Financial Support
A regional development grant is one of the types of financial support that the EU provides. This may help some countries to reduce unemployment. A regional development grant is given to a business by the government to start up in an area of high unemployment. The business will put a sum of their own money to start up. The agreement that will take place will be that the business will try and reduce unemployment.
Poorer regions will get help by getting regional development funds to improve a community’s infrastructure and to create jobs
Source
Under the banner of EU Structural Funds, actually several funds are grouped. These are:
- The European Regional Development Fund (ERDF), which aims to reduce the gaps in development between the Union's regions
- The European Social Fund (ESF), which has the task of improving employment prospects in the Union;
- The European Agricultural Guidance and Guarantee Fund (EAGGF), which assists in part-financing national agricultural aid schemes and in developing and diversifying the Community's rural areas;
- The Financial Instrument for Fisheries Guidance (FIFG), which assists in the restructuring of the fisheries sector.
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Employment initiatives
This is a programme that is set up for unemployed people to get jobs. Problems of unemployment occur when big factories in a certain area close down and a huge amount of people with few qualifications are made redundant. There will be a few people who have qualifications that can get jobs in other sectors and other who might not have much qualifications or experience would have to claim benefits of governments. This would be because there would be no other job opportunities, as other businesses around the factory would be shut down, as people will not have money to spend. This can cause serious problems in the community. Crime and drugs could rise which would mean that the government would have to employ more police officers within the area.
The government will want to create jobs within the economy and to improve economic prosperity. For example if they open a factory there will be jobs created for people within the community. This then would mean that people will have money to spend which would then lead to other shops and restaurants opening which would create more jobs. This is called the ripplr effect.
Improvements to infrastructure
This is a network of necessary services to help and support the community. Examples of basic service infrastructure could be electricity, gas, and water. Example of communication services could be roads, railways, telephone networks, postal services etc.
Infrastructure can be very important to a business as it can affect them in a number of ways. If communication services are good and there are good roads, for businesses this would mean that they could deliver goods quickly to customers, communicate well with customers and they can receive their stock to make products easily. Businesses can benefit by being close to air transport or rail links if they use it.
If there is a break down in a service then it could cost businesses a lot of money. It can also cause problems for consumers for example factories could loose production if stock is delivered late.