(Source: European Committee of Regions)
The CoR writes to the EU Commission highlighting the urgent request coming from local and regional authorities which are still bearing the brunt of the pandemic’s impact.
The results of a survey carried out by the European Committee of the Regions (CoR) show a clear demand among local and regional authorities to extend the flexibility measures introduced last year to mobilise EU structural funds and state aid in the fight against COVID-19. Regions and cities need extraordinary rules to be maintained in order to secure the continuity of emergency investment and the deployment of crucial initiatives such as job retention schemes. This request is included in a letter co-signed by the CoR President Apostolos Tzitzikostas and the chair of the CoR’s COTER commission Isabelle Boudineau, addressed to the President of the European Commission Ursula von der Leyen and the commissioners responsible for the relevant policies.
Cities and regions have been at the forefront of COVID-19 crisis management over the last year. The two Coronavirus Response Investment Initiatives ( CRII and CRII+ ) introduced exceptional and useful flexibility measures to use cohesion policy funds 2014-2020 to finance measures related to the COVID-19 outbreak, such as investments in the healthcare sector, support for SMEs and the labour market. In addition, the new REACT-EU programme, which is an emergency legislative initiative releasing EUR 47.5 billion through structural funds supporting the hardest hit member states and regions, has just begun to be implemented by Member States.
To face the consequences of the pandemic on the ground and avoid any interruption of vital investment in such a delicate phase, regional and local leaders need to keep relying on this extraordinary regulatory framework. In order to understand how the managing authorities of structural funds have been dealing with these three emergency instruments, the Commission for Territorial Cohesion Policy and EU Budget ( COTER ) carried out a survey among CoR members. The results show a clear request to extend the flexibility measures included under CRII and CRII+, in order to duly certify all eligible costs, to increase permitted absorption rates and to reduce potential errors.
Along these lines, the European Commission should consider:
- an extension of the possibility of a 100% EU co-financing rate for another year, beyond 30 June 2021,
- an extension of the “N+3” rule,
- a temporary increase in the de minimis state aid threshold.
The timely extension of the flexible rules would preserve investment needed by citizens and businesses struggling with the crisis and alleviate the workload of hundreds of regional managing authorities that are under enormous stress to conclude 2014-20 cohesion programmes, launch the 2021-27 ones and contribute the kick-off of national recovery and resilience plans.
In the letter , President Apostolos Tzitzikostas and COTER chair Isabelle Boudineau underline that an extension of flexibility measures would support cities and regions in their commitment to make the best use of cohesion policy with increased efficiency, transparency and ownership, while also ensuring the transition to a sustainable society as defined in the Sustainable Development Goals and the EU Green Deal.
The survey on the implementation of the Coronavirus Response Investment Initiative (CRII and CRII+) was launched in May 2021 by the CoR’s COTER Commission. It gathered the views and experiences of 67 representatives of local and regional authorities (officials, politicians or other), the managing authorities of Structural Funds Operational Programmes, and from other stakeholders at local and regional level concerned by CRII, CRII+ and REACT-EU in 20 EU Member States. These are: Austria, Belgium, Bulgaria, Croatia, the Czech Republic, Denmark, France, Germany, Greece, Hungary, Italy, Latvia, Lithuania, the Netherlands, Poland, Portugal, Romania, Slovakia, Spain, and Sweden.
The results are available here .
Member States must always add a national co-financing to investments made through structural funds. The co-financing rates vary from one EU country to the other, and even from one region to another, because they depend on the relative prosperity of EU territories. Among other simplified procedures and flexibility, the CRII included the possibility for Member States to apply a 100% EU co-financing rate to relevant operational programmes, exempting them from the obligation to add a national co-financing.
The “N+3 rule” is the decommitment methodology applied to the 2014-2020 programming period. This means that the European Commission will decommit any part of the amount in an operational programme that has not been used by 31 December of the third financial year following the year of budget commitment under the operational programme.
The de minimis aid refers to small amounts of state aid to undertakings (essentially companies) that EU countries do not have to notify the European Commission about. The maximum amount is EUR 200 000 for each undertaking over a 3-year period.