On Friday 13 March, the European Commission proposed a €37 billion 'Coronavirus Response Investment Initiative'. "No new money from the Member States is needed for this aid", a European source said.
"We have made sure to take additional measures, because the situation demands it. The amount has therefore been increased", said the President of the European Commission, Ursula von der Leyen, presenting the package of measures to fight the health crisis (see other news). The Commission initially planned an envelope of €25 billion, but this was revised upwards (see EUROPE 12445/7).
Dormant funds. Mrs von der Leyen told the press that this envelope would consist of 'dormant' funds "which Member States could no longer use".
The funds come from the structural funds, she confirmed, "and we propose to allow these dormant funds to be activated so that they can be redirected immediately to sectors such as healthcare, the labour market and SMEs". The Commission is proposing to "free up funds that otherwise would not have been used now", she concluded.
The Commission is therefore proposing a 'Coronavirus Response Investment Initiative' to promote investment by mobilising the cash reserves available in the European Structural Funds and investment funds to tackle the crisis immediately. Investment is expected to rapidly reach over €37 billion, according to the proposal.
The Commission proposes to the EU Council and the European Parliament to release around €8 billion of investment liquidity (to be made immediately available to Member States for national contributions under cohesion policy interventions). If fully used, this will be complemented by €29 billion of EU budget money from the European Structural and Investment Funds. The remaining Structural and Investment Funds would amount to EUR 28 billion.
Italy. For Italy, the measure would provide €853 million in liquidity, to be topped up by €1.46 billion from the EU budget. In addition, Italy will be able to spend €9 billion of unallocated cohesion money half of which coming from the EU budget.
Cohesion put to work. To make this 37 billion available, the Commission proposes to relinquish this year its obligation to request Member States to refund unspent pre-financing under the European Regional Development Fund (ERDF), the European Social Fund (ESF), the Cohesion Fund (CF) and the European Maritime and Fisheries Fund (EMFF) until the end of the 2014-2020 programmes.
Member States will use the amounts not recovered in 2020 to accelerate investments related to the epidemic in the following areas: - health (hospital equipment, inhalers, masks); - support for SMEs working capital; - short-term employment schemes.
The Commission calls on the European Parliament and the EU Council to approve this proposal quickly so that it can be adopted "within the next two weeks".
The Chair of the European Parliament Regional Development Committee, Younous Omarjee (GUE/NGL, France), said that cohesion policy "will respond 'now', so that it can take effect quickly and in the most effective way. The Regional Development Committee will do its utmost to ensure that funding arrives quickly where it is most urgently needed".
EU Solidarity Fund. In addition, the Commission is proposing to extend the scope of the EU Solidarity Fund by also including a public health crisis within its scope, in view of mobilising it if needed for the hardest hit Member States. Up to €800 million is available in 2020.
The European Globalisation Adjustment Fund has €175 million available to mobilise support for dismissed workers and the self-employed.
Link to the Commission proposal: http://bit.ly/3cVG3Fh
See also the explanatory presentation: http://bit.ly/2IM1MBy (Original version in French by Lionel Changeur)