Brexit: € 5 billion to help EU countries mitigate their social and economic impact – The European Sting – Critical News & Insights on European Politics, Economy, Foreign Affairs, Business & Technology
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The Brexit Adjustment Reserve is expected to primarily support the countries and sectors most affected by the UK’s withdrawal from the EU.
On Tuesday, the Regional Development Committee adopted its position on the Brexit Adjustment Reserve (BAR), paving the way for the opening of negotiations with the Council on the final form of the tool. The draft report was approved with 35 votes in favor, 1 against and 6 abstentions.
The EUR 5 billion fund (at 2018 prices – EUR 5.4 billion at current prices) will be created as a special instrument outside the budgetary ceilings of the multiannual financial framework (MFF) 2021-2027.
MEPs want the resources to be disbursed in three installments:
– pre-financing of 4 billion euros in two equal installments of 2 billion euros in 2021 and 2022;
– the billion euros remaining in 2025, broken down on the basis of expenditure declared to the Commission, taking into account pre-financing.
Under this new method, Ireland will be by far the largest recipient in absolute terms, followed by the Netherlands, France, Germany and Belgium.
Eligibility of funds
According to Parliament’s proposal, the reserve will support public expenditure committed from July 1, 2019 to December 31, 2023, compared to the period from July 1, 2020 to December 31, 2022 proposed by the Commission. The extension would allow member states to cover investments made before the end of the transition period on January 1, 2021, in anticipation of the expected negative effects of Brexit.
MEPs also called for financial and banking entities benefiting from the UK’s withdrawal from the EU to be excluded from BAR support.
To be eligible for aid, measures must be specifically put in place in relation to the United Kingdom’s withdrawal from the European Union, including support for:
– SMEs and the self-employed to overcome the administrative burden and increased operating costs;
– artisanal fishing and local communities dependent on fishing activities in UK waters (at least 7% of the national allocation for the countries concerned), and
– help EU citizens who have left the UK to reintegrate.
âWe need to make sure that EU aid reaches the countries, regions, businesses and people most affected by Brexit. European businesses already suffering from the COVID-19 crisis should not pay twice for the Brexit debacle. This is why this reserve is so important and must be paid as soon as possible, on the basis of statistical and measurable data â, stated Pascal Arimont (EEP, BE), rapporteur.
The Chairman of the Regional Development Committee, Younous Omarjee (Left, FR), said: âThe committee has shown remarkable unity. We have amended the regulation to make it as operational as possible, closer to the expectations of the regions and sectors affected by the UK’s withdrawal from the EU. We are determined to act quickly and we hope that the Council will show the same determination and, therefore, show flexibility in the negotiations, in order to conclude the trialogue on time. “
Parliament is expected to confirm the draft mandate at its first plenary session in June. Discussions with the Council will then begin immediately with the aim of reaching a comprehensive agreement with the Portuguese Presidency in June.
On December 25, 2020, the Commission presented its proposal for the Brexit Adjustment Reserve, a financial tool to help EU countries counter the negative economic and social consequences of the UK’s withdrawal.