“Using cohesion policy to react to a crisis risks distancing it from its main strategic objective”. A warning that has been repeated many times (see EUROPE 13068/5), but which now comes from the European Court of Auditors.
In a report published on Thursday 2 February, the auditors questioned whether cohesion policy is the right tool to respond to crises. After the analysis of the CRII, CRII+ and REACT-EU instruments introduced in response to the health crisis, the question remains open. On the one hand, mobilising unspent cohesion funds allowed the consequences of the health crisis to be addressed quickly. On the other hand, the additional funds have increased the pressure on Member States to spend the EU money “well and fast”.
Furthermore, the auditors point out, “cohesion has often been used to provide short-term responses to crises and some of the changes made for this purpose have become an established feature of the policy”. In particular, the relaxations introduced by CRII/CRII+ remain in the period 2021-2027, opening the door to the risk that cohesion policy will be mobilised on a recurrent basis in the face of crises, and thus diverted from its long-term strategic objective.
The Court therefore invites the European Commission to analyse this long-term policy impact and to ensure that REACT-EU funds are effectively absorbed. More broadly, it encourages the Commission to take these findings into account in the ex-post evaluation of the 2014-2020 period, scheduled for the end of 2024, as well as in the development of post-2027 cohesion policy.
€35 billion in transfers
The report also states that the flexibilities introduced by CRII/CRII+ have led to “substantial movements of funds”. Member states have transferred €35 billion, or 10% of the cohesion funds. These funds were mainly shifted from energy and environment and research and innovation to healthcare (+€7.7 billion, a leap of 80%) and business support (+€5.7 billion, or +16%).
REACT-EU provided an additional €50.4 billion, of which more than half (57%) was earmarked for Spain and Italy, i.e. more than €14 billion for each of these countries which were heavily affected by the consequences of Covid-19. Overall, additional funding has been targeted at health care, business support and employment.
REACT-EU funds can be used with relative freedom (discretion between ERDF-ESF distribution, regions and types of investments), but within a short timeframe (by 2023), leading to delays in the launch of the 2021-2027 programmes and concerns about the absorption capacity and quality of investments.
To read the report: https://aeur.eu/f/573 (Original version in French by Hélène Seynaeve)