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Document 52024DC0006

REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS European Structural and Investment Funds 2023 summary report of the annual programme implementation reports covering implementation in 2014-2020

COM/2024/6 final

Brussels, 15.1.2024

COM(2024) 6 final

REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS

European Structural and Investment Funds









2023 summary report of the annual programme implementation reports
covering implementation in 2014-2020

{SWD(2024) 2 final}


REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS

European Structural and Investment Funds

2023 summary report of the annual programme implementation reports covering implementation in 2014-2020

1.Introduction

The EU’s Structural and Investment Funds (the ESI Funds) are the largest investment toolbox within the 2014-2020 multiannual financial framework (the EU budget) and remain at the heart of the EU’s growth strategy. They are supporting the territorial, economic and social cohesion of the EU’s regions, are investing in human development and are contributing to the EU’s resilience to and recovery from the crises faced in recent years.

The ESI Funds comprise:

·the European Regional Development Fund (ERDF); 

·the European Social Fund (ESF); 

·the Cohesion Fund (CF); 

·the European Agricultural Fund for Rural Development (EAFRD);

·the European Maritime and Fisheries Fund (EMFF).

The report shows that the ESI Funds, with their long-term planning and implementation period, have continued to offer a stable and predictable framework for public and private investment across all EU regions.

The report shows steady progress in implementation with one year left for spending the 2014-2020 ESI Funds. It highlights in particular the wide range of investments under the instruments and their real impact on people, companies and regional authorities. It also shows the flexibility of the framework, which has been able to adapt, in order to provide solutions to the COVID-19 pandemic, Russia’s unprovoked aggression against Ukraine and, more recently, the energy crisis.

In addition to focusing on long-term competitiveness and social goals, the ESI Funds were the face of the EU’s solidarity and togetherness. They helped Member States to care for refugees, provide support to small and medium enterprises (SMEs) and vulnerable households, and alleviatee the pressure on national budgets. They provided a lifeline for SMEs and vulnerable households through the COVID-19 and the energy crises.

In 2022, the ESI Funds were supplemented with EUR 11 billion from the second tranche of the Recovery Assistance for Cohesion and the Territories of Europe (REACT-EU). The extra resources were used to support investment projects that foster crisis-repair capacities and contribute to a green, digital and resilient recovery of the economy, including support for maintaining jobs, short-time work schemes and support for the self-employed.

Responding to the full-scale Russian invasion of Ukraine in 2022, the EU stood firmly alongside Ukraine and extended its solidarity with the Ukrainian people. In order to tackle the consequences of the full-scale invasion, the EU has agreed on a series of instruments to supply the basic needs of the most vulnerable people. The EU was quick to show its solidarity with Ukraine through two instruments: the Cohesion’s Action for Refugees in Europe (CARE – adopted in April 2022) and Flexible Assistance to Territories (FAST-CARE – adopted in October 2022). These provided additional liquidity, flexibility and simplification to finance urgent needs on the ground.

More recently, the Supporting Affordable Energy instrument (SAFE) adopted in December 2022 allowed Cohesion Policy funds to provide support to vulnerable households, workers and SMEs facing increased energy costs.

Notwithstanding the EU’s continuing readiness to assist in the recovery from the multiple crises, the ESI Funds have continued to champion investments for inclusive growth and jobs, to foster human capital development and encourage EU territorial cooperation. With around EUR 630 billion spent by Member States by end-September 2023 ( 1 ) the concrete results are evident:

·around 5 million businesses were supported through projects( 2 );

·370 000 new jobs were created and, in addition, in the fishing and aquaculture sector almost 48 000 jobs were maintained and over 6 500 new jobs were created;

·6 000 MW ( 3 ) of additional capacity of renewable energy production was installed (the equivalent of around 2 400 wind turbines);

·the energy performance of more than 550 000 households has been improved;

·17 million people were protected from floods and 15 million people were protected from forest fires;

·health services for more than 63 million people have been improved;

·64.5 million participants benefited from measures to improve employment opportunities (more than 10.2 million of these participants gained a qualification); 

·support was provided to 4.1 million people with disabilities and just over 9.1 million people from marginalised groups, such as migrants, people with a foreign background and minorities; 

·2.8 million projects were supported to help the agricultural sector and rural businesses become more competitive and to create and maintain jobs in rural areas;

·35 million hectares of agricultural land (20% of the utilised agricultural area) was selected for support for land management to better protect biodiversity and European landscapes; 

·over 150 000 agricultural holdings received support to produce agri-food quality products, and support was also given to local markets and short-supply chains.

This report, as required by Article 53 of Regulation (EU) No 1303/2013 ( 4 ), presents the progress made in implementing the ESI Funds in the ninth year of the ten-year implementation cycle. It covers financial implementation as well as the progress made on common indicators by the end of 2022 (which is the latest complete year for which full implementation data is available). This report also presents the latest available financial data from the end of September 2023, where available.

2.Overview of implementation

2.1.Financial implementation( 5 )

The five ESI Funds make available EUR 546 billion of EU resources under the 2014-2020 programming period bringing the total investment in the EU economy to EUR 741 billion when including the national co-financing. Costs incurred by project beneficiaries are eligible for co-financing from the ESI Funds until the end of 2023( 6 ).

The figure below shows the trend in project spending over the implementation cycle, in relation to the overall planned amount. These amounts remain an indication of the level of commitment to the objectives because Member States may request adjustments to the planned amounts. Some of the Member States’ annual reports refer, for example, to challenges in the implementation of specific projects or with absorption capacity, which may lead to adjustments in the run-up to the end of the implementation period. At the end of 2022, 76% of the total planned amount had been spent by projects. According to the latest financial data available at the end of September 2023, 85% of the total planned investment was spent by projects.

Figure 1 Financial implementation

As regards payments made by the Commission, at the end of 2022, EUR 412 billion was paid to Member States (75% of the EU resources over the entire period). At the end of September 2023, this has increased to EUR 460 billion, raising payments to 84% of the EU’s planned amounts. Looking in more detail, the rate of absorption for the ERDF, CF and the ESF is almost identical to that witnessed at the end of September 2015, the final year of eligibility for the 2007-2013 programming period. The experience of previous programming periods suggests that the spending rate will continue to accelerate until the closure of programmes( 7 ).

At the same time, EUR 66.75 million were decommitted in 2022 ( 8 ). The Commission continuously monitors lower-performing programmes in order to support them to better implement their measures.

Finally, it is important to note that the aggregated picture presented in this report hides important variations between Member States. A detailed view of the financial implementation per Member State is included in the annexes.

2.2.Response to the COVID-19 pandemic

In response to the COVID-19 pandemic, the EU has adopted the largest recovery package to date to emerge more resilient from the crisis and to support Europe’s digital and green transformation, including the Recovery Assistance for Cohesion and the Territories of Europe (REACT-EU) as well as the Recovery and Resilience Facility, as the largest funding element under NextGenerationEU. In 2022, the second tranche of REACT-EU, worth EUR 11 billion, was made available. By the end of 2022, the full amount of EUR 50.6 billion had been programmed through the ERDF and the ESF. By the end of September 2023, EUR 26.2 billion has been paid out through the programmes.

Financing has gone to medical institutions, researchers, business owners, employees and vulnerable people, enabling the purchase of 3.7 billion items of personal protective equipment and around 12 500 ventilators as well as supporting more than 920 000 enterprises( 9 ). 

As of September 2023, EUR 8.7 billion was allocated to green investments under REACT-EU (of which EUR 6.6 billion to climate actions) and EUR 3.1 billion to the digital economy; EUR 8.7 billion was allocated to enterprises and business support; EUR 8.8 billion to the health sector and EUR 12.7 billion to labour market measures.

Within Cohesion Policy, under REACT-EU, the ESF is the primary source of support for social services, retention of employment and support to vulnerable groups, in line with the European Pillar of Social Rights action plan. This has been done by promoting support for short-time work arrangements, supplementary wages for healthcare personnel, IT equipment, protective equipment and services for vulnerable groups.

The EMFF introduced emergency support to compensate for the temporary cessation of fishing activities and the suspension or reduction of production and processing in the context of the COVID-19 pandemic. EUR 210 million of the EMFF funding was committed to mitigating the impact of the COVID-19 pandemic and more than half (59%) of this was allocated to mitigate the impact of the temporary cessation of fishing activities.

Examples of projects funded by ESI Funds contributing to the COVID-19 response

In Italy and Spain, a large part of the vaccination campaign against the COVID-19 virus was co-financed by REACT-EU funding. More than EUR 2.5 billion has been used to secure the doses of vaccines needed to protect the whole population of the two countries.

Through the ‘Digital Plan’ project implemented in the city of Montpellier in France, REACT-EU has helped tackle the lack of digital equipment in local schools that was revealed during the COVID-19 pandemic. The EUR 3.5 million grant from REACT-EU allowed every teacher to be equipped with a laptop and every class to have video projectors to ensure pedagogical continuity as well as the modernisation of teaching and learning methods. This will help enhance digital knowledge and skills, reduce school failure and ensure pedagogical continuity in the event of a new health crisis.

In Finland, the EAFRD-funded KoroKausi project  helped farmers to overcome the serious shortage of seasonal workers caused by the COVID-19 pandemic, which was driving several farms into bankruptcy. The project helped to find employees for almost all farms that sought help from the service. Communications campaigns were carried out and an online networking platform was established, with about 7 000 registered users and the number of available farm jobs peaking at around 2 100. Similar projects in response to the COVID-19 pandemic have been funded by the EAFRD in several other Member States.

3.Implementation by key theme

The following sections provide an overview of the ESI Funds’ achievements by main policy area and theme as reported by the Member States at the end of 2022.

3.1.Smart growth 

Using the ESI Funds to promote research and innovation is key to helping Member States and regions create the conditions necessary for economic growth on the ground. Supporting innovation through smart-specialisation strategies is key to a range of Commission priorities (particularly to the European Green Deal; an economy that works for people; and making the EU fit for the digital age).

The following achievements had been recorded by the end of 2022:

·around 5 million SMEs received support, representing a 25% increase compared to the 4 million enterprises that had received support at the end of 2021;

·more than 75 000 enterprises had cooperated with research institutions;

·around 37 000 enterprises had introduced new products onto the market, which exceeded the target of 32 000 enterprises set by the programmes;

·over 7.8 million households were already benefiting from improved broadband access thanks to ERDF-financed projects. Nearly 12 million households are expected to benefit from improved broadband access by the end of 2023;

·In rural areas, more than 1 900 investment operations received support from the EAFRD to enhance the accessibility, use and quality of ICT for a total amount exceeding EUR 1.1 billion. More than 5.1 million people in rural areas have benefited from improved IT infrastructure or services.

Smart-growth investments make up around 28% of total ESI funding. EUR 211 billion was dedicated to the three themes which are part of the smart growth chapter: research and innovation (EUR 74 billion), information and communication technology (EUR 19 billion) and SME competitiveness (EUR 118 billion)( 10 ).

By the end of 2022, EUR 166 billion (corresponding to 79% of the allocation for this chapter) had already been paid to project beneficiaries. This represents an increase of 16 percentage points on the previous year. The figure below gives a more detailed breakdown of the implementation rate for each of the three themes.

Figure 2 Smart growth implementation rates

There are no significant differences in the financial progress across the different themes. In the case of investment in research and innovation activities, 79% of the total planned amount has already been spent. This is comparable with the information and communication technologies theme, where 79% of the total amounts have been spent.

The ESI Funds also enable companies to grow and become more productive and competitive and enable businesses to introduce innovative solutions. Overall, EUR 118 billion (16% of the total budget) is planned for enhancing the competitiveness of EU SMEs, the largest single theme in the budget. By the end of 2022, 79% of the planned amount had already been spent.

Examples of projects funded by ESI Funds contributing to smart growth

The regional Italian ERDF-Sicily programme has contributed EUR 7.5 million to supporting the research infrastructure for the Mediterranean Institute for Transplantation and Advanced Specialised Therapies (ISMETT). A transplant centre of excellence and a reference hospital for the entire Mediterranean area, ISMETT is involved in important research projects to provide patients with the most advanced therapies for end-stage vital organ failure.

The Sustainable Bottom Line 2.0 project received EUR 1.8 million from the ERDF to help SMEs in the capital region of Denmark with green and circular business development. Around 100 enterprises received a circular potential assessment and around 80 enterprises developed green and circular business models that led to energy and resource efficiency, improved competitiveness and enhanced growth potential. This led to a reduction of almost 7 000 tonnes in greenhouse gas emissions (GHG), almost 100 000 gigajoules (GJ) reduction in energy consumption and a reduction of almost 2 000 tonnes in material consumption.

The ERDF invested around EUR 4 million in the development of a practical training centre in the Kaunas Technical Vocational Training Centre in Lithuania. The project consisted of the modernisation of the premises, the creation of a modern environment for training aircraft-repair specialists and the acquisition of specialised training equipment. The project created the first practical training base in Lithuania for aircraft repair as well as hybrid vehicle repair.

The ERDF has provided support to the CYENS Centre of Excellence in Nicosia, Cyprus. The Centre is an integrator of academic research and industrial innovation with the aim of promoting sustainable scientific, technological and economic growth. It facilitates the exploitation of research outcomes and supports innovative start-ups in fields such as interactive media, intelligent systems, emerging technologies (e.g. artificial intelligence and 5G) and art and technology. The Centre promotes measures that benefit both Greek and Turkish Cypriots.

EMFF supported Wageningen University & Research in the Netherlands in developing a digital tool to implement a ‘ Fully Documented Fishery . The tool uses artificial intelligence to automatically recognise the species and size of each fish, thus facilitating the handling of fish and the recording of catches on board vessels as well as providing valuable data for fisheries management. The tool increases transparency not only for the sector itself but also for consumers and NGOs. The tool could also facilitate the management of fisheries for all partners.

The ‘ North Sweden Cleantech - the climate-smart innovation site of the future’ project has supported companies that work in the fields of cleantech, green technology and sustainable solutions. The ERDF has contributed EUR 1 million to strengthening the innovation capacity of SMEs. The platform provides business-development support and serves as a networking forum for over 100 companies in northern Sweden.

 In Portugal, the Lisbon 2020 programme financed the Institute for Experimental and Technological Biology (IBET) with EUR 7.7 million for the construction of a building with laboratory spaces, and analytical and biological production platforms. As a result, a new cycle of technical and scientific advances was initiated in the new building, notably through partnerships with the bio-pharmaceutical industry (specifically in the areas of vaccines and gene and cell therapy). The building is a step forward in terms of energy efficiency, with shading systems, air-treatment units with energy recovery, a centralised technical management system and smart lighting. When fully operational, it will incorporate a team of 25 technicians by 2025.

In Ireland, the EAFRD supported the villages of Piltown and Fiddown (south-eastern Ireland), which had not been included in the national broadband plan, to build their own community-owned broadband network. The Broadband 4 Our Community project  became a model of social and financial innovation and was able to attract co-funding from local businesses to support and facilitate the installation of the infrastructure needed to create a fibre to the premises network. The project has provided 750 homes and businesses in Piltown and Fiddown with high-speed internet.

3.2.Sustainable growth

The ESI Funds are supporting investment in a climate-neutral, clean and circular economy as well as in the environment and climate change adaptation. They are thus making an important contribution to achieving the goals of the European Green Deal.

By the end of 2022, the following tangible achievements had been recorded:

·6 000 MW of renewable energy production capacity had already been installed (the target is 8 700 MW);

·over 550 000 households had benefited from improved energy performance conditions (the target is 620 000 households);

·3.5 terawatt-hours of energy consumption in public buildings was being saved annually (the targeted reduction is 6.5 terawatt-hours);

·flood protection measures will reduce the vulnerability of almost 20 million people, of which 17 million are already being less exposed to flood risks due to investments supported;

·progress has continued with improving the management of agricultural and forest land on restoring, preserving and enhancing ecosystems, including biodiversity, water and soil, carbon sequestration and conservation, and reducing the emission of greenhouse gases and ammonia emissions in agriculture. At the end of 2022, the EU had already exceeded its 2025 targets in these areas;

·EUR 1.8 billion (equal to nearly 34% of the total EMFF support committed to the fisheries and aquaculture sectors) had been allocated to preserving and protecting the environment (for example, through protection of Natura 2000 areas) and to promoting resource efficiency and reducing waste.

Sustainable growth investments make up around 37% of the total ESI funding. EUR 273 billion is planned for the four themes of the sustainable growth chapter. They cover investments in: a low-carbon economy (EUR 55 billion), climate change adaptation and risk prevention measures (EUR 51 billion), environment protection and resource efficiency (EUR 90 billion) and support for network infrastructures in transport and energy (EUR 77 billion).