Making sense of the EU financial support jungle

The European Union has suggested a number of instruments to overcome the COVID-19 crisis. These can be broadly grouped into three groups:

• Next Generation EU: short-term recovery plan (mainly 2021-2022) to mitigate the effects of the pandemic

• Emergency measures adopted in March/April 2020

• Multiannual Financial Framework (MFF): regular EU budget

Many of these instruments will be further designed and implemented through national recovery plans in each Member State. In order for the cultural sector to be able to access these funds, it is of crucial importance that the national recovery plans include concrete actions and measures for the cultural sector. See below which parts of these three instruments are or can be relevant for the cultural sector and what is needed now to ensure accessibility of the cultural sector.

The new Recovery and Resilience Facility will provide large-scale financial support to reforms and investments undertaken by Member States, with the aims of mitigating the economic and social impact of the coronavirus pandemic and of making the EU economies more sustainable, resilient and better prepared for the challenges posed by the green and digital transitions.

The Recovery and Resilience Facility will provide a total of €672.5 billion to support investment and reforms. Grants worth a total of €312.5 billion will be provided to Member States under the Facility and the remaining €360 billion will be provided in loans.

To access the facility, Member States have to prepare recovery and resilience plans setting out their reform and investment agendas for the subsequent four years, until 2024. These plans should consist of reforms and public investment projects through a coherent package.

More about the national recovery and resilience plans

The European Semester and the Recovery and Resilience Facility are intrinsically linked. The European Semester provides a framework for the coordination of economic policies across the EU and is based on three key documents: the Annual Growth Strategy (AGS) published by the European Commission, the National Reform Programmes (NRPs) submitted by the Member States and the Country-Specific Recommendations published by the European Commission.

The plans of the Recovery and Resilience Facility should set out reforms and investments for addressing the challenges identified in the context of the European Semester, in particular those related to the green and digital transitions. They should, among others, explain how they contribute to strengthening the growth potential, resilience and cohesion of the Member State concerned.

→ What is needed now? Earmark 2% for culture!

REACT-EU stands for Recovery Assistance for Cohesion and the Territories of Europe. The 47.5 billion Euro of REACT-EU funding are part of the temporary recovery package Next Generation EU. The aim of REACT-EU is to contribute to a green, digital and resilient recovery of the economy. These additional funds will be provided in 2021-2022 from Next Generation EU and already in 2020 through a targeted revision to the current financial framework.

REACT-EU will provide additional funding for the most important sectors that will be crucial to lay the basis for a sound recovery. This will involve investment to support job maintenance, including through short-time work schemes and support for the self-employed. Such support will be available across economic sectors, including for the much-affected tourism and culture sectors.

Member States will be able to decide themselves how exactly to channel the funds. Maximum flexibility, as proposed under the Coronavirus Response Investment Initiative and Coronavirus Response Investment Initiative Plus packages, will be maintained and they will be able to either direct them to crisis-repair measures through the European Regional Development Fund (ERDF) or the European Social Fund (ESF), or support the most vulnerable parts of the society, under the Fund for European Aid to the most deprived (FEAD).

The focus of the EU cohesion policy in 2021-2027 remains the economic competitiveness through research and innovation, digital transition as well as the European Green Deal agenda and the promotion of the European Pillar of Social Rights.

The new proposal reinforces support for the preparedness of health systems and ensures better exploiting of the potential of culture and tourism. At the same time, it provides support to workers and to measures addressing youth unemployment and child poverty.

→ What is needed now? Identify a clear budget associated with swift and concrete actions for the cultural and creative sector

SURE is the European instrument for temporary Support to mitigate Unemployment Risks in an Emergency. It is available for Member States that need to mobilise significant financial means to fight the negative economic and social consequences of the coronavirus outbreak. It can provide financial assistance up to EUR 100 billion in the form of loans from the EU to affected Member States to address sudden increases in public expenditure for the preservation of employment supporting short-time work schemes and similar measures.

Based on the negotiations and the national guarantees, the Commission has presented proposals to the Council to grant financial support of €87.3 billion to 16 Member States under SURE: Belgium, Bulgaria, Czechia, Greece, Spain, Croatia, Italy, Cyprus, Latvia, Lithuania, Malta, Poland, Portugal, Romania, Slovakia and Slovenia.

→ What is needed now? Specific measures for freelancers, micro, small and medium enterprises in the cultural and creative sectors!