Lawmakers on the European Parliament’s regional development committee are keen to see a quicker deployment of funds for the mitigation of the immediate effects of the COVID-19 crisis, but they face an uphill battle with the member states who propose less money and potentially longer procedures.
The Parliament’s committee responsible for cohesion policy pushed on Monday (7 September) to maintain the additional EU resources to battle the economic fallout of the pandemic, known as REACT-EU, at €55 billion, as proposed by the Commission in spring.
“People outside the glass and concrete Brussels buildings could not care less about our procedures, political statements and political fights in the Council, they would like to see results,” Andrey Novakov (EPP), one of the MEPs leading the REACT-EU negotiations, told EURACTIV.
Novakov said REACT-EU will be one of the first concrete results that the EU will be able to offer to its citizens, hopefully “before Christmas.”
The Parliament will, however, face an uphill battle in the negotiations with the Council. The European Commission initially proposed that €5 billion for REACT-EU could come by amending the current seven-year budget, while an additional €50 billion for the programme could be borrowed from the markets.
However, at a marathon summit in July, European leaders agreed that “there will be no change” to the 2014-2020 budget. This effectively cut €5 billion from the proposal while countries later shaved off an additional €2.5 billion through reallocation, resulting in overall financing of €47.5 billion to be spent during 2020-2022.
“I was surprised by the position of the Council, it proposed cuts to their own funding, the funding which will go directly to the member states,” Novakov said.
The €47.5 billion cannot be directed to the regions, however, until all national parliaments in the EU approve the plan to borrow €750 billion for recovery from the markets, a decision over which the European Parliament has little control.
Democratic oversight of how the revenue from the borrowing is spent is one of the major sticking points in the ongoing negotiations between the Council and the Parliament.
The talks between the European co-legislators are further complicated by signs that some national parliaments may withhold their consent to borrowing on the markets if EU spending is linked to the rule of law.
The decision not to change the 2014-2020 budget and provide €5 billion for REACT-EU “causes a political problem but also a budgetary problem,” said Younous Omarjee, chair of the regional development committee, adding that “the European regions expect that this money will be available from this year.”
“Indeed, the margin of maneuver of the European Parliament is narrow,” Omarjee told EURACTIV.
Member states and the Parliament agree that regions should be able to retroactively cover COVID-related costs via REACT-EU, starting from 1 February 2020, but European lawmakers would also like to see the period for which countries can use the additional funds extended by two years, from 2022 to 2024.
Once the Parliament adopts its stance on REACT-EU at the next plenary sitting, it will enter into negotiations with the Council, which lawmakers hope will be finished by the end of fall.
[Edited by Zoran Radosavljevic]