European Social Fund and the Youth Employment Initiative: vital instruments for a job rich recovery

The European Social Fund (ESF) plays a fundamental role in supporting Member States' investment in human capital and thereby in strengthening the competitiveness of the European economy as it is emerging from the crisis. Every year the ESF assists over 15 million people by helping them to upgrade their skills, facilitating their integration into the labour market, combating social exclusion and poverty and enhancing the efficiency of public administrations.

In the 2014-2020 period, the ESF will also be instrumental in helping Member States to respond to the EU's priorities and recommendations for national policy reforms in the fields of active labour market policies, social inclusion and employment policies, institutional capacity and public administration reform. These investments will contribute to the Europe 2020 reforms and help millions of citizens to get a job or to improve their skills to do so in the future, often targeting those that are hardest to reach and sometimes not sufficiently covered by national systems.

The allocation of cohesion policy resources in the 2014-2020 financial period between the European Regional Development Fund and the European Social Fund (and therefore the final budget of each fund) will be decided in bilateral negotiations between the Commission and the Member States. This flexibility ensures that EU resources are allocated in the most effective way to address the key challenges each individual Member State faces, in particular on the way to reach the Europe 2020 strategy targets.

However, recognising the key importance of human capital for restoring EU competitiveness and putting it on a path of smart, green and inclusive growth, for the first time in the history of EU cohesion policy , a legally binding minimum ESF share in each Member State has been set out. This means that the ESF will have to represent at least 23.1% within cohesion policy funding in the 2014-2020 period thus putting an end to the gradual decrease of the ESF share of the EU cohesion policy budget over the past 25 years.

Method to establish the minimum national ESF shares

As a starting point, the share of the ESF in each Member State cannot be lower than the share of the ESF of the Structural Funds resources in the 2007-2013 period. In order to reflect the key importance of the ESF to support employment at the current juncture, the 2007-2013 share has to be further increased proportionately to the employment challenge in each Member State as expressed by its respective employment rate. The detailed methodology for determining the ESF minimum share can be found in Annex IX of Regulation 1303/2013 . The resulting minimum ESF shares and corresponding minimum allocations to be respected are set out in the following table.

Youth employment

In addition to the ESF support that will result from bilateral negotiations as explained above, Member States which suffer from high youth unemployment will benefit from support drawn from a €3 billion special allocation (€3.2 billion in current prices) to fight youth unemployment under the Youth Employment Initiative (YEI). This money will be directed to support young people not in employment, education or training in regions experiencing youth unemployment rates above 25%. This special support will have to be complemented by at least the same amount drawn from the Member States' ESF allocations and in particular help Member States to implement their Youth Guarantee Implementation Plans ( MEMO/14/13 ).

The allocation of the €3 billion special envelope per Member State is set out in the following table:

*Member States have to match these amounts by at least the same amounts from their European Social Fund allocation.

Concentrating funding and partnership

Concentrating funding for achieving results will be crucial in the 2014-2020 period: the ESF will focus its interventions on a limited number of priorities in order to ensure a sufficiently high critical mass of funding to make a real impact. These priorities will be determined in the Partnership Agreements and Operational Programmes resulting from bilateral negotiations between the Commission and each Member State.

However, apart from the obligatory earmarking of ESF to youth support in the YEI-eligible Member States, each Member State will have to allocate at least 20% of its overall European Social Fund envelope to social inclusion support measures. This will ensure a critical mass of support to help people in difficulties and those from disadvantaged groups to get skills and jobs and have the same opportunities as others to integrate into the labour market. By doing so, the ESF will significantly contribute to the EU 2020 target to reduce the number of people in poverty by 20 million.

The ESF will be implemented in close cooperation between public authorities, social partners and bodies representing the civil society at national, regional and local levels throughout the whole programme cycle.