Member States’ ambassadors to the EU introduced a “retroactivity” clause by unanimously adopting in the Committee of Permanent Representatives (Coreper II) on Wednesday 22 July the partial negotiating mandate to open negotiations with the European Parliament on the REACT-EU regulation.
Indeed, at the European Summit (see EUROPE 12532/2), the Heads of State and Government agreed that relevant actions launched as from 1 February 2020 should be eligible for funding under REACT-EU (point A31).
The Ambassadors are therefore deleting the derogation prohibiting retroactive financing to cover funds made available in the context of the pandemic in Article 92b of the Regulation.
However, even if there were agreement, one diplomatic source questioned whether the EU Council decision was applicable in practice, given that the Member States agreed to remove the additional €5 billion provided for in the context of the 2014-2020 Multiannual Financial Framework (see EUROPE 12495/3).
This means that REACT-EU is being burdened with €7.5 billion, not €2.5 billion, contrary to the agreement reached in the early hours of last Tuesday morning. It was explained that the competent working group is expected to meet quickly on this specific issue.
Bittersweet welcome on the European Parliament side
The EU Council’s vote was welcomed by the European Parliament co-rapporteur on REACT-EU, Andrey Novakov (EPP, Bulgaria – see EUROPE 12523/11). Contacted by EUROPE, the MEP welcomed the introduction of retroactivity, which follows the approach of the co-rapporteurs, he said. On the other hand, he regretted that the EU Council keeps all budget-related issues strictly in the ‘negotiating box’ on the European budget.
As for the summit agreement, the MEP said he could not support cuts that undermine the REACT-EU programme, but also the Just Transition Fund (see other news). The European Parliament is set to adopt a resolution at a plenary session on Thursday 23 July in which MEPs reject the “massive” cuts to REACT-EU (see other news).
Other Covid-19-related changes to funds
The EU Council also adopted a series of partial mandates related to cohesion policy. It extended the scope of the European Regional Development Fund (ERDF) to support the economic development of the cultural and tourism sector to counteract the effects of the pandemic.
In addition, Member States validate the inclusion in the future Common Provisions Regulation (CPR), between the Structural and Investment Funds 2021-2027, of an emergency mechanism allowing the Commission to act quickly.
By amending Article 15a of the CPR, they thus give the European Commission greater latitude to respond to “exceptional and unusual circumstances”, in line with the definition provided in the Stability and Growth Pact. As a result, at the request of one or more Member States, the European Commission will be able to act by means of implementing acts for a defined period, in particular to increase cofinancing rates.
Consult the partial mandates on REACT-EU (https://bit.ly/2WKgNeJ ), on the CPR (https://bit.ly/3huU9yH ), on the ERDF and CF (https://bit.ly/2CXef61 ), and finally on the ESF (https://bit.ly/2ZQNV6l ). (Original version in French by Pascal Hansens)