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 and its consequences. Solidarity and responsibility across our societies and between EU countries are key to overcome this challenge. The benefit of collective and coordinated action as a community outweighs individual and parceled 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.

Existing funds have been re-oriented and new funds are available in all EU countries and regions to tackle the crisis.

REACT-EU, new funding

REACT-EU (Recovery Assistance for Cohesion and the Territories of Europe) continues and extends the crisis response and crisis repair measures delivered through the Coronavirus Response Investment Initiative and the Coronavirus Response Investment Initiative Plus and provides a bridge to the long-term recovery plan. Therefore, these additional resources should be used for projects that foster crisis repair capacities in the context of the coronavirus crisis, as well as investments in operations contributing to preparing a green, digital and resilient recovery of the economy.

This funding is entirely new (EUR 47 billion): it is a top up to funding still available under 2014-2020 programmes and additional to the cohesion allocations 2021-2027, bringing the total amount of the European Structural and Investment Funds higher than current levels and becoming the highest single-policy grant instrument in the EU budget.

More about REACT-EU

Current programmes are re-oriented

As of 16 December, 25 EU countries and the UK have requested 239 amendments to their existing Cohesion Policy programmes using the flexibilities offered by CRII and CRII Plus. The Commission has modified its internal procedures to allow for a swift treatment of all requests under lighter, faster procedures. The administrative burden has been alleviated through extension of deadlines, enlargement of project scope and other simplifications. All Member States automatically benefit from these measures regardless of whether or not they introduce any changes.

For more information on how the funds have been used so far, visit the Coronavirus Dashboard on the Open Data Platform.

Main measures per Member State

All existing projects are on track for implementation, especially for enterprise support, leaving little uncommitted resources for re-allocation. The Austrian authorities are focusing on rapid reimbursement of payment requests to beneficiaries of existing project contracts and address the remaining issues from national funding. The managing authorities are making use of the audit simplifications and additional liquidity provided by the €18 million of non-recoved pre-financing for use in the form of an advance payment for coronavirus-related expenditure. There are also examples of ERDF-co-financed projects which help coping with the COVID-crisis, such as the "House of Digitalisation or venture capital funding for a company developing rapid COVID tests.

Belgium has a very small budgetary margin due to the high selection rate of projects. Nevertheless, the Belgian government has reshuffled about €15 million for support to working capital. Flanders region reallocated the € 3 million for business support; and Wallonia made available more than €13 million to support financial instruments in view of helping SMEs already at a very early stage of the crisis. Brussels Capital Region reallocated another €2 million to financial instruments in order to restore working capital of targeted firms.

Bulgaria reprogrammed €20 million to help the country’s health sector better respond to the emergency, by purchasing new top class medical equipment and delivering life-saving medicines and personal protective equipment, including 317 ventilators, over 2 million face masks, 177,000 tests, 140,000 consumables, etc. Further €511 million from the European Regional Development Fund and the Cohesion Fund were mobilised through the Bulgarian Operational Programme “Innovation and Competitiveness”, which together with the national co-financing will result in a total package of more than €600 million to support the Bulgarian economy in dealing with effects of the coronavirus crisis. For example, this includes working capital support for over 22,000 micro companies and SMEs.

Croatia has already redirected almost €135 million, including €85 million for support through to small and medium-sized enterprises and €50 million for the supply of protective medical equipment. In the second wave of mitigating the negative effects of pandemic, the country is planning to reallocate additional €361 million for further support to SMEs.

Cyprus has transferred around €36 million from the Cohesion Fund towards its ESF programme that will benefit the labour market. About €21 million of ERDF allocations are being redirected to purchase hospital equipment and the hiring of additional medical staff. The remaining unspent funds were predominantly meant for the support of SMEs even before the crisis, therefore the authorities will continue to implement the foreseen projects.
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Czechia is highly focused on supporting SMEs, especially by encouraging digitalisation and by launching new project calls. So far, a total amount of € 238 million has been used for the design of new financial instruments, the majority of which were used to facilitate bank loans to SMEs. Moreover, a € 7.3 million aid scheme has been launched to support research and development activities related to the coronavirus outbreak.
In addition, another € 240.4 million have been transferred to the Operational Programme Employment aiming to increase the professional level of knowledge, skills and competences of workers and to increase the adaptability of older workers.

Denmark is using mainly national funding in order to fight the crisis as most projects have already been implemented or are at their final stages. This means that very little funding remains available for reallocation. Nevertheless, about € 7.8 million was transferred in support of SMEs through restructuring, developing new business models and digitalising the business. More information on the possibilities can be found on the web-site of the Danish Business Agency.

Estonia has dedicated over €12 million in financial support to the healthcare sector by purchasing PPE, ventilators and increasing its testing capacity. The government is taking measures to ensure adequate working environment of the health sector (for example investments into temporary infrastructure) and ensuring access to healthcare and social care services for vulnerable groups.

Finland has a high rate of programme implementation and has already committed almost all of the available cohesion policy funding, leaving scarce amounts for reprogramming.. As a consequence, ai mainland Finland the measures (business support, healthcare, employment) are essentially resourced from national funds. Some of the priorities of existing programmes were re-aligned to to provide a complementary input in the form of a few calls for projects to tackle the impact of Covid-19. In the Åland Islands, about € 500 thousand were reallocated from the ERDF to support SMEs by providing much needed liquidity.

France: already at the beginning of the Corona crisis, France had a very high selection rate for the EU financed projects, with 105% of EU funding already committed. Nevertheless, EU Funds worth almost €120 million have been dedicated to healthcare, of which €38 million to purchase personal protective equipment, €1.3 million to purchase medicines linked to COVID-19 and €1.3 million for medical equipment. Moreover, France has financed 100,000 COVID-19 tests from the ERDF. France has dedicated €223 million to support over 3,200 SMEs through grants and a variety of financial instruments, including €55 million for support to working capital, €21 million for business development, € 9 million for research and innovation and many other measures. Over €100 million has been dedicated to supporting people through ESF actions, including short time work schemes and social services to vulnerable groups. A total of 23 thousand entities have been supported in combating the negative social effects of the pandemic. In all its support plans, the government is putting forward new conditionalities for State support, linked to the Green and Digital transition. Since the beginning if the crisis, France has modified two thirds of its operational programmes in the framework of CRII and CRII+.

Germany has invested almost €6 million for the purchase of medical equipment and to support 10 laboratories to increase testing capacity. Some € 64 million are being used for business support, especially for the working capital of SMEs. The CRII flexibilities are being used to contrast potential delays in ongoing project calls and to ensure liquidity to beneficiaries. Funding for the unemployed and other vulnerable groups has increased by €25 million.

To help address the effects of the coronavirus crisis on the Greek national economy, the Commission approved modifications to 16 out of the 18 operational programmes (13 regional programmes and 3 national programmes) in record time. These modifications made €1.32 billion of EU Cohesion policy funds available to finance actions in favour of the Greek SMEs through the Operational Programme (OP) “Competitiveness, Entrepreneurship and Innovation” which will be co-funded by the EU at the rate of 100% in the account year 2020-21.

Greece has quickly set up a comprehensive framework for crisis response measures and, since April, has launched four business support schemes: loan guarantees to businesses through the creation of a Guarantee Fund for working capital loans; interest subsidy for existing SME loans; interest subsidy for new SME working capital loans; repayable advance scheme in the form of grants to SMEs. In total, approximately 105,500 enterprises hit by the crisis are expected to be supported through these schemes.
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Hungary reallocated € 320 million to provide working capital loans to SMEs Hungary also widened the scope of eligible beneficiaries for non-repayable support (grants). Following the amendment, the support has become available to a wider range of companies, notably in the service sector, which had been particularly hit by the crisis. Hungary also made use of the possibility to temporarily increase the EU co-financing rate to 100% of the eligible expenditure for all the Hungarian programmes. Hungary is currently working on additional modifications which aim to provide 1) additional liquidity support to SMEs; 2) support companies and vulnerable groups in the Capital city of Budapest, the worst affected region in Hungary; 3) support to sustainable transport contributing to the transition towards a greener economy in Budapest; 4) support people affected by the economic impact of the pandemic through additional labour market measures.

Ireland is putting a strong focus on supporting the healthcare sector by dedicating €285 million of available cohesion policy funds. Part of these resources are being used to purchase 65 million items of personal protective equipment for health care workers.

Italy has made major changes to almost all of its programmes, reallocating over €4.5 billion in total, making it the highest amount to be invested in the coronavirus response in the EU. The authorities have dedicated €1.8 billion to supporting the healthcare system: over €1 billion is dedicated to the purchase of personal protective equipment while € 800 million are for the purchase of medical equipment, which includes the purchase of 500 ventilators, an increase of 681 ICU bed spaces and an increase in the testing capacity of laboratories. Italy has also mobilised over €2.8 billion in support for SMEs through grants (€ 626 million) and soft loans (€2.2 billion). These measures have benefitted over 379 thousand SMEs across Italy. Financial assistance for unemployment and in support to vulnerable groups has reached over €1 billion.

Latvia completed its programme in July 2020, resulting in a reshuffle of about € 386 million of the available cohesion funding mainly towards healthcare, business support and employment. Specifically, Latvia allocated € 30 million for strengthening health services, including renovations of hospitals and hiring of additional medical staff, € 35 million for SME support via financial instruments and € 29 million in support of employment measures. Latvia is also investing € 35 million for remote learning, expansion of broadband access to rural areas to connect schools, and promote training in firms and export activities.

Lithuania took full advantage of the flexibility offered by the Coronavirus Response Investment Initiative (CRII and CRII+) and redistributed € 250 million of the European Structural and Investment Funds available to it. These funds were used 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 to support employment and jobs through measures such as wage subsidy co-financing, sickness benefits, guarantees and support to income for vulnerable groups. In addition, business support and economic stimulus pillars involved expansion and/or speed up of implementation of the EU-funded interventions in various sectors to boost demand and fuel the economy.

Luxembourg is using mainly national funding to address the negative effects of the pandemic due to its advanced progress in project implementation and therefore the unavailability of uncommitted resources.Nevertheless, some €1.3 million have been re-allocated in support of the healthcare sector.

Malta used the CRII and CRII+ flexibilities for the purchase of €14.4 million worth of equipment for healthcare (€5 million of personal protective equipment (PPE) items, 340 ventilators and 78 ICU bed spaces) and €7 million in financial instrument support for SMEs (investment and working capital support).

The Netherlands has a high selection rate for their EU-funded programmes and most projects are at an advanced stage, therefore the authorities have decided not to make significant changes. Instead, The Netherlands focuses on facilitating measures such as the extension of the project implementation period, accelerating payments to SMEs to counter liquidity problems, allowing beneficiaries to submit extra payment claims and paying additional advances. € 1 million has been reallocated to accelerate innovation projects from SMEs and knowledge institutions related to the corona crisis. The projects focus on the development and testing of medicines and accelerated rehabilitation of patients.

Poland has made extensive investments to specifically address the negative impacts of the crisis. Poland has invested almost €860 million to support the health sector, part of which was used for the purchase of 536 ventilators and 120 emergency vehicles. Some €1.1 billion was dedicated for support to SMEs, of which €840 million in grants and € 450 in Financial instruments.  Almost € 930 million have been used so far to mitigate the negative social impacts on people. € 162 million under Operational Programme Digital Poland have been used to finance equipment for distance learning and provide loans for preferential broadband infrastructure.

Portugal  redirected a total of more than €1 billion of EU Cohesion policy funds, namely the European Regional Development Fund (ERDF), the Cohesion Fund (CF) and the European Social Fund (ESF), of its allocation under the programming period 2014-2020. Initially it used the available instruments to mitigate the short term impacts, such as acceleration of payments to beneficiaries, retroactive eligibility of expenses, and support for SMEs in the adaptation process to the crisis. At a later stage, the health sector received €88 million for the purchase of ICU bed spaces, support to laboratories, increased testing capacity and research grants for COVID-19 related research. The business sector has received €48 million, of which €15m to be used in financial instruments for about 180 SMEs and €57 million are being used to support the labour market with particular attention on the tourism sector. Portugal is benefitting from the 100% EU co-financing rate for all of its programmes.

Romania has benefited substantially from the flexibility provided under the Coronavirus Response Investment Initiative to tackle the impact of the coronavirus crisis. The Commission has approved the reallocation of almost €1.8 billion of Cohesion policy funding to cushion the adverse effects of the coronavirus crisis on the country’s economy, directing €800 mil lion of financial support to more than 121,000 micro, small and medium-sized enterprises (SMEs) of which €300 million are in the form of grants. Furthermore, additional funds have been made available for purchase of IT equipment for education, contributing to the resilience of this sector. Romania has also mobilised €350 million of EU funds to support health workers in the frontline of the fight against the pandemic through the purchase of emergency healthcare provisions and protective equipment since February 2020. Finally, two additional OPs have been modified, so that Romania could benefit from the CRII+ flexibility to apply 100% EU co-financing rate for the accounting year 2020-2021.

Slovakia has already reallocated € 362.6 million for the setting-up or redesigning of financial instruments, including support to working capital to SMEs to fight the coronavirus crisis. Overall support for healthcare will receive additional € 117.3 million; employment-retaining schemes will be boosted by € 527 million, and other measures to soften the impacts of COVID-19 by € 115 million.

Slovakia has launched a call for proposal in the value of € 80 million specifically to support COVID-19-related research. In a second round of COVID-19 related transfers, Slovakia increased the support of research projects in the Bratislava region by another € 25 million.

Moreover, further calls are open for hospitals (€ 48 million), and regions and cities involved in public health protection measures (€ 28 million). In addition, € 10 million have already been disbursed for the purchase of ventilators.

Slovenia is focusing its activities on supporting the healthcare sector (€ 68 million), including the protection of vulnerable groups, whereby 827 ventilators and over 21 000 pieces of protective equipment have been purchased. Support to SMEs (€ 89 million) includes liquidity incentives, financial instruments and others forms of support, with € 18.4 million already spent and over 3 900 SMEs supported. In terms of employment, the focus is on job preservation (€ 95.5 million) with more than 27 400 employees receiving support for reduced working hours. Education is supported by € 4 million allocated to ICT, where over 4000 new computers have been provided. Most of these measures are already being implemented with support from the national budget, while the European Structural and Investment Funds calls will retroactively reimburse expenditure related to these measures.
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Spain has re-allocated € 2.5 billion of cohesion policy funds, making it the highest amount to be invested in the coronavirus response in the EU. The bulk of support has been used to strengthen the response capacity of the health system in all the regions, to purchase medical equipment, increase hospital capacity and hire additional medical staff. ERDF has financed the purchase of 2,100 ventilators, creation of more than 3,700 additional hospital beds, and 9 laboratories for tests, as well as the acquisition of protective equipment for the healthcare staff. At the same time, more than 5,500 SMEs will receive support from ERDF for working capital, through grants and financial instruments to help them to overcome the low activity during the lockdown (in Cataluña, Castilla y Leon, Andalusia, Murcia, etc). Lastly, ERDF has financed the digitalization of the education and public administration sectors, to face the challenges of the increasing on-line activities (the national programme Educa en digital). Spain will also benefit of the 100% EU co-financing rate in all the programmes until the end of June 2021.

Sweden has used almost all of its available cohesion policy funds (98% of the 2014-2020 EU allocation) therefore not leaving the possibility to use the remaining funds in a meaningful way. Nevertheless, the Swedish authorities have reallocated € 20.5 million to support SMEs, especially to enterprises in the tourism sector.

United Kingdom has reallocated about € 57.6 million towards healthcare to deal with the crisis while further measures are being contemplated. The UK has several national recovery programmes aimed at supporting the retail, hospitality and leisure sectors as well as a loan scheme for SMEs and a job retention scheme.

For ETC Programmes reprogramming is foreseen for cooperation programmes only to a limited extent as the overall project selection rate is 100% of the 2014-2020 allocation. Financial transfers under the Investment for growth and Jobs goal should not affect resources under the European territorial cooperation goal. Nonetheless, managing authorities for European territorial cooperation programmes are setting up more flexible rules for beneficiaries (e.g. extension of deadlines for implementation and completion of projects, reporting, coverage of expenditure linked to non-realised actions due to force majeure etc.) to support projects that are facing sudden difficulties linked to the COVID-19 outbreak.

They are also considering the use of simplification measures provided for by the CRII, CRII Plus and the EU Coronavirus Reponses for regions on EU external borders (e.g. possibility to submit their AIR later or the 10% flexibility at closure). Many projects and programmes also report extra difficulties due to the closure of borders between countries, which complicates the cooperation between project partners on both sides of the border. This is an additional risk factor in comparison to mainstream programmes. Nevertheless, where it was possible, calls were organised to finance projects linked to post-COVID recovery or the implementation of preventive measures for any potential future sanitary crisis.  It has to be noted that a number of existing projects reshaped their activities to join forces on COVID-related measures.  General health-care related projects decided to work specifically on the pandemic, but also on economical recovery. 

Examples under ETC

Pandemric: strengthen cooperation within the Euregio in tackling major crises such as COVID-19, including the exchange of information, cooperation between ICU departments and examining the legal aspects of cross-border ambulance transport. In addition, an early warning system and a centre for the collective procurement of protective equipment have been established. (Interreg CBC Euregio Maas-Rhine between NL, DE and BE)

EGALURG:  Toulouse University Hospital has created a “mobile hospital” which is being deployed in record time to give response to the higher demand of health care services as a result of the ongoing COVID-19 pandemic. This project was conceived before the pandemic started with the goal to create an operational network for cross-border cooperation in emergency and disaster medicine to allow equal access to emergency care for the populations. Considering that the geographic features along the French and Spanish border make land communication between the two countries more difficult and can also limit access to emergency care for the people who live in these areas, the "mobile hospital" was originally intended to be deployed in the event of disasters causing many injuries, such as terrorist attacks or natural disasters. At the time of the pandemic, the project partners decided to adapt and mobilise their hospital as a mobile unit to help in the fight against COVID-19. The innovative mobile hospital was inaugurated on 9 November at the Côte Basque hospital in Bayonne. (Interreg CBC POECTEFA between France and Spain)

SYNERGY : Interreg Central Europe project consists of help public and private organisations affected by the Coronavirus crisis. They could in the role of “challenge givers”, look for matching solutions or competences from the research and industry communities. The best proposals submitted to challenges in the pilot scheme will soon receive a voucher to pay for much needed services, which could become the spark for greater innovations that help to deal with this pandemic.

IXBIT : The news that 3D printers are making the visor masks to protect healthcare professionals from the virus is one of the most significant initiatives to combat the pandemic of COVID 19. In just a few days, 3D printers, laboratories, incubators, companies and volunteers from Serbia and Croatia organized to support the initiative and selflessly assist our heroes-medical staff on a daily basis. The aim of the action is to provide frontline workers with the best possible protection against the COVID-19 virus. A total of 350 visor masks have been successfully dispatched, and in the upcoming days additional 700 pieces will be prepared for distribution, which will allow at least 1000 healthcare workers from more than 30 health institutions in Croatia and Serbia to work fully protected.

TEX-MED ALLIANCES: the ENI CBC Mediterranean Sea project, could adapt to face the coronavirus pandemic. The original aim of TEX-MED ALLIANCES was to create cross-border alliances between private textile companies to find new partners, explore new business lines and improve their competitiveness. With the spread of COVID-19, this project has adapted to the emergency by mapping the industrial capacities of  the  Mediterranean  area  in  terms  of  production  of  self-filtering  masks, protective  gloves  and  clothes  for  medical  use.  The  collected  information  is  shared with public authorities and other possible buyers.

Background

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 also made all 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.