Cohesion Policy supporting rural areas and communities

This is not a rhetorical question: while we all have our idea of what a rural area is, the EU needs a detailed and common definition of rural areas in order to channel its investments in the most targeted manner possible. To this effect, EUROSTAT created a "degree of urbanisation" typology. The typology is based on a cross EU analysis of population location and density using the square kilometer population grid cells. The typology distinguishes three types of territories: 1) Cities, 2) Towns and Suburbs and 3) Rural areas. The latter are thinly populated areas with a majority (>50%) of the population living in rural grid cells (cells outside urban clusters).

Using this definition, it appears that rural areas in the EU cover 83% of the EU territory and were home to 29,1% of the EU population in 2018, while 39.3% of the population lived in cities and 31.6% lived in towns and suburbs.

In view of its initiative to design a vision for the future of rural areas by 2040, the European Commission has identified challenges salient for rural areas:

Despite these challenges, there are many opportunities in rural areas. They produce high quality food and non-food products and contribute to the richness and diversity of European culture. Their important role in ensuring the stewardship of natural resources and mitigating the effects of climate change will make them a crucial part of the transition to a green and sustainable Europe. Many eco-system services (food, feed, raw materials, water regulation, biodiversity, etc.) depend upon and are generated in rural areas. They can play a crucial role in ensuring balanced territorial distribution of the population avoiding overpopulation of cities. Furthermore, the COVID-19 crisis may introduce significant changes to society (increased home officing, appreciation for green spaces) which rural areas could benefit from.

To deal with the diverse challenges of rural areas and communities, interventions have to zoom-in on the specific situations on the ground. This reflects the fact that the situation is different between and within each country and region, for example in terms of the impact of demographic change.  A key question for rural areas is whether they are close to a city or far away from any functional urban area. Rural areas that are close to a city may have frequent interactions with that city requiring coordination and the mitigation of  negative effects. While remote rural areas, such as mountainous, island or sparsely populated areas, can face different challenges, for example, the preponderance of the primary sector and associated value chains or lower population and economic growth.

The challenges and opportunities identified can serve as basis to orient investments in rural areas, including Cohesion Policy investments.

Cohesion Policy investments target all EU territories. €35 billion from the EU budget (more than €46 billion with national contributions) are planned to be invested in rural areas for the 2014-2020 period, representing close to one quarter of all Cohesion Policy investments that target a specific type of territory (as of April 2023, including REACT-EU). These figures however only capture the investments clearly allocated by programmes to rural areas. Around 60% of Cohesion Policy investments are not linked to a specific type of territory. It is therefore likely that rural areas are actually benefiting from more Cohesion Policy investments than what is reflected in the chart below.

Find out more about Cohesion Policy investment by type of territory by reading this story.

In order to be fully meaningful, Cohesion Policy investments should also be compared to population to measure aid intensity. Cohesion policy aid intensity, which corresponds to funding per person and per year, appears to be systematically higher in rural regions. Analysis of previous programming periods suggest that aid intensity in rural regions is the highest, with 549 euros per inhabitants, against 282 euros in cities and 482 euros in towns and suburbs.

It is to be noted that rural areas are also supported by other EU funds, most notably the European Agricultural Fund for Rural Development (EAFRD) with an EU envelope of €100,1 billion for the 2014-2020 programming period.

Lastly, the shares of Cohesion Policy funds allocated to rural areas significantly differ from one country to another. This can be due to multiple factors, including the significance of rural areas, the level of development, the complementarities with the rural development fund (EAFRD), or the extent the investments are linked to a specific territory.

In absolute terms, Poland is the EU country with the highest Cohesion Policy budget allocated to rural areas (€8.6 billion), followed by the Czech Republic (€4.4 billion) and Portugal (€3.6 billion). In relative terms though, the highest share of Cohesion Policy funds for rural territories was planned by Austria (23%), followed by the Czech Republic and Finland (each with 21%).

Given the significance of rural areas in cross-border regions and  transnational macro-regions, Interreg or European territorial cooperation programmes (TC) allocate a significant budget (€1.3 billion) to rural areas.

The selection of operations under the rural area territorial label are progressing steadily in the majority of EU countries, even exceeding, in some of them, the initially planned amounts.

Absorption in rural areas is also particularly advanced in the Czech Republic, followed by Poland and Portugal. Although Croatia reported some expenditures in rural areas, it does not appear in the adjacent visualisation as there was no amount planned for this territorial code. Likewise, Cyprus, Denmark and the Netherlands did not plan funds specifically targeting rural areas.

To know whether Cohesion Policy investments address the challenges and accompany the opportunities of EU rural areas, one should look at the nature of the investments. Cohesion Policy investments for the 2014-2020 are divided into eleven Thematic Objectives, which correspond to broad categories of investment type.

The “Multiple Thematic Objective” category is the most commonly used when reporting the nature of investments planned in rural areas (23%),  while 76% are linked to individual Thematic Objectives (TOs). Among them, the largest amounts went to the thematic objective “Environment Protection and Resource Efficiency”. This is very much in line with the need to enhance the inherent comparative advantage of rural areas regarding the mitigation of the effects of climate change. The second thematic objective in terms of planned amounts is called “Network Infrastructures in Transport and Energy”. Investments under this objective appear as an answer to the challenge of limited access to services faced by populations of rural areas. Among the most used thematic objectives, investments under "Competitiveness of SMEs" help rural businesses to innovate, harness digitalisation, and build on the strengths of the rural and remote areas as part of their smart specialisation strategies. These investments also enhance the role of rural areas in the transition to a green and sustainable Europe. Investments under the thematic objective “Network Infrastructures in Transport and Energy” are the most performing ones, with decided operations much higher than planned ones and absorption approaching 100%.

To help respond the diverse needs and challenges of rural areas, Cohesion Policy also provides targeted and coordinated set of investments through integrated territorial and local development strategies. The Commission carries out further research to identify the territorial scope and other features of these strategies, and publishes information on the mapping webtool Strat-Board.

In the 2014-2020 period, Cohesion Policy funds support more than 900 territorial and local development strategies beyond urban areas through the so called integrated territorial tools. In rural areas, the majority of these tools are community-led local development (CLLD), but integrated territorial investment (ITI) and other national approaches also play an important role for these areas. ITI strategies include a larger percentage of rural areas close to a city, while CLLD strategies are more often covering remote towns and small urban areas. More than half of these strategies draw resources also from the rural development fund (EAFRD), and sometimes the fisheries fund (EMFF) besides the Cohesion Policy funds.

In addition, many sustainable urban development strategies also cover and support rural areas in recognition of the importance of rural-urban linkages. The emergence of the functional area approach can bring new opportunities for rural areas in pooling resources, providing sustainable access to services or facilitating mutually beneficial partnerships on specific subjects (e.g. food procurement, regional mobility). 

Behind these aggregated figures, hundreds of projects benefiting to rural areas are in the making throughout the EU. The REGIO project database provides examples of projects that are directly linked to the priorities that need to be addressed in rural areas. Below you will find a selection of those projects.  

More on the Cohesion Open Data Platform: ODP BLOG - Presentation of the ODP (ppt) - ODP FAQ - User Guide to ODP - Data catalogue
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