Local and regional leaders back increased financial support for Ukraine but warn of risk of undermining territorial cohesion through a more centralised management of EU funds.
Members of the European Committee of the Regions (CoR) on 5 July discussed the proposal for a mid-term review of the European Union’s Multiannual Financial Framework (MFF) with the EU Commissioner for Budget and Administration, Johannes Hahn.
The review of the long-term budget 2021-2027 of the EU, which the European Commission presented on 20 June, responds to the CoR’s call that new tasks need new financial resources to cope with current and future crises, from the war in Ukraine to natural disasters. As requested by regions and cities, the Commission suggested a revision of the MFF that also includes additional own resources in 2023, which are needed for the sound financial management of the EU budget.
During the debate with Commissioner Hahn, local and regional leaders welcomed the proposed €50 billion Ukraine Facility to support the country's reconstruction after the war. CoR members emphasised that they view Ukraine's reconstruction as a European necessity and a moral duty, and that reconstruction will require Europe-wide coordination of direct support actions by the Member States and additional resources. Regions and cities also expressed their strong appreciation for the recognition of the importance of decentralisation and local development in the reconstruction process in Ukraine. The proposed Facility highlights the need for close consultation and participation of local authorities and their associations in the recovery and aims at strengthening stakeholders' and local authorities' capacities, in line with the activity of the European Alliance of Cities and Regions for the Reconstruction of Ukraine.
CoR members support the ambition laid out in the MFF mid-term review to invest in critical sectors such as digital, clean and bio-technologies. However, they are concerned that the proposed Strategic Technologies for Europe Platform (STEP) may lead to a centralised management of EU funds, may undermine social, economic, and territorial cohesion, and go against the multilevel governance and partnership principles of Cohesion Policy.
The President of the CoR, Vasco Alves Cordeiro, said: "Welcoming Commissioner Johannes Hahn at the plenary session of the European Committee of the Regions was an important moment for all members of our assembly to discuss the current mid-term revision of the Union’s multiannual financial framework. I raised the issue that the renationalisation of EU funds could put EU key objectives such as cohesion at risk. The recent trend to use Cohesion Policy funds to tackle other challenges of the Union worries me and many other local and regional representatives. We count on the Commissioner‘s strong support for Cohesion Policy, which he expressed during the plenary. The Committee has started the debate on what is needed to give Cohesion Policy a new impetus. Only a strong Cohesion Policy, anchored in all EU policies, can ensure that citizens feel a strong sense of belonging to the European project.”
The Chair of the CoR Commission for Territorial Cohesion Policy and EU Budget (COTER) and mayor of Cluj-Napoca, Emil Boc (RO/EPP), said: “Cohesion policy is the solution, not the cause of our problems of poverty and deep regional disparities in the European Union. We, local and regional authorities, have cohesion projects in every corner of the European Union to meet the objectives of Cohesion Policy. We need more money, more money allocated directly to cities and regions and less bureaucracy on the ground in the process of the implementation of European funds.”
Commissioner Hahn said: "I am very grateful for the extraordinary efforts of local and regional authorities, because making the best use of our common means is a joint effort. As we are now facing unpredictable challenges, we need to underpin our common policy with funding. Together we can support Ukraine, manage migration and boost competitiveness much more effectively and it is also more cost-efficient than individual Member States trying to solve things on their own."
Local and regional authorities also welcomed the proposed €2.5 billion increase of the Solidarity and Emergency Aid Reserve as it will strengthen the EU's ability to respond to natural disasters such as floods, droughts and forest fires, which are unfortunately hitting regions and cities with increased frequency.
The assessment of the European Commission's proposal by local and regional leaders will feed into two new opinions. One - on the overall MFF revision - will be led by José Manuel Ribeiro (PT/PES), Mayor of Valongo; the other – on the Ukraine Facility -- will be drafted by Dario Nardella (IT/PES), Mayor of Florence.
The opinion drafted by Thomas Habermann (DE/EPP), District Commissioner of Rhön-Grabfeld, incorporates the requests of regions and cities for the MFF mid-term review. It was adopted one month ago by the CoR Plenary.
On 20 June, the European Commission presented a review and a "targeted and limited" revision of the MFF 2021-27 to respond to EU political priorities and legal obligations. The proposal will now be taken forward with the European Parliament and EU Member States in the Council for the final approval.
The European Alliance of Cities and Regions for the Reconstruction of Ukraine was established in June 2022 by associations of Ukrainian and EU regions and cities together with the CoR, to coordinate efforts for the recovery and reconstruction of Ukraine and to facilitate contacts and cooperation with EU institutions. The Alliance is open to individual cities and regions and to public and private-sector partners wishing to support Ukraine. Members of the Alliance meet today, 6 July, in Brussels. More information here.
Hannah Cornelsen - Spokesperson of the President
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