How does the Coronavirus Response Investment Initiative Plus (CRII+) complement the measures adopted under the first package?
The first package of measures of the Coronavirus Response Investment Initiative concentrated on the immediate mobilisation of structural funds, to allow for a prompt response to the crisis. In this regard, a number of very important changes have been introduced that extend the scope of support of the Funds, provide immediate liquidity and give flexibility in programme amendments. The first Coronavirus Response Investment Initiative package consisted of three main elements: about €8 billion of immediate liquidity to accelerate up to €37 billion of European public investment, flexibility in applying EU spending rules and extend the scope of the EU Solidarity Fund.
Today’s package complements the first one by introducing extraordinary flexibility to allow that all non-utilised support from the European Structural and Investment Funds can be mobilised to the fullest. This flexibility is provided for through: transfer possibilities across the three cohesion policy funds (the European Regional Development Fund, European Social Fund and Cohesion Fund); transfers between the different categories of regions; and also through flexibility when it comes to thematic concentration. There will also be the possibility for a 100% EU co-financing rate for cohesion policy programmes for the accounting year 2020-2021, allowing Member States to benefit for full EU financing for crisis-related measures. The CRII+ package also simplifies procedural steps linked to programme implementation, use of financial instruments and audit. This is unprecedented and warranted because of extraordinary situation that the coronavirus outbreak has led to.
Furthermore, CRII+ provides support to the most deprived by changing the rules for the Fund for European Aid to the Most Deprived (FEAD). For example, it will be possible to deliver food aid and basic material assistance through electronic vouchers and to provide the protective equipment, and thus lower risk of contamination. Also, it will be possible to finance measures at 100% for the accounting year 2020-2021.
In addition, amendments to the European Maritime and Fisheries Fund (EMFF) will enable a more flexible reallocation of financial resources within the operational programmes in each Member State and a simplified procedure for amending operational programmes with respect to the introduction of the new measures. The amendments will also provide support for temporary cessation of fishing activities and for the suspension of production and additional costs for the aquaculture farmers, as well as to producer organisations for the storage of fishery and aquaculture products.
For the second set of measures, the Commission consulted extensively with Member States, the European Parliament and the sectors concerned over recent weeks, taking account of the more than 200 clarification and advice questions received from national authorities concerning their handling of crisis response measures under the CRII.
Facilitating EU-funded investments
Which changes is the Commission proposing to make to cohesion policy rules?
The Coronavirus Response Investment Initiative Plus allows that all non-utilised support from the cohesion policy funds can be mobilised to address the effects of the public health crisis on our economies and societies. Certain procedural steps linked to programme implementation and audit will be simplified in order to grant flexibility, ensure legal certainty and to reduce administrative requirements. The Commission proposes notably to:
Give the exceptional and temporary possibility for Member States to request for cohesion policy programmes a co-financing rate of 100% to be applied for the accounting year 2020-2021;
Create additional flexibility to transfer resources between the cohesion policy funds, and between categories of regions;
Exempt Member States from the need to comply with thematic concentration requirements, to enable a redirection of resources to the areas most impacted by the current crisis;
Exempt Member States from the requirement to amend Partnership Agreements;
Postpone the deadline for the submission of annual reports for 2019;
Extend the possibility to make use of a non-statistical sampling method;
Exempt the requirement to review and update of ex-ante assessments and business plans, in order to facilitate the adjustment of financial instruments to effectively address the public health crisis;
Make expenditure for completed or fully implemented operations fostering crisis response capacity in the context of the coronavirus outbreak exceptionally eligible;
Allow limited financial flexibility at the closure of programmes, in order to allow Member States and regions to make full use of support from EU funding;
Allow for European Regional Development Fund to provide support for undertakings in difficulties in these specific circumstances consistently with the flexibility provided in State aid rules.
What are the conditions for applying a 100% EU co-financing rate for cohesion policy programmes?
Member States may request amendments to operational programmes to enable a 100% EU co-financing rate to apply for the accounting year 2020-2021.
Such requests can be made during the accounting year starting on 1 July 2020 and ending on 30 June 2021. This exceptional measure is proposed in order to allow Member States to benefit from full EU financing for coronavirus outbreak-related measures. The 100% co-financing rate shall only apply if the corresponding programme amendment is approved by Commission decision before the end of the accounting year concerned.
Is there any limit regarding the transfer of resources between categories of regions?
Currently, Member States can transfer up until 3% of allocated funds between regions. In today’s proposal, there is no longer a limit, as the impact of the coronavirus does not follow the usual cohesion policy categorisation of less and more developed regions. As we are in the last year of the 2014-2020 programming period, this full flexibility applies to the 2020 budget appropriations only.
In order to ensure continued focus on less developed regions, Member States should first examine other possibilities for transferring funding before considering transfers from the budget of less developed regions to more developed ones. In other words, transfers should not impede essential investments in the region of origin or prevent the completion of operations selected before. In addition, the transfer can be requested by Member States only for coronavirus-related operations in the context of the coronavirus crisis.It should be remembered that the goal of cohesion policy is to support reducing the backwardness of the least favoured regions. This principle is enshrined in the Treaty and should be followed even in the current circumstances.
How will the transfer between cohesion policy funds work, and what are the conditions?
The transfer is voluntary. Member States may request to transfer its resources available for programming for the year 2020 for the Investment for Growth and Jobs goal between the European Regional Development Fund, the European Social Fund and the Cohesion Fund.
Following this decision, the minimum share for European Social Fund established at 23.1% and the minimum share of the Cohesion Fund for Member States who joined the EU on or after 1st May 2004 set one third of their total final financial allocation, will not have to be respected.
Transfers shall not affect resources allocated to the Youth Employment Initiative (YEI).
Resources transferred between the ERDF, the ESF and the Cohesion Fund in response to the coronavirus crisis shall be implemented in accordance with the rules of the Fund to which the resources are transferred.
What does the exemption of Member States from the need to comply with thematic concentration requirements entail?
In the programming 2014-2020 period, Member States have to concentrate support on interventions that bring the greatest added value in relation to the Union strategy for smart, sustainable and inclusive growth. Therefore, specific rules were established in Fund-specific regulations that require from Member States to focus European Regional Development Fund on low-carbon economy or support to research and innovation and the European Social Fund on promoting social inclusion and combating the poverty.
In the current circumstances of the coronavirus outbreak, it is justified to exceptionally exempt Member States from the need to comply with these thematic concentration requirements until the end of the programming period. This will help Member States to quickly deploy available resources to respond to the crisis.
What will happen if the coronavirus outbreak is invoked as a reason of force majeure? What influence it will have on the implementation rules?
The Commission considers that all necessary flexibility should be deployed in dealing with failure by beneficiaries to fulfil obligations in a timely manner for reasons related to the coronavirus outbreak (for example, the unavailability of staff). Equally, the Commission will display the same flexibility in assessing the compliance of Member States with their obligations.
Therefore, where the coronavirus outbreak is invoked as a reason of force majeure, information on the amounts for which it has not been possible to make a payment application shall be provided at an aggregate level by priority for operations of total eligible costs of less than €1,000,000.
What does the exemption of Member States from the requirement to amend Partnership Agreements entail?
To enable Member States to concentrate on the necessary response to the coronavirus outbreak and to reduce the administrative burden, certain procedural requirements linked to programme implementation will be simplified.
In particular, Partnership Agreements should no longer be amended, until the end of the programming period; neither to reflect prior changes in operational programmes nor to introduce any other changes.
Taking into consideration a substantial number of programme amendments that will be processed in the upcoming months, this proposal will drastically simplify the re-programming process.
What does the extension of the possibility to make use of a non-statistical sampling method entail?
The current circumstances may have an impact on certain tasks, such as for instance on audit work both in the Member States as well as at EU-level. Therefore, certain procedural requirements linked to audits may be simplified in these exceptional times.
As regards the cohesion policy funds and the European Maritime and Fisheries Fund, the audit authorities may decide, based on their professional judgement, to use a non-statistical sampling method for the accounting year starting on 1 July 2019 and ending on 30 June 2020. This will significantly lower the required number of audited operations, and therefore reduce the pressure on final beneficiaries and audit authorities.
In addition to this legislative change, the Commission will work in close cooperation with national authorities to make use of additional methods that will allow Member State auditors to carry out their tasks.
What does the exemption of the requirement to review and update of ex-ante assessments and business plans entail?
To use the EU financial instruments to tackle this public health crisis, changes in the implementation procedure will be required. Under normal circumstances, Member States would need to amend the supporting documents, demonstrating that support provided was used for its intended purpose.
However, in the current situation, to reduce administrative burdens and delays in implementation, the review and update of the ex-ante assessment and updated business plans or equivalent documents will no longer be required until the end of the programming period.
How will you allow limited financial flexibility at the closure of programmes?
The Commission proposes to allow Member States to ‘overspend’ up until 10% of the budget allocated to a given priority, provided it is compensated by an equivalent reduction in another priority of the same programme. This flexibility will apply to the total programme, i.e. also the expenditure incurred prior to 1 February, but will only be applied at the closure of the programmes (the acceptance of the last annual accounts). This will enable the possibility of a higher co-financing of different measures, without the need of programme amendments. This does not change the total support available from the cohesion policy funds and the EMFF.
This possibility does not exist under the current rules, and constitutes yet another way of increasing the flexibility for Member States who want to use the programmes financed from cohesion policy and the EMFF in order to address the effects of the public health crisis.
How will you make expenditure for completed or fully implemented operations eligible for reimbursement in the context of the coronavirus outbreak?
To ensure the greatest possible added value of EU investments, EU rules did not allow for the financing of operations that have been physically completed or fully implemented before the application for funding by the beneficiary under the programme was made.
However, in the current exceptional situation of the coronavirus outbreak this should exceptionally be allowed to ensure that operations already implemented in response of the crisis can receive EU support. Such operations may be selected even before the necessary programme amendment is carried out. This means that operations for example where medical equipment is purchased, and the purchase was already made before the entry into force of the amending proposal, become eligible for EU support retroactively. This will alleviate pressure on national and regional budgets to respond to the public health crisis.
Will the Commission waive the obligation to comply with applicable management and control rules under cohesion policy?
The EU budget and taxpayer’s money must be protected and therefore all control and audit mechanism remain in place. The Commission merely proposes to simplify and clarify certain rules related to audit, the implementation of financial instruments or eligibility, in the context of the coronavirus outbreak.
This means that the legislative framework for the implementation of the European Structural and Investment Funds programmes remains fully applicable even under the current exceptional circumstances. This concerns in particular rules on the setup and functioning of the management and control system, which remain an important safeguard for obtaining assurance on their functioning and on the legality and regularity of operations.
What are the conditions for providing support from the European Regional Development Fund to undertakings in difficulty?
The current change in the European Regional Development Fund Regulation aims at ensuring a full alignment between the approach taken under the applicable EU State aid framework and the rules and conditions under which the ERDF may provide support to undertakings in the current crisis situation linked to the coronavirus outbreak. This follows in particular the adoption by the Commission on 19 March 2020 of the State aid Temporary Framework to support the economy in the context of the coronavirus outbreak, which enables Member States to support undertakings that entered into financial difficulty in a more flexible manner.
Alleviating the impact on the most deprived
What is the European Fund for European Aid to the Most Deprived (FEAD)?
The Fund for European Aid to the Most Deprived (FEAD) supports EU countries’ actions to provide food and/or basic material assistance to the most deprived. This includes food, clothing and other essential items for personal use, e.g. shoes, soap and shampoo. Material assistance needs to go hand in hand with social inclusion measures, such as guidance and support to help people out of poverty. National authorities may also support non-material assistance to the most deprived people, to alleviate the forms of extreme poverty with the greatest social exclusion impact, such as homelessness, child poverty and food deprivation. National authorities can either purchase the food and goods, and supply them to partner organisations, or fund the organisations so that they can make the purchases themselves. Partner organisations that buy the food or goods themselves can either distribute them directly, or ask other partner organisations to help. In real terms, over €3.8 billion are earmarked for the FEAD for the 2014-2020 period. In addition, EU countries are to contribute at least 15% in national co-financing to their national programme.
Why do you propose to amend the current FEAD rules?
The coronavirus crisis presents an unprecedented challenge for the operations supported by FEAD. Most importantly, it presents specific risks to the most deprived themselves. Specific measures need to be taken urgently in order to protect them from falling victim to this disease. This includes providing them and the workers and volunteers delivering the aid with the necessary protective equipment, and ensuring that the FEAD assistance still reaches the most vulnerable. Logistical and human resource constraints, notably due to the confinement and social distancing measures increasingly impede the distribution of food and basic material assistance, as well as social inclusion support. Many volunteers, the backbone of the Fund, can no longer be mobilised, as they often belong to groups at a higher risk of severe illness caused by the coronavirus. Therefore, new methods of delivery such as delivery through electronic vouchers are needed to ensure the safety of all the people involved in the implementation of the FEAD and of the most deprived.
What are the amendments to the FEAD rules proposed by the Commission?
The proposed measures include:
Eligibility of the expenditure for FEAD operations that are fostering crisis response capacities to the coronavirus outbreak as of 1 February 2020;
Eligibility of expenditure related to protective equipment for partner organisations is made explicit.
Temporary exemption of certain FEAD support measures from Commission approval;
Possibility to deliver food aid and basic material assistance through electronic vouchers (lower risk of contamination).
Providing 100% of co-financing (instead of 85%) to be applied for the accounting year 2020-2021
The proposed changes are intended to enable Managing Authorities, partner organisations and other actors involved in the implementation of the Fund to react quickly to the emerging additional needs of the target groups that are exposed to further hardship stemming from this crisis. In this respect, and notably on the social inclusion challenges related to it, the European Social Fund (ESF) will complement the support provided by the FEAD.
Supporting the seafood sector
What measures does the proposal include to mitigate the impact of coronavirus outbreak on the fishery and aquaculture sector?
The following specific measures are proposed to mitigate the impact of the coronavirus outbreak in the fishery and aquaculture sector:
support to fishermen for the temporary cessation of fishing activities caused by the coronavirus outbreak;
support to aquaculture farmers for the temporary suspension of production or additional costs caused by the coronavirus outbreak;
support to producer organisations and associations of producer organisations for the storage of fishery and aquaculture products, in accordance with the Common Market Organisation.
It is proposed that these measures are retroactively eligible as of 1 February 2020 and available until 31 December 2020.
Additional amendments to the EMFF Regulation aim to ensure a flexible reallocation of financial resources within the operational programmes.
How does the proposal support temporary cessation of fishing activities?
To mitigate the significant socio-economic consequences of the coronavirus outbreak and the need for liquidity in the economy, the European Maritime and Fisheries Fund (EMFF) would grant a financial compensation to fishermen for the temporary cessation of their fishing activities. The EU will pay up to maximum 75% of this compensation, the rest to be borne by Member States. Support for the temporary cessation of fishing activities caused by the coronavirus outbreak will not be subject to the financial capping applicable to the other cases of temporary cessation, thus allowing Member States to grant support on the basis of needs. Vessels that have already reached the maximum six month duration of EMFF support for temporary cessation under article 33 of the EMFF Regulation will nevertheless be eligible for support under the Coronavirus Response Investment Initiative Plus measures until the end of 2020.
How does the proposal support aquaculture farmers?
The proposal introduces compensation to aquaculture farmers for the temporary suspension or reduction of production, where it is the consequence of the coronavirus outbreak. This compensation will be calculated on the basis of the income foregone. The EU will pay up to 75% of this compensation, the rest to be borne by Member States.
How does the proposal ensure simplification of procedures?
Given the urgency of the support needed, it will be possible to apply a simplified procedure for amendments to Member States’ operational programmes related to the specific measures and the reallocation of financial resources. This simplified procedure should cover all the amendments necessary for the full implementation of the measures concerned, including their introduction and the description of the methods for calculating support.
The Commission proposal also includes budgetary flexibility. What is new?
The proposed modification does not imply any changes in the Multiannual Financial Framework annual ceilings for commitments and payments. The annual breakdown of commitment appropriations for the EMFF remains thus unchanged, the EMFF being one of the five European Structural and Investment (ESI) Funds.
With fishing and aquaculture activities locked down or significantly reduced, there is little room for implementing the current EMFF measures and operational programmes normally. The Commission therefore proposes to grant maximum flexibility to Member States to allocate resources at short notice in order to address coronavirus needs. However, resources available for fisheries control, the collection of scientific data and the compensation of additional costs in the outermost regions remain ring-fenced to ensure the implementation of the Common Fisheries Policy (CFP). Other available resources under shared management should be allocated by Member States on the basis of their needs.
The Commission will carefully monitor the impact of the proposed modification on payment appropriations in 2020 taking into account both the implementation of the budget and revised Member States forecasts.
How will producer organisations benefit from the Commission’s proposal?
Given the key role played by producer organisations in the management of the crisis, the ceiling for support to production and marketing plans is increased from 3% up to 12 % of the average annual value of the output placed on the market. It will also be possible for Member States to grant advances of up to 100 % of the financial support to producer organisations.
Why did the Commission decide to reintroduce storage aid and to expand its scope to aquaculture produces?
The sudden disruptions to fishery and aquaculture activities ensuing from the coronavirus outbreak and the resulting risk of jeopardising markets of fishery and aquaculture products, makes it appropriate to set up a mechanism for storing fishery and aquaculture products for human consumption. This will foster greater market stability, mitigate the risk of having such products wasted or redirected to non-human food purposes, and contribute to absorbing the impact of the crisis on the return of products.
This mechanism should enable fishery and aquaculture producers to make use of the same preservation or conservation techniques for similar species and ensure that fair competition between producers is maintained.
In order to enable Member States to react promptly to the suddenness and unpredictability of the coronavirus outbreak, they will be entitled to set trigger prices for their producer organisations to activate the storage mechanism. That trigger price should be set in such a way that fair competition between operators is maintained.
Supporting farmers and rural areas
What measures will directly support farmers and rural areas under the CRII+?
The Commission is proposing to increase flexibility in the use of financial instruments. Farmers and other rural development beneficiaries will be able to benefit from loans or guarantees of up to €200,000 at favourable conditions, such as very low interest rates or favourable payment schedules under the EAFRD. Usually these financial instruments have to be linked to investments, under this new measure, they can help farmers with their cash flow to finance costs or compensate temporary losses.
In addition, rural development funds can be used to invest in medical facilities and small-scale infrastructure in rural areas, such as the adaptation of health centres to treat growing numbers of patients or the set-up of mobile health facilities to carry out tests and provide treatments to farmers and rural inhabitants.
What measures under the CRII+ will help Member States in the implementation of their Rural Development Programmes?
Member States are facing practical difficulties in meeting certain requirements under the Common Agricultural Policy (CAP) and the Commission aims to help through a range of concrete measures.
Firstly, Member States will be allowed to reallocate money left unused under their Rural Development Programmes (RDP), rather than sending it back into the EU budget. The money will still have to be used in the framework of the respective RDP.
Secondly, Member States will also not have to amend their ESI Funds’ Partnership Agreements concluded for the 2014-2020 budgeting period to modify their Rural Development Programmes, lifting some administrative procedures for Member States.
Thirdly, every year Member States have to send an Annual Implementation Report on their Rural Development Programmes to the Commission. In these exceptional circumstances, the Commission is postponing the deadline for submissions (originally 30 June) to give more time to national authorities to put it together.
What other measures are being taken under the Common Agricultural Policy (CAP) to support the agri-food sector in these exceptional circumstances?
In addition to the measures directly linked to the EAFRD under the CRII+, the Commission is proposing further flexibility and simplification of other Common Agricultural Policy (CAP) instruments.
Firstly, the deadline for CAP payment applications will be extended by a month, from 15 May to 15 June 2020, offering more time to farmers to fill in their application for both direct payments and rural development payments.
Secondly, to increase the cash flow of farmers, the Commission will increase the advances of direct payments and rural development payments. The rate of advance payments will go up from 50% to 70% for direct payments, and from 75% to 85% for rural development payments. Farmers will start receiving these advances from 16 October 2020.
Finally, the Commission will propose a reduction of physical on-the-spot checks and give more leeway for timing requirements. This will reduce the administrative burden and avoid unnecessary delays. Currently Member States have to carry out checks to ensure that eligibility conditions are met. However, in the current exceptional circumstances, it is crucial to minimise physical contact between farmers and the inspectors carrying out the checks.
The final legal steps are currently being taken to adopt these measures.
Europe’s moment: Repair and prepare for the next generation
European Commission has put forward its proposal for a major recovery plan. To ensure the recovery is sustainable, even, inclusive and fair for all Member States, the European Commission is proposing to create a new recovery instrument, Next Generation EU, embedded within a powerful, modern and revamped long-term EU budget. The Commission has also unveiled its adjusted Work Programme for 2020, which will prioritise the actions needed to propel Europe’s recovery and resilience.
The coronavirus has shaken Europe and the world to its core, testing healthcare and welfare systems, our societies and economies and our way of living and working together. To protect lives and livelihoods, repair the Single Market, as well as to build a lasting and prosperous recovery, the European Commission is proposing to harness the full potential of the EU budget. Next Generation EU of €750 billion as well as targeted reinforcements to the long-term EU budget for 2021-2027 will bring the total financial firepower of the EU budget to €1.85 trillion.
European Commission President Ursula von der Leyen said: “The recovery plan turns the immense challenge we face into an opportunity, not only by supporting the recovery but also by investing in our future: the European Green Deal and digitalization will boost jobs and growth, the resilience of our societies and the health of our environment. This is Europe’s moment. Our willingness to act must live up to the challenges we are all facing. With Next Generation EU we are providing an ambitious answer.”
Commissioner Johannes Hahn, in charge of the EU budget, said: “Our common budget is at the heart of Europe’s recovery plan. The additional firepower of Next Generation EU and the reinforced multiannual financial framework will give us the power of solidarity to support Member States and the economy. Together, Europe will arise more competitive, resilient and sovereign.”
Vice-President Maroš Šefčovič, in charge of interinstitutional relations and foresight, said: “The recovery will need strong policy direction. The adapted Work Programme, reflecting the new reality, shows that we will focus all our actions on overcoming the crisis, jumpstarting our economy and putting the European Union firmly on a resilient, sustainable and fair recovery path. It will help us rebound stronger.”
INVESTING FOR THE NEXT GENERATION
Complementing national efforts, the EU budget is uniquely placed to power a fair socio-economic recovery, repair and revitalise the Single Market, to guarantee a level playing field, and support the urgent investments, in particular in the green and digital transitions, which hold the key to Europe’s future prosperity and resilience.
Next Generation EU will raise money by temporarily lifting the own resources ceiling to 2.00% of EU Gross National Income, allowing the Commission to use its strong credit rating to borrow €750 billion on the financial markets. This additional funding will be channelled through EU programmes and repaid over a long period of time throughout future EU budgets – not before 2028 and not after 2058. To help do this in a fair and shared way, the Commission proposes a number of new own resources. In addition, in order to make funds available as soon as possible to respond to the most pressing needs, the Commission proposes to amend the current multiannual financial framework 2014-2020 to make an additional €11.5 billion in funding available already in 2020.
The money raised for Next Generation EU will be invested across three pillars:
1. Support to Member States with investments and reforms:
- A new Recovery and Resilience Facility of €560 billion will offer financial support for investments and reforms, including in relation to the green and digital transitions and the resilience of national economies, linking these to the EU priorities. This facility will be embedded in the European Semester. It will be equipped with a grant facility of up to €310 billion and will be able to make up to €250 billion available in loans. Support will be available to all Member States but concentrated on the most affected and where resilience needs are the greatest.
- A €55 billion top-up of the current cohesion policy programmes between now and 2022 under the new REACT-EU initiative to be allocated based on the severity of the socio-economic impacts of the crisis, including the level of youth unemployment and the relative prosperity of Member States.
- A proposal to strenghten the Just Transition Fund up to €40 billion, toassist Member States in accelerating the transition towards climate neutrality.
- A €15 billion reinforcement for theEuropean Agricultural Fund for Rural Development to support rural areas in making the structural changes necessary in line with the European Green Deal and achieving the ambitious targets in line with the new biodiversity and Farm to Fork strategies.
2. Kick-starting the EU economy by incentivising private investments:
- A new Solvency Support Instrument will mobilise private resources to urgently support viable European companies in the sectors, regions and countries most affected. It can be operational from 2020 and will have a budget of €31 billion, aiming to unlock €300 billion in solvency support for companies from all economic sectors and prepare them for a cleaner, digital and resilient future.
- Upgrade InvestEU, Europe’s flagship investment programme, to a level of €15.3 billion to mobilise private investment in projects across the Union.
- A new Strategic Investment Facility built into InvestEU– to generate investments of up to €150 billion in boosting the resilience of strategic sectors, notably those linked to the green and digital transition, and key value chains in the internal market, thanks to a contribution of €15 billion from Next Generation EU.
3. Addressing the lessons of the crisis:
- A new Health Programme, EU4Health, to strengthen health security and prepare for future health crises with a budget of €9.4 billion.
- A €2 billion reinforcement of rescEU, the Union’s Civil Protection Mechanism, which will be expanded and strenghetend to equip the Union to prepare for and respond to future crises.
- An amount of EUR€94.4 billion forHorizon Europe, which will be reinforced to fund vital research in health, resilience and the green and digital transitions.
- Supporting Europe’s global partners through an additional €16.5 billion for external action, including humanitarian aid.
- Other EU programmes will be strengthened to align the future financial framework fully with recovery needs and strategic priorities. Other instruments will be reinforced to make the EU budget more flexible and responsive.
Reaching a rapid political agreement on Next Generation EUand the overall EU budget for 2021-2027 at the level of the European Council by July is necessary to give new dynamism to the recovery and equip the EU with a powerful tool to get the economy back on its feet and build for the future.
THE POLICY FUNDAMENTALS OF THE RECOVERY
Relaunching the economy does not mean going back to the status quo before the crisis, but bouncing forward. We must repair the short-term damage from the crisis in a way that also invests in our long-term future. All of the money raised through Next Generation EU will be channelled through EU programmes in the revamped long-term EU budget:
The European Green Deal as the EU’s recovery strategy:
- A massive renovation wave of our buildings and infrastructure and a more circular economy, bringing local jobs;
- Rolling out renewable energy projects, especially wind, solar and kick-starting a clean hydrogen economy in Europe;
- Cleaner transport and logistics, including the installation of one million charging points for electric vehicles and a boost for rail travel and clean mobility in our cities and regions;
- Strengthening the Just Transition Fund to support re-skilling, helping businesses create new economic opportunities.
Strengthening the Single Market and adapting it to the digital age:
- Investing in more and better connectivity, especially in the rapid deployment of 5G networks;
- A stronger industrial and technological presence in strategic sectors, including artificial intelligence, cybersecurity, supercomputing and cloud;
- Building a real data economy as a motor for innovation and job creation;
- Increased cyber resilience.
A fair and inclusive recovery for all:
- The short-term European Unemployment Reinsurance Scheme (SURE) will provide €100 billion to support workers and businesses;
- A Skills Agenda for Europe and a Digital Education Action Plan will ensure digital skills for all EU citizens;
- Fair minimum wages and binding pay transparency measures will help vulnerable workers, particularly women;
- The European Commission is stepping up the fight against tax evasion and this will help Member States generate revenue.
BUILDING A MORE RESILIENT EU
Europe must enhance its strategic autonomy in a number of specific areas, including in strategic value chains and reinforced screening of foreign direct investment. To increase crisis preparedness and crisis management, the Commission will reinforce the European Medicines Agency and give a stronger role to the European Centre for Disease Control (ECDC) in coordinating medical responses in crises.
The recovery must unequivocally be based on fundamental rights and full respect of the rule of law. Any emergency measures must be limited in time and be strictly proportionate. The Commission’s assessment will be included in the first report under the rule of law mechanism.
We can and must learn the lessons from this crisis, but this can only be done by involving our citizens, communities and cities. The Conference on the Future of Europe will play an important role in further strengthening Europe’s democratic foundations in the post-coronavirus crisis world.
RESPONSIBLE GLOBAL LEADERSHIP
The EU is committed in leading international efforts towards a truly global recovery, notably though joint coordination with the United Nations, the G20 and G7, the International Monetary Fund, the World Bank or the International Labour Organisation. The EU will continue working particularly closely with its immediate neighbourhood in the East and South and its partners in Africa.
The Joint Statement of the Members of the European Council adopted on 26 March 2020 called on the European Commission to develop a coordinated exit strategy, a comprehensive recovery plan and unprecedented investment to allow a normal functioning of our societies and economies and get to sustainable growth, integrating inter alia the green transition and the digital transformation. On the basis of this mandate, on 15 April the Presidents of the Commission and the Council presented, as a first step, a Joint European Roadmap towards lifting Covid-19 containment measures. The package presented today, based on a revamped proposal for the next long-term EU budget and the updated Commission Work Programme for 2020, addresses the second part of the mandate, namely the need for a comprehensive recovery plan.
The EU has already delivered a coordinated and powerful collective response to cushion the economic blow of the coronavirus crisis. We have relaxed our fiscal and state aid frameworks to give Member States room to act. We are using every available euro in the EU budget to support the healthcare sector, workers and businesses, and mobilising finance from the markets to help save jobs.
Enabling Europe to lead the green and digital transition
The Commission released today its latest report on the EU’s Science, Research and Innovation Performance, through which it analyses how Europe performs in the global context. It highlights the need for research and innovation (R&I) to support sustainable and inclusive growth of companies, regions and countries, making sure that no one is left behind in the quest for strengthening innovation systems, especially in less-developed regions. It also emphasises the importance of ensuring that Europeans have the right skills, in the light of new technological revolutions, as well as the significant role of R&I policy in reinforcing companies’ productivity, resulting in jobs and value creation, in a sustainable way. In particular, the 2020 edition of the biennial report presents 11 policy recommendations to support our people, planet and prosperity.
Mariya Gabriel, Commissioner for Innovation, Research, Culture, Education and Youth said: “Research and innovation is at the core of the response to the unprecedented crisis we are facing and can significantly contribute to the economic recovery. The 2020 Science, Research and Innovation Performance report shows how research and innovation are central to bring about the ecological and digital transitions Europe needs. Horizon 2020 and the future Horizon Europe programme play a crucial role in this transformation.”
The EU ranks among the top players in scientific production and excellence, for example accounting worldwide for 25% of top-cited scientific publications on the topic of climate and for 27% in the area of bioeconomy. When it comes to patent applications in these two areas, the EU is also leading the way with 24% in climate and 25% in bioeconomy. Yet, more efforts are needed to turn research results into sustainable marketable solutions as well as to build a strong European Research Area and increase the effectiveness of public research systems.And, as digitalisation is transforming R&I,the right policy mix should foster deep-tech and researchers’ digital skills, alongside promoting open science and ensuring sufficient investments in high-quality data infrastructures. Horizon Europe, the EU’s next research and innovation framework programme, will be a key part in stepping up and steering R&I efforts, through its mission-oriented approach and European partnerships.
Building on the EU’s excellence and top performance in science-based research and innovation, the Science, Research and Innovation Performance report presents 11 policy recommendations, grouped around three main pillars:
- R&I for a safe and just space for humanity;
- R&I for global leadership;
- R&I for economic and societal impact.
Together, they pave the way towards R&I delivering on the Sustainable Development Goals and mainstreaming them into EU policies and initiatives that will contribute to a fair, climate-neutral and digital Europe, while at the same time boosting the competitiveness of European businesses and regions.
The Science, Research and Innovation performance of the EU report analyses research and innovation dynamics as well as Europe’s performance on science and innovation and their drivers. The Report combines indicator-based macroeconomic analysis with in-depth analytical research to create a narrative that speaks to an audience of both research and innovation as well as economics and finance policymakers and analysts. This is the third edition of the biennial publication by the European Commission’s Directorate-General for Research and Innovation.
Japan-EU Leaders’ meeting
H.E. Mr. Shinzo Abe, Prime Minister of Japan, H.E. Mr. Charles Michel, President of the European Council, and H.E. Dr. Ursula von der Leyen, President of the European Commission, held a Leaders Meeting via VTC on 26 May 2020.
The leaders expressed their deepest sympathy with the victims of the COVID-19 pandemic. They recognised that global solidarity,cooperation and effective multilateralism are required more than ever to defeat the virus as well as to ensure economic recovery. They reaffirmed their strong commitment to continue tackling global challenges together in the international arena based upon the close and strong Japan-EU relations.
The leaders confirmed that both Japan and the EU are sparing no effort to stop the COVID-19 pandemic, protect lives, and mitigate the social and economic consequences, in keeping with their principles and values of democracy, human rights, the rule of law, and non-discrimination. They are promoting global coordination in various international fora such as the G7, G20, and the United Nations system, and assisting vulnerable countries and communities in need.
In order to prevent future pandemics, the leaders emphasised the importance of strengthening our preparedness and response capacities, of sharing information in a free, transparent and prompt manner, and of improving international response including through relevant international organisations, such as the WHO, drawing on lessons learned from the current global responses. The leaders reaffirmed the role of the WHO in coordinating the fight against the COVID-19 pandemic. They welcomed the recently adopted resolution at the 73rd World Health Assembly which requests the Director General of the WHO to initiate, at the earliest appropriate moment, a stepwise process of impartial, independent and comprehensive evaluation to review experience gained and lessons learnt from the WHO-coordinated international health response to COVID-19.
The leaders reaffirmed their commitment to global collaboration and sustained funding for developing and deploying effective antiviral medicines, diagnostics, treatments and vaccines in orderto make them available to all at an affordable price. They called for the future COVID-19 vaccine to become a global common good. In this context, they welcomed the successful pledging initiative of “the Global Coronavirus Response” that started on May 4, with the aim of raising at least €7.5 billion. Prime Minister Abe expressed his gratitude for the EU’s initiative, and the EU leaders expressed their appreciation for Japan’s contribution. The leaders confirmed their determination to continue efforts toward closing the financial gap, including the collaborative efforts for the success of the upcoming pledging conference of Gavi in June. The leaders announced that Japan and the EU will accelerate cooperation on research on health, welcoming in this regard the signature of the Letter of Intent on strengthening cooperation in science, technology and innovation, which includes collaboration between Japan’s Moonshot Research and Development Program and the EU’s Horizon Europe Programme.
The leaders stressed their determination to ensure a robust economic recovery and rebuild more sustainable, inclusive and resilient economies, in keeping with the Agenda 2030, the Sustainable Development Goals and the Paris Agreement. Decarbonization / green transition, digital transformation, and the virtuous cycle of environment and growth, will be a part of the recovery strategy. The leaders welcomed the G20 Action Plan at the G20 Finance Ministers and Central Bank Governors Meeting to support the global economy during and after the pandemic. They would continue to adjust their economic responses, using all relevant policy tools, including digital tools to prevent the spread of infections while ensuring privacy and security, and standing ready to provide further support in a coordinated way. They also underlined the importance of keeping the trading system open. Japan and the EU will cooperate to facilitate the flow of medical supplies, agricultural products, raw materials and other goods and services across borders, while ensuring that any necessary emergency measures designed to tackle COVID-19 are targeted, proportionate, transparent, temporary, and consistent with WTO rules so that they do not create unnecessary barriers to trade or disruption to global supply chains.They called for refraining from unnecessary travel and export restrictions. Looking forward, they stressed the need to make global supply chains more resilient, and will work together to reform and strengthen the WTO, through rule-making on e-commerce and fostering a level playing field, to promote international discussions under the Osaka Track, to further elaborate “Data Free Flow with Trust” (DFFT) with a view to facilitating safe and secure cross-border data flows through enhancing data security and privacy, to harness the benefits of the digital economy further underscored by the current economic crisis. They confirmed that transport services should be progressively restored on the premise that public health safety is ensured as they are key enablers of the global economy.
With a view to assisting developing countries, including in Africa and other vulnerable regions, the leaders mutually welcomed the commitment made by the EU, including its Member States, securing over €20 billion in order to help partner countries face the COVID-19 impact and Japan’s commitment to step up its assistance to partner countries, not only by providing short-term assistances but also by supporting them over the mid-to-long term to strengthen their healthcare systems as well as by addressing the enormous economic impact of the current crisis. They also welcomed the financial assistance deployed by the IMF, World Bank and other international institutions, and the agreement reached by the G20 and the Paris Club on a coordinated approach to a time bound suspension of debt service payments for the poorest countries, calling for full implementation of this initiative.
The leaders also discussed the geopolitical situation in the light of the COVID-19 pandemic. They reiterated their commitment to upholding the rules-based international order and looked forward to strengthening practical cooperation in areas such as cybersecurity, countering hybrid threats and counter-terrorism. They confirmed that access to transparent, timely, reliable and fact-based information is crucial for an effective global response to the pandemic. It constitutes the foundation of good governance and reinforces the resilience of our societies and democracies. The leaders confirmed their resolve to counter disinformation, in accordance with shared principles such as freedom of expression and the rule of law. The leaders shared concern that the spread of the virus may escalate some regional conflicts and make it more difficult to protect civilian population. They supported the UN Secretary-General’s call for a global ceasefire amid the COVID-19 pandemic and insisted on respect for humanitarian principles.
They shared the view to intensify coordination to contribute to resolving regional issues based on international law, including eastern Ukraine, Afghanistan, North Korea, East and South China Seas, Libya, Syria and Sahel.
The leaders reaffirmed their commitment to the Japan-EU strategic partnership. It will play an important role in recovering from the effects of the COVID-19 pandemic and in tackling other common challenges that have not diminished. Encouraged by the initial positive results, the leaders expressed their determination to continue implementing the Japan-EU Strategic Partnership Agreement and Economic Partnership Agreement. They looked forward to holding a Summit Meeting in the near future when conditions allow in order to take cooperation between Japan and the EU further in the areas such as connectivity, global environmental issues and challenges, climate change, digital transformation, research and innovation, health, energy, free, fair and rules-based trade, and security and defence, transport and urban policy. The leaders confirmed that preparatory work in these fields should advance.
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