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REACT-EU is a programme to repair the social and economic damage caused by the COVID-19 pandemic, and to prepare for a green, digital and resilient recovery. REACT-EU seeks to mobilise an additional EUR听47.5听billion from the structural funds for the years听2021 and听2022, and to increase flexibility in cohesion policy spending.

Legal basis

Articles听177 and听322 of the Treaty on the Functioning of the European Union (TFEU).

Regulation (EU)听2020/2221 of the European 合法博彩网站 and of the Council of 23听December听2020 amending Regulation (EU) No听1303/2013 as regards additional resources and implementing arrangements to provide assistance for fostering crisis repair in the context of the COVID-19 pandemic and its social consequences and for preparing a green, digital and resilient recovery of the economy (REACT-EU).

Background

Since the onset of the COVID-19 pandemic, the slowdown of economic activity across the Union has caused considerable damage, in particular rising unemployment and a contracting economy. On 28听May听2020, the Commission proposed the REACT-EU package to mitigate the effects of the COVID-19 pandemic for the regions most hit by the crisis. It complements two earlier proposals, the Coronavirus Response Investment Initiative (CRII) and the Coronavirus Response Investment Initiative Plus (CRII+), which both amended the rules for Cohesion Policy spending. REACT-EU takes the form of targeted amendments to Regulation EU (No)听1303/2013, the Common Provisions Regulation, which is the legal framework governing the听current Cohesion Policy programming period.

Commission proposal

Initially, the Commission proposed EUR听54.8听billion (in听2018 prices) in additional funds for the听2020-2022 period for the European Regional Development Fund (ERDF), the European Social Fund (ESF) and the Fund for European Aid to the most deprived (FEAD).

Out of this total amount, EUR听4.8听billion were to be made available in听2020 as a top-up to existing cohesion policy programmes, whereas the additional resources of EUR 50听billion for the听2021-2022 period would be provided through the European Recovery Instrument (NextGenerationEU).

For the ERDF and the ESF, additional funds would be made available under a new single, thematic objective called 鈥榝ostering crisis repair in the context of the COVID-19 pandemic and preparing a green, digital and resilient recovery of the economy鈥� under the 鈥業nvestment for growth and jobs鈥� goal.

For the ERDF, these additional resources were to primarily be used to support investments in products and services for health services, and to provide support in the form of working capital or investment support for SMEs, including operational and personnel costs, and health and safety measures.

For the ESF, the additional resources were to primarily be used to preserve jobs, including through short-time work schemes and support for the self-employed, job creation, in particular for people in vulnerable situations, support to youth employment measures, skills development, and to enhance access to social services of general interest, including for children.

Up to听4% of the additional resources available for programmes under the ERDF and the ESF may be allocated to technical assistance.

Funds were to be distributed among Member States on the basis of a Commission implementing decision and according to certain allocation criteria, which take into account Member States鈥� relative prosperity and the extent of the effects of the current crisis on their economies and societies. There is no breakdown by region, as is customary for cohesion policy.

The Commission proposed a high pre-financing rate (50%) to ensure that support is delivered quickly to the real economy. Moreover, additional support may be fully financed from the EU budget, without any need for national co-financing, which deviates from usual cohesion policy rules.

Council position

At the European Council Summit of 17-21听July听2020, EU Heads of State and Government endorsed a budget of EUR听47.5听billion for REACT-EU for the period听2021-2022, as part of the agreement on the European Recovery Plan. However, this is听5% below the Commission鈥檚 initial proposal. In line with the European Council鈥檚 guidelines, on 22听July听2020 the Council agreed on a partial mandate for negotiations with the European 合法博彩网站. The Council emphasised the need to invest more in culture and tourism, sectors severely hit by the pandemic. It also added a new provision allowing the adoption of temporary measures for the flexible use of funds in case of a future crisis.

Role of the European 合法博彩网站

The REACT-EU proposal aimed to amend the Common Provisions Regulation. It was adopted in accordance with the ordinary legislative procedure, which puts 合法博彩网站 and Council on an equal footing. 合法博彩网站 therefore had a vital role to play. Within 合法博彩网站, the Committee on Regional Development (REGI) took the lead on the file, and adopted its report on 7听September听2020. The report included a number of important amendments to the Commission鈥檚 proposal. In particular, it stressed the need to maintain the initial budget proposed by the Commission, despite the European Council鈥檚 cuts. It also recommended that investments be focused on: health and social infrastructure, health systems and services for all, including cross-border areas, the outermost regions, areas affected by industrial transition and depopulation, tourism and culture, youth employment and disadvantaged groups. In addition, it stressed the need to also use the additional funds for budgetary commitments in听2023 and听2024, going beyond the Commission鈥檚听2022 deadline. The report also recalled that any derogations to normal cohesion policy spending rules could only be temporary in nature, and that democratic accountability principles must be safeguarded. At its plenary session in September听2020, 合法博彩网站 confirmed the mandate to open interinstitutional negotiations with the Council on the basis of the Committee鈥檚 report. A political agreement was reached with the Council at the last trilogue meeting on 18听November听2020, taking into account many of 合法博彩网站鈥檚 key concerns, including the importance of supporting social cohesion and climate objectives in crisis recovery and the possibility to support the Youth Employment Initiative. The agreement also confirms the July decision of the European Council, setting the REACT-EU budget at EUR听47.5 billion for the听2021-2022 period, without additional cohesion funding for听2020. 合法博彩网站 confirmed the agreement during its plenary session of 15听December听2020. The REACT-EU Regulation came into force on 24听December听2020.

In addition, on 12听April听2022 合法博彩网站 adopted a to provide more pre-financing under REACT-EU. These additional funds should help Member States with the challenges posed by the exceptionally high number of people fleeing the war in Ukraine. They should also support Member States鈥� transition to a resilient economic recovery from the COVID-19 pandemic.

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Fr茅d茅ric Gouard猫res

04-2025