Ukraine: at the end of May the European Parliament will vote on the use of EU funds to produce munitions
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At the end of May the European Parliament will vote in Brussels on the Commission’s proposal to use cohesion policy funds to increase the production of ammunition in order to be able to deliver one million to Ukraine within a year. The emergency voting procedure was approved today, May 9, with 518 votes in favour, 59 against, including the MPs of the 5 Star Movement, and 31 abstentions.
Cohesion is a medium-long term European investment policy which aims to promote the harmonious development of European regions and to combat existing inequalities. For this reason, the hypothesis of reprogramming the expenditure of EU funds for military purposes has raised doubts and concerns about the coherence between the objectives of cohesion and the contents of the Commission’s proposal, the so-called “ASAP”, Act in Support of Ammunition Production.
However, if approved by Parliament, it would not be the first time that cohesion policy resources have been used for emergency situations. In fact, starting from the pandemic, cohesion was activated to divert resources where there was a need for immediate intervention and above all there were no ad hoc tools to give economic support to Member States in difficulty.
Here is a backwards run of the proposals for the reprogramming of Cohesion policy funds presented starting with ASAP, the latest arrival, up until the pandemic.
ASAP proposed on May 3, 2023 – purpose: to support defense industry
ASAP – Act in Support of Ammunition Production – but in the common sense also as soon as possible. It is the acronym of the 1 billion euro program – of which 500 million from EU funds, the rest from national co-financing – with which the EU Commission intends to support the defense industries of the member states. In recent weeks, the Commissioner for the internal market Thierry Breton has in fact left for a tour of the military production plants still present in the EU territory to evaluate their production capacity and identify the bottlenecks that slow down their production. The commissioner was in Italy on April 13, where he met with Prime Minister Giorgia Meloni and Defense Minister Crosetto, and visited two military production plants. The outcome of the reconnaissance was positive: according to the Commissioner, the EU still has a significant war production capacity, but to respect the commitments undertaken with Ukraine it is necessary to switch from a “peacetime” production method to one “in time of war”. To do this, resources are needed, 500 million for now, which will come from the redirection of various funds, including: the European Defense Fund and Edirpa – an instrument for strengthening the European defense industry through common procurement. It will then be possible for the States to use the Recovery Funds and the ERDF and ESF+ funds where – Commissioner Breton explained to the press – these ammunition production sites are located in isolated areas and, in order to revitalize their production capacity, need reindustrialization interventions.
REPowerEU presented by the Commission in October 2022 against the expensive energy
Following energy price hikes, the European Commission has allowed member states to divert up to 10% of unused 2014-2020 cohesion policy resources to support small and medium-sized enterprises and vulnerable households to help them pay the bills. For Italy it was a dowry of around 4 billion euros. Already on this occasion, some insiders turned up their noses at the statements of Commission Vice-President Dombrovskis, who motivated the decision by explaining that “neither the Recovery Fund nor RePowerEU finance initiatives to support incomes or similar, situations that require resources of another kind”. In this case, the initiative found a regulatory foundation in the regulation of REPowerEU, the instrument through which states can finance energy conversion to become independent from Russian gas.
CARE proposed in March 2022 – purpose: to help regions engaged in reception of Ukrainian refugees
Announced by Commissioner Elisa Ferreira at the Summit of the Regions in Marseille a few weeks after the Russian invasion of Ukraine, Care has allowed the reallocation of funds from the 2014-2020 cohesion policy and 10 billion from React-EU – the additional fund from 47 billion allocated to help member states during the pandemic – to help EU regions involved in welcoming Ukrainian refugees. Through CARE it has been possible to finance – by suspending the national co-financing rule – reception services for refugees such as food aid, temporary accommodation, food and water supplies or medical care, but also programs to improve the administrative capacity of the Member States involved in hospitality. In this case, the use of cohesion funds to welcome refugees was justified by the principle of solidarity – typical of cohesion policy – towards the regions bordering Ukraine which had already welcomed 3 million Ukrainian refugees in March 2022 .
CRII and CRII+ presented by the Commission in April 2020 to stem the pandemic
In April 2020, the EU Commission launched two packages of measures: the Coronavirus Response Investment Initiative (CRII) and the Coronavirus Response Investment Initiative Plus (CRII+), which made it possible to reprogram cohesion policy funds for health purposes and to support those who have lost their jobs as a result of the lockdowns. For the first time the two cardinal principles of cohesion policy: planning and the principle of additionality are missing. The Commission does not request the return of the unspent sums of 2019 – as required by the regulations – and allows them to be used to support the economy hit by the pandemic. The rule of national co-financing is then suspended. Through the CRII and CRII+ programmes, Italy has reallocated more than 4.5 billion euros of cohesion policy to purchase personal protective equipment (1.8 billion), while 800 million euros are earmarked for the purchase of medical equipment , which include the purchase of 500 ventilators, the increase of 681 intensive care beds and the increase in laboratory analysis capacity. In May 2020, the Commission presented REACT-EU, a new €47 billion fund to complement the 2014-2020 cohesion funds.
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