On Tuesday, EU legislators reached a provisional political agreement on how EU countries will be able to spend EU regional, cohesion and social funds for 2021-2027.
Parliament’s and Council’s negotiators agreed that the total resources for economic, social and territorial funds available for 2021-2027 are 330 billion EUR (330 234 776 619 in 2018 prices).
The deal means less developed regions will continue to benefit from substantial EU support with co-financing rates of up to 85% of funds provided by the EU. The co-financing rate for transition regions and more developed ones has been set to 60% and 40% respectively.
The new CPR slightly redefines the thresholds of the three categories of regions:
- less developed regions – GDP per capita less than 75% of the EU average
- transition regions – GDP per capita between 75% and 100% of the EU average
- more developed regions – GDP per capita above 100% of the EU average
All cohesion programmes require national contributions in addition to EU funding. The co-legislators agreed that the share of EU resources shall not be higher than:
- 85% for less developed and outermost regions
- 70% for transition regions that were classified as less developed in the 2014-2020 period
- 60% for transition regions
- 50% for more developed regions previously classified as transition regions
- 40% for more developed regions
The Cohesion Fund will still support only those member states whose GNI per capita is less than 90% of the EU average. The EU co-financing rate will not exceed 85%.
The main structural and investment funds are the European Regional Development Fund, the European Social Fund Plus and the Cohesion Fund, while the new Just Transition Fund is part of the European Green Deal. The programmes financed by these funds aim to reduce the economic and social disparities within member states and across Europe, thus reinforcing the single market.
Simplifying and strengthening the Partnership Agreement
Partnership agreements, which are prepared by national authorities, for the European Regional Development Fund (ERDF), the Cohesion Fund, the European Social Fund Plus (ESF+) and the European Maritime and Fisheries Fund (EMFF) will be simplified and limited to 35 pages, unless member states wish to go further. Regional, local, urban and other public authorities, economic and social partners, civil society, as well as research bodies, where appropriate, will be key partners to the agreements.
Introducing horizontal principles for EU funds
Parliament succeeded in integrating four main overarching principles to adhere to in order to receive EU funding: (1) compliance with the EU Charter of Fundamental Rights; (2) gender equality and mainstreaming; (3) fighting discrimination; and (4) the respect of the UN Sustainable Development Goals and the Paris Climate Agreement.
Sound economic governance
Measures linked to funds being suspended when countries do not comply with EU economic and employment policies guidelines will be time-limited (suspension procedures may be applied only between 2023 and 2025). Sanctions linked to non-compliance with national economic targets, such as excessive deficit, will not be applicable as long as the general escape clause of the Stability and Growth Pact is activated. ESF+ and Interreg funds may not be suspended.
Other key measures
- Mainstreaming climate action: the funds will contribute to achieving an overall target of 30% of the EU budget expenditure supporting climate objectives and will respect the „do no significant harm“ principle of the Green Deal;
- Simplified objectives: There are now five policy objectives (instead of 11 in the previous period): a more competitive and smarter Europe; a greener, low-carbon transitioning towards a net zero carbon economy and resilient Europe; a more connected Europe; a more social and inclusive Europe; a Europe closer to citizens.
- Mid-term review: 50% of the remaining funds can now be allocated elsewhere for the last two years of the programming period;
- Audit requirements: following the EP position, member states which are part of the European Public Prosecutor’s Office will benefit from simplified audit procedures;
Co-rapporteur Andrey Novakov (EPP, BG) said: “Agreed after two years of negotiations! This means that member states now have clarity on programming, implementation and closure of their programmes. Finally, we can plan the budget of over 330 billion EUR. I am glad to see an agreement on Parliament’s initial demands: 85% EU co-financing for less developed regions. There will be thus less pressure on central and municipal budgets in times of recovery.”
Co-rapporteur Constanze Krehl (S&D, DE) said: “I am very happy that cohesion policy got sufficient means in the end so all regions can participate and profit from it. It is very important for the regions that we could agree on raising the co-financing rates above what was in the Commission’s proposal. We managed to make cohesion policy fit for the future, especially concerning social and environmental issues. I’m glad that, thanks to the European Parliament, 30% of the budget will be spent on the fight against climate change.”The full text of the draft regulation will be finalised by the co-legislators in the first months of 2021 under the Portuguese presidency.
Foto: Guillaume Périgois | unsplash.com