In line with the objective of preventing the widening of disparities caused by the COVID-19 pandemic and avoiding an uneven recovery process, it is necessary, through cohesion policy instruments, to provide additional support over the short and medium term to Member States and regions worst hit by the pandemic.
The objective of the CoR opinion is to provide input into the legislative procedure of adopting a REACT-EU regulation by means of an amendment to the existing Common Provisions Regulation
On 18 November 2020, the European Parliament and the German Presidency of the Council reached a political agreement on the REACT-EU proposal. It features the following elements:
Total flexibility for Member States to decide the share of the resources for the ERDF, the ESF – including the Youth Employment Initiative, and the FEAD;
No pre-determined breakdown by category of regions to direct the resources to where they are most needed;
The possibility of EU co-financing of investments up to 100%;
The retroactive eligibility of expenditure from 1 February 2020, encompassing both physically completed and fully implemented operations (provided that they have started as of 1 February 2020), in continuity with the CRII and CRII+;
The end date for the eligibility of expenditure on 31 December 2023, in line with the 2014-2020 legislative framework;
The possibility to allocate resources also to existing cross-border cooperation programmes under the European Territorial Cooperation goal;
The allocation of 70% of the national envelopes in 2021 based on the socio-economic effects of the crisis, including the level of youth unemployment and the relative prosperity of Member States, with the remaining 30% for 2022 being calculated at the end of 2021 on the basis the latest statistical data;
Exceptionally no breakdown by category of regions. Member States need to ensure a balanced support between the needs of the areas most affected by the impact of the COVID 19 pandemic and the need to maintain focus on less developed regions.
Finally, in order to allow for a smooth and quick mobilisation of investments, ex-ante conditionalities, thematic concentration requirements and performance framework do not apply to REACT-EU. The Commission will do its utmost to approve programmes and programme amendments within 15 working days after submission.
The final agreement has been reached taking into account also the following coR recommendations:
The REACT-EU will cover also the ETC goal
The new regulation addresses the increased risk of poverty and a deepening of social cleavages in the EU
The Commission should approve amendments to existing programmes or new programmes within 15 working days after their submission by a Member State (this was taken on board only partially; the CoR asked for 10 working days maximum).
The regulation 2221/2020 (OJ L 437, 28.12.2020, p. 30-42) entered into force on 29 December 2020.
THE EUROPEAN COMMITTEE OF THE REGIONS
- highlights the importance of cohesion policy and its capacity to support cities and regions in times of crisis; stresses that the challenges addressed by REACT-EU require tailor-made and territorially adapted strategies;
- underlines the need to strike a balance between fast disbursement of newly available resources and the need to avoid irregularities, systemic errors or fraud;
- insists that cohesion policy should not lose sight of its long-term objectives and development needs when implementing short-term priorities;
- takes note of the exemption from the thematic concentration requirement under REACT-EU, but recommends a minimum thematic concentration to ensure the funds spent on crisis repair are in line with the EU 2050 climate neutrality goal;
- calls on the Member States to make innovative use of the additional resources to bring their economies closer to a green, digital and resilient development path ensuring longer-term recovery;
- stresses that the COVID-19 pandemic and unilateral closing of borders in a number of Member States have caused massive damage to border regions which needs to be properly addressed;
- underlines that post-2020 cohesion policy should be more flexible so as to absorb potential negative shocks such as the current pandemic;
- underlines that regions and cities were at the forefront of the Covid-19 pandemic and are the best places to ensure recovery from asymmetric shocks such as the crisis;
- stresses that the measures justified by the COVID-19 crisis should under no circumstances lead to an attempt to centralise the implementation of cohesion policy in the post-2020 period;
- underlines that decentralised EU funding for regions and cities is an effective way to lay the foundations for a medium- and long-term sustainable recovery.