Last night the European Parliament and the Council reached an agreement on Repower Eu, the package of measures intended to mobilize resources to reduce energy dependence on Russia and fight inflation due to rising energy costs. Among the tools available there is also the possibility of using the funds not yet committed from the Cohesion Policy to provide direct support to the most vulnerable households and small and medium-sized enterprises affected by the increase in energy costs.
The agreement provides that up to 10% of the overall endowment for the 2014-2020 programming period may be used, ie around 4 billion euro for Italy. The national co-financing rule will not apply to funds diverted to RePower. The change does not concern the funds of the common agricultural policy.
Looking at the medium-long term, and therefore at investments for energy independence, the agreement provides that the Member States can use up to 7.5% of the cohesion policy funds of the new 2021-2027 programming period to achieve the objectives of RePower Eu.
In general, the agreement provides that the additional resources obtained by the Member States from the Next Generation Eu will serve to add a chapter dedicated to energy in their respective National Recovery and Resilience Plans.
Parliament: we need a permanent flexibility mechanism
In the light of the economic repercussions of the war of Russian aggression, the European Parliament wants to propose to the Commission a reflection on the functioning mechanism of the European budget through a resolution which will be voted on tomorrow. The current budget rules, approved every seven years, would no longer be adequate to respond effectively to the new global context. “It is not a question of increasing the resources available for this or that other policy, but of adapting the functioning mechanism of the Multiannual Financial Framework (MFF)” explained Margarida Marques, co-rapporteur of the resolution which will be voted on tomorrow in Parliament for the S&D group. If on the one hand, the rapporteurs explain, referring to the Ukrainian refugee crisis, Parliament has welcomed the flexibility shown by the Commission in making existing funds available to respond quickly to crises, now Parliament expects the Commission to show that it knows how to look to the future by proposing a reform of the European budget. With Next Generation Eu, the Commission has demonstrated the political will to find new resources for the Member States, including financing through the market, but – the rapporteurs underline – this instrument took too long to be approved.
Safeguard cohesion policy
What arouses Parliament’s concerns is precisely the safeguarding of cohesion policy, which, “without new rules suited to the new context of recurring crises, runs the risk of continuing to be cannibalized to pursue other objectives, and therefore emptied of meaning”. And indeed, over the last couple of years, cohesion funds have been used to address situations that went beyond their original purpose. For the first time in 2020, when they were used to purchase machinery and masks during the pandemic crisis. Then this spring, when they were made available to regions – especially those bordering Ukraine – engaged in welcoming refugees. And finally today to counter the consequences of expensive energy with the approval of the RePower Eu package. Future budget rules will also have to include a mechanism for automatic adjustment to inflation. “We are used to thinking about the European budget in a context of inflation at 2%, a scenario that evidently no longer fits our reality” concluded Marguarida Marques.