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EU proposes to use 40 billion from cohesion funds against high energy prices

18 ottobre 2022

Photographer: Etienne AnsotteTo use structural funds from the Cohesion policy framework 2014-2020 is going to be possible to tackle the issue of the cost of energy raised as a consequence of Russian invasion of Ukraine.

The European Commission proposes to use up to 40 billion euros from cohesion funds to support citizens and SMEs in the face of high energy prices. This was announced by EU Cohesion Commissioner Elisa Ferreira and the chair of the European Parliament's Regions Committee.

Brussels opens the possibility for governments to use uncommitted cohesion funds from 2014-2020 programming and reprogram them to support vulnerable businesses and households in paying their energy bills. "We could not ignore all the difficulties that families and SMEs go through with the current energy prices," Ferreira said.

"We are determined to work and are working with the Council and Parliament on targeted, exceptional and temporary measures, within the 2014-2020 cohesion framework, to address the energy price shock for vulnerable small and medium-sized enterprises and households”, Ferreira said last week EU.

“We have to take into account the state aid framework" and "be sure that there is no impact on the 2021-2027 funding period”, "the work is ongoing", but "we recognise that if we do nothing a lot of small and medium-sized enterprises will close”, she explained.

The intention is reportedly for a decision by the end of the year to make the funds available from the beginning of 2023, providing maximum flexibility to member states. From the European Committee of the Regions, meanwhile, came the repeated call, at the various events of the EU week of the Regions, not to forget that European structural funds are for long-term policies and not for emergencies, however important they may be in the covid crisis, first, and migrants, then.

"My main concern is not to turn the extraordinary into the new normal, to turn what should only be extraordinary circumstances into the normal way of dealing with energy," said the president of the European Committee of the Regions, Vasco Alves Cordeiro, on the high energy bills. "I would prefer to make the cohesion funds easier to use in the energy transition," he said.

Cohesion policy "is the heart of the European project, a lot has been done with them, but there are new challenges, which do not only concern issues such as energy and green and digital transition, but also the method of cohesion policies that must give greater recognition to the role of regions and local authorities”, he concluded.

On the energy bill, however, the chairman of the European Parliament's Regional Development Committee, Younous Omarjee, expressed confidence in "common sense and dialogue" with the Commission to "come up with answers soon". "It is not possible to maintain the big long-term goals if we do not address the big crises, as happened with the Covid crisis and today with the Ukraine war."

Even though the Commission agreed “maximum flexibility” to member states to reallocate loans - grants are not available as it would require a change in the regulation- to address the energy costs, the pool of expenditure that is actually available needs to be carefully calculated in order to avoid putting in a difficult position those companies that already signed a contract to receive financing.