The analysis in Chapter Five has given EU social investments a mixed bill of health: EU social investments foster employment in rich regions, which should be unsurprising given the strong focus on improving education, training and employment prospects. However, young people, who have been a key focus of the ESF over almost 30 years and are one of the most vulnerable groups to social exclusion in society, do not appear to benefit. In addition, EU social investments are found to have adverse effects on income inequality in poor regions, for which EU regional funding is mainly intended, and where people face pervasive inequality and extensive loss of opportunities.

This chapter seeks to provide a deeper understanding of why EU spending fosters employment but harms distributive justice. It explores the argument developed in Chapter Three that richer regions are more likely to capitalize on the effects of EU social investment on well-being, due to their superior endowments of human and social capital compared to poor regions. Consistent support for skilled labour in wealthy areas within regions implies that the already better off benefit the most from social investments. Building on this argument, this chapter identifies five main barriers to obtaining wellbeing effects from EU social investments. These barriers were identified based on an inductive analysis of news media evidence gathered from the daily bulletins provided by Agence Europe, qualitative and standardized interviews with domestic and EU policymakers conducted during and in the aftermath of the 2007–12 crisis (see Appendix A), and insights from previous literature on EU regional and social policy (e.g., Pierson, 1996; Chalmers, 2013; Schraff, 2014).

In a nutshell, I show that regional and national authorities tend to select projects in ways that maximize their own interests, and that there are powerful structural barriers to providing these authorities with incentives to pursue EU social goals forcefully: (a) social and economic investments remain largely siloed; (b) social funding amounts continue to be small; (c) small amounts are spread thinly and to richer areas; (d) informational asymmetries persist; and (e) shortfalls in administrative capacity in poor regions undermine the ability of resource-poor actors to attract EU funding. I discuss each barrier in turn.

Social and economic investments remain siloed

It is neither news nor surprising that domestic practices in using EU funding do not systematically take social performance into consideration when budgeting, formulating OPs and selecting projects (e.g., Bachtler et al, 2019).