Brexit Adjustment Reserve

The withdrawal of a Member State from the EU is an unprecedented situation both for the EU as a whole and for its Member States. BREXIT will affect all Member States but in different ways. Some Member States, regions, sectors or local communities will be more affected than others. This is why the proposal is designed to support all Member States while ensuring a strong concentration on those most affected. The design of the Brexit Adjustment Reserve acknowledges these particular circumstances: it does not ask for advance programming or planning of measures and provides for flexibility in the implementation and in line with the subsidiarity principle.

The Regulation will enter into force in October.

Which countries can apply?

All EU Member States including their regions and local communities, and sectors are eligible to apply for the Reserve via a designated body or bodies previously notified to the Commission.

How to apply?

Two steps approach to the disbursement of the financial contribution from the Reserve:

  1. Pre-financing
    Within two months from the date of the entry into force of this Regulation and prior to the payment of the first instalment of pre-financing, Member States should notify the Commission of the identity of the designated bodies designated and of the body to which the pre-financing shall be paid, and confirm that the systems’ descriptions of the management and control systems for the Reserve have been drawn up
  2. Financial contribution
    Member States shall submit to the Commission applications for a financial contribution from the Reserve by 30 September 2024.

The Commission shall assess those applications and establish whether the remaining provisional allocation and additional amounts are due to Member States or if any amounts are to be recovered from Member States

How much money will it make available?

The maximum amount available for the Reserve will be EUR 5.4 billion. All amounts on this page are expressed in “current prices” (i.e. including the indexation of annual amounts over the period). A special instrument outside the EU budget ceilings of the Multiannual Financial Framework 2021-2027 was set up for this purpose.

How will the resources be distributed?

The maximum amount was provisionally allocated among Member States and will be disbursed in two allocation rounds. The first round (80%) will be activated in the form of pre-financing, paid in three instalments of around EUR 1.7 billion in 2021, and EUR 1.3 billion by April 2022 and EUR 1.3 billion by April 2023; the remaining amount of EUR 1.1 billion – will be paid in 2025 to reimburse eligible costs actually incurred and paid by Member States in implementing measures eligible for support.

The financial contribution from the reserve to a Member State will be implemented under shared management, with the contribution used.

Allocation of the resources 

According to Regulation, three factors will be used to calculate how much money each EU country will receive from the Reserve:

  • The factor linked to fish caught in the UK EEZ is used to allocate EUR 656 million
  • The factor linked to trade is used to allocate EUR 4.5 billion
  • The factor linked to maritime border regions with the UK is used to allocate EUR 274 million

Member states that depend significantly on fisheries will have to direct a specific percentage of their national allocation to small-scale coastal fisheries and local and regional communities dependent on fishing activities

What types of measures will the Reserve finance and over what period of time?

The Reserve will support measures specifically set up in relation to the withdrawal of the UK from the Union. They can include the following:

  • support to economic sectors, business and local communities, and organisations, including small-scale coastal fisheries,  dependent on fishing activities in the UK waters;
  • support to job creation and protection, including through short-time work schemes, re-skilling and training;
  • measures aimed at the re-integration of Union citizens as well as persons having the right to reside on the territory of the Union who left the United Kingdom, as a result of the withdrawal of the United Kingdom from the Union
  • ensuring the functioning of border, customs, sanitary and phytosanitary and security controls, fisheries control, certification and authorisation regimes
  • measures for communication, information and awareness raising of citizens and businesses about changes to their rights and obligations stemming from the withdrawal of the United Kingdom from the Union.

The reference period for the expenditure starts with retroactivity on 1 January 2020 to 31 December 2023. The expenditure is eligible for a financial contribution from the Reserve also for measures carried over before the reference period but incurred and paid by authorities in the Member States, at national, regional or local level during the reference period.

Will the fisheries sector receive an earmarked support from the Reserve?

The withdrawal of the UK from the EU poses specific risks to the fisheries sector in terms of less favourable access to the UK waters and of other changes ensuing from Brexit. Therefore, a part of the contribution from the reserve will be earmarked for the most concerned Member States (above 10 million of contribution from the fishery criteria in the allocation method). At least 50% of this amount or 7% of their provisionally allocated amount, whichever is lower, should be spent on measures to support local and regional coastal communities, including the fisheries sector in particular the small scale coastal fisheries sector dependent on fishing activities. The scope will concern measures to support regional and local communities and organisations, including the small scale coastal fisheries, dependent on fishing activities in the United Kingdom waters in the waters of its territories with special status or in the waters covered by fisheries agreements with coastal states where fishing opportunities for EU fleets have been reduced as a result of the United Kingdom’s withdrawal from the Union. If the earmarking threshold is not completely met, 50% of the earmarked amount which is unused shall be deducted in the calculation of the total accepted amount.

Legal basis

  • Full text of the BAR regulation on Eur-Lex : 8/10/2021
  • BAR Statement on further measures to protect the EU budget and Next Generation EU resources (NGEU) against fraud and irregularities by requiring an obligatory use of a single data-mining tool provided by the Commission: 8/10/2021
  • Commission Implementing Decision on provisional amounts allocated per Member State: 8/10/2021

Background

Contacts

European Commission
DG Regional and Urban Policy
REGIO-E1-BAR@ec.europa.eu
B-1049 Brussels
Belgium

Stefan APPEL
(Head of Unit)
Stefan.Appel@ec.europa.eu
phone: +32 229-54596

Dominika CHROSZCZ-KOCZERGA
Dominika.CHROSZCZ@ec.europa.eu
phone: +32 229-69869