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Under the impression of the COVID-19 pandemic, the European Commission amended its draft European Development Fund/Cohesion fund regulation. The changes are part of the Next Generation EU recovery measures to enlarge the scope and allow for more flexibility of the regional and cohesion funding.

The future regional and cohesion funds have been cleared in December, for which the Multiannual Financial Framework (MFF) foresees over €240 billion, of which €191 billion are allocated for the European Regional Development Fund (ERDF) and €43 billion for the Cohesion Fund. The ERDF focuses its investments on several key priority areas, such as innovation and research, the digital agenda, support for SMEs as well as environment and the zero-carbon economy. The allocation of the ERDF and the Cohesion Fund for each region will be defined in the programming process over the next months, based on a needs-assessment and country-specific recommendations.

The following five priorities are defined:

  1. “Smarter Europe”, through innovation, digitalisation, economic transformation and support to SMEs;
  2. “Greener, carbon free Europe” by investing in energy transition, renewables and measures against climate change;
  3. “Connected Europe” by investing in strategic transport and digital networks;
  4. “Social Europe”;
  5. “Europe closer to citizens”, by supporting locally-led development strategies and sustainable urban development.

The major part of the investment shall be spent on “smarter growth” and “green economy”.

The Member States will be able to allocate the resources according to the following thresholds:

Countries/regions: Minimum % of resources for “smarter Europe” Minimum % of resources for “greener Europe”
Group 1 countries / more developed regions (GNI ratio equal to or above 100% of EU average) 30%
Group 2 countries / transition regions
(GNI ratio between 75%-100% of EU average)
40% 30%
Group 3 countries / less developed regions (GNI ratio below 75% of EU average) 25% 30%

The Cohesion Fund continues to focus on investments in environmental and transport infrastructure; for instance, priority projects in Trans-European Networks. It will also address projects of energy efficiency, the use of renewable energy or sustainable mobility.

Example Slovakia:

Slovakia will participate with a total of almost €13 billion of ESIF-funding for the period 2021 to 2027. This is almost an increase of 30% as compared to the previous funding period. This entails a significant absorption challenge. On the one hand Slovakia has to complement the EU funding allocated for the new period and on the other the Operational Programmes have to be finalised and formalised before spending. The informal dialogue for the preparation of programming has been started in early 2019, but it still needs to be concluded. This includes issues such as the territorial approach, simplification measures and enabling conditions. The preparatory steps also involve an administrative capacity building to ensure the administrative absorption capacity. For the conclusion of the programming only a few months are left. Whilst the foreseen simplification measures are designed to increase the efficiency of spending, Slovakia is expected to set up robust institutional structures and programme management capacities. So far the core of those tasks are planned to be concluded in the first half of 2021;

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