Following the coronavirus pandemic, the European Commission launched a comprehensive and ambitious recovery plan. In this regard, cohesion policy will play a key role in ensuring a balanced recovery, fostering convergence and ensuring that no one is left behind. The REACT-EU regulation was adopted on December 23, 2020.
The REACT-EU package
REACT-EU (Recovery Aid for European Cohesion and Territories) will be one of the largest programs of the new Next Generation EU instrument amounting to 50.6 billion euros.
This funding is entirely new: it is a in addition to the 2014-2020 programs and in addition to the 2021-2027 cohesion allocations, raising the total envelope of Structural and Investment Funds above current levels and becoming the highest single grant instrument in the EU budget.
This continue and extend crisis response and repair measures issued through the Coronavirus Response Investment Initiative and the Coronavirus Response Investment Initiative Plus and is a gateway to the long-term recovery plan. Therefore, these additional resources should be used for projects that promote crisis repair capacities in the context of the coronavirus crisis, as well as investments in operations helping to prepare a green, digital and resilient economic recovery.
The successful implementation of REACT-EU will depend on 3 building blocks – its strength (financial allowance), the speed (using existing programs until 2023) and total flexibility implementation rules
The methodology for allocating this funding takes full account of the economic and social impact of the crisis in EU countries, reflecting the Declining GDP and rising unemployment including among young people, as well as relative wealth of countries.
In order to ensure that additional resources can be geographically targeted to areas where support is most needed, on an exceptional basis and without prejudice to normal cohesion policy allocations, additional resources are exceptionally not divided by categories of regions.
However, the principle of partnership requiring close cooperation with regional and local authorities for the programming and implementation of these resources fully applies. Likewise, the focus on the less developed regions cannot be overlooked and regions that need more support will receive more support.
These additional resources will be distributed to Member States in 2021 and 2022 from the European Regional Development Fund (ERDF), the European Social Fund (ESF), the Fund for European Aid to the Most Deprived (FEAD) – as well as the Youth Employment Initiative (YEI). Technical assistance measures can also be financed.
In order to provide rapid support to the regions, expenses incurred from February 1, 2020 are eligible.
The final eligibility date for this expenditure is maintained at December 31, 2023, in accordance with the 2014-2020 legislative framework.
The package will provide additional funding for existing or new dedicated programs under the Investment for Growth and Jobs (IGJ) objective and for existing cross-border cooperation programs under the European territorial cooperation objective. .
From the ERDF, the additional resources are mainly used to support investment in products and services for health services and to provide support in the form of working capital or investment assistance to SMEs.
In order to create the conditions conducive to recovery, it should also be possible to support investments contributing to the transition to a digital and green economy as well as in infrastructure providing basic services to citizens, or economic measures in the most vulnerable regions. more dependent on the sectors most affected by the crisis (eg tourism, culture, hotels, etc.).
ESF, the additional resources are mainly used to support the maintenance of employment, in particular through partial unemployment schemes and aid to self-employed workers. The additional resources will also support job creation, in particular for people in vulnerable situations, measures for youth employment, skills development, in particular to support the dual green and digital transition, and better access to social services of general interest, including for children.
In order to provide maximum assistance to Member States, the conditions for implementing these additional resources are very generous and flexible.
- No national co-funding is required for this funding. This means that the EU will provide 100% support if Member States so wish.
- A high level of pre-financing is proposed to ensure that the lack of liquidity does not impose a bottleneck on the rapid deployment of this support. Member States will be encouraged to use this high additional pre-financing to pay advances to beneficiaries.
- This attribution can be spent in any region category, the the scope of support is wide and transfers between ERDF and ESF are always possible
- There are no ex ante conditionality or thematic concentration