REACT-EU has been approved: Here’s what Germany gets

German regions will receive roughly €2.4 billion from the fund. [Phoenixns | Shutterstock]

European regional policy has a special role to play in overcoming the coronavirus crisis, with one of the main new instruments being REACT-EU, a fund which represents an increase of €47.5 billion in structural funds. EURACTIV Germany reports.

Europe’s regions are getting a fresh influx of money to tackle the coronavirus crisis. On Tuesday (15 December), the REACT-EU programme passed through the European Parliament with an overwhelming majority of 654 votes to 23, with 17 abstentions.

A total of additional €47.5 billion will flow to the regions, distributed through the structural funds, as part of the EU’s recovery package.

Germany will receive around €2.4 billion of this, in two tranches: next year it will be €1.9 billion, then another half-billion in 2022.

“That’s quite a hefty gulp out of the bottle,” Ulrike Witt, state representative for regional development in Braunschweig in northwestern Germany, told EURACTIV Germany.

The money also comes at just the right time, because “we notice that the funding period is coming to an end”, which means that in many cases there is hardly any funding left for the co-funded projects.

The rapporteur for REACT-EU, MEP Constanze Krehl (S&D), also described these sums as “pretty decent amounts.”

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Attractive for Germany’s states

The distribution of the money among the individual German states has already been agreed internally, according to a formula. As EURACTIV Germany was able to find out, Lower Saxony, for example, expects €205 million.

These funds can be used to finance projects retroactively starting on 1 February 2020.

There should be no additional bureaucracy as the money is to be paid out directly via the existing structural funds. For this reason, too, Krehl thinks that “the programme is certainly very attractive for the German states.” They can use it “to react precisely to the COVID crisis and its effects.”

REACT-EU is just one of several regional policy contributions to overcoming the crisis.

Early on, unused funding was released from the EU’s structural funds to provide economic support to regions. The promise in March was that €37 billion from the funds, which would have to be repaid to the Commission under normal circumstances, can be spent. However, the final amount is not yet clear as the money is still being reallocated.

Repayable support: no silver bullet but a means to tackle EU funds graft

Increasing the role of loans and guarantees utilised to narrow the disparities between European regions may help combat the misuse of EU funds but cannot replace the role of accountability, transparency and sound domestic institutions.

Greater trust in regional institutions

The background to this regional approach is also the fear that the pandemic will widen the gap between poor and rich regions, a risk revealed by an EU-wide survey, the “Regional and Local Barometer”, in October.

Report charts new EU 'COVID-19 geography', growing inequality risks

The first EU-wide survey of the current challenges the pandemic has posed for local and regional governments across the bloc shows risks of a widening divide between the EU’s regions and calls for closer involvement of local authorities in drawing up recovery plans.

It was therefore recommended that regional and local actors be more involved in shaping national recovery plans.

Another finding in the survey also supported this approach: regional players enjoy a particularly high level of trust among the European population.

For example, 52% of citizens trust their local authorities, compared with 47% for EU institutions and only 43% for national authorities. The same pattern emerges when it comes to the question of which institutions are most likely to be trusted to manage the coronavirus crisis.

Exploring discontent with the EU

EURACTIV takes a closer look a what the geography of EU discontent is, what a regional analysis of the citizens’ dissatisfaction can reveal about the places that are most anti-EU and what the EU can do.

EU Council approved structural funds

An agreement was reached in the Council on Wednesday (16 December) on structural funding as a whole, and EU27 gave their blessing to plans for the €400 billion over the next seven years.

“With today’s approval of our negotiation result, we are creating clarity and predictability for the countries and regions in Europe,” said German Economy Minister Peter Altmaier (CDU), adding that “we negotiated efficiently and were able to achieve results quickly because the Parliament and the Council presidency were aware of the great responsibility.”

“This is a strong signal to strengthen cohesion and overcome the corona crisis,” Altmaier said.

[Edited by Zoran Radosavljevic/Vlagyiszlav Makszimov]

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