€5bn will help EU countries soften social and economic effect of Brexit

The Adjustment Reserve should largely support the Member States and sectors worst affected by the divorce

Photo: EP Pascal Arimont.

The Regional Development Committee adopted its position on the Brexit Adjustment Reserve (BAR), thus prepare to start negotiations with the Council on the final form of the instrument.

The €5bn fund (in 2018 prices - €5.4bn in current prices) will be set up as a special instrument outside of the 2021-2027 Multiannual Financial Framework (MFF) budget ceilings.

MEPs want the resources to be disbursed in three tranches.  There will be €4bn in pre-financing in 2021 and 2022, in two equal instalments of €2bn. The rest €1bn will come in 2025, distributed on the basis of the expenditure reported to the Commission, taking into account the pre-financing.

The new allocation method will take into account trade, fisheries and population of maritime regions bordering the UK. Ireland will be by far the largest beneficiary in absolute terms, followed by the Netherlands, France, Germany and Belgium.

The Reserve will support public expenditure incurred from 1 July 2019 to 31 December 2023. The Commission proposal was for the period of 1 July 2020 to 31 December 2022.

The extension would allow member states to cover investments made prior to the end of the transition period, on 1 January 2021, in preparation for the expected negative effects of Brexit.

MEPs also demanded that financial and banking entities benefitting from the UK’s withdrawal from the EU be excluded from receiving support from BAR.

As to be eligible for aid, measures have to be specifically set up in relation to the withdrawal of the UK from the EU. It could include support to SMEs and those who are self-employed to overcome the increased administrative burden and operational costs.

Also, small-scale fisheries and local communities dependent on fishing activities in UK waters (at least 7% of national allocation for countries concerned), and help EU citizens who left the UK to reintegrate.

We must ensure that EU aid reaches the countries, regions, companies and people most affected by Brexit. European companies already suffering from the COVID-19 crisis shouldn't pay twice for the Brexit debacle, rapporteur Pascal Arimont (EPP, BE) stressed.

He underlined that that is why this reserve is so important and needs to be paid out as soon as possible, on the basis of statistical and measurable data.

 On the Reserve, Regional Development Committee Chair, Younous Omarjee (The Left, FR), commented that REGI has shown remarkable unity. We have amended the regulation to make it as operational as possible, as close as possible to the expectations of the regions and sectors affected by the UK’s withdrawal from the EU, he said.

The REGI Chair also pointed out that the Committee is determined to move quickly. “We expect the Council to display the same determination and be flexible in the negotiations, in order to conclude the trilogue on time,” he specified.

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