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EU budget 2021: An annual budget focused on European recovery

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The Commission has today proposed an EU budget of €166.7 billion for 2021, to be complemented by €211 billion in grants and approximately €133 billion in loans under Next Generation EU, the temporary recovery instrument aimed at mobilising investments and kick-starting the European economy. Together, the annual budget and Next Generation EU will mobilise significant investments in 2021 to address the immediate economic and social damage caused by the coronavirus pandemic, kick-start a sustainable recovery and protect and create jobs. The budget is also fully in line with the commitment to invest in the future in order to achieve a greener, more digital and resilient Europe.

Once adopted, this will be the first budget under the new 2021-2027 multiannual financial framework and the first annual budget proposed by President von der Leyen‘s Commission.

Commissioner Johannes Hahn responsible for the EU Budget stated: “In these extraordinary times, the European Commission’s proposal mobilises unprecedented support. The annual budget 2021 will help hundreds of thousands of people, companies and regions to overcome the crisis and emerge stronger than before. To make it happen, we need an agreement on the long-term budget and Next Generation EU – a deal that will send a signal of confidence throughout Europe.”

The draft budget 2021, boosted by Next Generation EU, directs funds to where they can make the greatest difference, in line with the most crucial recovery needs of the EU Member States and our partners around the world.

The funding will help rebuild and modernise our Union, by fostering the green and digital transitions, creating jobs and strengthening Europe’s role in the world.

The budget reflects Europe’s priorities, which are relevant to ensure a sustainable recovery. To that end, the Commission is proposing to allocate:

–   €1.34 billion for Digital Europe programme for the Union’s cyber-defences and support the digital transition;

–   €3 billion for Connecting Europe Facility in an up-to-date, high-performance transport infrastructure to facilitate cross-border connections;

–  €575 million for the Single Market Programme, €36.2 million and €127 million respectively for the programmes supporting cooperation in the fields of taxation and customs;

–   €2.89 billion for Erasmus Plus to invest in young people, as well as €306 million for the cultural and creative sectors through Creative Europe;

–   €1.1 billion for the Asylum and Migration Fund and €1.0 billion for Integrated Border Management Fund to step up cooperation on external border management as well as migration and asylum policy;

–   €55.2 billion for the Common Agricultural Policy and €813 million for the European Maritime and Fisheries Fund, for Europe’s farmers and fishermen, but also to strengthen the resilience of the agri-food and fisheries sectors and to provide the necessary scope for crisis management;

–   €228 million for the Internal Security Fund and €1.05 million for the European Defence Fund to support the European strategic autonomy and security;

–   €1.9 billion for pre-accession assistance, to support our neighbours, including in the Western Balkans;

In addition, large part of the funds will go to the priority actions identified in connection with Next Generation EU, including:

–   €131.5 billion of loans and approximately €133 billion of grants can be provided to Member States under the Recovery and Resilience Facility, as part of Next Generation EU;

–   €17.3 billion for Horizon Europe, to increase European support for health and climate-related research and innovation activities, of which €5 billion under Next Generation EU;

–   €10.13 billion for InvestEU, to invest in sustainable infrastructure, innovation and digitisation. Part of the money will be for the Strategic Investment Facility, to build strategic autonomy in vital supply chains at European level;

–   €8.28 billion for the Solvency Support Instrument as proposed by Next Generation EU, to address the solvency concerns of viable companies from all economic sectors;

–   €47.15 billion for cohesion policy, to be complemented by €42.45 billion under REACT-EU as proposed under Next Generation EU. The money will go for employment subsidies, short time work schemes and youth employment measures; liquidity and solvency for SMEs;

–   €9.47 billion for the Just Transition Fund to make sure the transition towards climate neutrality leaves nobody behind, of which €7.96 billion under Next Generation EU;

–   €619 million for rescEU, the Union civil protection mechanism, to make sure the Union has the capacity to respond to large-scale emergencies;

–   €1.19 billion for EU4Health, the new health programme, which will equip our Union against future health threats; of which €1.17 billion from Next Generation EU;

–   €15.36 billion for our external partners through the Neighbourhood, Development and International Cooperation Instrument (NDICI) of which €3.29 billion under Next Generation EU;

–   €2.8 billion for humanitarian aid, of which €1.3 billion under Next Generation EU, for the growing humanitarian needs in the most vulnerable parts of the world.

The draft budget for 2021 is based on the Commission’s proposal for the EU’s next long-term budget as put forward on 27 May 2020. Once the European Parliament and the Council agree on the MFF 2021-2027, including Next Generation EU, the Commission will adapt its proposal for the 2021 budget accordingly through an amending letter.

It is essential that the draft budget is adopted swiftly so that hundreds of thousands of entrepreneurs, researchers, farmers, and municipalities across Europe can start benefitting from the funds, thus investing in a better future for next generations.

Background

The draft 2021 EU budget includes expenditure under Next Generation EU that will be financed from borrowing at the capital markets and the expenditure covered by the appropriations under the long-term budget ceilings which are financed from own resources. For the latter, two amounts for each programme are proposed – commitments and payments. “Commitments” refers to the funding that can be agreed in contracts in a given year; “payments” to the money actually paid out. The proposed 2021 EU budget amounts to €166.7 billion in commitments (-9.7% compared to 2020) and €163.5 billion in payments (+0.8% compared to 2020). This is the first budget for EU 27, after the withdrawal of the UK and the end of the transition period.

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EU Politics

Coronavirus response: EU support for regions to work together in innovative pilot projects

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The Commission has announced the winners of a new EU-funded initiative for interregional partnerships in four areas: coronavirus-related innovative solutions, circular economy in health, sustainable and digital tourism, and hydrogen technologies in carbon–intensive regions. The aim of this new pilot action, which builds on the successful experience of a similar action on “interregional innovation projects” launched at the end of 2017, is to mobilise regional and national innovation actors to address the impact of coronavirus. This initiative also helps the recovery using the new Commission programmes through scaling up projects in new priority areas, such as health, tourism or hydrogen.

Commissioner for Cohesion and Reforms, Elisa Ferreira, said: “Interregional partnerships are proof that when we cooperate beyond borders, we are stronger as we come up with smart and useful solutions for all. This new pilot initiative supporting interregional innovative partnerships is especially important in the current coronavirus context, showing how much cohesion policy is committed to contribute to Europe’s prompt response and recovery.” 

Following a Commission’s call for expression of interest launched in July 2020, four interregional partnerships were selected, with one or several coordinating regions in the lead:

  • País Vasco (ES), together with three regions, will focus on the support to an emerging industry sector for prediction and prevention of the coronavirus pandemic;
  • In the field of Circular Economy in Health, the RegioTex partnership on textile innovation involves 16 regions led by North Portugal (PT);
  • In the field of Sustainable and Digital Tourism, the partnership coordinated by the Time Machine Organisation, an international cooperation network in technology, science and cultural heritage, involves five regions and Cyprus, led by Thüringen (DE); 
  • In order to enable the development of innovative solutions based on Hydrogen technologies in carbon–intensive regions with a broad geographical coverage, two partnerships will merge: the European Hydrogen Valleys partnership gathering 12 regions led by Aragon (ES), Auvergne Rhône Alpes (FR), Normandie (FR) and Northern Netherlands (NL), and the partnership led by Košice Region (SK) with four other regions.

These partnerships will benefit from the Commission experts’ support, providing, among others, advice on how to best combine EU funds to finance projects. In addition to this hands-on support from the Commission, each partnership can benefit from external advisory service of up to €100,000 for scale-up and commercialisation activities. The money comes from the European Regional Development Fund (ERDF).

Next steps

The work with the partnerships will start in this month and will run for one year.This pilot further stimulates interregional cooperation, with the possibility for the partnerships to apply for support under the new programmes and the “Interregional Innovation Investment” instrument from 2021 onwards.

Background

In recent years, the Commission has called on national and regional authorities to develop smart specialisation strategies aiming at more effective innovation policies and enhanced interregional cooperation in value chains across borders. To date, more than 180 regional smart specialisation strategies have been adopted. Their implementation is supported by €40 billion of EU Cohesion policy funds.

As part of a set of actions presented in 2017 by the Commission to take smart specialisation a step further, a pilot action on “Interregional innovation projects” sought to test new ways to encourage regions and cities to develop new value chains and scale up their good ideas in the EU single market. This pilot action, which involved nine partnerships in high-tech priority sectors, was completed in 2019 and showed significant potential to accelerate the investment readiness of interregional investment projects.

The lessons learned will be integrated in the new “Interregional Innovation Investment” instrument proposed in the framework of the post 2020 Cohesion Policy package.

The new pilot action has similar goals. Moreover, in the context of the crisis, it aims at finding solutions to the coronavirus challenges and accelerating the recovery through the commercialisation and scale-up of innovation investment. 

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EU Politics

Commission proposes to purchase up to 300 million additional doses of BioNTech-Pfizer vaccine

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image: BioNTech

The European Commission today proposed to the EU Member States to purchase an additional 200 million doses of the COVID-19 vaccine produced by BioNTech and Pfizer, with the option to acquire another 100 million doses.  

This would enable the EU to purchase up to 600 million doses of this vaccine, which is already being used across the EU.

The additional doses will be delivered starting in the second quarter of 2021. 

The EU has acquired a broad portfolio of vaccines with different technologies. It has secured up to 2.3 billion doses from the most promising vaccine candidates for Europe and its neighbourhood.  

In addition to the BioNTech-Pfizer vaccine, a second vaccine, produced by Moderna, was authorised on 6 January 2021. Other vaccines are expected to be approved soon.  

This vaccine portfolio would enable the EU not only to cover the needs of its whole population, but also to supply vaccines to neighbouring countries.

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EU Politics

Brexit deal: How new EU-UK relations will affect you

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EU-UK relations are changing following Brexit and the deal reached at the end of 2020. Find out what this means for you.

The UK left the EU on 31 January 2020. There was a transition period during which the UK remained part of the Single market and Customs Union to allow for negotiations on the future relations. Following intense negotiations, an agreement on future EU-UK relations was concluded end of December 2020. Although it will be provisionally applied, it will still need to be approved by the Parliament before it can formally enter into force. MEPs are currently scrutinising the text in the specialised parliamentary committees before voting on it during a plenary session.

A number of issues were already covered by the withdrawal agreement, which the EU and the UK agreed at the end of 2019. This agreement on the separation issues deals with the protection of the rights of EU citizens in the UK and UK citizens living in other parts of the EU, the UK’s financial commitments undertaken as a member state, as well as border issues, especially on the Isle of Ireland.

Living and working in the UK or the EU

EU citizens in the UK or UK citizens in an EU member state who were already living there before January 2021 are allowed to continue living and working where they are now provided they registered and were granted settlement permits by the national authorities of the member states or the UK.

For those UK citizens not already living in the EU, their right to live and work in any EU country apart from the Republic of Ireland (as the UK has a separate agreement with them) is not automatically granted and can be subject to restrictions. Also, they no longer have their qualifications automatically recognised in EU countries, which was previously the case.

For UK citizens wanting to visit or stay in the EU for more than 90 days for any reason need to meet the requirements for entry and stay for people from outside the EU. This also applies to UK citizens with a second home in the EU.

People from the EU wanting to move to the UK for a long-term stay or work – meaning more than six months – will need to meet the migration conditions set out by the UK government, including applying for a visa.

Travelling

UK citizens can visit the EU for up to 90 days within any 180-day period without needing a visa.

However, UK citizens can no longer make use of the EU’s fast track passport controls and customs lanes. They also need to have a return ticket and be able to prove they have enough funds for their stay. They also need to have at least six months left on their passport.

EU citizens can visit the UK for up to six months without needing a visa. EU citizens will need to present a valid passport to visit the UK.

Healthcare

EU citizens temporarily staying in the UK still benefit from emergency healthcare based on the European Health Insurance Card. For stays longer than six months, they need to pay a healthcare surcharge.

Pensioners continue to benefit from healthcare where they live. The country paying for their pension will reimburse the country of residence.

Erasmus

The UK has decided to stop participating in the popular Erasmus+ exchange programme and to create its own exchange programme. Therefore EU students will not be able to participate in exchange programme in the UK anymore. However, people from Northern Ireland can continue to take part.

Trade in goods and services

With the agreement, goods exchanged between the UK and EU countries are not subject to tariffs or quotas. However, there are new procedures for moving goods to and from the UK as border controls on the respect of the internal market rules (sanitary, security, social, environmental standard for example) or applicable UK regulation are in place. This means more red tape and additional costs. For example, all imports into the EU are subject to customs formalities while they must also meet all EU standards so they are subject to regulatory checks and controls. This does not apply to goods being moved between Northern Ireland and the EU.

Regarding services, UK companies no longer have the automatic right to offer services across the EU. If they want to continue operating in the EU, they will need to establish themselves here.

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