Commission paves way to draw €37 billion from structural funds
The European Commission proposed numerous changes to its cohesion policy rulebook on Thursday (2 April) in order to draw €37 billion of unused funds to finance various measures during the coronavirus pandemic. But these measures can only help to a limited extent.
The Commission adopted a legislative package on Thursday allowing for the use of €37 billion from the EU structural funds promised three weeks ago. To this end, the executive is proposing far-reaching changes to the rulebook of cohesion policy.
“We must use all our instruments. We will reallocate every euro available in the EU budget and we will relax all the rules,” said European Commission President Ursula von der Leyen.
This proposal follows from the CRII package proposed on 13 March, which grants €37 billion financial aid to combat the coronavirus for EU member states. However, for the changes to enter into force, the European Parliament and the Council will have to give their approval.
The money is to come from unused structural funds, which normally have to be returned to the Commission each year. Thus, €8 billion, which were planned for 2019, are to remain in the hands of the member states, and another €29 billion are to be paid out early.
To implement this, the Commission proposed changes to the rules of cohesion policy to make the use of the funds more flexible and less bureaucratic. Member states should be given the opportunity to shift unlimited funds between the different funds this year, and also to transfer money between richer and poorer regions.
As is the case for Northern Italy, some economically prosperous and densely populated regions, in particular, have been hit hard but they have limited access to EU funds under the current arrangements.
Despite the new freedoms, member states should “first examine other ways of transferring funds before considering transfers from the budget of less developed regions”, as these transfers could potentially have negative effects, the draft says.
Unlimited refinancing should now also be possible between the substantive priorities of the current funding programmes. Only 8% had been proposed, according to an EU diplomat. Besides, EU member states can now temporarily overstretch their budgets by 10% with regards to certain priority areas such as healthcare, provided the money is saved elsewhere.
With yesterday’s proposals, the Commission is responding to requests from the Parliament’s Committee on Regional Development (REGI). In a video conference held by the committee’s chairs and Commissioner Elisa Ferreira on 30 March, the MEPs had insisted on the relaxation and simplification of the rules so that the promised €37 billion could be paid out quickly.
The president of the Committee of the Regions, Apostolos Tzitzikostas, has said that he supports the Commission’s efforts allowing a quick reprogramming of the investment planned before the crisis. “Cohesion policy funds are once again proving vital on the ground in unprecedented times of crisis”.
