Changes from plenary report to adopted text

RemovedRecital 3: (3) In order to redress huge shocks to the economy and avoid disastrous social and economic consequences for the Union stemming from the exceptional restrictions put in place by Member States to contain the spread of COVID-19 and the risks of an asymmetric recovery stemming from the different national means available in different Member States which resulted in serious impacts on the functioning of the Internal Market, the European Council endorsed on 23 April 2020 the “Roadmap for recovery” with a strong investment component, called for the establishment of the European Recovery Fund and mandated the Commission to analyse the needs so that the resources would be targeted towards the sectors and geographical parts of the Union most affected, as stated in the conclusions of the European Council on 21 July 2020, while clarifying also the link with the Multiannual Financial Framework for 2021-2027.

RemovedRecital 4: (4) In accordance with Regulation [European Recovery Instrument] and within the limits of resources allocated therein, recovery and resilience measures under the European Investment and Structural Funds should be carried out to address the unprecedented impact of the COVID-19 crisis. Moreover, additional resources for economic, social and territorial cohesion should be made available through a revision of the multiannual financial framework for 2014-2020, making it possible to flexibly address needs emerging as a result of the COVID-19 crisis.

RemovedRecital 5: (5) An additional exceptional amount of EUR 58 272 800 000 (in current prices, EUR 54 806 498 104 in 2018 prices) for budgetary commitment from the Structural Funds under the Investment for growth and jobs goal and the European territorial cooperation goal, for the years 2020, 2021 and 2022 and where justified by a Member State, also for the years 2023 and 2024, should be made available to support Member States and regions most impacted in crisis repair in the context of the COVID-19 pandemic and its socio-economic consequences, and preparing a green, digital and resilient recovery of the economy, with a view to deploying resources quickly to the real economy through the existing operational programmes. Resources for 2020 stem from an increase in the resources available for economic, social and territorial cohesion in the multiannual financial framework for 2014-2020 whereas resources for 2021 and 2022, and, where applicable, for 2023 and 2024, stem from the European Union Recovery Instrument. Part of the additional resources should be allocated to technical assistance at the initiative of the Commission. For budgetary commitments under both the Investment for growth and jobs and the European territorial cooperation goals, the Commission should set out the annual breakdown of the remaining additional resources for each Member State in implementing acts, on the basis of an allocation method based on the latest available objective statistical data concerning Member States’ rela…

RemovedRecital 6: (6) Horizontal financial rules adopted by the European Parliament and the Council on the basis of Article 322 of the Treaty on the Functioning of the European Union apply to this Regulation. These rules are laid down in the Financial Regulation and determine in particular the procedure for establishing and implementing the budget through grants, procurement, prizes,indirect implementation, and provide for checks on the responsibility of financial actors. Rules adopted on the basis of Article 322 TFEU also concern the protection of the Union's budget in case of generalised deficiencies as regards the rule of law in the Member States, as the respect for the rule of law is an essential precondition for sound financial management and effective EU funding, while the protection of final beneficiaries is crucial to foster crisis repair.

RemovedRecital 7: (7) In order to allow maximum flexibility to Member States for tailoring crisis repair actions in the context of the COVID-19 pandemic and its socio-economic consequences and preparing a green, digital and resilient recovery of health systems and the economy, allocations should be established by the Commission at Member State level taking into account those regions most affected. Furthermore, the possibility for using any additional resources to support aid for the most deprived and Youth Employment Initiative should also be provided for. In addition, it is necessary to establish ceilings concerning the allocation to technical assistance at the initiative of the Member States while allowing maximum flexibility to the Member States as to its allocation within operational programmes supported by the ERDF or the ESF. The operational strength of the ESF should be maintained. Taking account of the expected quick spending of the additional resources, the commitments linked to those additional resources should only be decommitted at the closure of the operational programmes.

RemovedRecital 7 a (new): (7a) As the COVID-19 pandemic has affected regions and municipalities in Member States differently, the involvement of regional and local actors from authorities, economic and social partners and civil society is important for the preparation, implementation, monitoring and evaluation of crisis repair supported by the REACT-EU. Partnership and multi-level governance in Member States should be strengthened and closely monitored by the Commission.

RemovedRecital 9: (9) In order to complement the actions already available under the scope of support of the ERDF, as extended by Regulations (EU) 2020/460 and (EU) 2020/558 of the European Parliament and of the Council5, Member States should continue to be allowed to use the additional resources primarily for investments in products and services for health services, including cross-border health services and care homes, ensuring maximum complementarity with other Union instruments, for providing support in the form of working capital or investment support to SMEs, particularly in the sectors most impacted by the COVID-19 pandemic and needing rapid revitalization, such as tourism and culture, in operations contributing to the transition towards a digital and green economy, as well as providing support to social economy enterprises, infrastructure providing non-discriminatory basic services to people living in rural, border, less developed, insular, mountainous, sparsely populated and outermost regions, as well as areas affected by industrial transition and depopulation, or economic support measures for those regions dependent on sectors most affected by the crisis. Stronger health cooperation, coordination and resilience should be fostered by building and developing a network of centres of excellence across the Union, specialised in developing specific treatment for the evolving health needs. Other investments with a proven high job creation potential, such as urban renewal, should also be sup…

RemovedRecital 10: (10) For the ESF, Member States should primarily use the additional resources to support the modernisation of the labour market, health and social systems, job maintenance, including in rural, border, less developed, insular, mountainous, sparsely populated and outermost regions, as well as areas affected by industrial transition and depopulation, including through short-time work schemes and support to self-employed, entrepreneurs, freelancers, artists and creative workers, job creation, in particular for people in vulnerable situations, social inclusion and poverty eradication, support to youth employment measures, inclusive education and training, including lifelong learning, online education, skills development, reskilling and upskilling, in particular for disadvantaged groups and carriers and to enhance equal and universal access to healthcare and social services of general interest, including for children, elderly, persons with disabilities, women bearing the brunt of the ensuing economic crisis, minorities and the homeless. It should be clarified that in the present exceptional circumstances support to short-time work schemes for employees and the self-employed in the context of the COVID-19 pandemic can be provided even when that support is not combined with active labour market measures, unless the latter are imposed by national law. Union support to those short-time work schemes should be limited in time. Those short-time work schemes should aim at maintaining the s…

RemovedRecital 10 a (new): (10a) As the temporary closing of borders between Member States has led to significant challenges for cross-border communities and businesses, the economies of border regions Member States should use up to 5% of the additional resources to support cross-border projects, by using existing Interreg projects or creating new ones.

RemovedRecital 11: (11) In order to ensure that Member States have sufficient financial means to swiftly implement crisis repair actions in the context of the COVID-19 pandemic and its socio-economic consequences and preparing a green, digital and resilient recovery of health systems and the economy, it is necessary to provide a higher level of initial pre-financing payment or, where applicable, annual pre-financing, for the quick implementation of actions supported by the additional resources. The initial pre-financing to be paid should ensure that Member States have the means to arrange for advance payments to beneficiaries where necessary and to reimburse beneficiaries quickly following the submission of payment claims.

RemovedRecital 12 a (new): (12a) The additional resources should be used in line with the sustainable development and “Do no harm” principles, taking into account the UN Sustainable Development Goals and the Paris Climate Agreement. Furthermore, equality between men and women, gender mainstreaming and the integration of gender perspective should be taken into account and promoted throughout the implementation of operational programmes.

RemovedRecital 13: (13) With a view to alleviating the burden on public budgets regarding crisis repair in the context of the COVID-19 pandemic and preparing a green, digital and resilient recovery of health systems and the economy, Member States should be given the exceptional possibility to request a co-financing rate of up to 100 % to be applied to the separate priority axes of operational programmes providing support from the additional resources.

RemovedRecital 14: (14) In order to enable Member States to deploy the additional resources for crisis repair quickly in the context of the COVID-19 pandemic and its socio-economic consequences and preparing a green, digital and resilient recovery of the health systems and economy within the current programming period, it is justified to exempt, on an exceptional basis, Member States from the need to comply with ex ante conditionalities and requirements on the performance reserve and application of the performance framework, on thematic concentration, also in relation to the thresholds established for sustainable urban development for the ERDF, and requirements on preparation of a communication strategy for the additional resources. It is nevertheless necessary that Member States carry out at least one evaluation by 31 December 2024, or by 31 December 2026 where additional resources are made available for budgetary commitment in 2023 and 2024, to assess the effectiveness, inclusiveness, efficiency and impact of the additional resources as well as how they contributed to achieving the goals of the new dedicated thematic objective. To facilitate the availability of comparable information at Union level, Member States are required to make use of the programme-specific indicators made available by the Commission. In addition,while carrying out their responsibilities linked to information, communication and visibility, Member States and managing authorities should enhance the visibility of the excep…

RemovedRecital 15: (15) With a view to allow the targeting of these additional resources to the geographic areas that were most affected, including border regions, as an exceptional measure and without prejudice to the general rules for allocating Structural Funds resources, the additional resources allocated to the ERDF and the ESF are not to be broken down per category of region. However, Member States are expected to take into account the different regional investment needs resulting from the impact of the COVID-19 pandemic, as well as development levels in order to ensure a balanced focus both on less developed regions and deprived communities, in accordance with the objectives of economic, social and territorial cohesion set out in Article 173 TFEU and on the regions and cities most affected by the pandemic. Member States should also involve local and regional authorities, as well as relevant bodies representing civil society, in particular the third sector, in accordance with the partnership principle.

RemovedRecital 15 a (new): (15a) Except for those cases where derogations are provided for by this Regulation, expenditure under REACT-EU should be subject to the same obligations and safeguards as all cohesion funding. This includes respect for fundamental rights and compliance with the Charter of Fundamental Rights of the European Union as well as effective anti-fraud measures implemented with the support of existing anti-fraud agencies at Member State and Union level, such as OLAF and, where relevant, the EPPO.

RemovedRecital 19: deleted

RemovedRegulation (EU) No 1303/2013

RemovedArticle 1 – paragraph 1 – point 1, Article 91 – paragraph 1 a: 1a. In addition to the global resources referred to in paragraph 1, additional resources of EUR 4 805 843 906 in 2018 prices shall be made available for economic, social and territorial cohesion for budgetary commitment for 2020, and allocated to the ERDF and the ESF.

RemovedRegulation (EU) No 1303/2013

RemovedArticle 1 – paragraph 1 – point 2, Article 92a – subparagraph 1: Measures referred to in Article 2 of Regulation [ERI] shall be implemented under the Structural Funds with an amount of EUR 50 000 654 198 in 2018 prices of the amount referred to in Article 3(2)(a)(i) of that Regulation, subject to its Article 4(3), (4) and (8).

RemovedRegulation (EU) No 1303/2013

RemovedArticle 1 – paragraph 1 – point 2, Article 92a – subparagraph 2: These additional resources for 2021 and 2022 shall constitute external assigned revenues in accordance with Article 21(5) of the Financial Regulation. Based on the statistics and future developments related to recovery from the economic crisis provoked by COVID-19, a decision to prolong the flexibility measures under REACT-EU to the years 2023 and 2024 may be taken through a delegated act.

RemovedRegulation (EU) No 1303/2013

RemovedArticle 1 – paragraph 1 – point 2, Article 92b – title: Exceptional additional resources and implementing arrangements for the Investment for growth and jobs goal and the European territorial cooperation goal to provide assistance for fostering crisis repair in the context of the COVID-19 pandemic and its social consequences and preparing a green, digital and resilient recovery of the economy (REACT-EU)

RemovedRegulation (EU) No 1303/2013

RemovedArticle 1 – paragraph 1 – point 2, Article 92b – paragraph 1: 1. At least 95% of the additional resources referred to in Articles 91(1a) and 92a (‘the additional resources’) shall be made available under the Investment for growth and jobs goal. A minimum of 3 % and up to 5 % of those resources shall be made available under the European territorial cooperation goal. In both cases, the additional resources shall provide assistance for fostering crisis repair in the context of the COVID-19 pandemic and preparing a green, digital and resilient recovery of the economy (REACT-EU). The additional resources shall be used to implement technical assistance pursuant to paragraph 6 of this Article and the operations implementing the thematic objective in paragraph 9 of this Article.

RemovedRegulation (EU) No 1303/2013

RemovedArticle 1 – paragraph 1 – point 2, Article 92b – paragraph 2 – indent 1: — 2020: EUR 5 000 000 000 in current prices (EUR 4 805 843 906 in 2018 prices);

RemovedRegulation (EU) No 1303/2013

RemovedArticle 1 – paragraph 1 – point 2, Article 92b – paragraph 2 – indent 2: — 2021: EUR 42 434 400 000 in current prices (EUR 39 987 184 320 in 2018 prices);

RemovedRegulation (EU) No 1303/2013

RemovedArticle 1 – paragraph 1 – point 2, Article 92b – paragraph 2 – indent 3: — 2022: EUR 10 820 400 000 in current prices (EUR 9 996 674 058 in 2018 prices).

RemovedRegulation (EU) No 1303/2013

RemovedArticle 1 – paragraph 1 – point 2, Article 92b – paragraph 2 – subparagraph 3: Under both the Investment for growth and jobs goal and the European territorial cooperation goal, the additional resources as set out in Article 92a shall be made available for 2021 and 2022. By way of revision of this Regulation through a delegated act and based on a reasoned request of a Member State, the additional resources may also be made available for budgetary commitment in 2023 and 2024. The additional resources set out in Article 92a shall be supplemented by support for administrative expenditure of up to EUR 18 000 000 in current prices (EUR 16 795 821 in 2018 prices).

RemovedRegulation (EU) No 1303/2013

RemovedArticle 1 – paragraph 1 – point 2, Article 92b – paragraph 3: 3. 0.35% of the additional resources shall be allocated to technical assistance at the initiative of the Commission with a special focus on Member States hit harder by the COVID-19 pandemic and Member States with lower absorption and implementation rates.

RemovedRegulation (EU) No 1303/2013

RemovedArticle 1 – paragraph 1 – point 2, Article 92b – paragraph 4: 4. With regard to both the Investment for growth and jobs goal and the European territorial cooperation goal, the Commission shall adopt a decision by means of implementing acts setting out the breakdown of the additional resources as appropriations from the Structural Funds for 2020 and 2021 for each Member State in accordance with the criteria and methodology set out in Annex VIIa. That decision shall be revised in 2021 to set out the breakdown of the additional resources for 2022 based on data available by 19 October 2021. Where applicable, it shall also be revised in 2022 in relation to budgetary commitments in 2023 and 2024, based on the latest statistical data available. The revisions shall ensure that operational programmes are not negatively impacted. / (Annex VII a shall be updated to cover the breakdown for the European Territorial Cooperation goal)

RemovedRegulation (EU) No 1303/2013

RemovedArticle 1 – paragraph 1 – point 2, Article 92b – paragraph 5 – subparagraph 6: Each Member State shall allocate the additional resources available for programming under the ERDF and the ESF to operational programmes, involving local and regional authorities, as well as relevant bodies representing civil society and social partners, in accordance with the partnership principle.

RemovedRegulation (EU) No 1303/2013

RemovedArticle 1 – paragraph 1 – point 2, Article 92b – paragraph 5 – subparagraph 7: By way of derogation from Article 92(7), a share of at least 3% of the additional resources shall may also be proposed to be used to increase the support for the Fund for European Aid to the Most Deprived (‘FEAD’), in order to address the situation of those who have been hit to an unprecedented degree by the COVID-19 crisis. A share of the additional resources may also be used to increase the support for the Youth Employment Initiative, before or at the same time as the allocation to the ERDF and the ESF.

RemovedRegulation (EU) No 1303/2013

RemovedArticle 1 – paragraph 1 – point 2, Article 92b – paragraph 5 – subparagraph 7 a (new): The additional allocation for the outermost regions shall be added to the allocation that every outermost region will receive through the distribution of the national budget as calculated in line with paragraphs 1 and 2 of Annex I.

RemovedRegulation (EU° No 1303/2013

RemovedArticle 1 – paragraph 1 – point 2, Article 92b – paragraph 5 – subparagraph 8: Following their initial allocation, the additional resources may, at the request of a Member State for amendment of an operational programme pursuant to Article 30(1), be transferred between the ERDF and the ESF, irrespective of the percentages referred to in points (a), (b) and (c) of Article 92(1), as long as the ESF share does not decrease below 23,1 %.

RemovedRegulation (EU° No 1303/2013

RemovedArticle 1 – paragraph 1 – point 2, Article 92b – paragraph 5 – subparagraph 13: The additional resources shall be implemented in accordance with the rules of the Fund to which they are allocated or transferred and with the provisions of this Regulation.

RemovedRegulation (EU) No 1303/2013

RemovedArticle 1 – paragraph 1 – point 2, Article 92b – paragraph 6: 6. Up to 4% of the total additional resources under the ERDF and the ESF may be allocated to technical assistance at the initiative of the Member States, in all stages, under any existing operational programme supported from the ERDF or the ESF or the new operational programme referred to in paragraph 10.

RemovedRegulation (EU) No 1303/2013

RemovedArticle 1 – paragraph 1 – point 2, Article 92b – paragraph 7 – subparagraph 1: By way of derogation from Article 81(1) and Article 134(1), the initial pre-financing to be paid following the Commission decision adopting an operational programme or approving the amendment to an operational programme for the allocation of the additional resources shall be 50% of the additional resources allocated to programmes for the year 2020 under the new thematic objective referred to in paragraph 9 of this Article.

RemovedRegulation (EU) No 1303/2013

RemovedArticle 1 – paragraph 1 – point 2, Article 92b – paragraph 7 – subparagraph 2: By way of derogation from Article 134(2), the annual pre-financing for the years 2021, 2022, and, based on a reasoned request from a Member State, for 2023 and 2024, may consist of up to 50 % of the additional resources allocated to programmes under the new thematic objective referred to in paragraph 9. For the purposes of calculating the annual pre-financing for 2021, 2022, 2023 and, where applicable, for 2024, the amount of the support from the Funds for the whole programming period to the operational programme shall include the additional resources.

RemovedRegulation (EU) No 1303/2013

RemovedArticle 1 – paragraph 1 – point 2, Article 92b – paragraph 8 – subparagraph 1: The additional resources not allocated to technical assistance shall be used under the thematic objective set out in paragraph 9 to support operations fostering crisis repair in the context of the COVID-19 pandemic, preparing a green, digital and resilient recovery of the economy, by focusing for example on the revitalization of health and the competitiveness of hard-hit economic sectors.

RemovedRegulation (EU) No 1303/2013

RemovedArticle 1 – paragraph 1 – point 2, Article 92b – paragraph 8 – subparagraph 2: Member States may allocate the additional resources either to one or more separate priority axes within an existing operational programme or programmes or to a new operational programme referred to in paragraph 10. By way of derogation from Article 26(1), the programme shall cover the period until 31 December 2022, or 31 December 2024 where the derogation referred to in paragraph 2 applies, subject to paragraph 4 of this Article.

RemovedRegulation (EU) No 1303/2013

RemovedArticle 1 – paragraph 1 – point 2, Article 92b – paragraph 8 – subparagraph 3: For the ERDF, the additional resources shall primarily be used to support investment in products and services for health and social infrastructure, health systems and services for all, including cross-border ones, as well as care homes (including elderly day-care residences), to provide support in the form of working capital or investment and advisory support to SMEs and social economy enterprises, investments contributing to the transition towards a digital, and green economy, including adaptation to teleworking conditions, investments in infrastructure providing non-discriminatory basic services to people living in rural, border, less developed, insular, mountainous, sparsely populated and outermost regions, as well as areas affected by industrial transition and depopulation, and economic measures in the regions which are dependent on sectors most affected by the crisis such as tourism and culture. Other investments with a high job creation potential, such as urban renewal, may also be supported.

RemovedRegulation (EU) No 1303/2013

RemovedArticle 1 – paragraph 1 – point 2, Article 92b – paragraph 8 – subparagraph 4: For the ESF, the additional resources shall primarily be used to support the labour market, social economy, health and social systems, job maintenance, including through short-time work schemes aiming at maintaining the same level of working and employment conditions and rights, including protection against dismissal and reduction in wages. In the case of those short-timework schemes, the ESF additional resources shall be used exclusively for financing the partial unemployment benefits and not for any other company purposes or expenditure. The support shall cover entrepreneurs and the self-employed, including freelancers, artists and other creative workers, even when that support is not combined with active labour market measures, unless the latter are imposed by national law, as well as social inclusion, antidiscrimination and poverty eradication measures, with a particular focus on child poverty. The additional resources shall support quality job creation, in particular for people in vulnerable situations, including the long-term unemployed and those far from the labour market, as well as those living in rural, insular, mountainous, sparsely populated, and outermost regions as well as areas affected by industrial transition and depopulation. Furthermore, the resources shall also cover youth employment measures, inclusive lifelong education and training, online education, skills development, individualised reskilling and upskilling, in particular for disadvantaged groups, to…

RemovedRegulation (EU) No 1303/2013

RemovedArticle 1 – paragraph 1 – point 2, Article 92b – paragraph 9 – subparagraph 1: With the exception of technical assistance referred to in paragraph 6 and of the additional resources used for the FEAD or for the Youth Employment Initiative referred to in the seventh subparagraph of paragraph 5, the additional resources shall support operations under the new thematic objective “Fostering crisis repair in the context of the COVID-19 pandemic and preparing a green, digital and resilient recovery of the economy”, complementing the thematic objectives set out in Article 9.

RemovedRegulation (EU) 1303/2013

RemovedArticle 1 – paragraph 1 – point 2, Article 92b – paragraph 9 – subparagraph 5: The revised financing plan set out in Article 96(2)(d)shall set out the allocation of the additional resources for the years 2020, 2021 and, where applicable, for 2022, 2023 and 2024, without identifying amounts for the performance reserve and with no breakdown per category of regions.

RemovedRegulation (EU) No 1303/2013

RemovedArticle 1 – paragraph 1 – point 2, Article 92b – paragraph 9 – subparagraph 6: By way of derogation from Article 30(1), requests for the amendment of a programme submitted by a Member State shall be duly justified and shall in particular set out expected impact of the changes to the programme on fostering crisis repair in the context of the COVID-19 pandemic and preparing a green, digital and resilient recovery of the economy as well as of health systems. They shall be accompanied by the revised programme.

RemovedRegulation (EU) No 1303/2013

RemovedArticle 1 – paragraph 1 – point 2, Article 92b – paragraph 10 – subparagraph 3: Where such a new operational programme is established, only authorities designated under on-going operational programmes supported by the ERDF, the ESF and the Cohesion Fund may be identified by the Member States for the purposes of point(a) of Article 96(5), following the consultation with regional and local authorities.

RemovedRegulation (EU) No 1303/2013

RemovedArticle 1 – paragraph 1 – point 2, Article 92b – paragraph 10 – subparagraph 4 a (new): By way of derogation from Article 29(3) and (4) and Article 30(2), the Commission shall approve any new dedicated operational programme or any amendment to an existing programme within 10 working days of its submission by a Member State.

RemovedRegulation (EU) No 1303/2013

RemovedArticle 1 – paragraph 1 – point 2, Article 92b – paragraph 10 a (new): 10a. By way of derogation from Article 65(2), expenditure shall be eligible for a contribution if it has been incurred by a beneficiary and paid between the date of submission of the programme to the Commission and 31 December 2024.

RemovedRegulation (EU) No 1303/2013

RemovedArticle 1 – paragraph 1 – point 2, Article 92b – paragraph 10 b (new): 10b. By way of derogation from Article 65(4), in the case of costs reimbursed pursuant to points (b) and (c) of the first subparagraph of Article 67(1), the actions constituting the basis for reimbursement shall be carried out between 1 February 2020 and 31 December 2024.

RemovedRegulation (EU) No 1303/2013

RemovedArticle 1 – paragraph 1 – point 2, Article 92b – paragraph 10 c (new): 10c. By way of derogation from Article 65(9), expenditure for operations supported under the thematic objective set out in paragraph 9 shall be eligible as of 1 February 2020.

RemovedRegulation (EU) No 1303/2013

RemovedArticle 1 – paragraph 1 – point 2, Article 92b – paragraph 10 d (new): 10d. By way of derogation from Article 136(2), that part of commitments still open on 31 December 2023 or on 31 December 2024, as the case may be, shall be decommitted if any of the documents required under Article 141(1) has not been submitted to the Commission by the deadline set out in Article 141(1).

RemovedRegulation (EU) No 1303/2013

RemovedArticle 1 – paragraph 1 – point 2, Article 92b – paragraph 10 e (new): 10e. By way of derogation from Article 141(1), in addition to the documents referred to in Article 138, for the final accounting year from 1 July 2024 to 30 June 2025, Member States shall submit a final implementation report for the operational programme.

RemovedRegulation (EU) No 1303/2013

RemovedArticle 1 – paragraph 1 – point 2, Article 92b – paragraph 11 – subparagraph 1: By way of derogation from the first and second subparagraphs of Article 120(3), a co-financing rate of up to 100% may be applied to the priority axis or axes supported by the additional resources programmed under the thematic objective referred to in paragraph 9 of this Article. To that end, they are required to make use of programme-specific indicators made available by the Commission.

RemovedRegulation (EU) No 1303/2013

RemovedArticle 1 – paragraph 1 – point 2, Article 92b – paragraph 11 – subparagraph 2: By way of derogation from Article 56(3) and 114(2), the Member States shall ensure that by 31 December 2024, or by 31 December 2026, where the derogation referred to in subparagraph 3 of paragraph 2 of this Article applies, at least one evaluation on the use of the additional resources is carried out to assess their effectiveness, efficiency, impact and, where appropriate, inclusiveness and non-discrimination, including from a gender perspective and how they contributed to the thematic objective referred to in paragraph 9 of this Article.

RemovedRegulation (EU) No 1303/2013

RemovedArticle 1 – paragraph 1 – point 2, Article 92b – paragraph 12 – point d: deleted

RemovedRegulation (EU) No 1303/2013

RemovedArticle 1 – paragraph 1 – point 2, Article 92b – paragraph 12 – point e: deleted

RemovedRegulation (EU) No 1303/2013

RemovedArticle 1 – paragraph 1 – point 2, Article 92b – paragraph 12 – point f a (new): (fa) requirements as set out in Article 12(4) of Regulation (EU) No 1299/2013 for beneficiaries to cooperate in at least three out of four dimensions. By way of derogation, Interreg partners shall cooperate in at least one dimension when implementing projects funded by the additional resources;

RemovedRegulation (EU) No 1303/2013

RemovedArticle 1 – paragraph 1 – point 2, Article 92b – paragraph 13 – subparagraph 1: While carrying out their responsibilities linked to information, communication and visibility in accordance with Article 115(1) and (3) and with Annex XII, Member States and managing authorities shall ensure that potential beneficiaries, beneficiaries, participants, final recipients of financial instruments and the general public are aware of the existence, volume and additional support stemming from the additional resources. The reference to additional resources under REACT-EU shall be made by way of a hashtag or other exploratory tools, in order to make clear to citizens that the project in question is funded as part of the Union’s response to the COVID-19 pandemic and to ensure full transparency.

RemovedArticle 1 a (new): Article 1 a / The Commission shall provide the European Parliament and the Council with an evaluation report on REACT-EU by 31 March 2025, covering budgetary commitments for the years 2020, 2021 and 2022. That report shall include information on the achievement of the objectives of REACT-EU, the efficiency of the use of its resources, the types of actions financed, the beneficiaries and final recipients of the financial allocations and its European added value in aiding the economic recovery. / The Commission shall provide the European Parliament and the Council with a supplementary evaluation report by 31 March 2027, covering any budgetary commitments for the years 2023 and 2024 under the derogation referred to in Article 92b(2) of Regulation (EU) No 1303/2013.

RemovedRegulation (EU) No 1303/2013

RemovedAnnex I – paragraph 1, Annex VIIa – paragraph 2 – subparagraph 1: The rules described in paragraph 1 shall not result in allocations per Member State for the whole period 2020 to 2024 higher than

RemovedA. Background to REACT-EU

RemovedREACT-EU is a proposal made by the European Commission to address the economic fallout of the Covid-19 pandemic. The closure or slowdown of economic activity across the Union has caused considerable economic and social damage, and REACT-EU is to be one tool to help resolve that. It follows two earlier proposals relating to cohesion policy, the Coronavirus Response Investment Initiative (CRII) and the Coronavirus Response Initiative Plus (CRII+), which both modified the rules for regional spending in order to facilitate recovery.

RemovedB. Scope of the proposal

RemovedThe REACT-EU proposal seeks to amend the Common Provisions Regulation for the 2014-2020 cohesion funds. It provides for an additional budget in two parts, for 2020 and for 2021-2022, and also sets out a number of derogations from the normal rules for cohesion spending, which specifically relate to the additional budget for the economic and social recovery. REACT-EU will not apply to the United Kingdom (even for the financial year 2020), as the Withdrawal Agreement provides that budgetary increases do not bind the United Kingdom during the transition period.

RemovedC. Budgetary aspects

RemovedThe proposal makes an additional EUR 5 billion available during the financial year 2020, which will be included in the budget. It also provides for an additional EUR 42 billion in 2021 and EUR 11 billion in 2022, which will be “outside” the budget, as they will constitute external assigned resources. The co-rapporteurs propose that the additional resources should also be available for budgetary commitment in 2023 and/or 2024 where required.

RemovedD. The problem of external assigned resources

RemovedExternal assigned resources are a specific class of EU resources which are “bracketed out” of the general budget, as they are resources which can only be spent on for a specific purpose. Generally, this applies to revenues from repaid grants and other reimbursements, which can only be used for their original purpose, and to payments from third countries for specific programmes, which can natually only be used for the programmes indicated by the country in question. When used in other areas, external assigned resources can raise issues of democratic accountability, as this is money which is not subject to the same democratic oversight as the rest of the budget, and constitutes an exception to the principle of budgetary universality (and, arguably, sincerity).

RemovedE. Breakdown of resources

RemovedThe proposal provides for a breakdown of resources by Member State, rather than by region as is customary in the area of cohesion policy. However, the Commission justifies this by the special nature of funding to address the economic and social consequences of Covid-19. The breakdown by Member State is to take place in accordance with the rules laid down in the new Annex VIIa, and applied in a Commission implementing act.

RemovedF. New thematic objective

RemovedREACT-EU creates a new, single thematic objective which will apply to the additional funding, entitled “Fostering crisis repair in the context of the Covid-19 pandemic and preparing a green, digital and resilient recovery of the economy”. This thematic objective will apply to both the ERDF and the ESF, in the context of existing operational programmes or specific new programmes, at the choice of the Member States. The co-rapporteurs propose that this new thematic objective should apply not only to the Investment for growth and jobs goal, but also to the European territorial cooperation goal (i.e. Interreg), as border regions have been particularly affected by the crisis.

RemovedG. Flexibilisation of cohesion spending

RemovedFor the additional funding under REACT-EU, the new Article 92b provides for a number of derogations which make programming and implementation more flexible. For example, transfers between the ERDF and ESF, and towards the FEAD, are made possible, with only the rules of the receiving fund being applicable.

RemovedH. Pre-financing rate

RemovedThe additional resources will give rise to a particularly high pre-financing rate of 50%.

RemovedI. Co-financing rate

RemovedThe REACT-EU proposal provides for a co-financing rate of up to 100% for spending related to the economic recovery.

RemovedJ. Other derogations

RemovedFurthermore, implementation of the additional funding will be not be subject to the usual rules on thematic concentration, ex-ante conditionalities, the performance reserve, or certain deadlines.

RemovedK. Communication

RemovedProjects funded under REACT-EU will have to publicly acknowledge that funding, in line with the usual rules for cohesion projects.

RemovedL. Conclusion

RemovedYour co-rapporteurs have considered this proposal very carefully, and propose that it should be adopted, subject to the modifications outlined in this report. However, it should be stressed that the various derogations and flexible rules it contains must remain temporary in nature, and that cohesion policy must return to its usual rules and controls from 2023 or 2025. This particularly applies to the massive use of external assigned revenues, which can be tolerated exceptionally, but cannot become a permanent phenomenon, as that use risks undermining democratic decision-making on the EU budget.

Removed1.9.2020