03.02 ERDF

The European Regional Development Fund (ERDF) is one of the European structural funds and, among other things, aimed at reducing the most important regional imbalances in the European Union.

This is in line with the objectives of the European regional policy. In order to achieve this, the fund finances programmes for the development and structural adjustment of regions whose development is lagging behind and for the conversion of declining industrial regions.

For already developed regions within the EU, such as the Netherlands, the fund focuses, among other things, on strengthening regional competitiveness and increasing employment.

Target groups

To be implemented by: the Central government, provincial and municipal authorities, businesses.

Operation

The Netherlands has been given € 830 million from the EU for ERDF activities during the period between 2007 and 2013. On the condition that the subsidy is doubled by the Dutch government or by businesses. At the start of the current programme period, the Dutch government immediately made € 255 million available. This amount has been supplemented by local Dutch authorities, such as provinces and municipalities. The hope is that a limited part is financed by the private sector.

The ERDF aims to strengthen economic and social cohesion in the European Union by correcting imbalances between its regions. In short, the ERDF finances:

              • direct aid to investments in companies (in particular SMEs) to create sustainable jobs;
              • infrastructures linked notably to research and innovation, telecommunications, environment, energy and transport;
              • financial instruments (capital risk funds, local development funds, etc.) to support regional and local development and to foster cooperation between towns and regions;
              • technical assistance measures.

ERDF is mostly used as a subsidy. Parties file a subsidy application with the relevant management authority. The latter will assess whether the project qualifies for subsidy and decides on whether to grant it or not.

In the Netherlands, four operational programmes are relevant to the ERDF budget:

              • North: Northern Netherlands Operational Programme, the Northern Netherlands Provinces (Samenwerkingsverband Noord-Nederland) act as the management authority. The executive organisation rotates.
              • South: Southern Netherlands Operational Programme, for the provinces of Limburg, North Brabant and Zeeland. The Province of North Brabant acts as the management authority.
              • East: Eastern Netherlands Operational Programme, for the Provinces of Gelderland and Overijssel, the management authority being placed with the Province of Gelderland.
              • West: Western Netherlands Operational Programme: Opportunities for West (Kansen voor West). For the cities of Utrecht, Amsterdam, The Hague and Rotterdam and the Provinces of Flevoland, North Holland, South Holland and Utrecht. The management authority has been placed with the city of Rotterdam.

Advantages and disadvantages

Strengths:

ERDF always demands co-financing from the local governments. So other parties must also be prepared to financially support the relevant project.

Possibilities:

The special forms (such as JESSICA) make the ERFD an even more efficient and sustainable fund.

Tax consequences

Consequences for public-law bodies:

              • Is, in principle, used as a subsidy, therefore no tax consequences.

Consequences for taxpayers:

              • Some investments may result in an additional exemption in box 3 Income Tax for private individuals.

Particulars

Within the framework of the 2007-2013 programming period, the European Commission (Directorate General for Regional Policy), has, together with the European Investment Bank and other financial institutions, developed four joint initiatives for a more efficient and sustainable cohesion policy. Two of these initiatives promote the use of financial instruments (JEREMIE and JESSICA), the other two (JASPERS and JASMINE) offer technical support.

Projects

Project 1: Health Valley (Eastern Netherlands)

Project 2: De Hofbogen (Kansen voor West), Rotterdam


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