MEPs on the European Parliament's Committee on Regional Development (REGI) increased the REACT-EU budget to €55 billion in 2018 prices and gave the possibility to extend budget commitments until 2024, in a report adopted on Monday 7 September by an overwhelming majority (37 votes in favour, 0 votes against, 4 abstentions).
“The role of the European Parliament is to transform REACT-EU into PROACT-EU”, welcomed co-rapporteur Andrey Novakov (EPP, Bulgaria). “We want to allow the funds to cover the expenses of Covid-19 from 1 February 2020”, he continued, stressing that the Commission must give its green light to any investment within 10 days.
“REACT-EU funding should also go to cross-border projects, the most deprived and young people”, explained co-rapporteur Constanze Krehl (S&D, Germany), who highlighted the European Parliament’s introduction of “minimum shares” for support from Interreg, the European Social Fund (ESF), the Fund for European Aid to the Most Deprived (FEAD) and the Youth Employment Initiative.
All the compromise amendments were adopted. Among these, Parliament proposes to increase the REACT-EU budget to almost €55 billion in 2018 prices (specifically €54.8 billion).
This is a larger sum than the Commission’s proposal of around €50 billion in current prices (the current price inflates the sums to take account of inflation). Parliament’s position remains far more ambitious than that of the EU Council, which reduced the budget to €47.5 billion in 2018 prices (see EUROPE 12532/2).
The idea is to counterbalance the decision of the extraordinary European summit in July, where the Member States, in addition to reducing the budget of REACT-EU, rejected the proposal by the European Commission to increase the budget of the multiannual financial framework by €5 billion for the year 2020.
This was deplored by REGI Committee chair Younous Omarjee (GUE/NGL) on his Twitter account after the vote. “The European Parliament is in the midst of an urgent need for regional responses to the Covid crisis. But it is very regrettable, if not unacceptable, that the Council has chosen not to modify the 2014-2020 budget when it was understood that REACT-EU would apply from this year”.
Another major change is that the European Parliament introduces the possibility of adopting by delegated act, at the reasoned request of a Member State, in order to use the additional resources for budgetary commitments up to 2023 and 2024, i.e., beyond the deadlines set by the European Commission, which set the deadline at 2022.
MEPs have made it more restrictive to use the funds to fight the effects of the pandemic in the worst-affected regions, with the original proposal leaving too much in the hands of Member States, notably for the European Social Fund and the European Regional Development Fund (see EUROPE 12553/2).
Deputies also introduced a binding 3-5% percentage to direct the funds provided by REACT-EU to European territorial cooperation (Interreg), which the European Commission had not initially foreseen. Furthermore, they reaffirmed the need to respect the partnership principle in the body of the Regulation and not only in the recitals.
Only the Greens/EFA group abstained in the final vote: many of its amendments to strengthen the greening of REACT-EU were not retained. Furthermore, it did not welcome the possibility of extending the expenditure, nor did the European Commission. Some fear that an extension could impede spending and dilute the beneficial effect over time. Parliament is proposing a communication campaign to make REACT-EU expenditure more visible.
Parliament’s plenary is expected to give the mandate for the inter-institutional negotiations at its September session without any problems: both co-rapporteurs received unanimous votes in committee to open negotiations with the EU Council. (Original version in French by Pascal Hansens)