The European Commission has presented, in the framework of the Investment Plan for a Sustainable Europe (see other news), the 8th structural fund of the Cohesion Policy, namely the Just Transition Fund, which will be endowed with €7.5 billion (2018 prices), supplemented by a minimum of €11 billion from other structural and investment funds, as well as national co-financing. The aim is to achieve a financial effort of up to €50 billion.
The modus operandi remains the one detailed by EUROPE (see EUROPE 12401/12) - for every euro spent by the Just Transition Fund, at least one and a half euros (or even three euros, if the Member State so wishes) will have to be provided either by the European Regional Development Fund or the European Social Fund. Transfers may not, however, exceed 20% of the national allocation of the two funds.
In addition, there are national co-financing rates, in line with the rules laid down in the umbrella regulation on common provisions. This would mean a European co-financing rate of 70% for the least developed regions, 55% for the regions in transition and 40% for the most developed.
The programming process, including the identification of intervention territories, will be agreed in a dialogue between the Commission and each Member State. It will be steered through the 'European Semester' process. Thus, in February, the Commission will make suggestions to the Member States of the regions concerned according to the criteria of the transition fund just on the basis of Annex D of the 'European Semester'.
It should be noted that the territories identified for action by the Fund will be identified at NUTS 3, i.e. the level of the smallest regions, in order to carry out specific diagnoses.
While the European Commission had initially envisaged extending the Fund's scope to 10 Member States, mainly in Central and Eastern Europe, it ultimately decided to open it to all Member States. On the other hand, in order to avoid spreading the Fund too thinly, the Commission has introduced a series of restrictive criteria to preserve a strong impact.
To this end, the Commission will look at the rate of greenhouse gas emissions from industrial installations in carbon-intensive regions, the rate of employment in industry in these regions, employment in coal and lignite extraction or in peat or oil shale production.
Corrections will be applied to these criteria provided for in Annex I. This will take into account corrections related to gross national income per capita to ensure a concentration on the least developed Member States. Above all, there is a ceiling of 2 billion euros to avoid too much imbalance in the distribution of funds.
It should be noted that large companies covered by the Emissions Trading Scheme (ETS) will be able to be covered by the Fund, which is not possible under Cohesion Policy.
When questioned by EUROPE, the Commissioner for Cohesion and Reforms acknowledged that cohesion policy was being heavily used, because of the importance of the issues at stake in the transitions, to create a leverage effect. However, Elisa Ferreira insisted on the existence of the contribution limit of 20% of the national allocation.
According to the European Commission, the introduction of this new fund will have only a minor impact on the inter-institutional negotiations on the Common Provisions Regulation and on the programming of the funds. As such, the Commission plans to create a technical assistance platform specifically for this Fund.
Mixed reaction from the Committee of the Regions. The Committee of the Regions welcomed the European Commission's proposals, but noted that the proposal to provide 7.5 billion euros in no way compensated for the planned budget cuts in cohesion policy (around 12% compared to the current budget cycle). Committee of the Regions President Karl-Heinz Lambertz believes that Member States need to revise their ambitions upwards after the disappointment of the Finnish proposals at the end of 2019 on the next multiannual financial framework. Furthermore, the Committee welcomed the Commission's intention to revise the rules on state aid to bring them into line with the rules on directly managed funds (Horizon Europe type).
To consult the Regulation establishing the Fund: http://bit.ly/35Uke4i (Original version in French by Pascal Hansens and Sophie Petitjean)