On the evening of Tuesday 15 July, the Danish Presidency of the EU Council and the European Parliament reached an agreement on new flexibilities for the European Social Fund Plus (ESF+), which will focus on defence, decarbonisation and support for front-line regions, according to a European Parliament press release.
This review is part of wider proposals to overhaul cohesion policy (see other news).
The Commission proposed further relaxations on 1 April (see EUROPE 13612/23). The ESF+ has a budget of €95.8 billion for the period 2021–2027. When Member States decide to use ESF+ funds in these new strategic sectors, they will be able to benefit from an immediate financial injection and new flexibilities, the Commission explained.
The proposal also introduced specific financial support for the regions bordering Russia, Belarus and Ukraine, with increased pre-financing and the possibility for the EU to fully fund projects.
Under the 15 July agreement, priority access to funds will also be developed for micro-businesses and SMEs to support them in developing new skills. Beneficiaries will also have to comply with certain working and employment conditions.
The co-legislators also agreed to support EU countries using ESF+ funds to develop skills in the defence sector and decarbonise industries. The regions bordering Russia, Belarus and Ukraine will also benefit from additional support.
Under the new rules, EU countries will receive additional pre-financing of 1.5% on the basis of their amended budget programme if they allocate at least 10% of resources to new priority competences in civil preparedness and the defence industry, as well as to decarbonisation. Regions bordering Russia, Belarus or Ukraine will be able to receive up to 9.5% pre-financing.
In addition to pre-financing, EU countries can benefit from a maximum co-financing rate for specific priorities that is 10 percentage points higher than for current priorities, as well as exceptional pre-financing of 20%.
When modifying their existing programmes, EU countries will have to include obligations to ensure that beneficiaries comply with certain working and employment conditions. The agreement also provides for conditionality linked to the rule of law, ensuring that funds frozen due to violations of EU ‘values’ cannot be reallocated until the conditions are met.
The EU Council, in its mandate of 18 June, had lowered certain “extremely high” criteria in the initial proposal, a source mentioned.
For example, the Commission had proposed that EU countries should receive additional pre-financing of 4.5% on the basis of their amended budget programme if they allocated at least 15% of resources to new priority competences in civil preparedness and the defence industry, as well as to decarbonisation.
Link to the mandate of the EU Council: https://aeur.eu/f/hw8 (Original version in French by Solenn Paulic)