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The European Green Deal Investment Plan and Just Transition Mechanism

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The European Union is committed to becoming the first climate-neutral bloc in the world by 2050. This requires significant investment from both the EU and the national public sector, as well as the private sector. The European Green Deal’s Investment Plan – the Sustainable Europe Investment Plan – presented today will mobilise public investment and help to unlock private funds through EU financial instruments, notably InvestEU, which would lead to at least €1 trillion of investments.

While all Member States, regions and sectors will need to contribute to the transition, the scale of the challenge is not the same. Some regions will be particularly affected and will undergo a profound economic and social transformation. The Just Transition Mechanism will provide tailored financial and practical support to help workers and generate the necessary investments in those areas.

The President of the European Commission, Ursula von der Leyen, said: “People are at the core of the European Green Deal, our vision to make Europe climate-neutral by 2050. The transformation ahead of us is unprecedented. And it will only work if it is just – and if it works for all. We will support our people and our regions that need to make bigger efforts in this transformation, to make sure that we leave no one behind. The Green Deal comes with important investment needs, which we will turn into investment opportunities. The plan that we present today, to mobilise at least €1 trillion, will show the direction and unleash a green investment wave.”

Executive Vice-President for the European Green Deal, Frans Timmermans, said: “The necessary transition towards climate-neutrality is going to improve people’s well-being and make Europe more competitive. But it will require more efforts from citizens, sectors and regions that rely more on fossil fuels than others. The Just Transition Mechanism will help support those most affected by making investments more attractive and proposing a package of financial and practical support worth at least €100 billion. This is our pledge of solidarity and fairness.”

Valdis Dombrovskis, Executive Vice-President for an Economy that Works for People, added: “For Europe to transition to a climate-neutral economy, we need both political commitment and massive investments. The Green Deal shows our determination to tackle climate change, which we are now backing up with a funding plan. First, we will use the EU budget to leverage private funds for green projects across Europe and support the regions and people most affected by transition. Second, we will create the right regulatory incentives for green investments to thrive. Last but not least, we will help public authorities and market players to identify and develop such projects. The European Union was not built in a day. A Green Europe will not happen overnight. Putting sustainability at the heart of how we invest requires a change of mindset. We have taken an important step towards achieving this today.”

The European Green Deal Investment Plan

The European Green Deal Investment Plan will mobilise EU funding and create an enabling framework to facilitate and stimulate the public and private investments needed for the transition to a climate-neutral, green, competitive and inclusive economy. Complementing other initiatives announced under the Green Deal, the Plan is based on three dimensions:

  • Financing: mobilising at least €1 trillion of sustainable investments over the next decade. A greater share of spending on climate and environmental action from the EU budget than ever before will crowd in private funding, with a key role to be played by the European Investment Bank.
  • Enabling: providing incentives to unlock and redirect public and private investment. The EU will provide tools for investors by putting sustainable finance at the heart of the financial system, and will facilitate sustainable investment by public authorities by encouraging green budgeting and procurement, and by designing ways to facilitate procedures to approve State Aid for just transition regions.
  • Practical support: the Commission will provide support to public authorities and project promoters in planning, designing and executing sustainable projects.

The Just Transition Mechanism

The Just Transition Mechanism (JTM) is a key tool to ensure that the transition towards a climate-neutral economy happens in a fair way, leaving no one behind. While all regions will require funding and the European Green Deal Investment Plan caters for that, the Mechanism provides targeted support to help mobilise at least €100 billion over the period 2021-2027 in the most affected regions, to alleviate the socio-economic impact of the transition. The Mechanism will create the necessary investment to help workers and communities which rely on the fossil fuel value chain. It will come in addition to the substantial contribution of the EU’s budget through all instruments directly relevant to the transition.

The Just Transition Mechanism will consist of three main sources of financing:

1)   A Just Transition Fund, whichwill receive €7.5 billion of fresh EU funds, coming on top of the Commission’s proposal for the next long-term EU budget. In order to tap into their share of the Fund, Member States will, in dialogue with the Commission, have to identify the eligible territories through dedicated territorial just transition plans. They will also have to commit to match each euro from the Just Transition Fund with money from the European Regional Development Fund and the European Social Fund Plus and provide additional national resources. Taken together, this will provide between €30 and €50 billion of funding, which will mobilise even more investments. The Fund will primarily provide grants to regions. It will, for example, support workers to develop skills and competences for the job market of the future and help SMEs, start-ups and incubators to create new economic opportunities in these regions. It will also support investments in the clean energy transition, for example in energy efficiency.

2)   A dedicated just transition scheme under InvestEU to mobilise up to €45 billion of investments. It will seek to attract private investments, including in sustainable energy and transport that benefit those regions and help their economies find new sources of growth. 

3)   A public sector loan facility with the European Investment Bank backed by the EU budget to mobilise between €25 and €30 billion of investments. It will be used for loans to the public sector, for instance for investments in district heating networks and renovation of buildings. The Commission will come with a legislative proposal to set this up in March 2020.

The Just Transition Mechanism is about more than funding: relying on a Just Transition Platform, the Commission will be providing technical assistance to Member States and investors and make sure the affected communities, local authorities, social partners and non-governmental organisations are involved. The Just Transition Mechanism will include a strong governance framework centred on territorial just transition plans.

Background

On 11 December 2019, the Commission presented the European Green Deal, with the ambition of becoming the first climate-neutral bloc in the world by 2050. Europe’s transition to a sustainable economy means significant investment efforts across all sectors: reaching the current 2030 climate and energy targets will require additional investments of €260 billion a year by 2030.

The success of the European Green Deal Investment Plan will depend on the engagement of all actors involved. It is vital that Member States and the European Parliament maintain the high ambition of the Commission proposal during the negotiations on the upcoming financial framework. A swift adoption of the proposal for a Just Transition Fund Regulation will be crucial.

The Commission will closely monitor and evaluate the progress on this transition path. As part of these efforts, every year the Commission will hold a Sustainable Investment Summit, involving all relevant stakeholders, and it will continue to work for promoting and financing the transition. The Commission invites the investment community to make full use of the enabling regulatory conditions and ever-growing needs for sustainable investments, and authorities to take an active role in identifying and promoting such investments.

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“Together for Europe’s recovery”: Germany takes over Council presidency

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While the corona pandemic continues, Germany took over the six-month presidency of the Council of the EU on 1 July. We asked German MEPs for their expectations.

The coronavirus represents a significant challenge for the EU and immediate management of the pandemic and recovery are at the heart of the German programme for the presidency.

The aim is to reach a swift agreement on the recovery fund and the EU’s budget 2021-2027. Germany intends to make progress on climate protection, through the European Green Deal, and economic and social digitalisation. With a focus on Africa and relations with China, it also wants Europe to take more global responsibility and strengthen its role in the world. Another priority will be future EU-UK-relations.

German priorities for the presidency 

  • Overcoming Covid-19 pandemic; economic and social recovery 
  • A stronger and more innovative Europe 
  • A fair Europe 
  • A sustainable Europe 
  • A Europe of security and common values 
  • A strong Europe in the world 

We asked German MEPs what they expect from the German presidency.

Daniel Caspary (EPP): “The EU multi-annual budget for 2021-2027 and the recovery fund will determine whether the EU emerges stronger from the corona crisis. The German presidency of the Council and Chancellor Angela Merkel can bring experience and expertise on European issues, a positive sign for the controversial and hard discussions.” Berlin can also provide an “important impulse” for the success of the negotiations on the EU-UK agreement, he said.

Jens Geier (S&D) sees potential for change in the Covid-19 crisis: “The federal government’s strong proposal for a recovery fund is an opportunity to make Europe fairer, more social and sustainable. In line with the European Green Deal, the recovery fund should promote sustainable investments in renewable energy and digitalisation. The fact that regions in need should also receive grants rather than just loans for reconstruction is a major step towards a strong Europe.”

“Europe now needs the courage to rebuild,” said Nicola Beer (Renew Europe): “Germany will be measured, among other things, by whether it can quickly kick-start the economic recovery, relying on innovation and small and medium-sized enterprises.“ On Brexit, she said there was a need ”not to slide into a no-deal scenario”. The EU should also “finally live up to its geopolitical aspirations, externally with a strong common voice for peace, disarmament, human rights and trade, internally by releasing the blockage in asylum and migration policies”.

German interests should not come second, said Jörg Meuthen (ID). “It is already the debt presidency,” he said. Germany should “reduce the EU to its core tasks and the budget to the minimum necessary, prevent EU taxing competence and instead include, as a sign of genuine solidarity, the per capita wealth of member states in the calculation of financial redistribution”.

For Sven Giegold (Greens/EFA), climate protection remains a priority: “The climate crisis is not taking a corona break. The German presidency of the Council must therefore become a climate presidency in corona times. During the German presidency, we need to conclude the negotiations for an EU climate law with improved greenhouse gas reduction targets.”

Helmut Geuking (ECR) hopes that the German presidency of the Council will “finally fulfil the Child Guarantee and launch a European child benefit”. “Only with strong families can a strong and social Europe emerge that can hold its own in the globalised world in the future.”

The presidency could “lay the foundations for a solidarity-based EU,” said Martin Schirdewan (GUE/NGL). “Everyone should contribute their fair share to the social and economic recovery and revival of society. This means the introduction of a digital tax, a comprehensive financial transaction tax and a one-off wealth tax for the super-rich.”

Germany will work closely with Portugal and Slovenia, which take over the presidency on 1 January and 1 July 2021 respectively. This is the 13th time Germany has held the Council presidency. The last time was in 2007.

Chancellor Angela Merkel will present and discuss her country’s programme in the European Parliament in Brussels at the next plenary session on 8 July. You can watch it live on our website.

German ministers will discuss the presidency programme with parliamentary committees at the beginning of July.

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Ursula von der Leyen: Next six months crucial for the EU

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© European Union 2019 – EP

The College of Commissioners met today via videoconference the Government of Germany for the beginning of the German Presidency of the Council of the EU. President of the European Commission Ursula von der Leyen said that the start of the German Presidency came at a crucial point in time as the next six months would, to a large extent, determine the future of the EU.

“Not only must we overcome the crisis, but rather we want to and we must also continue courageously along the path of modernisation within the European Union”, she said at the press conference following the meeting. “Europe’s most significant challenges before the crisis will remain the same once this crisis is over: climate change, digitalisation, and Europe’s position in the world.”

She reminded of the urgency of the task to forge an agreement on the NextGenerationEU and the long-term EU budget in the European Council, saying it was the crisis that ‘sets the pace’. “Every day we lose, we will be seeing people losing their jobs, companies going bust, and the weakening of our economies.”

In a statement issued earlier today, President von der Leyen invited David Sassoli, the President of the European Parliament, Angela Merkel, German Chancellor, in her capacity as rotating Presidency of the Council, and Charles Michel, the President of the European Council, to a meeting on 8 July to take stock of progress and prepare the intensive political negotiations that lie ahead.

Von der Leyen also noted that the priorities of the German Presidency and the priority projects the Commission adopted were fully aligned – from climate change to digitalisation to resilience. She said the Commission would also be closely working with the German Presidency during the ‘decisive phase’ of the Brexit negotiations, as well as on external relations.

She stressed that the two sides working together can help Europe navigate its way through this crisis with strength and unity, as well as make NextGenerationEU a catalyst for modernisation in Europe.

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Youth Employment Support: a bridge to jobs for the next generation

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European Commission is taking action to give young people all possible opportunities to develop their full potential to shape the future of the EU, and thrive in the green and digital transitions. The coronavirus pandemic has emphasised the often difficult start many young people face in the labour market. We need to act fast. Now is the time to direct our attention towards the next generation.

The Commission is using this opportunity to ingrain the green and digital transitions in the DNA of the EU’s youth and employment policies. With NextGenerationEU and the future EU budget, the Commission already proposed significant EU financing opportunities for youth employment. It is now for the Member States to prioritise these investments. At least €22 billion should be spent on youth employment support.

Executive Vice-President for an Economy that Works for People, Valdis Dombrovskis, said: “It is more important than ever that we help the next generation of Europeans to thrive and get on the jobs ladder, especially at this time of crisis. We are proposing clear and specific ways forward for our young people to get the professional chances that they deserve. Today’s proposals also set out what EU funding is available to support Member States in boosting youth employment. By investing in the youth of today, we will help to create a competitive, resilient and inclusive labour market for tomorrow.”

Nicolas Schmit, Commissioner for Jobs and Social Rights, said: “Now is the time to carry out much-needed reforms of the support measures we offer to young people. We owe it to the millions of graduates and those taking their early steps on the labour market to mobilise all the support we can. Our youth deserve the very best opportunities possible to develop their full potential.”

Youth Employment Support: a bridge to jobs for the next generation

The Youth Employment Support package is built around four strands that together provide a bridge to jobs for the next generation:

  • The EU created the Youth Guarantee in 2013 and has since built bridges to the labour market for some 24 million young people. The Commission’s proposal for a Council Recommendation on a Bridge to Jobs reinforces theYouth Guarantee and steps up the outreach to vulnerable young people across the EU, now covering people aged 15 – 29. The Recommendation keeps the pledge that if you sign up to the Youth Guarantee, you will receive an offer of employment, education, apprenticeship or training within four months. Bridge to Jobs will be more inclusive to avoid any forms of discrimination, with a wider outreach to more vulnerable groups, such as youth of racial and ethnic minorities, young people with disabilities, or young people living in some rural, remote or disadvantaged urban areas. It will link in with the needs of companies, providing the skills required – in particular those for the green and digital transitions – and short preparatory courses; and it will provide tailored counselling, guidance and mentoring.
  •  The Commission’s proposal for a Council Recommendation on vocational education and training aims to make systems more modern, attractive, flexible and fit for the digital and green economy. More agile, learner-centred vocational education and training will prepare young people for their first jobs and gives more adults opportunities to enhance or change their careers. It will help vocational education and training providers to become centres of vocational excellence, while supporting diversity and inclusiveness.
  •  A renewed impetus for apprenticeships will benefit both employers and young people, adding a skilled labour force to a wide range of sectors. The European Alliance for Apprenticeships has made available more than 900,000 opportunities. The renewed Alliance will promote national coalitions, support SMEs and reinforce the involvement of social partners: trade unions and employers’ organisations. The goal is to sustain the apprenticeship offers now, as apprentices we train now will be highly skilled workers in a few years’ time.
  •  Additional measures to support youth employment include employment and start-up incentives in the short term, and capacity building, young entrepreneur networks and inter-company training centres in the medium term.

The Commission urges Member States to step up youth employment support by making use of the significant funding available under NextGenerationEU and the future EU budget. For example, the EU can help fund:

  • Start-up grants and loans for young entrepreneurs, mentoring schemes and business incubators
  • Bonuses for SMEs hiring apprentices
  • Training sessions to acquire new skills needed on the labour market
  • Capacity-building of public employment services
  • Career management training in formal education
  • Investments in digital learning infrastructure and technology

Background

During the aftermath of the global 2008 financial crisis, youth unemployment went up from 16.0% in 2008 to a peak of 24.4% in 2013. The figures went down since, with record lows of 14.9%, just before the pandemic hit. Nevertheless, youth unemployment has always remained more than twice as high as general unemployment. The latest figures show that youth unemployment stood at 15.4% across the EU in April 2020. Many fear that a spike is just in front of us.

Significant EU funding is available for Member States to implement reforms spearheaded by the initiatives presented today. The European Social Fund Plus will be a key EU financial resource to support the implementation of the youth employment support measures. As part of the Recovery Plan for Europe, the Recovery and Resilience Facility and REACT-EU will provide additional financial support for youth employment.

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