October 10, 2023

The following is a press release:

Local and regional leaders warn that redirecting cohesion funds to meet unforeseen needs could increase regional disparities.

The revision of the Union's 2021-2027 Multiannual Financial Framework (MFF) and measures to strengthen investment in critical technologies in Europe (STEP) should reinforce the long-term objectives of cohesion policy and respect the 'do no harm to cohesion' principle. These are the key demands included in the opinion on the Review and proposal for the revision of the MFF 2021-2027 led by José Manuel Ribeiro, Mayor of Valongo, and adopted at the plenary session of the European Committee of the Regions (CoR) on 10 October.

The mid-term revision of the Union's current long-term budget, that needs to enter into force at the beginning of 2024, aims to provide the Union with sufficient financial resources to respond to both the challenges and unforeseen events currently facing the EU, such as the Russian invasion of Ukraine, inflation, natural disasters and other emergencies.

Local and regional leaders support the key elements of the revision and call for increasing funds for emergency responses as well as for the allocation of €60 billion for the Ukraine Facility. The CoR recognises the need for the creation of the Strategic Technologies for Europe Platform (STEP), but disagrees with the mechanism proposed to fund it, as it risks promoting centralised governance that ignores local needs and opportunities.

Vasco Alves Cordeiro, President of the European Committee of the Regions, said: "An ambitious European Union should be supported by an ambitious MFF and reflect the increasingly important role the Union is playing in the world. This midterm revision should confirm the central role of Cohesion Policy as the main investment instrument covering all regions in Europe, whilst ensuring that all other policies don’t undermine its accomplishments. Next year, ahead of the European elections, the EU institutions will need to assess what has been delivered. Local and regional authorities implement 70 % of EU legislation. But they need the EU's support in delivering concrete and tangible improvements for citizens. The Union's budget needs to recognise that."

The rapporteur of the opinion, (PT/PES), José Manuel Ribeiro (PT/PES), Mayor of Valongo, highlighted: "Cohesion policy was created to balance the asymmetries of the internal market, and therefore to reduce social, territorial and economic disparities in the European Union, putting in practice the subsidiarity principle and the multi-level governance method. The European Committee of the Regions questions the method used to finance the STEP proposal. Taking money from regions and cities and giving it to central governments goes against the successful multi-level governance model and risks re-directing EU money away from projects that will benefit EU citizens. Using cohesion policy money to finance every new emergency must end."

As for the other key aspects of the revision, the CoR states that funding increases will help to enhance the MFF's flexibility and the EU's capacity to respond to natural disasters and unforeseen events. Nonetheless, some measures appear to be insufficient, notably for the Ukraine Facility, whose allocations need to be increased to €60 billion. The Committee also stresses that the overall proposal is mostly focused on short-term solutions rather than on structural answers to recurring problems.

Local and regional leaders strongly advocate that cohesion policy funds should not be redirected to finance new tasks, as cohesion policy programmes should remain the EU's main investment instrument to combat territorial inequalities. CoR members also argue that centralising funds in response to emergencies could lead to further regional imbalances.

The opening up of cohesion policy instruments, under the proposal creating the platform, to large companies could lead to a concentration of funding and critical technologies in a few regions and Member States, harming both SMEs and less developed regions and therefore affecting fair competition, warn the local leaders. In addition, they draw attention to the fact that no territorial impact assessment of the platform has been carried out and that no mechanism is foreseen to ensure the concrete participation of local and regional authorities in the process of selecting the projects to which the "Sovereignty Seal" would be granted.

Background:

The European Union's (EU) long-term budget, known as the Multiannual Financial Framework (MFF), defines the annual amounts that can be spent on European public policies, establishing the EU's priorities for seven years.

The MFF for the years 2021-2027 was adapted to respond to the economic and social consequences of the COVID-19 pandemic. EU budget investment have been then complemented with the creation of a recovery instrument, Next Generation EU, worth €750 billion. In June 2023 the European Commission presented its proposal for a review.

AnchorSTEP seeks to reinforce, leverage and steer EU funds – existing and new – to investments in deep and digital, clean and biotechnologies in the EU and in people who can implement those technologies into the economy. STEP is also launching the sovereignty label – the EU's quality label for sovereignty projects.

Contact:

Name: Ângela Machado

Tel. +32 475 41 31 58

Ângela.Machado@cor.europa.eu