Regional policy of the European Union

By far the largest amount of regional policy funding is dedicated to the regions designated as less developed. This covers Europe's poorest regions whose per capita gross domestic product (GDP) is less than 75% of the EU average. This includes nearly all the regions of the new member states, most of Southern Italy, Greece and Portugal, and some parts of the United Kingdom and Spain.

With the addition of the newest member countries in 2004 and 2007, the EU average GDP fell. As a result, some regions in the EU's "old" member states, which used to be eligible for funding under the Convergence objective, became above the 75% threshold. These regions received transitional, "phasing out" support during the previous funding period of 2007–13. Regions that used to be covered under the convergence criteria but got above the 75% threshold even within the EU-15 received "phasing-in" support through the Regional competitiveness and employment objective.[6] [7] Despite the large investment requirements of the EU, cohesion areas continue to have lower investment rates. Only 77% of businesses in transitional regions and 75% of those in less developed regions invested, compared to 79% of businesses in more developed regions.[8]

Financial limitations are more common in less developed areas, especially for small and medium-sized enterprises (SMEs). SMEs in these regions are more than twice as likely (11%) than their counterparts in transition (5%) and non-cohesion zones (5%) to report having financial difficulties.[9][10] Less developed regions also have the lowest percentage of businesses who have made investments to combat climate change or reduce their carbon emissions, at 46%.[8] In 2022, lending from the EIB Group under the SME/mid-cap financing policy reached €3.5 billion.[11][12]

In less developed regions, bank loans account for 49% of finance. Grants make up a larger portion of the financing in less developed areas, accounting for 13% of external financing. [13]

• Bulgaria – all (except Southwestern region)
• Croatia - all
• Czech Republic – all (except Prague)
• Estonia – all
• France – French Guiana, Guadeloupe, Martinique, Réunion
• Greece – Anatoliki Makedonia Thraki, Dytiki Ellada, Ipeiros, Kentriki Makedonia, Thessalia
• Hungary – all (except Central Hungary)
• Italy – Basilicata, Calabria, Campania, Apulia, Sicily
• Latvia – all
• Lithuania – all
• Poland – all (except the Warsaw Metro NUTS2 Unit carved out of Masovian Voivodeship)
• Portugal – Alentejo, Azores, Centro, Norte
• Romania – all (except Bucharest)
• Slovakia – all (except Bratislava)
• Slovenia – Vzhodna Slovenija
• Spain – Extremadura
• United Kingdom – Cornwall and the Isles of Scilly, West Wales and the Valleys

These are regions whose GDP per capita falls between 75 and 90 percent of the EU average. As such, they receive less funding than the less developed regions but more funding than the more developed regions.

In transition regions, bank loans account for 69% of finance. [14][13] Particularly transitional regions appear to profit from investments in more developed regions. There is a 34% of the impact on GDP and 47% of the impact on employment in some circumstances.[15]

In the green transition, 19% of firms in transition regions claim that climate change is significantly affecting their business, while 43% believe climate change has a minor effect. [16] 25% of businesses in transition regions can also be categorized as "green and digital".

• Austria – Burgenland
• Belgium – all of Wallonia (except Walloon Brabant)
• Denmark – Sjælland
• France – Auvergne, Corsica, Franche-Comté, Languedoc-Roussillon, Limousin, Lorraine, Lower Normandy, Nord-Pas-de-Calais, Picardy, Poitou-Charentes
• Germany – Lüneburg, all of the former East Germany sans Berlin (except Leipzig)
• Greece – Dytiki Makedonia, Ionia Nisia, Kriti, Peloponnisos, Sterea Ellada, Voreio Aigaio
• Italy – Abruzzo, Molise, Sardinia
• Malta – all
• Poland - none
• Portugal – Algarve
• Spain – Andalucía, Canarias, Castilla-La Mancha, Melilla, Murcia
• United Kingdom – Cumbria, Devon, East Yorkshire and Northern Lincolnshire, Highlands and Islands, Lancashire, Lincolnshire, Merseyside, Northern Ireland, Shropshire and Staffordshire, South Yorkshire, Tees Valley and Durham
• Bulgaria – Southwestern region

This covers all European regions that are not covered elsewhere, namely those which have a GDP per capita above 90 percent of the EU average. The main aim of funding for these regions is to create jobs by promoting competitiveness and making the regions concerned more attractive to businesses and investors. Possible projects include developing clean transport, supporting research centres, universities, small businesses and start-ups, providing training, and creating jobs. Funding is managed through either the ERDF or the ESF.

In all regions, bank loans are the most prevalent type of external financing. In more developed regions, they account for 58% of finance. [14][13]

• Austria – all (except Burgenland)
• Belgium – all of Flanders, Brussels, Walloon Brabant
• Cyprus – all
• Czech Republic – Prague
• Denmark – all (except Sjælland)
• Finland – all
• France – Alsace, Aquitaine, Burgundy, Brittany, Centre, Champagne-Ardenne, Île-de-France, Midi-Pyrénées, Pays de la Loire, Provence-Alpes-Côte d'Azur, Rhône-Alpes, Upper Normandy
• Germany – Berlin, Leipzig, all of the former West Germany (except Lüneburg)
• Greece – Attiki, Notio Aigaio
• Hungary – Közép-Magyarország
• Ireland – all
• Italy – Emilia-Romagna, Friuli-Venezia Giulia, Lazio, Liguria, Lombardy, Marche, Piedmont, South Tyrol, Trentino, Tuscany, Umbria, Valle d'Aosta, Veneto
• Luxembourg – all
• Netherlands – all
• Poland – the Warsaw Metro NUTS2 Unit carved out of Masovian Voivodeship
• Portugal – Lisbon region, Madeira
• Romania – Bucharest
• Slovakia – Bratislava
• Slovenia - Zahodna Slovenija
• Spain – Aragon, Asturias, Balearic Islands, Basque Country, Cantabria, Castilla y León, Catalonia, Ceuta, Galicia, La Rioja, Madrid Region, Navarre, Valencian Community
• Sweden – all
• United Kingdom – all of London, South East England, and the East of England, plus Dorset, Somerset, Gloucestershire, Wiltshire, Herefordshire, Worcestershire, Warwickshire, West Midlands, Leicestershire, Rutland, Northamptonshire, Derbyshire, Nottinghamshire, Cheshire, Greater Manchester, West Yorkshire, North Yorkshire, Tyne and Wear, Northumberland, South Western Scotland, Eastern Scotland, North Eastern Scotland and East Wales

This objective aims to reduce the importance of borders within Europe – both between and within countries – by improving regional cooperation. It allows for three different types of cooperation: cross-border, transnational and interregional cooperation. The objective is currently by far the least important in pure financial terms, accounting for only 2.5% of the EU's regional policy budget. It is funded exclusively through the ERDF.