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Cross-border
economic
development 74 Cross-cutting themes in cross-border economic development
Funding partnerships and projects
There are as many frameworks for financing cross-border economic
partnerships and projects as there are potential financiers and
beneficiaries. The adoption of Europe 2020 and the start of the new
2014-2020 programme period have redefined procedures for the use
of this funding, especially with regard to the areas targeted (innovation,
assistance to SMEs, employment, etc.) and the links between them.
Three major categories of financing may be identified: European funding,
national and territorial authority funding, and cross-border venture
capital funds.
European funding
The European Structural and Investment Funds (ESIF) are the main
source of funding at the cross-border territory level, notably through the
European territorial cooperation programmes (ETC, formerly INTERREG),
which directly co-finance projects.
In the economic field, ETC programmes co-finance initiatives related to
entrepreneurship, innovation and competitiveness (business start-up
support, cross-border networks and clusters, technology transfer, uptake
of ICTs, business incubators, etc.), strategic and financial assistance
to SMEs (access to capital in the start-up and growth phases, legal/
administrative/tax support, etc.), help with cross-border development
(support for internationalisation) and human resources.
Other European programmes may also contribute (e.g. the European
Social Fund and the EURES placement services for job seekers).110
The 14 cross-border cooperation programmes for 2014-2020 relating
to mainland France and its overseas territories put even greater
focus on economic development and employment priorities than the
programmes of the previous period did.
110 European Commission, Enabling synergies between European Structural and Investment
Funds, Horizon 2020 and other research, innovation and competitiveness-related Union
programmes.
Nine programmes, a majority, have assigned funds to strengthening
research and innovation (thematic objective 1) and promoting the
competitiveness of SMEs (thematic objective 3). In addition, six
programmes have devoted a significant portion of funds to supporting
employment and mobility (thematic objective 8) and five to promoting
social inclusion and combating poverty (thematic objective 9).
In the 2014-2020 period, greater attention will also be paid to measuring
the impact of aid on territories. Indicators of performance and results have
been designed to do so, notwithstanding the numerous methodological
and practical challenges, and will help to provide objective data on the
dynamics of cross-border economic development.
In previous programme periods, businesses were only very rarely the
direct beneficiaries of these funds, which were mostly used by public
and semi-public bodies to implement actions with strong economic
leverage for the cross-border territory.
Direct aid to businesses is regulated by the state aid regime, and
is authorised only in certain cases (defined in Articles 107-2 and 3
of the Treaty on the functioning of the European Union) where such
assistance to businesses affects neither trade between Member states,
nor competition, two key principles of the internal market. This is the
case when state financial aid remedies market failure or promotes the
common interest (innovation, energy performance, employment and
training, development of the least-developed regions, etc.), and also
when it is deemed appropriate and proportional to the extent that it
is the aid instrument that creates the least distortions and is limited
strictly to needs.
To these general criteria for compatibility of state aid with the
single market may be added highly specific conditions under which
it can be granted to businesses: incentive effect of the aid (change
in behaviour of the beneficiary), compliance with the list of eligible
costs, transparency, compliance with maximum aid intensity, rules for
cumulation of aid measures (depending on the purpose and spending
base) and the de minimis rule, which authorises aid of up to €200,000
per consolidated company over a three-year period.111 In addition to
its complexity, legislation relating to state aid is constantly evolving,
both legally and jurisprudentially.
111 See the CGET’s website on regulations applicable to state aid to companies: