Cohesion policy action against coronavirus
The Coronavirus outbreak presents a major challenge to the entire European Union. National, regional and local communities are on the frontline in countering the disease. Solidarity and responsibility across our societies and between Member States are key to overcome this challenge. The benefit of collective and coordinated action as a community outweighs individual and parcelled responses.
The Commission has, therefore, launched in April 2020 two packages of measures: the Coronavirus Response Investment Initiative (CRII) and the Coronavirus Response Investment Initiative Plus (CRII+), which were swiftly endorsed by the European Parliament and the European Council. This was supplemented on 27 May with the presentation of the REACT-EU package, which is currently under negotiation with the two institutions.
“Three months after the adoption of the CRII+ and pending agreement on the REACT-EU package, Member States are making full use of the flexibilities and liquidities offered by Cohesion funds to help those most impacted: healthcare workers and hospitals, SMEs, and workers. The initiative is ongoing and Member States continue to adopt measures in line with the evolving needs. While standard cohesion support focuses on long-term investments for regional convergence, the CRII provided emergency response where it was most needed. We have excellent examples on the mobilisation of funds and the measures introduced in many cities and regions across Europe”.
(Elisa Ferreira, Commissioner for Cohesion and Reforms)
As of July 2020, 26 EU countries and the United Kingdom have already put CRII into action, making full use of the flexibilities provided for.
As of 30th July, there were 97 confirmed coronavirus relevant programme amendments from 18 Member States (and 4 ETC programmes) – 27 by notification (all adopted at national level) and 70 by Commission decision (42 adopted, 28 ongoing).
The Commission has modified its internal procedures to allow for a swift treatment of all requests. In addition, CRII allows a number of programme modifications to be introduced under lighter, faster procedures.
Some examples on the ground
CRII ensured the reallocation of more than €20 million of cohesion policy funding to strengthen the healthcare sector’s response to the coronavirus outbreak. Thanks to this funding, the Bulgarian Ministry of Health purchased new top class medical equipment, life-saving medication and personal protective equipment for health care facilities all over Bulgaria, including more than 377 ventilators, over 2 million face masks and 177,000 test kits.
Thanks to the Coronavirus Response Investment Initiative, €400 million are now being mobilised to tackle the current crisis and its effects. €40 million have been invested in increasing the use of online tools in primary and secondary education in Croatia - enabling the Croatian students and teachers to enjoy continuity in the educational process also during lockdown. Another €48 million from the European Regional Development Fund have been invested in a world-class health research centre for children. The Children’s Hospital in Srebrnjak, on the outskirts of Zagreb not only ensures better treatment of common and chronic diseases in children and adolescents, but also makes possible the research on and development of new medicines, thus retaining talented medical researchers and practitioners in Croatia.
The European Regional Development Fund supported the purchase of equipment for health infrastructures (masks, respirators) and provided economic support for SMEs. Further support measures will continue the purchase of urgent health equipment or support to the working capital of SMEs (either with grants or through financial instruments). The support to SMEs could also help them to reconvert their activity towards the local production of urgent health products (masks, gloves, disinfectants). In a few case they will also concern support by the European Social Fund of the training of health staff with remote digital equipment.
The European Commission has approved the modification of thirteen 2014-2020 Regional Operational Programmes and two national Operational Programmes in Greece. These modifications make €1.14 billion available to address the effects of the coronavirus crisis in the Greek economy through the funding of entrepreneurship support actions. The €1.14 billion of EU Cohesion policy funds (allowing for more than €1.50 billion total investment with the inclusion of the national contribution) will finance actions in favour of the Greek SMEs through the Operational Programme (OP) “Competitiveness, Entrepreneurship and Innovation”.
Hungary reallocated € 320 million from different thematic objectives to provide working capital loans to SMEs. The move aims to provide much needed liquidity support to companies hit by the current economic crisis.
Hungary also widened the scope of eligible beneficiaries for non-repayable support (grants). Up until now, only SMEs active in the manufacturing sector were eligible for grant support (except for the least developed regions territories of the country). With the amendment, the support has became available to a wider range of companies, notably in the service sector, which had been particularly hit by the crisis.
Italy€30 million from the European Regional Development Fund (ERDF) were redirected to help two Italian regions, Emilia Romagna and Tuscany to cope with the coronavirus crisis. The two regions are the first to use the flexibilities provided under the CRII. Emilia Romagna will fund a call for short-term projects to develop and test innovative service and product. Tuscany will provide regional SMEs easier access to liquidity to keep their business running at time of economic uncertainty.
Italy is dedicating € 40 million for the protection of visitors and personnel of cultural sites across the country to minimize the risks related to the COVID-19 outbreak and to ensure the safety of visiting tourists during the holiday season.
Latvia has used the flexibilities offered by CRII and CRII Plus to reshuffle €500 million of the cohesion funding by directing unused funding mainly towards healthcare, business support and employment. Specifically, Latvia has allocated €30 million for strengthening health services including renovations of hospitals and hiring of additional medical staff, €35 million for SME support and €20 million in support of employment measures. Latvia is also investing €45 million for the expansion of broadband access to rural areas to allow remote learning, temporary work, tackling unemployment and continued education.
€250 million of the ESI Funds have been redistributed to address the urgent needs of the medical sector such as the acquisition of personal protective equipment (PPE), test kits, laboratory equipment, and medical devices as well as measures to support employment and jobs through wage subsidy co-financing, sickness benefits, guarantees and support to income of vulnerable groups. In addition, business support and economic stimulus packages are being expanded and the speed of EU-funded interventions has been increased in various sectors to boost the demand and fuel economy.
Poland has made extensive investments to specifically fight the negative impacts of the crisis. It has invested almost € 71 million to support the health sector, it has dedicated € 568 million for the financing of working capital in SMEs from ERDF, € 418 million for the design or modification of FI support to working capital, and € 162 million under the Regional Operational Programme Digital Poland to finance equipment for distance learning and provide loans for preferential broadband infrastructure.
The modification of the Regional Operational Programme for Warmińsko-Mazurskie region in Poland allowed for further investments in health services and to compensate for enterprise financial loss related to the outbreak of COVID-19. The purpose of this regional programme amendment is to use around €15 million of EU Cohesion policy funds for the purchase of medical equipment. Some additional €3.5 million will be dedicated to the protection of social assistance homes, medical and nursing homes, care facilities and hospices against the virus. Regional companies suffering from financial loss as a consequence of the COVID-19 outbreak will also get nearly €120 million of EU Cohesion policy funds.
In Poland, CRII flexibilities allowed also to modify existing EU project in the field of e-health to respond to crisis needs. Under the modifications, Poland aims to set up an electronic platform for medical practitioners, administration staff and patients for collection, analysis and sharing of digital medical records. This will allow patients to continue their treatment without the need to visit hospitals and practitioners to save time they can dedicate to the current health emergency. The project has been supported by the European Regional Development Fund over the past (2007-2013) and current (2014-2020) EU budget periods with a total of € 128.5 million.
Slovakia has been making good use of the flexibilities offered by the CRII and CRII plus by channelling € 330 million of unspent funds to fight the COVID crisis through innovative use of existing financial instruments.
Moreover, Slovakia has launched a call for proposal in the value of € 80 million specifically to support COVID-related research.
Thanks to the Coronavirus Response Investment Initiative, in total €275 million are now being mobilised to tackle the current crisis and its effects. Slovenia aims at helping those most in need by launching an ESF financed project to develop innovative solutions for addressing the issues encountered by the most vulnerable groups due to the outbreak. Within the projects, solutions such as psycho-sociological counselling, field work improvements, establishment of new safe points with social distancing possibilities, digital solutions, etc. will be supported to the amount of € 1.93 million.
In addition, € 4 million are made available to support pupils, students and teachers by providing 4220 ICT devices to facilitate distance learning and improving the capacities of the academic, research and educational network of Slovenia (ARNES).
Thanks to the Coronavirus Response Investment Initiative, Member States can immediately address three key priorities in the fight against the current emergency and its economic consequences: spending on healthcare, support to short time work schemes, and support to the SMEs working capital.
To make this money available, the Commission proposed to mobilise quickly unspent cash reserves from the EU funds. This provided immediate liquidity to Member States' budgets and helped to frontload the yet unallocated €37 billion of cohesion policy funding within the 2014-2020 cohesion policy programmes, thus providing a much needed boost to economic investments.
The Commission has also madeall Coronavirus crisis related expenditure since February 1, 2020 eligible under cohesion policy rules. The rules for cohesion spending are applied with maximum flexibility, thus enabling Member States to use the funds to finance crisis-related action. This also means providing greater flexibility for countries to reallocate financial resources, making sure the money is spent in the areas of greatest need: the health sector, support for SMEs, and the labour market.
The EU Solidarity Fund provided additional assistance of up to €800 million to the worst affected countries in order to alleviate the financial burden of the immediate response measures.