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Europe’s moment: Repair and prepare for the next generation

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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:

  • 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.
  • €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.

BACKGROUND

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.

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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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Most EU Member States not on track to reduce air pollution by 2030

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The assessment of Member States’ first programmes of measures to control air emissions finds that the implementation of the new European clean air rules needs improvement. Member States need to step up efforts across all sectors to make sure their citizens can breathe clean air, preventing respiratory diseases and premature death caused by breathing polluted air.

EU Commissioner for the Environment, Fisheries and Oceans Virginijus Sinkevičius said: “This report sends a clear message. All across Europe, too many citizens are still at risk from the air they breathe. We need more effective measures to cut pollution in numerous Member States and to tackle air emissions across sectors, including agriculture, transport and energy. There has never been a better time to make these changes: investing in cleaner air means investing in citizens’ health, in our climate, and it’s the kick-start our economy needs. That’s the thinking behind the European Green Deal, and it’s the logic the environment needs.”

According to the first Commission report to assess the implementation of the National Emission reduction Commitments Directive (NEC Directive) published today, most Member States are at risk of not complying with their 2020 or 2030 emission reduction commitments. While some Member States show good practices that should be inspiring for others, the Report demonstrates the need for additional measures in order to reduce air pollution. The Commission will continue to monitor and support national efforts in this regard, through financial and non-financial tools.  Efforts are especially needed in agriculture to reduce ammonia emissions, which is the most common and severe implementation challenge across the EU.

Effective implementation of clean air legislation forms an essential contribution to ‘a zero pollution ambition for a toxic-free environment’ announced by the Commission in the European Green Deal and related initiatives.  Synergies with climate and energy policies need to be enhanced and further assessed, also in line with the European Green Deal approach.

Alongside this implementation report, the Commission has also released today its consultants’ analysis of each Member State National Air Pollution Control Programme and emission projections, as well as an EU-wide horizontal report bringing together this information.

Background

The National Emission reduction Commitments Directive, which entered into force on 31 December 2016, is the main legislative instrument to achieve the 2030 objectives of the Clean Air Programme. When fully implemented, the Directive would reduce by almost 50% the negative health impacts of air pollution by 2030, and bring substantial benefits for the environment and climate.

The Directive sets national emission reduction commitments for the periods 2020-29 and more ambitious ones for 2030-onwards for five important air pollutants: nitrogen oxides (NOx), non-methane volatile organic compounds (NMVOC), sulphur dioxide (SO2), ammonia (NH3) and fine particulate matter (PM2.5).

Compliance with the 2020 emissions reduction commitments will be checked in 2022, when the emission inventories for 2020 become available.

Next steps

The NEC implementation report will be complemented later this year by the Second Clean Air Outlook which will present up-to-date modelling results on the extent to which the EU and its Member States are on track to meet their clean air objectives for 2030 and later.

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Green Deal: Commission launch the European Just Transition Platform

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On Monday 29 June, the Just Transition Platform (JTP) will be launched to help Member States to draw up their territorial Just Transition Plans and access funding from the over €150 billion Just Transition Mechanism. This online Platform will provide technical and advisory support for public and private stakeholders in coal and other carbon-intensive regions, with easy access to information on funding opportunities and sources of technical assistance.

The Platform will ensure that the €40 billion (in 2018 constant prices) proposed under the Just Transition Fund is channelled to the right projects and that no region is left behind. It will also support access to the dedicated scheme under InvestEU and the public sector loan facility, which together with the Just Transition Fund form the three pillars of the Just Transition Mechanism. The platform will provide:

  • Technical and advisory support to Member States and regions, including on the operationalisation of the territorial Just Transition Plans and the building of pipelines of projects for the Just Transition Mechanism;
  • A web-based single access point, including the possibility to contact the Commission with technical and administrative questions related to just transition;
  • Sharing of information, experience and knowledge for fossil fuel and carbon-intensive regions, with dedicated project and expert databases;
  • A forum for dialogue on just transition involving local and national stakeholders, social partners, public authorities and EU institutions.

Executive Vice-President for the European Green Deal Frans Timmermans, Commissioner for Cohesion and Reforms, Elisa Ferreira, and Commissioner for Energy, Kadri Simson, will launch the Just Transition Platform during an online event starting on Monday 29 June at 09:30.

This will kick-start a week of online events dedicated to coal, lignite, peat and oil shale regions as well as carbon-intensive regions, organised under the Coal Regions Virtual Week and a Carbon-Intensive Regions Seminar. These events will inform stakeholders of the latest EU policy developments and provide an opportunity for good practices sharing.

Next steps

The Platform will host a projects and experts database towards the end of 2020.

Members of the College said:

Executive Vice-President for the European Green Deal, Frans Timmermans, said: “Our Green Deal ambition is to demonstrate a new model for inclusive transformation based on a just transition. As we rebuild our economies and societies, we owe it to our children and grandchildren to grasp the opportunity to build a more sustainable future. With the Just Transition Platform we can start making this a reality

Commissioner for Cohesion and Reforms, Elisa Ferreira, said: “The Just Transition Platform is a firm step towards a climate-neutral Europe. I encourage authorities from all Member States to make full use of it when developing and implementing territorial just transition plans that promote economic renewal, new skills and new job opportunities. I am determined that no one is left behind and that all regions and all Europeans are able to tap the benefits of a greener, fairer more digital future.”

Commissioner for Energy, Kadri Simson, said: “The Just Transition Platform will provide tailor-made support to regions that will be most affected by the green transition. It will bring together expertise from all relevant Commission services to make sure that fossil fuel and carbon intensive regions have all the information, tools and assistance they need to transform their economies in a fair way.

Background

The Just Transition Mechanism (JTM) is part of the European Green Deal effort to create a climate-neutral economy in Europe by 2050. The Mechanism will seek to overcome the economic and social costs of the climate transition in the most vulnerable coal and carbon-intensive regions. The Mechanism consists of three pillars of financing: the Just Transition Fund, proposed on 14 January 2020 and strengthened by the 27 May Recovery Package; a dedicated just transition scheme under InvestEU; and a public sector loan facility. The three pillars are expected to mobilise more than €150 billion of investments in the EU regions most vulnerable to the climate transition over the period 2021-2027.

Announced with the European Green Deal Investment Plan, the Just Transition Platform builds on and expands the work of the Initiative for Coal Regions in Transition, and is part of the Just Transition Mechanism. It will have three work streams: coordinated technical assistance from the European Commission and the EIB group, a web-based single access point and helpdesk, and events promoting stakeholder involvement and the exchange of best practices.

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