Filenews 10 April 2022
In the context of a better presentation of European Union programmes for funding specific actions in the Member States, Anthi Filippidou, Director of EU Cohesion Policy, Directorate-General for Development, at the Ministry of Finance, answers questions about the programme "Contribution to Recovery for Cohesion and the Regions of Europe (REACT-EU)", the way the programme was implemented or is being implemented in Cyprus, the social groups and entities that benefited and the contribution that the state budget has had to some expenditure during the pandemic.
What exactly is react-EU and Recovery Assistance programme for Cohesion and Regions of Europe and how will Cyprus benefit?
React-EU was the first instrument used under NextGenerationEU to address and recover from the pandemic crisis, which was implemented with the Coronavirus Response Investment Initiative (CRII) and the Coronavirus Response Investment Initiative + (CRII+), and allows for the transition to the long-term recovery plan. Within the framework of the Programme "Assistance to The Recovery for Cohesion and the Regions of Europe (REACT-EU)", the Republic of Cyprus has secured additional resources totalling €132 million. approximately, which were allocated to the existing Cohesion Policy Programmes of the 2014-2020 programming period for the two-year period 2021 and 2022, taking into account the provisions of Regulation (EU) 2020/2221, in order to support the restoration of the consequences of the crisis, including social ones, due to the COVID-19 pandemic and to prepare for a green, digital and resilient recovery of the economy.
More specifically, in the context of the unprecedented conditions created due to the COVID-19 pandemic, the resources that will be channelled to the European Social Fund - ESF will be used exclusively to support employees through the implementation of Short-Term Employment Support Plans (€65 million). These Schemes aim to protect workers from the risk of unemployment, while maintaining the same level of working and employment conditions as well as workers' wages.
The resources that will be allocated to the European Regional Development Fund - ERDF will be allocated to support businesses affected by the pandemic (€57 million), while the remaining €10 million will be allocated to businesses affected by the pandemic. it was considered appropriate to allocate them to actions that contribute to the objectives of climate change, taking into account the relevant provision of the Regulation, as well as the importance of addressing the effects of climate change in Cyprus.
As can be seen from the above distribution, Cyprus attaches particular importance to the support of businesses and workers, which are the productive fabric of the economy and were most affected by the crisis, since the pandemic has had a universal negative impact on all sectors of the economy.
What is the difference between this package and other EU packages for Cyprus? I mean there were other processes, was it faster, did it have other specifications?
React-EU is not a new Cohesion Policy Fund, but provides additional funds to the European Regional Development Fund and the European Social Fund for the period 2014-2020, hence the procedures are much faster and more effective. The rapid adoption of the measures has enabled the Member States to allocate EUR 37 billion to existing programmes almost immediately. euro. These funds can be used until the end of 2023, as is already the case for the original funds. These funds have been used mainly to bridge the gap between the emergency measures taken at the start of the crisis and the long-term restoration of its consequences.
Digital and green transition
Two stable axes of European subsidies are the digital transition and the green economy. Are they also included in REACT-EU?
In fact, the Programme "Contribution to Recovery for Cohesion and the Regions of Europe (REACT-EU)" is the necessary bridge between the two programming periods 2014-2020 and 2021-2027, which was deemed necessary due to the pandemic crisis. In this light, it can finance needs that, in other circumstances, were not eligible, such as the purchase of medicines and pharmaceutical services. At the same time, the two fronts of the European funding that you mentioned could not be absent. It is noted that the Green and Digital Transition effort started from the programming period 2014-2020 and intensified after 2020.
Do the programmes as they have been created finance only jobs or even additional operational expenditure and actions?
In various periods of time (May/June 2020, November 2020, March 2021, April 2021, May 2021), lump sums were paid to businesses and self-employed persons to cover operating expenses. The expenditure relating to these amounts is covered by the state budget. Part of the one-off grant to the self-employed is covered by the joint lending initiative "SURE".
By which bodies or ministries is the programme implemented in Cyprus?
The Programme "Contribution to Recovery for Cohesion and the Regions of Europe (REACT-EU)", which amounts to €132 million. for Cyprus, it has as Managing Authority the General Directorate of Development, in the Ministry of Finance, which is also the Managing Authority for all EU Cohesion Policy Funds. The implementing bodies are the Ministry of Labour and Social Insurance (€122 million) and the Ministry of Transport, Communications and Works (€10 million).
REACT-EU also applies to small and medium-sized enterprises, but what about the self-employed?
Through the Programme "Contribution to Recovery for Cohesion and the Regions of Europe (REACT-EU)" expenses related to the Special Projects addressed to companies-companies as well as enterprises belonging to self-employed persons are covered. However, especially for the self-employed, a Plan was implemented throughout the period of implementation of the Special Covid-19 Plans, i.e. from 16/3/2020 until 31/10/2021, with the exception of the period 13/6/2020-30/6/2020. The expenditure for this project was covered by the state budget, through the joint lending initiative "SURE". In addition, a special one-off grant was paid to the self-employed during various periods of time.
Will needs related to the new crisis be met?
Do you have any idea whether this program will continue into 2022, considering both the pandemic and the war now in Ukraine?
REACT-EU is part of "NextGenerationEU" and provides additional funding to the Cohesion Policy Programmes for the 2014-2020 programming period, which should be used by the end of 2023. As mentioned in answer 1 above, the programming has been made for all "REACT-EU" resources, which will be fully used by the end of 2023. With regard to the consequences of the war in Ukraine, the European Commission, in cooperation with the Member States, is already in the process of adopting amendments to the regulations of the European Funds, in order to enable the Member States to finance actions to deal with them. At this stage this is only possible from existing initial allocations of resources that have not yet been used for other actions and do not concern additional amounts.
