However, Community-level regional policy did not exist at this point in time; only indirect regulations were introduced. The Spaak report is, amongst others, the reason for this, which anticipates territorial disparities to even out through economic growth, and on the basis of which the member states of the Community prioritised the abolition of restrictions on trade and the establishment of a single market. Moreover, US experiences also demonstrated how it is possible to truly eliminate territorial disparities if there is a sufficient degree of capital mobility.
It became evident in the 1960s that the mechanism targeting the elimination of disparities does not operate in the member states of the Community the same way as it does in the states of the USA, since there are significant social disparities between the two continents. This process did not function, disparities only further increased between the developed and under-developed regions of the Community. Member states responded to this by establishing an independent regional policy; however, these policies varied from one country to another as regards their instruments and mechanisms alike, and in many cases even violated the common competitiveness policy. The Commission compiled a report in 1965, which highlighted the need to cooperate at various levels. The Directorate General for Regional Policy was set up 1968 for coordinating national policies.
Defining regional policy at a Community level became necessary for several reasons at the beginning of the 70s. One being that the customs union was established in 1969, which increased competitiveness, as well as regional disparities; therefore, the Council issued a report, which set out four priorities in connection with the regional policy, in addition to putting forth a proposal concerning the institutional system. The second reason for defining a regional policy relates to the Werner Plan announced publicly in 1970, which plan espouses the establishment of an economic and monetary union. However, this concept also suggested the need to coordinate economic policies, since member states were in very different situations, as regards their budgets and foreign trade. An agreement was concluded in 1971 on the coordination of economic policies, and the first directive regulating regional funding was also published. The third reason relates to how new member states joined the Community for the first time in 1973, amongst which countries it is worthwhile primarily mentioning Great Britain and Ireland, since Great Britain became one of the losers of the common budget, whilst Ireland was the most under-developed and backward territories of the Community, which caused great concern for the 6 founding member states. The regional policy was reformed during the second half of the 1970s, and on several instances during the 1980s. Financial instruments were increased for the first time in 1978, as a result of the impact of the MacDougall Report proposing a significant increase of budgetary contributions. Moreover, the requirement of coordinating member state and Community funding was also defined at this point in time, as well as how Community funding does not substitute member state funding. The requirement to develop development plans was also introduced. The second reform took place in 1984, when the automatic quota system was abolished and resources within the scope of competency of the Commission were given the title Community Initiatives. The enlargement of 1986, during which process two countries that failed to reach the Community average by a considerable margin joined the ten member states of the Community, once again made it necessary to introduce reforms; the Single European Act approved in 1986 specified the basis of these reforms, which in turn defined the policy at a Community level.
The reforms prepared by SEA were approved as Delors Plan I in 1988. In addition to regional policy, this also transformed the budget, since it was necessary to ensure coverage for the increasing rate of expenditures. The operations of the various regional policy funds were reconciled, standard sets of principles were introduced and the Structural Funds were also re-regulated within the context of the reform. This is when the operational core principles and objectives of the funds were defined, which were finalised by the Treaty of Maastricht in 1993, which is also the first step taken towards the establishment of the monetary union. The Treaty amended the objectives defined in 1988 and set up the Cohesion Fund with the role of closing the development gap in the case of the most under-developed member states.
The last reform was introduced in 1999 at the meeting of the European Council held in Berlin. AGENDA 2000 proposed in 1997 served as background to this, which document defines the strategy of the European Union vis-à-vis enlargement, extending its scope and financing these operations. The reform is exceptionally relevant for Hungary as well, since the Hungarian system will also need to comply with these regulations following the accession of the country.