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

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.