European Funds - how does the European Union manage them?

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The Polish economy has developed in recent years also thanks to the European Funds granted to it by the European Union. Co-financing and subsidies, which are willingly used by entrepreneurs, offices and public administration, are awarded to individual Member States according to specific criteria. Not every country can count on the same amount of subsidies. The European Funds were created to provide equal opportunities and lead to symmetrical development of all members of the European Union. To what extent the subsidies contribute to the implementation of the EU cohesion policy, we should judge for ourselves. However, it is worth getting acquainted with the European Funds management mechanism applied by European Union agencies.

The budget of the European Union and the European Funds

The budget of the European Union is built thanks to revenues from the following sources:

  • from customs duties that are imposed on goods imported from non-EU countries,

  • from part of the income of EU countries from value added tax at an individually agreed percentage rate,

  • from funds transferred by Member States in connection with their GNP (Gross National Product) - each EU member must pay 0.73% of the value of the achieved GNP,

  • from taxes levied on the salaries of staff employed by the EU institutions,

  • from contributions paid by countries that are not EU members, but participating in some EU programs,

  • penalties imposed on European companies and organizations that have not complied with the law in force in the EU.

The collected funds from the budget are allocated by the EU primarily to the implementation of the cohesion policy, which translates directly into increasing the competitiveness of the entire European Community. European funds constitute a significant part of the EU budget (44.2%) and support the development of individual member states.

Which countries can count on European Funds?

The EU member states are categorized in terms of the level of GDP. On this basis, officials identify countries that can benefit from European Funds.



A given country may count on the possibility of benefiting from the support of European Funds, if GDP per capita in a given region is lower than 75% of the EU average.


It follows that it is enough for one of the voivodships to achieve very low GDP for the country to be able to benefit from subsidies granted by the European Union. In the case of some Member States where social stratification is beginning to emerge, the Union directs European Funds exclusively to a given region. This is the case, for example, in Germany.

NUTS and European Funds

The European Union has adopted its own territorial division. NUTS (Nomenclature of Units for Territorial Statistics), i.e. administrative units, have been separated in the EU. Thanks to the introduction of a uniform division, it becomes easy to determine which regions, i.e. NUTS, need support. This is where individual European Funds are directed.

On the example of Poland, it can be indicated that five types of NUTS have been distinguished on the territory of our country.

  • NUTS 1 are areas that group several provinces,

  • NUTS 2 stands for voivodships,

  • NUTS 3 is made up of subregions that consist of connected counties,

  • NUTS 4 one hundred poviats and cities that received poviat rights,

  • NUTS 5 are municipalities.

At the level of individual NUTS, statistical data of individual regions are compared. Then averages are calculated for the entire area (e.g. for Poland). NUTS that will be below the average will be able to benefit from EU funding.

European funds for red areas

The European Union monitors data on the standard of living of individual NUTS on an ongoing basis. On the basis of this information, EU maps are prepared, in which areas that can benefit from support and numerous subsidies are marked in red. The aim of such activities is to achieve convergence, that is to achieve symmetry of development in the EU. Currently, the entire territory of Poland is among the countries circled in red, which means that we can use European Funds.