social Fund). The EU assistance will be complemented by national public funds (EUR billion) and private funding (approx. EUR 6.4 billion). Jointly with the national financing, EUR billion will be available for Poland. A comparable amount Europe received under the Marshall Plan. Expenditure under the Cohesion Policy will be coordinated with expenditure on the structural instruments of the Common Agricultural Policy and the Common Fisheries Policy, as well as European programmes supporting competitiveness. The total value of funds earmarked for development activities in Poland will amount to over EUR billion, of which EUR 85.4 billion will come from the EU funding. In the years the funding from the Structural Funds and the Cohesion Fund will be expended under the following regional programmes and operational programmes implemented at national level: 16 Regional Operational Programmes The Infrastructure and Environment Operational Programme The Innovative Economy Operational The Human Capital Operational Programme The Eastern Poland Development Operational Programme European Territorial Cooperation Programmes. The Technical Assistance Operational Programme will facilitate the implementation of the above programmes (the pool of funds appropriated for that goal is EUR million). 16 Poland and its funds

17 Allocation of funds under the Cohesion Policy by objectives Cohesion Fund Phasing in** Cross-border cooperation 1.8% Regional competitiveness and employment 20% 4% 12.6% 3.4% Supra-national cooperation 0.5% Interregional cooperation 0.1% Peace Programme*** 0.1% 57.5% Funds The highest investment in the history of the EU The value of the largest investment in the history of the European Union amounts to EUR billion. This sum has been allocated to three main goals of the Cohesion Policy: 1. Convergence 81.5% (EUR 293 billion) supports growth and creation of new jobs in the most disadvantaged regions (GDP per capita below 75% of the EU average). 2. Competitiveness and employment in regions 16% (EUR 55 billion) supports structural changes in regions which are not covered by Convergence objectives and the changes in the labour market. 3. European territorial cooperation 2.5% (EUR 8.7 billion) supports territorial competitiveness and promotes harmonious and sustainable development of the EU territory under three components: cross-border, transnational and interregional. Phasing out* Regions with GDP per capita lower than 75% of the EU average European Territorial Cooperation Competitiveness and employment in regions Convergence * Phasing out To consolidate the achievements of previous programmes, until 2013 a special (decreasing) transitory support is provided for regions which exceed the 75% indicator as a result of the statistical effect of the enlargement and show GDP per capita ranging between 75% of the EU average and an indicator fixed on the basis of list of eligible regions. ** Phasing in Until 2013 countries, which are ineligible for the Convergence objective as a result of their economic progress will be offered special (decreasing) transitory assistance in order to consolidate their efforts to achieve equal levels of economic development. *** The Peace Programme A programme to support the peace process in Northern Ireland and in border areas of Ireland. Źródło: Komisja Europejska Poland and its funds 17

18 Funds for Europe Today the European Union consists of as many as 27 Member States. The new Cohesion Policy makes an effort to tackle problems posed by the coexistence of many countries which significantly differ in terms of their development levels. The distribution of the EU funds for the years has been agreed by the European Union on the basis of objective statistics. The guiding principle of the distribution system was that a major proportion of support should be targeted to less developed regions and countries. Following this idea, by the end of the current programming period a percentage share of the funding allocated for regions with the lowest income will amount to 85% of the total amount of support available. Strong regions are becoming development drivers for more disadvantaged regions. In the new financial perspective, Poland is the largest recipient of the UE funds. Every fifth Euro will come to Poland. We can see with our own eyes Europe to invest in our future Allocation of funds under the Cohesion Policy by Member States in current prices, in million EUR Austria Belgium Cyprus Czech Rep. Germany Denmark Estonia Spain Finland France Greece Hungary Ireland Italy United Kingdom Lithuania Luxembourg Latvia Malta POLAND Netherlands Portugal Sweden Slovenia Slovakia Bulgaria Romania 18 Poland and its funds Source: European Commission

19 Support for Member States in the years and , expressed in EUR per capita and as a percentage of GDP EUR per capita The allocation as a percentage of GDP per year Funds How many Euros per resident? One of the main rules of the distribution of funds among EU Member States and citizens is that the amount of financial aid awarded needs to be referred to the relevant level of GDP per capita in a given region or country so as the underprivileged obtain the highest amounts of aid. It can be seen that the amount of support for Poland per capita is not the highest when compared with other new Member States. It is worth noting, however, that Poland is the largest of new Member States in the enlarged European Union, both in terms of its territory and population. Importantly, the funds available from the EU budget may, on average, account for nearly 4% of Polish GDP per year The value of support (annual transfers) The value of support (annual transfers) 50 Bulgaria Romania Latvia Sweden United Belgium Austria Kingdom Luxembourg Netherlands Czech Germany Estonia POLAND Slovakigal Hungary Portu- Slovenia Rep. Malta Greece Cyprus Spain Italy Ireland Finland France Denmark Lithuania Source: DG REGIO Poland and its funds 19

20 Distribution of funds under the Cohesion Policy by values for a given fund in EUR European Social Fund 9,707,176,000 Cohesion Fund 22,176,353,774 33% The three Funds 15% 52% European Regional Development Fund 34,069,415,893 Source: NSRF , May 2007 Under the new Financial Perspective, the number of the Structural Funds has been reduced to two, i.e. the European Regional Development Fund (ERDF) and the European Social Fund (ESF). The Cohesion Fund, being indispensable for the Structural Funds, still operates. The system of the funds implementation has been simplified. Over a half of the funds total allocation for Poland (52%) will be earmarked for infrastructural investments and enterprise development (from ERDF). Only one third of the funding (approx. 33%) will be allocated, in major part, to infrastructural investments in the development of roads, railway system and environmental protection (Cohesion Fund), while approx. 15% will be allocated for projects to enhance the human resources (ESF). Not only the Cohesion Fund The financial assistance in the years is also available to farmers and fishermen. Expenditure under the Cohesion Policy will be coordinated with expenditure for structural instruments of the Common Agricultural Policy and the Common Fisheries Policy, as well as EU programmes to enhance competitiveness. The total value of the EU funding available for the co-financing of development activities in Poland will amount to EUR 85.4 billion. One should also bear in mind that EUR billion from the national public funds (of which approx. EUR 5.93 billion from the state budget) and approx. EUR 6.4 billion from private sources will be available for the implementation of projects under the New Financial Perspective programmes. Allocation of EU funds for the years , broken down by the Cohesion Policy, the Common Agricultural Policy and the Common Fisheries Policy. Common Agricultural Policy EUR 13.2 billion 16% 83% 1% Common Fisheries Policy EUR 0.7 billion Cohesion Policy (NSRF) EUR 67.3 billion Source: NSRF , May Poland and its funds

21 New perspective, new programmes In the years the money from the Structural Funds and the Cohesion Fund will be expended under 16 regional programmes and 6 operational programmes implemented at national level. Funds The amount of the co-financing received, related to the planned budgets for the years (in thousand PLN) 228,952, ,803,096 35,282,110 Podział środków pomiędzy programy operacyjne 14,686, ,266, ,520, % European Territorial Cooperation Programmes 14.4% Human Capital Operational Programme 12.3% Innovative Economy Operational Programme Value in billion EUR 0.8% Technical Assistance Operational Programme 1.9% Performance reserve 24.6% 16 Regional Operational Programmes 3.4% Eastern Poland Development Operational Programme 41.5% Infrastructure and Environment Operational Programme Source: NSRF , May 2007 State budget revenues in 2007 Tax and non-tax revenues of the state budget State budget revenues in 2008 The funds and the budget EU funding and non-reimbursable funding from other sources Source: Budget Act 2007; Draft Budget Act 2008 On average (until 2015), EUR 9.5 billion will be spent in Poland annually, which is equivalent to around 5% of the Gross Domestic Product. Pursuant to the 2007 Budget Act, the value of EU funds and other non-reimbursable funding accounted for approx. 6.5% of the state budget revenues. As provided for in the Budget Act for the coming year, a percentage of these funds will increase to 12.5%. Poland and its funds 21

22 How much regions will benefit? The distribution of NSRF funds in terms of allocation for each voivodeship (in million EUR) The management of the funding for the development of regions, which was obtained from the EU was delegated to voivodeship authorities. Under the 16 Regional Operational Programmes, the Eastern Poland Development OP and the regional component of the Human Capital OP, nearly EUR 24.8 billion is allocated for investments in voivodeships. It is both a high responsibility and a unique opportunity for the dynamic development of each of the regions. The value of EU support earmarked for investments in regions, expressed as a percentage of the allocation from the European Regional Development Fund, the European Social Fund and the Cohesion Fund, totalled 36.8%. A similar comparison for the IROP for the years , gives the respective value of 22%. DolnoÊlàskie Kujawsko-Pomorskie Lubelskie Lubuskie ódzkie Ma opolskie Mazowieckie Opolskie Podkarpackie , , , , , , , Podlaskie 1, With due caution and considering two important differences (different length of the programming period and different nature of EU funds), it can be stated that under the New Financial Perspective Poland was granted more than a double of the funding available for the previous programming period. Allocation for the years Allocation for the years EUR billion (in prices of 2004) EUR billion (in prices of 2004) Annual average: EUR billion Annual average: EUR billion Pomorskie Âlàskie Âwi tokrzyskie Warmiƒsko-Mazurskie Wielkopolskie Zachodniopomorskie 1, , , , , , The values of EU funding for the activities related to agriculture and fisheries were not taken into account. Source: NSRF , May Poland and its funds

23 Estimated impact of investments co-financed from EU funds on the labour market Source: NSRF , May 2007 More jobs Unemployment rate without NSRF Unemployment rate with NSRF In addition to a significant impact of investments co-financed from the EU funds on a GDP level, their positive influence on the labour market is also clearly seen. It is estimated that due to the investments implemented using EU funding, in 2013 the unemployment rate will drop to the level of about 6%. After 2013 it will restart growing to reach around 10% in 2020, but it will still be lower than it would have been were there no EU undertakings. An equally positive scenario may be expected as regards the number of the employed, which when using EU funds, in 2013 will be higher by 900,000 than if no such funding was available. Funds Development funds The analysis of the potential influence of investments co-financed from EU funds was done by a team of experts from the Wrocław Regional Development Agency and the Institute for Socio-Economic Studies in Dublin using the HERMIN model. The results of the analysis are promising. It appears that the investments will have a positive impact on the GDP level. However, initially the impact of the funds on GDP will be low, as only a very small part of the strategy will be implemented in the first year. Then the impact will gradually increase to make the 2013 GDP in the scenario in which the EU funding is used 11.7% higher than were there no such funding in the same year. GDP increase due investments co-financed from EU funds Source: NSRF , May 2007 Poland and its funds 23

24 Infrastructure and Environment Operational Programme The programme is aimed to contribute to the enhanced investment attractiveness of Poland and its regions, through the development of technical infrastructure while at the same time protecting and improving the condition of the environment, preserving the cultural identity and developing territorial cohesion. Over EUR 36 billion has been allocated for the Programme implementation in the years , of which more than EUR 27.8 billion comes from the EU co-financing. Beneficiaries territorial self-government units, their associations and entities providing water and sewage services the Army, Voivodes, PGL Lasy Państwowe (State Forests), maritime offices, Maritime Search and Rescue Service, Water Management Boards, Voivodeship Board of Melioration and Water Systems, Institute of Meteorology and Water Management, Central Headquarters and Voivodeship Headquarters of the State Fire Service, entities responsible for management of national roads and airports members of the TENT, entrepreneurs, as well as public and non-public healthcare establishments, higher schools, churches and religious associations and art schools under the Ministry of Culture and National Heritage, Chief Inspectorate for Environmental Protection, Voivodeship Inspectorates for Environmental Protection, units supervising protected areas, national parks, landscape parks and complexes thereof, forest district offices and their groupings, NGOs and research institutions Management The Managing Authority is the minister in charge of regional development. Intermediate Bodies for particular priorities are ministers in charge of the environment, transport, the economy, culture and protection of national heritage, health, science and higher education. Priority Community contribution (in million EUR) I Water and sewage management 2,783.9 II Waste management and the protection of the earth 1,215.7 III Resource management and counteracting environmental risks IInitiatives aimed at adjusting enterprises to the requirements of environmental protection IV V Environment protection and the promotion of ecological habits 89.8 VI TEN-T road and air transport network 8,802.4 VII Environment-friendly transport 7,676.0 VIII Transport safety and national transport networks 2,945.5 IX Environment-friendly energy infrastructure and energy efficiency X Energy security, including the diversification of energy sources XI Culture and cultural heritage XII Health safety and improvement of health protection system XIII Higher education infrastructure 500,0 XIV Technical assistance ERDF XV Technical assistance Cohesion Fund Poland and its funds

25 Regional Operational Programmes The development of 16 Regional Operational Programmes is justified by the decentralisation of regional development, increased effectiveness of development activities run by the public administration, as well as the effective use of the Structural Funds by regions in the period under the IROP. The budget of all the ROPs contains EUR 16.6 billion from the European Regional Development Fund. Each ROP is similarly structured, but their content and financial resources will be determined at regional level. EU co-financing may be sought for various types of investment under the ROPs in the area of education, health protection, road infrastructure and environment protection, information society, culture, tourism and sports, as well as investments which contribute to the increased competitiveness of enterprises. Beneficiaries territorial self-government units, their unions and associations TSU organisational units having a legal personality, government administration, entrepreneurs and business environment institutions, NGOs higher schools and research establishments, culture institutions, churches and religious associations, healthcare establishments operating within the public health protection system, public finance sector units having a legal personality, Funds PGL Lasy Państwowe (State Forests) and its organisational units, as well as national parks and landscape parks, co-operatives and housing communities, other entities. Management The function of Managing Authorities has been taken over by Voivodeship Boards. Community contribution (in million EUR) 1, DolnoÊlàskie 951 Kujawsko-Pomorskie 1,156 Lubelskie Lubuskie 1, ódzkie 1, Ma opolskie 1,831.5 Mazowieckie Opolskie 1,136.3 Podkarpackie Podlaskie Pomorskie 1, Âlàskie Âwi tokrzyskie 1, Warmiƒsko-Mazurskie 1, Wielkopolskie Zachodniopomorskie Poland and its funds 25

26 The Human Capital Operational Programme The main goal of the programme is to enable making the full use of the human resource potential through increased employment and adaptability of enterprises and their employees, as well as upgrading the general level of education, reducing areas of social exclusion and supporting the development of administrative structures of the state. The Human Capital OP consists of 10 priorities implemented in parallel at central and regional levels. The amount allocated for the Programme implementation totals almost EUR 11.5 billion, including the financial contribution of the European Social Fund of over EUR 9.7 billion. Beneficiaries labour market institutions, training institutions, government and territorial self-government units, entrepreneurs and business environment institutions, NGOs, institutions of the education and higher education system, other entities. Management The Managing Authority is the Minister in charge of regional development, who performs his/her function through the Director of the Department for Managing the European Social Fund at the Ministry of Regional Development. The Managing Authority transferred some of its tasks to the Intermediate Bodies: Priorities I, II minister in charge of labour and social policy, Priority III minister in charge of education, Priority IV minister in charge of higher education, Priority V there is no IB, the role of coordinating authority is played by the ESF Managing Department Priorities VI-IX tasks are delegated to voivodeship self-governments. Priority Community contribution (in million EUR) I Employment and social integration Development of human resources, adaptability of enterprises and II improvement of the health condition of employed persons III High quality of the education system IV Higher education and science V Good governance VI Labour market open for all VII Promotion of social integration VIII Regional economy staff IX Development of education and competence in regions X Technical assistance Poland and its funds