Cohesion & NextGenerationEU: Europe’s double‑act for recovery?

Source: Xavier Lejeune/ Depositphotos.

Cohesion & NextGenerationEu in the context of COVID‑19 and the Russian war on Ukraine

The COVID‑19 pandemic was an unprecedented and unexpected event that caused a major shock to society, affecting people, businesses and national, regional and local public authorities (1). The EU needed to act fast, and it needed to act effectively. Cohesion policy played a major role during the pandemic, allowing Member States great flexibility in their use of billions in EU funding for recovery. So cohesion funding was the first EU response, but it was not the only one. NextGenerationEu entered the mix with a package of over €800 billion for recovery and repairs to the socioeconomic fallout from the pandemic. Then a new crisis in the history of the EU emerged with the Russian war on Ukraine. The flood of Ukrainian refugees and the economic impact of the war led to the Cohesion’s Action for Refugees in Europe (CARE) and CARE+ proposals. However, implementing all that funding has turned out to be a headache.

The paradox: delays in the flow of EU money just when it is most needed

There has been unprecedented delay in deploying cohesion policy programmes. So far the Commission has received for approval only 13 cohesion partnership agreements and not many more than 100 draft cohesion programmes (2). Technically speaking, the programmes should have been in operation as of 1 January 2021. Fifteen months later, none of the 2021‑2027 cohesion policy budget has yet been implemented. In essence, the Member States missed the opportunity to invest €49 billion from the EU budget under the Common Provisions Regulation (CPR) — the EU’s entire cohesion policy allocation for 2021. The Commission was therefore obliged to propose a correction to the multiannual financial framework (MFF) allocations to cohesion policy, aiming to redistribute the unused amount in four equal parts over the next four years (3). This internal reshuffling is not a serious issue for the moment, but it might be in the context of the €392 billion in CPR funding which has to be absorbed by Member States and regions before the end of 2027. All these carryovers do is postpone the solution to the problem. Adding one quarter of the €49 billion to the 2022 allocation will only make matters worse. Moreover, if the Member States ended up not using their 2022 cohesion allocations, that money would be gone for good.

Andrey Novakov (seated centre) discussing with colleagues during the CPR negotiations. Source: European Parliament.

Cohesion and NextGenerationEu: frenemies and coopetition

To put the situation in context, it is important to understand that, at this very moment, the Member States are closing the 2014‑2020 programming period, trying to launch their 2021‑2027 programmes, investing their REACT‑EU allocations and doing their best to make sure they absorb all the funding available from the Recovery and Resilience Facility (RRF) through their national recovery and resilience plans. The truth is that there is simply too much funding to deal with simultaneously, and the Member States do not have the administrative capacity to handle the challenge. Attempting to carry out all of the above tasks in parallel could lead to under‑implementation, because Member States have to prioritise funding instruments by their eligibility deadline. The choice is obvious: start with REACT‑EU, go on to the RRF, and focus only then on the 2021‑2027 cohesion programmes.

Finding solutions in the context of the current crisis

The March 2022 plenary debate on the delayed implementation of cohesion policy was followed by a European Parliament resolution that was adopted during the April session in Strasbourg. Again, my team and I were behind the idea of a debate because we needed to publicise concrete ideas. I am glad that the REGI Committee backed this initiative. The adopted document underlines the issue of the late start but also proposes solutions.

The future of cohesion policy will be tackled by the EPP Cohesion Monitoring Group

Last year my team and I came up with the idea of establishing a forum in which Members of the European Parliament would be able to discuss and resolve cohesion policy issues. The idea was triggered by the obvious delays in the implementation of cohesion policy and the competition between cohesion and the RRF. On 8 March 2022, our idea became reality. We launched the Cohesion Monitoring Group (CMG), an official structure of the Group of the European People’s Party in the European Parliament. This is a cross‑committee forum open to all EPP MEPs who are interested in how approximately one third of the EU budget is channelled towards investments that deliver the EU’s political priorities and strengthen economic, social and territorial cohesion.

Participants of the Cohesion Monitoring Group meeting in March 2022. Source: European Parliament.

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European Court of Auditors

European Court of Auditors

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