European Parliament Approves €37bn for Coronavirus-hit Sectors
The European Parliament on Thursday voted in favor of making 37 billion euros from EU structural funds available to member countries to tackle the coronavirus (Covid-19) crisis.
According to Parliament, the measure, proposed by the European Commission, is a key element in the EU response to the pandemic. The proposal was adopted with 683 votes in favour, 1 against and 4 abstentions.
Dubbed the Corona Response Investment Initiative, 37 billion euros will be channeled from available EU funds as soon as possible to citizens, regions and countries hit the hardest by the Coronavirus pandemic. The funds will be directed towards healthcare systems, SMEs, labour markets and other vulnerable parts of EU member states’ economies.
When the European Commission had proposed the 37-billion-euro response initiative, President Ursula von der Leyen had stressed that tourism, transport and retail were among the most coronavirus-affected sectors.
Where does the money come from?
The decision concerns European structural and investment funds that support the development of regions, the fishing industry and social policy measures, such as retraining laid-off workers.
Every year member states receive money from these funds as pre-financing for projects. If some of the pre-financing remains unused, it has to be returned to the EU budget the following year.
EU countries were due to return almost 8 billion euros in unused pre-financing for 2019, so the European Commission proposed that they keep that money and use it for new projects mitigating the effects of the coronavirus crisis.
Part of the money for projects comes from member states and the rest is co-financed with EU funds. The share of the costs covered by the EU budget varies: if a project concerns a less developed region, the EU contribution reaches 85 percent of the total amount.
The money member states are now allowed to keep will allow them to cover their share in projects for a much larger amount, with the rest of the funds coming from the EU budget.
The Commission calculates that the 8 billion euros could be supplemented by about 29 billion euros in EU co-financing. That would make a total of 37 billion euros that could be deployed in investments across the EU.
The 8 billion euros will have to be returned at the closure of the programmes under the 2014-2020 budget, which might be around 2025.
The decision to approve the Corona Response Investment Initiative was adopted by MEPS during an extraordinary plenary session held as part of the EU’s joint response to the Covid-19 outbreak.
MEPs also approved other measures to tackle the coronavirus crisis, including a proposal to allow member states to request support from the EU Solidarity Fund in case of public health crises; and a proposal to temporarily suspend EU rules on airport slots to stop air carriers from operating empty flights during the pandemic.