Cohesion policy may be described as s a part of redistribution policies according to Margrave’s typology of the goals of public expenditure. The main aim of redistribution is to promote equality or in other words to reduce inequality among different subjects, i.e. the reduction of disparities between different regions and social groups in the EU.

As far as the EU budget is created due to a balanced-budget principle, that means revenue must equal or exceed expenditure, it is necessary to be able to promote already mentioned equality within EU – referring to Article 2 of the Treaty on European Union, which consists of objectives of the European Union, e. g. promoting economic and social progress, a high level of employment, achieving balanced and sustainable development, through the strengthening of economic and social cohesion and to Article 158 of the Treaty establishing the European Community, which reads as following: …strengthening of its economic and social cohesion – but within the budgetary framework taking into account for instance coming enlargement, growing discontent of netto payers.
The cohesion policy is along with the CAP one of the two main expenditure categories. In the period of time between 1988 and 1999 the expenditure on the cohesion policy increased from under 20 per cent of the EU budget to over 35 per cent. Together with the CAP it comprises cca. 81 per cent of the expenditures of the EU budget.

For the abovementioned goals the EU might use following funds:

The European Regional Development Fund – accounted for 49 per cent of the 1994-99 cohesion budget

The European Social Fund – accounted for 30 per cent of the 1994-99 cohesion budget

The Guidance Section of the European Agricultural Guidance and Guarantee Fund – accounted for 180 per cent of the 1994-99 cohesion budget

The Financial Instrument for Fisheries – accounted for 3 per cent of the 1994-99 cohesion budget

In 1999 reform has increased the concentration of assistance and therefore introduced a new system of priority objectives:

Objective 1 promotes the development and structural adjustment of regions whose development is lagging behind, i.e. whose average per capita GDP is below 75% of the European Union average.