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The Commission yesterday welcomed the political agreement between the European Parliament and EU Member States in the Council on the Recovery Assistance for Cohesion and the Territories of Europe package (REACT-EU). This is the first cohesion policy file whose trilogue negotiations are concluded pending the final approval of the legal texts by the European Parliament Plenary and the Council.

Commissioner for Cohesion and Reforms, Elisa Ferreira, yesterday said:

“I welcome today's political agreement on REACT-EU. Cohesion policy has from the very beginning been at the heart of fighting the pandemic thanks to the Coronavirus Response Investment Initiatives. This new initiative is a further step in supporting Member States' recovery, providing additional funding for bridging the gap between the first emergency crisis response and the long-term recovery of the economy supported by the 2021-2027 programming period. We are working hard to ensure a fair and cohesive recovery.”

With a dedicated amount of €47.5 billion (€50.5 billion in current prices), REACT-EU will continue and extend the crisis response and crisis repair measures delivered through the two Coronavirus Response Investment Initiative (CRII and CRII+) packages, thus ensuring that the economic and social recovery in the context of the coronavirus pandemic will continue smoothly and without interruption.

The main elements of yesterday's compromise include:

• Total flexibility for Member States to decide the share of the resources for the European Regional Development Fund, the European Social Fund – including the Youth Employment Initiative, and the Fund for European Aid to the Most Deprived;
• No pre-determined breakdown by category of regions to direct the resources to where they are most needed;
• The possibility of EU co-financing of investments up to 100%;
• The retroactive eligibility of expenditure from 1 February 2020, encompassing both physically completed and fully implemented operations (provided that they have started as of 1 February 2020), in continuity with the CRII and CRII+;
• The end date for the eligibility of expenditure on 31 December 2023, in line with the 2014-2020 legislative framework;
• The possibility to allocate resources also to existing cross-border cooperation programmes under the European Territorial Cooperation goal;
• The allocation of 70% of the national envelopes in 2021 based on the socio-economic effects of the crisis, including the level of youth unemployment and the relative prosperity of Member States, with the remaining 30% for 2022 being calculated at the end of 2021 on the basis the latest statistical data;
• Exceptionally no breakdown by category of regions. Member States need to ensure a balanced support between the needs of the areas most affected by the impact of the COVID 19 pandemic and the need to maintain focus on less developed regions.
• Finally, in order to allow for a smooth and quick mobilisation of investments, ex-ante conditionalities, thematic concentration requirements and performance framework do not apply to REACT-EU. The Commission will do its utmost to approve programmes and programme amendments within 15 working days after submission.

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