Economic, social and territorial disparities at both regional and national level have increased in the enlarged European Union. At the dawn of the 21st century, gross domestic product (GDP) per head in the lagging regions of the Union averaged 66% of the EU15 average, which stood at EUR 20,213 per head. The enlargement to ten new countries in 2004 and to two more in 2007 reduced the EU average GDP per head to EUR 16,500. The population living in regions with GDP per head of less than 75% of the present EU average was increased from 71 million to 174 million, or from 19% of the EU15 total to 36% of the EU27 total. Three groups of countries can be distinguished in the EU of 27 in terms of GDP per head. The first group with GDP per head 20% above the new average was formed by the EU15 Member States, apart from Greece, Portugal and Spain. These three cohesion countries plus Cyprus, the Czech Republic, Slovenia and Malta formed the second group, with GDP per head between 68% (the Czech Republic) and 95% (Spain) of the EU 27 average. The remaining 8 countries formed the third group, with GDP per head only 40% of the EU27 average.
The identification of the priority regions and areas at European level are based on the common classification of territorial units for statistics (NUTS) [Regulation 1059/2003, last amended by Regulation 2016/2066]. On this basis, Regulation 1303/2013 [last amended by Regulation 2015/1839 and Decision 2014/190] laying down general provisions on the Structural Funds, declares that resources for the Investment for growth and jobs goal set up by this Regulation, shall be allocated among the following three categories of NUTS level 2 regions:
(a) less developed regions, whose GDP per capita is less than 75% of the average GDP of the EU-27;
(b) transition regions, whose GDP per capita is between 75% and 90% of the average GDP of the EU-27;
(c) more developed regions, whose GDP per capita is above 90% of the average GDP of the EU-27.
The classification of regions under one of the three categories of regions is determined on the basis of how the GDP per capita of each region, measured in purchasing power parities (PPS) and calculated on the basis of Union figures for the period 2007 - 2009, relates to the average GDP of the EU-27 for the same reference period.
The Cohesion Fund supports those Member States whose GNI per capita, measured in PPS and calculated on the basis of Union figures for the period 2008 - 2010, is less than 90% of the average GNI per capita of the EU-27 for the same reference period. The Member States eligible for funding from the Cohesion Fund in 2013, but whose nominal GNI per capita exceeds 90% of the average GNI per capita of the EU-27 receive support from the Cohesion Fund on a transitional and specific basis.
On the basis of Regulation 1303/2013 [last amended by Regulation 2015/1839 and Decision 2014/190], the Commission adopted a decision, by means of an implementing act, setting out the list of regions fulfilling the criteria of the three categories of regions eligible for funding from the European Regional Development Fund and the European Social Fund and of Member States eligible for funding from the Cohesion Fund for the period 2014-2020 [Decision 2014/99].
The Regulation on specific provisions for the support from the European Regional Development Fund to the European territorial cooperation goal defines, among other things the criteria for Member States and regions to be eligible for support from the ERDF [Regulation 1299/2013 and Decision 2014/366, last amended by Decision 2014/805].
Moreover, certain regions or areas benefit from specific measures and/or additional funding, notably: areas with an extremely low population density in Finland and Sweden, as referred to in Protocol 6 to the 1994 Act of Accession; the outermost regions mentioned in Article 349 of the Treaty on the functioning of the EU (ex Article 299 TEC), and areas with a natural handicap, i.e. certain islands, mountainous areas and areas with a low population density, as well as for certain border areas of the EU following enlargement.