The EU outermost regions turn on the calculator

The European Parliament votes on the new regulation of the Regional Development Fund. The outermost regions will receive 1,447 million euros from the specific and additional allocation in the ERDF, during the period 2021–2027

© European Union, 2019.

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HE PLENARY OF THE EUROPEAN PARLIAMENT will vote on Wednesday, March 27, 2019, the draft Legislative Resolution on the Regulation of the European Regional Development Fund and the Cohesion Fund for the next budget cycle of 2021–2027. The debate will take place on Tuesday 26, around the speech of the Italian MEP Andrea Cozzolino (Social Democrats), while the vote is scheduled for Wednesday 27 in the afternoon.

The reform of the Cohesion Policy after 2020 includes a new method for calculating the allocation, according to the proposal of the European Commission, submitted in May 2018. Criteria such as the youth unemployment rate, the costs of Decarbonization of the economy or migratory pressure on a region. The nine outermost regions of the European Union will maintain a specific and additional ERDF allocation corresponding to the calculation method common to all regions. For the new budget cycle 2021–2027, the European Commission has proposed that the Feder-Rup be 1,447 million euros, one hundred million more than in the period 2014–2020.

The EU Cohesion Policy consists of seven instruments: the European Regional Development Fund (ERDF), the Cohesion Fund (CF), the European Social Fund Plus, the European Maritime and Fisheries Fund, the Asylum and Migration Fund , the Internal Security Fund, and the Border Management Instrument.

Within the Cohesion Policy, the Structural and Investment Funds package comprises the ERDF, the Cohesion Fund and the European Social Fund. Together they carry out the policy of economic, social and territorial cohesion, with resources that the European Commission proposes to add 330,000 million euros in the 2021–2027 cycle. One in three euros of the total budget of the European Union is applied through these three instruments.

51 mentions to the outermost regions

This Wednesday’s vote in the European Parliament concerns the regulation of the ERDF and the Cohesion Fund. The ERDF is the largest instrument of the Cohesion Policy, to which the Commission assigns 200,629 million euros for 2021–2027. The forecast for the Cohesion Fund for the same period is 41,349 million euros.

The procedure falls on the European Parliament and the Council, like all legislative acts of the Union. The Resolution that Parliament will vote on Wednesday will follow a trilogy phase or dialogue with three of the Chamber, the Commission and the Council. Then, the project will return to Parliament, for a second reading vote. If approved, the Regulation will be formally adopted as European Union Law.

This week’s debate and voting are of the utmost importance for the outermost regions. The draft resolution mentions them 51 times. The amendments that affect the rup range from operating aid to garbage incinerators, including investment in airports.

The outermost regions have received, jointly, 13,300 million euros from the Cohesion Policy and the Agricultural Policy during the period 2014–2020. Of this amount, more than 6,000 million correspond to the Agricultural Policy, through the specific instrument for the outermost regions, the Program of Specific Options on Remoteness and Insularity, or Posei. The rest, up to 13,300 million, have been applied through the Structural and Investment Funds -Feder and the Cohesion Fund, basically.

The ORs amendments

Mention, from article 1

The Plenary of the European Parliament will vote this Wednesday a new wording of the first article of the Regulation, in which the status of the outermost regions is mentioned. If the Plenary supports it, Article 1, paragraph 1 of the Regulation would be worded as follows:

“This Regulation will contribute to the financing of aid aimed at strengthening economic, social and territorial cohesion by correcting the main regional imbalances within the Union and reducing the backwardness of the less favored regions, among which special attention should be paid to the regions they suffer serious and permanent natural or demographic disadvantages such as, for example, the outermost regions, the northernmost regions with very low population density and island, trans-frontier and mountain regions.”

New uses for operating aid

The Commission proposes …

The European Commission (Recital 27 of its Proposal for a Regulation) foresees that the additional allocation of the European Regional Development Fund (ERDF) for the outermost regions (€ 1,447 million for the period 2021–2027) may be applied in transport operating aid. of goods and the start-up of transport services. As a general rule, Community law prohibits exploitation aid, because the Legislator considers them a factor of distortion of competition.

… And this is what Parliament will vote

The legislative resolution to be voted on Wednesday in the Plenary of the European Parliament proposes that, in addition to the transport of goods and the implementation of transport services, they can receive help from Feder funds other exploitation activities, such as “ecological logistics and mobility management” in companies. It also proposes that the specific allocation of the Feder-ORs is not “subject to the planned thematic concentration” in the Regulation. In short: the allocation of an additional 1,447 million euros for the outermost regions can be applied to all economic activities, not only those that are priorities for the Commission.

Yes to new airports

The Commission proposes …

Excluding from the application of the ERDF and the Cohesion Fund the investments in airport infrastructures, except in the case of the outermost regions (Article 6, 1, e of the proposed Regulation).

… And this is what Parliament will vote

Exclude only the construction of new regional airports, except in the case of “investments related to the outermost regions.”

Yes to garbage incinerators

The Commission proposes …

Exclude from the application of the ERDF and the Cohesion Fund “investments for the disposal of waste in landfills.” (Article 6, 1, f)

… And this is what Parliament will vote

Include these same investments, when they are made in the outermost regions, and for “dismantling, reconversion or security of existing facilities” interventions. In practice, this means that European funds can support the construction of waste incinerators in the outermost regions, an option that contradicts the EU’s environmental policy. The environmental organizations are collecting signatures for Parliament to reject this amendment.

Investment support

The Plenary of Parliament will vote on the inclusion of a new section of Article 11, which will authorize the ERDF to “support productive investments in companies located in outermost regions regardless of their size”.

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