The European Commission intends to propose an increase in cohesion funds in its new proposal for the Multiannual Financial Framework (MFF) for the 2020-2027 period in a bid to help countries hardest hit by the coronavirus crisis.
According to an internal Commission document, referenced by Reuters, "an ambitious and strengthened cohesion policy could be a key component of support efforts through a strong and appropriate MFF." The document also says that additional funding is needed for those countries most severely affected by the coronavirus pandemic, rather than a mere redistribution of allocations from one country to another.
Commission President Ursula von der Leyen has said on several occasions that the Multiannual Financial Framework is the most appropriate instrument for dealing with the current crisis, referring to it as a kind of Marshall Plan. The Marshall Plan, named after then US Secretary of State George Marshall, was an American plan for the reconstruction of Western Europe after World War II. The commission is expected to present the proposed MFF for the coming seven-year period by the end of April.
Prior to the outbreak of the coronavirus epidemic, EU Member States were nowhere near agreeing on a budget for the 2021-2027 period. In its original MFF proposal presented in May of 2018, the Commission proposed a reduction in cohesion and agricultural policy funding in order to partially cover the budgetary gap due to the departure of the United Kingdom. This was not welcomed by wealthier Member States, which pay more into the EU budget than they receive from it. They instead demanded that the 2020-2027 MFF be even smaller than the commission’s proposal.
Last week Member State finance ministers agreed to consider setting up a Recovery Fund to ensure a strong European economic recovery in all Member States. The President of the Council of the European Union, Charles Michel, voiced his support for the minister’s position, noting that together with Commission President Von der Leyen, he is working on a plan and an action plan to ensure the well-being of all Europeans and to bring back strong, sustainable and inclusive EU growth through a green and digital strategy.
It remains to be seen however, if the Recovery Fund will be a part of the Multiannual Financial Framework and how it will be financed.
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