Press554

Upcoming recovery package and MFF should support municipalities and regions

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The response to the COVID-19 pandemic has made it clear: local and regional governments are playing a crucial role in implementing and monitoring the necessary measures to tackle the crisis. With revenue sources in steep decline and expenses skyrocketing, municipalities and regions need to be specifically targeted under the European Union’s proposed recovery plan.

More than ever, the EU needs a robust budget, both for the immediate recovery and to invest in future generations. This has been clearly voiced by European Commission President Ursula von der Leyen and is backed up by the joint proposal of French President Emmanuel Macron and German Chancellor Angela Merkel to provide a €500 billion recovery fund to modernise the European economy.

The European institutions and national governments must closely involve municipalities, regions and their representative associations in the implementation of the recovery fund.  As the OECD states in its recent study on the territorial impact of COVID-19, coordination mechanisms and shared responsibilities across all levels of government are essential to ensuring a coherent and effective response.

What’s more, the recovery fund will be linked to the Commission’s recommendations to member states issued as part of the European Semester. Given that 60% of these recommendations have a local or regional impact, it is essential to take into account local and regional governments’ role in the recovery. This is all the more necessary insofar as the fund aims to support those regions and sectors that have suffered most.

Supporting future-oriented investments and resilient territories

CEMR fully supports using the EU’s new Multiannual Financial Framework (MFF) to encourage future-oriented investments that respect European climate ambitions and foster resilient societies, including through the Green Deal and the Digital Strategy.

“Member States have a unique opportunity here to take action to mitigate and fight against climate change”, said French Senator and CEMR Spokesperson for Climate Ronan Dantec. “The EU’s immediate and long-term investments need to be climate-proof, especially in the areas of mobility, construction and energy.”

Cohesion funds are more crucial than ever to enabling Europe’s towns and regions to undertake long-term and sustainable planning and investment, and thus become more resilient. That is why cohesion policy should continue to make up at least one third of the EU budget.

“Europe now needs to be thinking about the post-crisis situation and long-term needs”, said Ilaria Bugetti, Councillor of the Toscana Region and CEMR Spokesperson for Territorial Development. “We need to support the local economies and citizens that have suffered from the lockdowns, rethink territorial planning and redesign urban spaces to make them more resilient; we have to invest in innovation and education to make our societies sustainable and fit for a carbon-free future. This is a huge effort, to which cohesion funds need to considerably contribute.”

Decentralised cooperation will contribute to the EU’s international engagements

Municipalities and regions are also well-placed to contribute to the EU’s international development policies, if supported by the right tools, notably the new Neighbourhood, Development and International Cooperation Instrument (NDICI).  “Local and regional governments’ actions with partner countries to limit the spread of COVID-19 show once again their central role beyond our borders”, said Tine Soens, Municipal Councillor for Kortrijk (Belgium) and PLATFORMA Spokesperson for International Cooperation. “By financing decentralised cooperation between towns and regions, the EU’s long-term budget can foster a swift recovery and resilient societies worldwide.”

The future EU budget must be agreed as soon as possible and ideally before the end of the year. Any further delay would jeopardise the security of many planned EU projects and negatively impact municipalities, regions, SMEs, workers and an already vulnerable population.

How to upgrade the EU’s COVID response in the territories

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This op-ed by CEMR Secretary General, Frédéric Vallier, was originally published in English in Euractiv and in French in Le Courrier des Maires and in Euractiv France.

While all of Europe is reeling from the coronavirus pandemic, the crisis undeniably has a strong territorial dimension. Some localities and territories are more severely affected and different regions are not equally well equipped to deal with such a rapidly propagating virus. There is unbearable pressure on hospitals and health services, most severely in areas such as northern Italy, Spain, northern England, or eastern France.

Municipalities and regions are at the forefront of this crisis, whether in enforcing lockdowns, continuing to provide essential public services – above all healthcare and support for the most vulnerable – or in leading the gradual relaxation of containment measures. At the same time, many of their sources of revenue are falling due to the closure of public facilities and the general economic slowdown.

The European Commission has taken steps towards addressing these challenges by creating the Coronavirus Response Investment Initiatives (CRII and CRII+). These will provide unspent cohesion funds to finance medical assistance and economic and social support to fight the pandemic.

The new rules feature some welcome flexibility. Member States will be able to redirect money from the European Regional Development Fund (ERDF) towards the priorities they identify, such as direct support to SMEs. They will also have the option of transferring money between different thematic priorities and cohesion funds.

In this difficult moment, we are fortunate to be able to build on solidarity and cooperation between European regions. This is what European Cohesion Policy is all about.

Improving the Coronavirus Response Investment Initiatives

However, there continue to be obstacles to the rapid and smooth implementation of the new measures and the EU’s territorial response to coronavirus could be improved. In particular, the rules of audits and control need to be drastically relaxed to allow the Managing Authorities to make rapid and secure use of these measures. The controls on state aid, public procurement, traceability, justification of expenses and eligibility of beneficiaries must be adapted to the new needs and the emergency situation created by the crisis. 

The possibility of transferring funds between categories of regions should be solely motivated by high local or regional impact of the current health, social and economic crisis. Otherwise, there is a risk that funds will be recentralised at the national level at a time when Member States are defining how they will work with the local and regional level for the next budgetary period. 

The impact of the COVID-19 crisis on the local and regional level is tremendous and the proposed support will not be sufficient to address it completely. What’s more CRII and CRII+ will only use unallocated cohesion funds from the previous spending period and hence the money available in various countries will not necessarily be proportionate to COVID-19’s impact there.

At CEMR, we strongly believe the European Commission and Member States should explore additional possibilities to support municipalities and regions. The Commission in particular should consider extraordinary measures for 2021 in order to ensure continuity of the response to the economic and social challenges that are only beginning to emerge. 

The EU’s long-term response

We can’t go back to business as usual. We need a long-term budget and strategy to be prepared for future pandemics and crises. 

Member States are struggling to contain the pandemic because of a structural lack of investment in critical sectors. This shows more than ever the need for a strong Cohesion Policy, which is not designed to respond to an urgent crisis situation, but rather to structurally strengthen regions’ social and economic development (including health and climate action) through long-term planning.

This crisis has also shown that European states have failed to ensure their collective capacity to respond to such a situation. We will need to rethink our model of development, so that our continent can provide for our basic needs and not be dependent on others when it comes to safeguarding the health and life of Europeans. 

Without an agreement on the EU’s next long-term budget, we will not have the resources to answer the dire needs of citizens and the territories most affected by the crisis. I urge legislators to promptly reach an agreement for an ambitious Multiannual Financial Framework (MFF). This must provide the necessary funds to dampen the COVID-19 crisis’ short- and medium-term socio-economic impact and promote robust territorial, economic and social cohesion in all Member States and regions.

Municipalities and regions have a wealth of experience and expertise of practical management in our territories. As such, to ensure CRII and CRII+ can be swiftly and practically implemented, we call on Member States to include their country’s associations of local and regional governments in the reflection on how to implement these new measures. The associations will be able to identify the remaining barriers to the full application of the CRII and CRII+. At European level, the Council of European Municipalities and Regions will both collect and share information on the effective implementation of CRII and CRII+ in different Member States.

We must do all we can to help those in need and put an end to this pandemic. The need for a vigorous immediate response should not however make us lose sight of our long-term goals: resilient and equitable societies founded on sustainable development. A strong Cohesion Policy is needed more than ever to make sure all of Europe’s territories can thrive and look to the future with confidence.

Stefano Bonaccini: Strong local and regional governments are crucial to tackling COVID-19

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This op-ed by CEMR President Stefano Bonaccini was first published by EUobserver.

The COVID-19 pandemic is an unprecedented situation for virtually all of Europe’s citizens, territories and Union. So far, over a million Europeans have been infected and 100,000 have died from this disease. These grim figures can only increase in the coming weeks and months. All of our lives have been affected in one way or another.

As President of the Italian Region of Emilia-Romagna and of the Council of European Municipalities and Regions, I have witnessed first-hand the efforts and sacrifices of our doctors, nurses, police officers, waste collectors, civil servants, volunteers and countless others in the struggle to protect our citizens from the virus and continue to serve their community.

As is often the case during crises, municipalities and regions are on the frontlines against this pandemic. They continue to provide essential services all the while doing their utmost to limit the risk of further infection. Simultaneously, local governments face huge shortfalls in revenue due to the collapse in business activity and general economic slowdown, as well as the closure of theatres, museums and sports facilities. In Italy alone, cities face a shortfall in revenue estimated around €3 billion.

At a time when solidarity was needed, European States’ initial response was dismaying. Nationalistic reflexes reappeared in many countries, with export embargoes on certain medical products and even expressions of xenophobia. All EU countries and levels of government must now work together to fight this virus, which respects neither borders nor nationalities and restore our continent’s well-being.

We have been happy to see the swift mobilisation of resources by the European institutions. More will have to be done however to overcome this crisis and be better prepared for the next one. The Council of European Municipalities and Regions and its members are committed to a strong and united Europe, based on joint action, shared values, and solidarity.

Though EU Cohesion Policy is not designed to respond to emergency situations, it will in this crisis show its usefulness as a concrete expression of European solidarity. The European Commission’s new Coronavirus Response Investment Initiative (CRII), allocating unspent cohesion funds to help municipalities and regions to handle the crisis, will provide much-needed support.

It is true that the new financial assistance will not be sufficient and will even be marginal compared to the large-scale national support schemes that are being prepared in the Member States. Beyond the emergency response, CEMR urges the Commission to consider extraordinary measures for 2021 to ensure continuity of response to the economic and social challenges that are only beginning to emerge.

More generally, we call on the European Commission to work with us and Member States to include the national associations of local and regional governments in their immediate and long-term working groups responding to coronavirus.

Why? Because, our expertise, knowledge of territorial realities and continuous contact with local and regional officials can be of invaluable assistance. In all affected countries, and in particular among the worst-hit as I can bear witness in my own country of Italy, we have seen that a coordinated response and dialogue between cities, regions and national governments are crucial.

As we enter a new phase of gradually withdrawing restriction measures, municipalities and regions will continue to have a crucial role. As the European Commission observed in its recent coronavirus exit strategy roadmap: “The lifting of measures should start with those with a local impact and be gradually extended to measures with a broader geographic coverage”. Close collaboration with local and regional governments will be essential in safely executing this great task.

The ordeal of COVID-19 must lead us to reflect on our policies and stimulate us to prepare for the future. Addressing the immediate crisis should not make us overlook the need to invest in the future-oriented sectors necessary for a prosperous and sustainable future. The European Green Deal and the European Digital Strategy are steps in the right direction and others should follow.

This crisis shows yet again the need for strong international coordination and resilient territories. As such, Europe should continue to promote worldwide both vertical and horizontal cooperation between all levels of government, as well as the achievement of the Sustainable Development Goals.

It is often said that the European Union takes the necessary steps when it is challenged by a crisis. If this is true, we should not remain passive in this ongoing tragedy, but make the most to prepare for a healthier and safer tomorrow. It is not too late to unite and to build a sustainable future based on solidarity.
Europe’s municipalities and regions are ready to play their part.