Definition and objectives of the European Regional Development Fund (ERDF)
Der European Regional Development Fund (ERDF) is a structural fund of the European Union. Its main aim is to strengthen economic, social, and territorial cohesion within the EU Member States. It primarily supports investments in infrastructure, innovation, energy efficiency, as well as small and medium-sized enterprises (SMEs) in structurally weak regions.
Legal basis of the ERDF
The legal foundations of the ERDF are enshrined in both the primary and secondary law of the European Union:
Classification under primary law
The basis for the ERDF is found in the Treaty on the Functioning of the European Union (TFEU), in particular in Articles 174 to 178 TFEU. These provisions oblige the EU to promote the development of its regions, with special consideration for less developed areas.
Specification under secondary law
The details regarding the operation and implementation of the ERDF are regularly regulated by regulations. For the current funding period 2021-2027, the following in particular apply:
- Regulation (EU) 2021/1058 on the European Regional Development Fund and the Cohesion Fund
- Regulation (EU) 2021/1060 with common provisions for the cohesion policy funds (Common Provisions Regulation, CPR)
- Furthermore, the relevant implementing and delegated acts of the European Commission are applicable.
These regulations define the scope, eligible measures, implementation structures, and the control of ERDF funds.
Eligible measures and focus areas
Within its legal provisions, the ERDF particularly finances the following measures:
- Promotion of innovation, research and technological development
- Support for small and medium-sized enterprises
- Strengthening environmental protection, adaptation to climate change, and promotion of renewable energies
- Investments in information and communication technology (ICT)
- Development of sustainable and high-quality infrastructure
- Promotion of urban development
Eligible regions
According to the regulation, a distinction is made in particular between less developed regions, transition regions, and more developed regions (in accordance with Art. 108 of Regulation (EU) 2021/1060). The funding rate and intensity depend on these three categories.
Exclusion criteria
Within the framework of ERDF funding, certain areas are excluded. These include, for example, administrative buildings, nuclear power plants or purely debt restructuring measures (see Art. 7 of Regulation (EU) 2021/1058).
Administrative structures and control mechanisms
Managing authorities
Responsibility for the management of ERDF funds lies with the individual EU Member States and their regions. They develop programs (operational programs) and establish managing, auditing, and certifying authorities.
Partnership principle
Pursuant to Art. 8 of Regulation (EU) 2021/1060, the Partnership principle must be observed. Accordingly, the programming, implementation, and control of measures are carried out with the involvement of representatives of public authorities, business, social partners, and civil society.
Supervision and control mechanisms
The European Commission monitors the proper use of funds through annual reports, audit procedures, and evaluation. Misuse is subject to recovery and sanction mechanisms according to Art. 103 et seq. of Regulation (EU) 2021/1060.
Legal protection and complaints
Beneficiaries and potential applicants can, in cases of divergence, rejection, and recovery, seek national legal remedies. In addition, it is possible to contact the European Court of Auditors or the European Anti-Fraud Office (OLAF).
Financing and co-financing
Funding resources
The volume of ERDF resources is established in each case by the Multiannual Financial Framework of the EU. In the funding period 2021-2027, around 200 billion euros are available to the ERDF.
Co-financing principle
Funding through the ERDF is generally based on the co-financingprinciple. This means projects are jointly funded by the EU and the respective Member States or regions. The exact co-financing rates vary according to the status of the region and the type of project funded (up to 85% in less developed regions).
Implementation in Germany
In Germany, the federal states are responsible for programming and implementing ERDF measures within the framework of operational programs. Authority and design are essentially governed by the Cohesion Act as well as specific administrative agreements.
Examples of eligible measures in Germany include:
- Investments in innovation-driven companies and research institutions
- Programs for urban and regional development
- Measures for energy efficiency and CO₂ reduction
Reporting requirements, evaluation, and transparency
Reporting requirements
The managing authorities are obliged to report regularly to the European Commission. This includes, among other things, annual implementation reports, compliance with funding criteria, and evidence of the use of funds.
Evaluation
Independent program-level evaluations assess the effectiveness, efficiency, and impact of the funds used. The European Commission carries out meta-evaluations and impact analyses.
Transparency regulations
According to Art. 49 of Regulation (EU) 2021/1060, all ERDF-funded measures are subject to extensive information and publicity requirements. Member States must publish beneficiaries and funding amounts in publicly accessible registers.
Relationship to other EU structural and investment funds
The ERDF is part of the so-called European Structural and Investment Funds (ESI Funds), which also include the following funds:
- European Social Fund Plus (ESF+)
- Cohesion Fund (CF)
- European Agricultural Fund for Rural Development (EAFRD)
- European Maritime, Fisheries and Aquaculture Fund (EMFAF)
Coordination of the individual funds must be ensured in accordance with the common provisions. Regulation (EU) 2021/1060 sets out differing responsibilities, programming, and funding conditions in this regard.
Outlook and reform efforts
Cohesion policy, and thus the ERDF, are subject to ongoing evaluations and reform discussions. Central goals include the simplification of procedures, a stronger results orientation, and support for the European Green Deal.
Bibliography
- Regulation (EU) 2021/1058 of the European Parliament and of the Council
- Regulation (EU) 2021/1060 of the European Parliament and of the Council
- Treaty on the Functioning of the European Union (TFEU), Art. 174 et seq.
- Website of the European Commission, Directorate-General for Regional Policy (Regio)
- German Coordination Office for ERDF
Conclusion
The European Regional Development Fund (ERDF) is a key instrument of European cohesion policy. It is based on detailed legal foundations and is subject to extensive administrative and control mechanisms. The use of funds is governed by strict legal requirements, with transparency, co-financing, and the direct promotion of structurally disadvantaged regions at the forefront.
Frequently asked questions
How is the legal basis for support through the European Regional Development Fund (ERDF) regulated?
Support through the ERDF is based on a variety of legal foundations, the most important of which is Regulation (EU) 2021/1058 of the European Parliament and of the Council of 24 June 2021 on the European Regional Development Fund and the Cohesion Fund. In addition, the so-called “General Regulations” for the Multiannual Financial Framework 2021-2027, in particular Regulation (EU) 2021/1060 (“Umbrella Regulation”), are decisive. These regulations specify, among other things, the objectives, priorities, allocation of funds as well as requirements for the management and control systems. For implementation at a national level, the European requirements are supplemented by national laws, funding guidelines, and administrative agreements, in Germany primarily by the Administrative Procedure Act (VwVfG), the federal and state budget law, as well as state-specific funding guidelines.
What requirements exist regarding transparency and publicity in the allocation of ERDF funds?
Measures financed by the ERDF are subject to strict requirements regarding transparency, publicity, and information obligations, as set out in Articles 49 to 50 of Regulation (EU) 2021/1060. Beneficiaries must inform the public about the support received, for example by placing signage at funded projects and mentioning the ERDF on communication materials. The administration and allocation of funds must be transparently documented and, upon request, be verifiable by authorities and institutions such as the European Court of Auditors. Calls for tenders and contract awards must be made in accordance with European and national public procurement law (including GWB, VgV, UVgO, SektVO).
What control and sanction mechanisms exist under the ERDF?
A multi-level control system applies to the ERDF, organized at both the European and national levels. The managing authorities of the Member States are required to establish effective audit, control, and audit mechanisms to prevent misuse of funds, irregularities, and fraud. In addition, the European Commission, the European Court of Auditors, and the European Anti-Fraud Office (OLAF) monitor the correct use of funds. In the event of violations of legal provisions – such as proven irregularities or violations of state aid law – there is a risk of recovery of the funding, the imposition of financial corrections, as well as administrative penalties under European and national law.
What rights and obligations do recipients of funding have in the course of project implementation?
Recipients of funding undertake, in accordance with the funding notices and relevant legal regulations, to comply with all requirements applicable to the ERDF, in particular regarding evidence of use, documentation obligations, compliance with procurement regulations, and avoidance of double funding. The project implementation must be monitored during and after the project duration, and all relevant documents must be kept for defined periods. In case of violations, recovery measures and possible claims for damages may be enforced.
What role does European state aid law play in ERDF funding?
European state aid law (Art. 107 and 108 TFEU) is central to the admissibility and design of ERDF-funded projects. Any funding considered state aid within the meaning of EU law must either fall under an existing block exemption regulation (such as the General Block Exemption Regulation, GBER) or must be individually approved by the European Commission. Violations of state aid law regularly result in the obligation to repay granted subsidies. Practical implementation is ensured by relevant audit notes and evidence submitted to the management authorities.
What deadlines and limitation periods apply to recoveries and audits?
According to Article 145 of Regulation (EU) 2021/1060, the European Commission may decide on financial corrections by no later than 31 December of the third calendar year following the year in which the Member State declared the expenditure. For national audits and recoveries, the respective national limitation periods additionally apply, for example according to §§ 48, 49 and 49a VwVfG. In practice, this may mean that recovery claims can be asserted even years after the end of a project, especially in cases of serious violations of fundamental funding principles.
What legal remedies are available to applicants and beneficiaries in the funding procedure?
Applicants and beneficiaries may use the usual legal remedies of administrative procedure in the funding procedure. In the case of negative funding decisions or recovery notices, an objection or legal action before the competent administrative court is initially possible. In specific cases, the European Commission may also be contacted, for example, in the event of alleged discrimination or incompatibility with Union law. Judicial review covers compliance with the formal and material requirements of the EU funding regulations as well as the national provisions.
