Cyprus Mail 29 December 2020 - by Andrew Rosenbaum
The European Commission last week proposed a €5 billion fund to provide relief to Member States from the effects of Brexit on their economies.
“A Brexit Adjustment Reserve was agreed by the European Council in July, to help counter the adverse economic and social consequences of Brexit – at the end of the transition period on December 31, 2020 – in the sectors that are worst affected,” the Commission said in a statement.
“The Reserve will support businesses and employment in affected sectors. It will assist regions and local communities, including those dependent on fishing activities in UK waters. It can also assist public administrations for the proper functioning of border, customs, sanitary and phytosanitary controls and to ensure essential services to the citizens and companies affected,” the statement said.
Commissioner for Budget and Administration Johannes Hahn said: ”We designed this Reserve to provide swift and uncomplicated help, focusing on those EU Member States most adversely affected by Brexit. I now count on the Council and the European Parliament to convert our proposal into concrete financial support without delay. Of course, adapting structurally to our new relationship with the UK will require much more long-term adjustment than this reserve alone will ever be able to provide. The powerful new EU budget will support this work.”
The Brexit Adjustment Reserve is intended to be rapid and flexible, and will cover expenditure in any Member State over a period of 30 months.
“It will be distributed in two rounds:
- the vast majority of the €5 billion through pre-financing in 2021, calculated on the basis of the expected impact of the end of the transition period on each Member State’s economy, taking into account the relative degree of economic integration with the UK, including trade in goods and services, and the negative implications on the EU fisheries sector;
- a smaller tranche of additional support in 2024, in case the actual expenditure exceeds the initial allocation , thus justifying the need for additional solidarity from the EU. To qualify for reimbursements from the Brexit Adjustment Reserve, Member States have to demonstrate their claims’ direct relation to Brexit. The usual financial control and management system for EU funds will apply.”
According to the statement, the Reserve can support measures such as:
- Support to economic sectors, businesses and local communities, including those dependent on fishing activities in the UK waters;
- Support to employment, including through short-time work schemes, re-skilling and training;
- Ensuring the functioning of border, customs, sanitary and phytosanitary and security controls, fisheries control, certification and authorisation regimes for products, communication, information and awareness raising for citizens and businesses.
The proposed Regulation will have to be adopted by the Parliament and the Council.
