The European Social Fund (ESF) was established by the European Economic Community to support employment and social development, particularly in regions that have faced high levels of unemployment. Since 1988 ESF has been one of the European Union’s (EU)Structural Funds. The other three are the European Regional Development Fund, the guidance section of the European Agricultural Guarantee and Guidance Fund and the Financial Instrument for Fisheries Guidance. For the period 2000–06, the Structural Funds, together with the Cohesion Fund (which is targeted specifically at Greece, Ireland, Portugal and Spain), account for approximately one-third of expenditure of the budget of the EU. More recently ESF has been used to promote the European Employment Strategy in each of the member states.
The ESF is the main financial tool through which the EU translates its strategic employment policy aims into action. The ESF was established by the Treaty of Rome in 1958 with the aim of improving mobility within the labour market, primarily by providing funds for the training and retraining of workers affected by industrial restructuring. In its first decade the main beneficiaries of the ESF were Italian agricultural workers migrating to work in northern Italy and workers in the Federal Republic of Germany. It was first reformed in 1971 to place a greater focus on providing support for workers in declining industries, women, migrant workers, young people and those with disabilities. The next major reform of the ESF came with the signing of the Single European Act and the reform of it and the other Structural Funds.
Since the Treaty of Amsterdam the ESF has been used as the major instrument for the EU to shape the implementation of the European Employment Strategy; in particular, its focus since the Lisbon European summit has been on employment and competitiveness in the knowledge-based economy.
The primary purpose of the ESF, through Structural Funds programmes, is to develop the employability of individuals. Although the focus of the ESF is therefore on the development of work skills, it also possesses the scope to reduce barriers which individuals or groups may face in re-entering the labour market. Programmes are planned by member states together with the European Commission and then implemented through a wide range of provider organizations both in the public and the private sectors. These organizations include national, regional and local authorities, educational and training institutions, voluntary organizations and the social partners (trade unions and works councils, industry and professional associations, and individual companies).
During the Structural Funds 2000–06 programming period, the ESF is investing approximately €62,500m. in modernizing and reforming labour markets. Key priorities include: preventing long-term unemployment, reintegrating marginalized groups into society, promoting equal opportunities, and helping in the transition towards the knowledge-based economy by the promotion of lifelong learning.
During the 2000–06 programming period, ESF support has targeted the following activities: education and vocational training projects; schemes to promote and encourage employment and self-employment; initiatives to generate new sources of employment; improvements to national, regional and local employment services; schemes to foster links between the worlds of work, education and research; and innovative measures and pilot projects to create work in local communities.
The current Structural Funds and Cohesion Fund regulations will expire in 2006. New regulations were proposed in 2004 for the period 2007–13. Following the conclusions of the Lisbon summit in 2000, key policy priorities will be the creation of more and better jobs, greater social inclusion, equal opportunities and continued support for the knowledge-based society. Following the accession in 2004 of countries with significantly lower levels of per caput gross domestic product than the average of the previous EU member states, the eligible funds will be targeted predominantly at the new member states with some transitional funding provisions made for the current recipients. The ESF will be used in 2007–13 to support the following objectives: convergence (the economic catch up of the poorest regions); regional competitiveness and employment (support outside the poorest regions); and European territorial co-operation (to promote co-operation between all regions, specifically around sustainable development).
