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Summaries of EU Legislation

REACT-EU — Recovery assistance for cohesion and the territories of Europe

 

SUMMARY OF:

Regulation (EU) 2020/2221 on additional resources and implementing arrangements to provide assistance for fostering crisis repair in the context of the COVID-19 pandemic and its social consequences and for preparing a green, digital and resilient recovery of the economy (REACT-EU)

WHAT IS THE AIM OF THE REGULATION?

  • It amends Regulation (EU) No 1303/2013 (see summary) and lays down the rules for allocating €47.5 billion from the recovery assistance for cohesion and the territories of Europe (REACT-EU) programme to help the EU Member States and regions hardest hit by the COVID-19 pandemic.
  • The financing is intended to mitigate the economic and social consequences of the pandemic and to prepare a green, digital and resilient European Union (EU).

KEY POINTS

Allocation

  • The €47.5 billion allocation (at 2018 prices) includes €18 million in administrative support (0.35% of the total) and is distributed as follows:
    • 2021: €37.5 billion
    • 2022: €10 billion.
  • Each Member State’s share of the REACT-EU resources is based on its relative prosperity and the socio-economic effects of COVID-19. The weighted criteria used are gross domestic product, unemployment and youth unemployment.
  • In order to ensure that the additional resources under REACT-EU reach the regions and municipalities most affected by the COVID-19 pandemic, the respect of the partnership principle in the distribution of the additional resources is of high importance.
  • The resources can be distributed by Member States with the maximum flexibility within the operational programmes supported by the European Regional Development Fund under Regulation (EU) 2021/1058 (see summary), the European Social Fund (ESF) under Regulation (EU) 2021/1057 (see summary), the European Fund for Aid to the Most Deprived under Regulation (EU) No 223/2014 (see summary) and the youth employment initiative.

Activities are eligible from 1 February 2020. The financing can be used until the end of 2023.

Use of resources

The European Regional Development Fund resources will primarily support:

  • investment in health services;
  • working capital and funding for small and medium-sized enterprises;
  • the transition to a digital and green economy, infrastructure providing basic services to citizens, or economic measures for regions most dependent on crisis-hit sectors such as tourism, culture and hospitality.

The ESF resources will primarily support:

  • job maintenance, through short-term work schemes and help for the self-employed
  • job creation, especially for youth employment, skills development and people in vulnerable situations
  • greater access to social services, including for children, the elderly, people with disabilities, ethnic minorities and the homeless.

Implementation

The flexible conditions:

  • do not require national co-financing, enabling the EU to provide 100% support if a Member State so wishes;
  • allow a high level (11%) of initial pre-financing to avoid initial liquidity problems;
  • permit funding to be spent in any category of region, along with transfers between the regional and social funds throughout the implementation period;
  • allow for 6% of the total funding to support existing cross-border cooperation programmes.

FROM WHEN DOES THE REGULATION APPLY?

It has applied since 29 December 2020.

BACKGROUND

  • REACT-EU is one of the largest initiatives under the NextGenerationEU initiative. The financing is in addition to the 2014-2020 programmes and the 2021-2027 cohesion funding.
  • It aims to bridge the gap between the immediate emergency response to the COVID-19 pandemic and the EU’s long-term economic and social recovery.
  • For more information, see:

MAIN DOCUMENT

Regulation (EU) 2020/2221 of the European Parliament and of the Council of 23 December 2020 amending Regulation (EU) No 1303/2013 as regards additional resources and implementing arrangements to provide assistance for fostering crisis repair in the context of the COVID-19 pandemic and its social consequences and for preparing a green, digital and resilient recovery of the economy (REACT-EU) (OJ L 437, 28.12.2020, pp. 30-42)

RELATED DOCUMENTS

Regulation (EU) 2021/1057 of the European Parliament and of the Council of 24 June 2021 establishing the European Social Fund Plus (ESF+) and repealing Regulation (EU) No 1296/2013 (OJ L 231, 30.6.2021, pp. 21-59)

Successive amendments to Regulation (EU) 2021/1057 have been incorporated into the original text. This consolidated version is of documentary value only.

Regulation (EU) 2021/1058 of the European Parliament and of the Council of 24 June 2021 on the European Regional Development Fund and on the Cohesion Fund (OJ L 231, 30.6.2021, pp. 60-93)

See consolidated version.

Regulation (EU) 2021/1060 of the European Parliament and of the Council of 24 June 2021 laying down common provisions on the European Regional Development Fund, the European Social Fund Plus, the Cohesion Fund, the Just Transition Fund and the European Maritime, Fisheries and Aquaculture Fund and financial rules for those and for the Asylum, Migration and Integration Fund, the Internal Security Fund and the Instrument for Financial Support for Border Management and Visa Policy (OJ L 231, 30.6.2021, pp. 159-706)

Regulation (EU) No 223/2014 of the European Parliament and of the Council of 11 March 2014 on the Fund for European Aid to the Most Deprived (OJ L 72, 12.3.2014, pp. 1-41)

See consolidated version.

Regulation (EU) No 1303/2013 of the European Parliament and of the Council of 17 December 2013 laying down common provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund, the European Agricultural Fund for Rural Development and the European Maritime and Fisheries Fund and laying down general provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund and the European Maritime and Fisheries Fund and repealing Council Regulation (EC) No 1083/2006 (OJ L 347, 20.12.2013, pp. 320-469)

See consolidated version.

last update 01.10.2021

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