There has been a major shift of European Union money from agricultural guarantees towards regional policy and the Social Fund since 1985. In the current five-year plan, 1994 to 1999, about 142 billion ECU at 1992 prices will be spent on the structural funds. About 70 per cent of this will go on Objective 1. By 1999 about 36 per cent of expenditure commitments will be on structural funds. Over the years since the accession of Greece, Spain and Portugal there have been special Integrated Mediterranean Programmes to spend extra money in those countries and in southern Italy.
When the Maastricht Treaty on European Union was agreed it included provision for additional funds to be channelled to four members in order to bring them more in line with the other members so that they would be readier for the introduction of a single currency or would suffer less if they did not immediately join. This provision is called the Cohesion Fund. The fund is aimed at the four countries mentioned above and they will receive, between 1993 and 1999, ECU 15.1 billion or ECU 16.223 billion in adjusted prices. The aim is to shift resources from the 'rich' north to the 'poorer' south and to remove the excessive economic and social differences between those areas. Each country must have an approved plan to meet the monetary union criteria and will receive these funds only after the projects, costing above ECU 10 million, are vetted by the European Investment bank. The money will only be given for environment and transport projects or for the trans-European Networks schemes. Spain will receive between 52 and 58 per cent of the total, Portugal 16 to 20, Ireland 7 to 10 and Greece 16 to 20 per cent.
The principles behind the allocation of structural funds
In 1989 a set of four principles was established to determine what action should be taken through the structural funds. They were modified in 1993 to produce the following:
The United Kingdom has sometimes come into conflict with the Commission because it has not always observed the third principle of additionality and has tried to substitute Union funds for United Kingdom money. There are a large number of programmes applied by the European Union itself and about 9 per cent of the structural funds are spent on those. They have names that are often acronyms such as ADAPT, RECHAR, KONVER and RESIDER that all deal with adjustment to industrial change. These programmes are occasionally upgraded and modified and may be renamed. The remaining 90 per cent of the money goes on national programmes agreed with the Commission and local and regional authorities. In the United Kingdom we shall see the impact of such programmes on Merseyside over the next five years since it now qualifies under Objective 1 for very large sums of money.
The regional policies have been the subject of intense study over the years and of much criticism. It is hard to isolate the effects of the regional policy from the concurrent macroeconomic climate. The conclusions are usually that the creation of new jobs costs a huge sum per job (akin to the £1 million per job of the UK Eurofighter programme announced in September 1996) or that the firms who relocate would have been forced by market pressures to relocate anyway. The bureaucracy of the system is also accused of absorbing too high a percentage of the funds and there are frequent allegations of corruption. There is no doubt, however, that many remote rural areas and declining industrial regions have benefited from the regional funds.
The European Union's social policy stems from the original Coal and Steel Community and the need to create jobs to replace those being phased out by technological change and the consequent plant and pit closures. Part of the approach was to promote geographical and vocational mobility. The ESCS pursued these policies to find new work for large numbers of unemployed coal miners. The ESF followed similar lines after 1961 and its role has expanded since into areas such as equal pay for equal work and health and safety at work. Progress was very slow in the 1980s because decisions in Council had to be unanimous unless the proposal could be 'smuggled' through under the Single Market rules of health and safety at work. The United Kingdom was usually the only member to vote against social legislation and in 1989 refused to sign the Social Charter or, to give it its proper title, The Charter of Fundamental Rights of Workers. As a result the other members incorporated a new Social Chapter into the Maastricht Treaty on Union and the UK opted out of it. In practice the other members, now 14, took the Social Chapter into a protocol of the Treaty and ran it using qualified majority voting without the UK having the right to participate in the voting. They removed this anomaly when the Amsterdam Treaty was agreed in June 1997 and the new UK Government signed the Social Chapter. Some social policy matters require unanimity because they still come under the Treaty of Rome and later treaties. The areas covered by social policy include:
The United Kingdom Government up to May 1997 had trouble accepting the elements concerning industrial democracy and workers' participation and resolutely opposed the Works Councils that have been accepted by the other members under the Social Chapter protocol. In practice many large British multinational companies that operate in other member states introduced Works Councils despite the objections of the Government. The UK also opposed the Social Charter and Chapter on the grounds that it would commit the UK to introducing a national minimum wage, but there is nothing specifically in the Chapter on this subject so it was something of a bogeyman. The Labour Government elected in May 1997 committed itself to signing the Social Chapter and to introducing some sort of national minimum wage. There has been a very confused and not very illuminating debate about the potential effects of a minimum wage and other social legislation. The Conservative Party argues that the general effect of the Social Chapter is to raise the costs of employing people and thus it contributes to reducing the international competitiveness of the European economy and 'destroys jobs'. Their opponents say that that is not the case and that a minimum wage at certain levels would not raise unemployment and that workers' morale and productivity would rise.
One area in which the European social policies have had a considerable impact on members' economies is in establishing the rights of women to equal pay and conditions and much of the progress in the UK is attributable to rulings of the European Court. The Court has also had a great impact on the rights of part-time workers and on pensions. In all of these changes the UK has been, to say the least, reluctant and often very obstructive until the Court ruling has been made. The accession of Sweden and Finland has shifted the balance of the Union further towards social intervention and the raising of standards of social provision. In September 1996 a conflict developed between the UK and the EU over the Working Hours Directive which limits the working week to 48 hours and its extension to hitherto excluded occupations such as hospital medical staff and transport workers.
The European Union has over the years evolved a reasonably coherent policy on the environment through the medium of action plans. The Maastricht Treaty on Union raised environmental action to the status of a policy and replaced unanimity by the QMV in Council on most environmental affairs. The latest action plan, the fifth, is called Towards Sustainability and runs from 1992 to 2000. The previous plans were subjected to regular reviews and one such review in 1988 had a big impact because it led to an increased emphasis on energy efficiency through programmes such as Thermie which provides money for spreading technological information on energy efficiency, renewable energy sources, clean coal technologies, and oil and gas prospecting and development. The programme is now in its second phase, 1995 to 1998. In December 1991, 45 nations signed the European Energy Charter which aims at exploiting Eastern European energy sources more efficiently after EU nations have installed modern, environmentally cleaner power stations and equipment. A new version of this was signed in 1994 and there are now 48 nations involved including the USA, Japan, Canada and Australia. One important aim is to modernise the energy industries of the former Soviet bloc, many of whose plants were appallingly harmful to the environment. Part of this policy includes shutting down the remaining reactors at Chernobyl which were still being used in late 1996.
The early Community policies began as early as 1972 and were intensified after the Single European Act of 1986 which established legal requirements in the environmental sphere. By 1993 over 200 directives had been approved on improving air and water quality, controlling waste disposal and monitoring industrial risk. Many of the measures were aimed at the protection of nature, that is flora and fauna. In general the approach to improving quality was based on prevention via the setting of standards and the prosecution of defaulters. This approach underwent a major change after 1992 when the Towards Sustainability action programme was adopted. This now concentrates on prevention and on the control and management of growth. The new action plan incorporates environmental considerations into the basic agricultural, social, regional, transport and economic policies. In many instances, for example the building of new major roads, an environmental impact study has to be made. Another example of the application of the policy is the Cohesion Fund mentioned above under Regional Policy, which incorporates the environmental dimension into part of the allocation of funds. The new programme is in accordance with the 'Earth Summit' held in Rio de Janeiro in
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