Resolution of the European Committee of the Regions on EU regions and cities’ support for Ukraine

(2022/C 301/01)

THE EUROPEAN COMMITTEE OF THE REGIONS (CoR),

Delivering concrete solidarity with local and regional authorities

7.

Highlights the extraordinary solidarity with people fleeing the war in Ukraine shown by EU citizens; expresses its concern about Ukrainians being deported against their will to Russian controlled territory; commends the European Union authorities for their unity in the face of Russia’s war on Ukraine, for stepping up solidarity through direct humanitarian aid and emergency civil protection assistance, and for activating the immediate protection mechanism for those fleeing the war; highlights that this help will need to be significantly increased in the coming months in order to avoid a humanitarian crisis in EU border regions;

8.

Commits to further mobilise cities and regions to deliver aid to refugees from Ukraine; points in particular to the needs in the border regions in terms of logistical support for initial reception and transit;

9.

Invites local and regional authorities from Europe to request or offer support via the Help Ukraine: Info-Support Hub (1) launched by the CoR;

10.

Echoes the call of Ukrainian and EU local and regional authorities to revitalise or establish partnerships, and city and region twinnings, in view of the reconstruction process;

Strengthening Ukraine’s European perspective

11.

Underlines that Ukraine’s decentralisation and regional development reforms have contributed significantly to the consolidation of local democracy, strengthened self-governance and the overall resilience of the country’s local communities, which is an important element of Ukrainian resistance against the Russian invaders. These reforms were implemented with substantial support from the European Union’s regions and cities, including through the ‘U-LEAD with Europe’ programme, and with targeted support from the CoR, within its Ukraine Task Force and through peer-to-peer cooperation activities. The success of these decentralisation reforms have brought Ukraine closer to the European Union and its values of freedom, democracy and the rule of law;

12.

Calls on the international community to prepare an assistance and recovery plan for Ukraine to support Ukraine’s economy, its institutions and public services, and the reconstruction of its destroyed infrastructure; welcomes in this context the European Council’s decision to set up a Ukraine Solidarity Trust Fund and calls for an International Conference to raise funding among partners; underlines that Russia, being responsible for the destruction caused, must also contribute with war reparations to the rebuilding of Ukraine;

13.

Supports Ukraine in obtaining EU candidate status in line with Article 49 of the Treaty on European Union and under the same revised accession negotiation methodology applied to the Western Balkans, with a stronger focus on the rule of law and democratic institutions; stresses that Georgia’s and Moldova’s applications to become EU candidate countries should also be positively treated; in the meantime, Ukraine’s integration into the EU single market along the lines of the Association Agreement needs to be pursued without delay;

Financing support measures

14.

Welcomes the European Commission’s CARE (Cohesion’s Action for Refugees in Europe) and CARE+ packages, and the flexibilities in the framework of REACT-EU, and underlines the benefits of directly involving regional and local authorities in the planning, management and implementation of the CARE and REACT-EU packages; stresses that adaptations of cohesion policy programmes need to be consistent with the principle of ‘do no harm to cohesion’ recently introduced in the 8th Cohesion report;

15.

Stresses that, both during the COVID-19 pandemic and in replying to the consequences of the war in Ukraine, cohesion policy has proven that it can deliver short-term results when needed; insists, however, that the actual aim of cohesion policy to strengthen economic social and territorial cohesion by reducing disparities between regions should not be put in competition with these aims;

16.

Welcomes the suspension of cross-border cooperation programmes involving Russian and Belarusian partners; calls for the existing programmes between EU regions (Poland, Hungary, Romania, Slovakia) and Ukraine to be strengthened; underlines that the financial support for local and regional authorities bordering Ukraine and non-bordering countries receiving the highest number of refugees is highly insufficient and needs to be significantly boosted given their role not only in providing shelter to refugees but also in integrating them into their education, healthcare and housing systems;

17.

Supports the establishment of a permanent crisis reserve to cushion future emergencies, complementing or reinforcing the existing contingency and flexibility instruments; calls for the creation of a single EU-Ukraine Refugees Local Facility gathering all funding available to local and regional authorities for sheltering refugees, with a view to simplifying, mainstreaming, and accelerating the use of funds at their disposal;

18.

Notes that, in the case of the most affected Member States and regions, it might be necessary to revise their Recovery and Resilience Plans, on the basis of a proper consultation of regional authorities, particularly in the light of the growing economic impact of the war on EU countries;

Reception of refugees fleeing from Ukraine

19.

Stresses that local and regional authorities are on the frontline when it comes to receiving the millions of refugees in neighbouring countries, as well as the internally displaced people in Ukraine (2), this being the biggest refugee crisis in Europe since the Second World War; underlines that all refugees, regardless of their origin and political or sexual affiliation should have the right for an equally positive welcome as the ones coming from Ukraine in all regions and cities in the EU;

20.

Welcomes the activation of the Temporary Protection Directive, which now has to be fully implemented in a well-coordinated, generous, inclusive and flexible way, guaranteeing access to the labour market, housing, healthcare, education and welfare support for all people fleeing Ukraine, with a focus on vulnerable groups, especially women and children, and regardless of their origin, ethnicity, political affiliation or sexual orientation;

21.

Draws attention to the specific features of the Council Directive 2001/55/EC (3) on Temporary Protection, which gives refugees the freedom to choose the EU Member State in which they wish to settle temporarily (Article 26), and underscores that recognising free movement rights and the autonomy of refugees has the positive result of alleviating pressure on national asylum systems, and on the reception capacities in border regions;

22.

Calls for the setting-up of a voluntary European relocation scheme, taking into account the reception capacities of regional and local authorities; reiterates here its call for EU cities and regions to be granted direct access to EU funding for migration and integration; calls on the Commission to put forward a working refugee distribution scheme for future refugee crises; calls on EU Member States to recognise and follow up on such voluntary pledges;

23.

Stresses that many Ukrainian refugees are particularly vulnerable and approximately half are minors; points out that, among the hundreds of thousands of children fleeing, many are unaccompanied and need special protection and care; supports a ‘Child Protection Package’ for Ukrainian refugee children, with priority given to the need for them to attend school;

24.

Calls for strong measures to prevent human trafficking, as the majority of people fleeing Ukraine are women and children, and human rights reports have shown an increase in cases of organised crime groups targeting and exploiting them, particularly for the purposes of sexual or labour exploitation;

25.

Underlines the need to provide language courses, education and training; points in this regard to the potential of the CoR’s Cities and Regions for Integration of Migrants network;

Impact on EU policies

26.

Encourages immediate steps in all European regions to reduce the EU’s dependence on third countries, and particularly on Russian energy imports, and calls on the European Commission to support their efforts;

27.

Supports the call for a full ban on the imports of Russian gas, oil and coal in Europe and encourages local and regional authorities to start drafting emergency plans to prepare for the consequences of such sanctions;

28.

Considers the REPowerEU plan (4) a way to accelerate the clean energy transition, increase the EU’s energy security, reduce the EU’s dependence on imports of fossil fuels and raw materials from third countries, particularly from the Russian Federation, and thus diminish the political, economic and security risks resulting from these imports; calls for massive investments and concrete measures to boost renewable energies, energy efficiency and saving, circularity, electrification, and research in alternative sustainable fuels as truly long-term secure and affordable solutions;

29.

Insists that the impacts of the war should not come at the detriment of climate action and sustainability, as provided for both in the Paris Agreement and in the UN Agenda 2030 on sustainable development, and reaffirms its commitment to the European Green Deal, which is also the path for strengthening the EU’s strategic autonomy;

30.

Considers the EU’s efforts to increase its energy independence must include the complete abandonment of the Nord Stream and Nord Stream 2 projects;

31.

Strongly welcomes the recent synchronisation of Ukrainian and Moldovan electricity grids with the Continental European Grid;

32.

Echoes the call of Ukrainian local and regional authorities on the international community to assist them with managing the environmental emergencies caused by the invasion, including at the sites of nuclear power plants and chemical factories;

33.

Welcomes the European Commission’s decision to start negotiations with Ukraine for the country to join the LIFE programme in order to benefit from financing to help restore its environment after the destruction from the Russian invasion, be it pollution, destruction of ecosystems, or other long-term effects;

34.

Stresses that the conflict will inevitably have severe consequences for the EU’s agri-food sector, considering that Ukraine and Russia are significant exporters of several agricultural products (such as grain and oilseeds) as well as of nitrogenous fertilisers; underlines that the EU must reinforce its commitment to deliver on sustainable food systems while guaranteeing the affordability of quality food for everyone by reducing dependencies on key imported agricultural products and inputs; expresses deep concern about the fact that the disruption of exports from Ukraine and Russia has already led to huge global increases in the prices of agricultural commodities and that the consequences are being felt especially in the world’s poorest countries and regions;

Further considerations

35.

Supports the rights of the Russian and Belarusian people who protest against Putin’s war and defend their rights to fair elections, freedom of expression and assembly, and demands the immediate release of unjustly detained protesters;

36.

Supports further coordinated robust sanctions against Russia and Belarus to effectively thwart Russia’s capabilities to continue the aggression; suggests that the Commission present guidelines on the enforcement and implementation of the sanctions, given that there is still divergence, including at regional and local level, in the instruments and procedures being used to verify the ownership status of companies, assets and real estate;

37.

Underlines that all candidate and potential candidate countries for EU membership should be encouraged to follow the sanctions agreed upon at EU level to stress their commitment to the EU and its values;

38.

Condemns Russian propaganda and hate speech, which fuels the conflict and assists the perpetrators of war crimes; calls for effective measures at European, national, regional and local level to counter and dispel such propaganda; contests demonstrations in support of the Russian aggression in European cities;

39.

Instructs its president to forward this resolution to the European Commission, the European Parliament, the French and Czech presidencies of the Council of the EU, and the President of the European Council, and to the President, the Government and the Parliament of Ukraine.

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(1)  Help Ukraine: Info-Support Hub — is a matchmaking platform to link transit regions and overburdened local and regional authorities with those from other EU Member States that have capacities to help.

(2)  Ukraine Refugee Situation (unhcr.org).

(3)  Council Directive 2001/55/EC of 20 July 2001 on minimum standards for giving temporary protection in the event of a mass influx of displaced persons and on measures promoting a balance of efforts between Member States in receiving such persons and bearing the consequences thereof (OJ L 212, 7.8.2001, p. 12).

(4)  Commission Communication on REPowerEU: joint European action for more affordable, secure and sustainable energy, 8 March 2022.

Resolution of the European Committee of the Regions — REPowerEU: cities and regions accelerating the energy transition

(2022/C 301/02)

THE EUROPEAN COMMITTEE OF THE REGIONS (CoR),

—	having regard to high and increasing energy prices, which have been eroding the purchasing power of households and enterprises since Summer 2021, driven by the global demand for energy, in particular gas, as we recover from the COVID-19 pandemic;

—	having regard to the Communication and toolbox of the European Commission (EC) on tackling rising energy prices, of 13 October 2021;

—	having regard to the unprovoked and unjustified invasion of Ukraine on 24 February 2022 by the Russian Federation, with the support of Belarus;

—	having regard to the EC Communication on REPowerEU: a joint European action for more affordable, secure and sustainable energy of 8 March 2022;

—	having regard to the Versailles Declaration issued by the EU Heads of State or Government at the informal meeting held on 10 and 11 March 2022;

—	having regard to the EC Communication on Security of supply and affordable energy prices, the Proposal for a Regulation on gas storage, and the Temporary crisis framework for flexibility under State aid rule, of 23 March 2022;

—	having regard to the joint Task Force on Energy Security to be immediately established by the European Commission and the United States;

—	having regard to the Presidency conclusions of the European Council of 24 and 25 March 2022;

—	having regard to its current work on the Fit for 55 package delivered through opinions and the Green Deal Going Local working group;

On facing multiple crises

1.

welcomes the initiatives envisaged by the European Commission to address the current high energy prices, which have been increasing since summer 2021, exacerbated by the Russian Federation’s illegal, unprovoked and unjustified war in Ukraine; underlines that it is not sufficient simply to phase out our dependence on the supply of fossil fuels from the Russian Federation only, but considers the REPowerEU plan a way to accelerate the energy transition, to reduce the EU’s dependence on imports of energy and raw materials in general and thus to diminish the political, economic and security risks resulting from these imports; nevertheless, deeply regrets the lack of clear reference to the role of cities and regions, both in terms of facing the current energy crisis and of providing long-lasting solutions to it;

2.

also expresses its concern about the expected asymmetric regional impact of the energy crisis on EU cities and regions reflecting their different abilities to respond to the disruption of energy supplies and rising energy prices and calls on the European Commission and Member States to take these asymmetries duly into account when devising and implementing the respective measures;

3.

is deeply concerned at the findings presented in the latest IPCC report on Climate Change 2022 — Impacts, Adaptation and Vulnerability (1), which confirms that many of the impacts of climate change are already irreversible; underlines the importance of not further delaying adaptation and mitigation measures, in which local and regional authorities are key actors;

4.

highlights that the objective of energy security should ultimately support the objective of climate neutrality and the energy transition. The pathway to secure, affordable and sustainable energy is the only future-proof approach to the present crisis; in this context, calls on the EU’s co-legislators to be more ambitious and to accelerate the adoption of the ‘Fit For 55 package’, which takes special account of the CoR opinions on the revisions of the Renewable Energy Directive (RED) and the Energy Efficiency Directive (EED) and on the Energy Performance of Buildings Directive (EPBD);

5.

welcomes the recognition of energy efficiency as a first principle and reiterates the crucial role of EU regions and cities in boosting energy efficiency gains; calls on the Commission to include in its strategy the concept of energy sufficiency (2) — an approach that aims to achieve a situation where ‘everyone has access to all the energy services they need and a fair share of the energy services they want whilst, at the same time, the impacts of the energy system do not exceed environmental limits’;

6.

highlights the key role played by the existing innovative governance tools for cooperation and capacity-building such as the Covenant of Mayors, the Energy Poverty Advisory Hub, the European Climate Pact, the Clean Energy for EU Islands initiative, and similar EU initiatives to enhance the much-needed transition towards affordable, sustainable and secure energy;

7.

calls on the Commission and Member States to support the creation of one-stop-shops to implement the REPowerEU plan at regional and local level, in close cooperation with the European Investment Bank;

8.

calls on the Commission to promote the systematic replication of current best practices through dedicated technical and financial support for LRAs, with the aim of reducing the initial cost burden of energy efficiency measures, paying particular attention to vulnerable households, micro and small enterprises and consumers;

9.

considers that the Toolbox for tackling energy prices (3) has made a first attempt to propose tools to mitigate the social consequences of the current energy crisis, but has not proven to be as effective as needed, and should be reinforced; considers that emphasis should be placed on long-term solutions for a fossil fuel-free and energy-independent Europe, with transformative changes in all sectors to eradicate energy and mobility poverty;

10.

asks the Commission to take into account the challenges of regions that depend on fossil fuels and that cannot connect to the continental network — such as the outermost regions — when providing long-term solutions for energy sufficiency;

On boosting renewable energy, energy efficiency and energy savings together through the REPowerEU plan

11.

calls on the Commission and Member States to ensure that massive investments and concrete measures to accelerate the deployment of renewable energies and to boost energy efficiency, energy saving and research in alternative sustainable fuels are prioritised and fully coupled together;

12.

looks forward to the upcoming EC proposal to ensure a faster permit-granting procedure, in compliance with the principle of subsidiarity in the field of renewable energies and calls for similar action to be put in place for key energy efficiency projects; calls on the Commission to strengthen existing tools that provide technical support to local and regional authorities; therefore welcomes the proposal for a European Solar Rooftops Initiative in the upcoming EC communication on solar energy strategy scheduled for June; calls on the Member States to put in place purchasing incentives, such as short-term grant programmes for consumers;

13.

highlights the decisive role that public acceptance of infrastructure projects plays in accelerating planning and permit-granting procedures and calls on the Commission and the Member States to encourage the dissemination of good practices in this field, such as those mentioned in the recent infrastructure report by the CoR’s Network of Regional Hubs;

14.

considers the decarbonisation of public and private buildings to be a central part of the European Green Deal and a key part of the solution to the current crisis to slash gas demand; urges the Commission to speed up both the rollout of heat pumps (4) as part of the REPowerEU plan and research into innovative solutions that make our building stock as smart and climate-neutral as possible;

15.

calls on the Commission also to facilitate public-private building renovation consortia of industries and local and regional authorities to showcase integrated renovation packages of heating and cooling upgrades for buildings, to set up an industrial insulation programme to capture cost-effective investments with short pay-back times and to support the training of the renovation workforce;

16.

notes that the potential for energy savings is underleveraged in the REPowerEU communication and calls on the Commission and Member States to consider measures such as campaigns to encourage behavioural change;

17.

regrets the delay in the adoption of the Nature Restoration Law and stresses that the protection and restoration of biodiversity is inherently linked to climate adaptation and must remain a key pillar of the green transition under the European Green Deal; asks the Commission to fully involve regional and local authorities in the identification of ‘go-to’ areas for the deployment of renewable energy projects in accordance with the principle of subsidiarity, with a view to ensuring that they fully comply with the ‘do-no-harm’ principle;

18.

believes that energy security and climate neutrality can only be achieved if the European Union relies on a robust and fully interconnected internal electricity market and a well-functioning carbon market; highlights that any short-term temporary actions, such as improved fossil gas storage and increased LNG imports, should not create additional lock-in and should be ‘green gas ready’, to prepare for climate neutrality with renewable hydrogen and other renewable fuels; urges that our gas, hydrogen and electricity interconnections be completed and improved throughout the European Union, including the full synchronisation of power grids;

19.

stresses the importance of fully encompassing and benefiting from the contributions of ‘prosumers’ and local renewable communities and suggests a less restrictive definition of smart grids within the Trans-European Networks for Energy (TEN-E) framework and infrastructure; underlines that there is a need to connect new small-scale producers to the low- and medium-voltage networks; calls on the Commission to provide a framework for the aggregation of several smaller projects, with flexibility especially for border regions, to be able to set up certain aggregated cross-border projects and to potentially obtain financing for these efforts; highlights that European Groupings of Territorial Cooperation (EGTC) can play a significant role in these projects; points to the indispensable role played by rural areas in renewable energy production;

20.

highlights that the current energy crisis represents an opportunity to significantly increase electrification and the production of renewable hydrogen as clean solutions to decarbonise our economy; calls on the Commission to put forward ambitious and concrete actions to implement the Hydrogen Accelerator, including a fixed timeline for each action; as a key action in this connection, calls on the Commission to establish an EU initiative for hydrogen valleys that should strengthen hydrogen valleys, provide structural support for European networking and cross-border cooperation, and comprise funding from the EU Innovation Fund as well as increased funding via the Clean Hydrogen Partnership Joint Undertaking; welcomes the proposal for a Global European Hydrogen Facility and calls for the structural involvement of those EU regions that are already active in the field; calls on European legislators, when adopting the ‘Fit for 55’ package, including the legislative package on the decarbonisation of the gas market, to support the accelerated uptake of green hydrogen in a consistent way;

21.

calls for an update of current State aid rules to make them optimal for the co-funding, operation and further development of electric public recharging infrastructure and considers that related investment costs should be eligible for public support, as was put forward in the recent infrastructure report by the CoR’s Network of Regional Hubs;

Towards a REPowerEU plan in partnership with cities and regions

22.

stresses that the upcoming REPowerEU plan should include a plan on financing and channelling existing or new EU funding to support implementation by local and regional authorities; calls on the Member States to redirect unused funds from the Recovery and Resilience Facility to support local planning for energy security and investments in renewable sources;

23.

calls on the Commission to be included as institutional partner within the newly established Energy Poverty and Vulnerable Consumers Coordination Group, in order to facilitate the exchange of information and coordination between the Commission and Member States on questions relating to the design and implementation of the upcoming REPowerEU plan, Union legislation, programmes and policies addressing vulnerable households and consumers affected by energy and mobility poverty at all levels. The CoR stands ready to contribute to this interinstitutional cooperation through its Working Group Green Deal Going Local by identifying bottlenecks, ways and means to frontload and ramp-up the Fit-for-55 measures at local and regional level, including through exchange of best practices, experiences and expertise;

24.

notes that the European Regional Development Fund (ERDF) regulation requires a minimum level of 30 % of resources in all categories of regions to be dedicated to making Europe and its regions greener, low-carbon and resilient; calls on the Member States and regions to make use of the possibilities offered by the European Structural and Investment Funds (ESIF) to finance projects on the energy transition, including on energy efficiency, renewable energy, and developing smart energy systems, grids and storage outside the TEN-E framework;

25.

welcomes the launch of a special call under the Technical Support Instrument (TSI) to support Member States in phasing out their reliance on fossil fuels from Russia but regrets the short deadline for the submission of requests for this specific support; calls on the Commission to make the TSI more readily available to support local and regional authorities, especially those in less-developed regions facing the largest capacity gap, as this discourages them from making the best use of RRF support when implementing investments and reforms; stands ready to support the Commission in ensuring the effective uptake of this instrument by cities and regions;

26.

recognises carbon pricing as a crucial tool for driving the EU’s increased climate ambitions and supports an all-sector approach to making these ambitions a reality; welcomes the fact that the Commission recognises these risks and the proposals to address them, such as amending the EU Emissions Trading System State aid Guidelines; highlights that some of the proposed measures, such as increased taxation of windfall profits, may not provide reliable support; is aware that the introduction of emissions trading in the road transport and building sector (ETS II), in combination with insufficient investment in these sectors and the increase in fuel prices could exacerbate the risk of energy and mobility poverty; therefore calls on the Commission and the co-legislators to introduce an obligation for Member States to set a minimum percentage threshold of at least 20 % of revenues generated from the auctioning of ETS allowances to be managed directly by local and regional authorities;

27.

welcomes the adoption of the Temporary Crisis Framework to enable Member States to use the flexibility provided for under State aid rules to support the economy in the context of Russia’s war in Ukraine; highlights that the possible negative effects on competition and distortion of the Single Market must be carefully monitored. Notes that the recent CoR RegHub infrastructure report (5) touches upon State aid and expresses the view that the current State aid rules are not optimal for the co-funding, operation and further development of electric public recharging infrastructure; a future review should consider investment costs to be eligible for public support;

28.

notes with concern that the current crisis will have a major impact on public finances, and therefore calls on the Commission to extend the application of the general escape clause of the Stability and Growth Pact (SGP) until a new economic governance framework is agreed, and at least until the end of 2023; public investments in support of the environmental transition, and in particular energy efficiency and renewable energies, should not be counted as structural expenditure in the economic governance framework;

29.

welcomes the measures provided for in Article 5 of the Electricity Directive regarding the electricity market, as well as the guidelines given (6) on the possibility for Member States to intervene in setting prices for electricity supply; considers that, in view of the current geopolitical situation and its consequences for the energy market, with the increase in and volatility of electricity prices, Member State intervention will be essential, with the dual aim of protecting vulnerable households and micro- and small enterprises and of enhancing competition, to the benefit of consumers over the long term. Nevertheless, it reiterates (7) that these measures must be limited in their duration, linked to the emergency aspect of the energy crisis and must never become a structural change that could undermine the liberalisation of electricity market management; in light of the increasing low cost of renewable power generation, suggests considering decoupling gas and electricity as a possible measure to prevent high gas prices from affecting power prices;

30.

welcomes the legislative proposal to ensure an adequate level of energy storage in the EU for next winter and beyond; underlines that the establishment of such minimum levels should take regional risk assessments into consideration;

31.

stresses the need for a better understanding of regional re- and upskilling needs and opportunities; calls on the Commission to use initiatives such as Erasmus+ and Horizon Europe to ensure closer collaboration between industry and the academic world and to launch the Pact for Skills in key industrial ecosystems such as the hydrogen, solar, heat pump and wind sectors; calls on the Member States to accelerate their use of the European Social Fund+, the Just Transition Fund and the Recovery and Resilience Facility (RRF) to boost the reskilling and upskilling of the workforce, in line with the need to adapt professional practices to circularity, the use of low-carbon materials and new technologies.

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(1)  https://report.ipcc.ch/ar6wg2/pdf/IPCC_AR6_WGII_FinalDraft_FullReport.pdf

(2)  https://www.energysufficiency.org

(3)  Tackling rising energy prices: a toolbox for action and support, 13 October 2021 (COM(2021) 660 final).

(4)  Heat pumps, which resemble air conditioners and are placed outside buildings, warm homes by moving rather than producing heat. Using electricity, they extract and concentrate heat either from outdoor air, the ground or water and then ‘pump’ that warmth into the house.

(5)  https://cor.europa.eu/en/news/Pages/reghub-launches-consultation-on-21st-century-rules.aspx

(6)  See Annex 1 of the European Commission’s REPower EU Communication.

(7)  See CoR Opinion on ‘Renewable energy and the internal market in electricity’ (OJ C 342, 12.10.2017, p. 79), by D. Matoniene (LT/ECR), Article 20.

Opinion of the European Committee of the Regions — Strengthening the EU-UK relationship at subnational level and remedying the territorial impact of the UK’s withdrawal from the EU

(2022/C 301/03)

Rapporteur: Michael MURPHY (IE/EPP), Councillor, Tipperary County Council, Mayor of Clonmel Borough District

POLICY RECOMMENDATIONS

THE EUROPEAN COMMITTEE OF THE REGIONS (CoR),

General remarks

1.

welcomes the Trade and Cooperation Agreement (TCA) between the European Union (EU) and the United Kingdom (UK) which fully entered into force on 1 May 2021 and provides a stable legal framework for the bilateral relationship. The CoR supports a joint and responsible approach to the implementation of the TCA, including the Northern Ireland Protocol and the respect of the level-playing field, and acknowledges the European Commission’s efforts to find creative solutions, in particular for issues arising between Northern Ireland and the rest of the UK;

2.

recalls that the TCA (1) is a Free Trade Agreement (FTA) (2) and includes provisions for cooperation on economic, social, environmental and fisheries issues, but also entails a ‘close partnership on citizens’ security’ and an overarching governance framework. The CoR notes that the TCA includes areas of Member State competence, which in some EU Member States are in the remits of regions with legislative competences;

3.

regrets therefore that the TCA lacks ‘territorial depth’ and does not duly recognise the role of local and regional authorities (LRAs) in the EU-UK relationship and refers to LRAs only when it comes to adapting some elements of the agreement to specific regional conditions (3) or on very specific issues such as fiscal provisions (4). The CoR highlights that the TCA includes a defined role for civil society, which is considered an element per se of the ‘Institutional framework’ (5);

4.

welcomes the cooperation between the European Union and the United Kingdom in reaction to the Russian aggression in Ukraine and highlights that local authorities across Europe are at the frontline of providing practical and humanitarian support;

Aiming for a greater institutional recognition of the EU-UK relationship at subnational level

5.

stresses that the CoR-UK Contact Group (CG), established in February 2020, is the only institutional channel for providing a forum for continued dialogue and political partnership between the EU and UK local and regional authorities and for exchanging know-how, in particular on territorial cooperation and cross-border issues; Recognises that the CG provides the space for mutual benefit and shared interest to discuss problems or opportunities, particularly in relation to thematic areas that know no boundaries (e.g. climate change, tourism, the digital and green transition and common cultural heritage) arising from the UK’s withdrawal from the EU. It also gives CoR representatives the means to discuss such issues with UK local and regional authority representatives, and thus allows for the CoR to maintain and foster such fruitful relationships at the subnational level;

6.

recognises that the relationship between the EU and the UK, taking account of the unprecedented withdrawal of a Member State from the EU, will remain the most intense and multi-dimensional of any relationship with a third country and the relationship at the subnational level deserves recognition. It therefore, calls for the formal recognition of the CoR-UK Contact Group and as an official sub-national interlocutor between EU and UK local and regional government under the TCA in order to provide an assessment of the subnational dimension of the key policy and legislative issues that will have an impact on the UK-EU bilateral relationship, just as the Parliamentary Assembly, the Civil Society Forum and the UK-EU specialised committees will undertake in their areas of interest. The CoR also calls on LRAs in the UK to continue to work with the UK Government on formal recognition of the CG;

7.

urges the European Commission to re-examine the structures of the Joint Partnership Council, which oversees the implementation and application of the TCA, to seek to address the lack of territorial depth by involving LRAs in the monitoring and governance of the TCA. The establishment of local dialogues (technical concertation) to address topics of local competences (fisheries, training, mobility, territorial cooperation…) would contribute to an improvement in EU/UK relations at the macro level;

8.

encourages the European Parliament to adopt a formalised interaction in a mutually beneficial way on points of common concern between the CoR and the European Parliament’s Delegation to the UK (D-UK) to the EU-UK Parliamentary Partnership Assembly (PPA) to provide territory-based evidence about the implementation of the TCA;

9.

appreciates the ongoing political and technical level talks to resolve the issues arising from the implementation of the Northern Ireland Protocol, is also aware of the ongoing work by the European Commission to finalise a Treaty on Gibraltar, but emphasises nonetheless that such developments that remain to be worked out should not hamper the pressing willingness of Local and Regional Authorities to chart out ways of cooperation;

Remedying the territorial impact of Brexit

10.

considers that since early 2020, it remains difficult to disentangle the effects emerging from the negotiation and entry into force of the TCA from those of the COVID-19 pandemic (6). Welcomes the recent CoR study on New trade and economic relations between EU-UK: the impact on regions and cities which concludes that Brexit effects are asymmetric across sectors and EU regions, impact more heavily on smaller companies, may reduce human capital mobility and cooperation between EU and UK enterprises, and negatively affect regions and communities involved in interregional projects with the UK; welcomes the fact that the study confirms that an increase of the Brexit Adjustment Reserve budget will be necessary to address these asymmetric impacts in Europe;

11.

recognises that the territorial impact of Brexit is felt in regions right across the EU and the issues are, amongst others, economic, environmental, social, cultural and educational — from trade at major ports that are particularly exposed, such as those of Antwerp, Calais, Cork, Dover, Dublin, Rotterdam and Zeebrugge, to the future of student exchanges, university sectors collaborating on climate adaptation and change, regional trade agencies scoping alternative markets and working out citizens’ issues including mobility and integration;

12.

stresses the importance of the Brexit Adjustment Reserve (BAR) in mitigating the most immediate costs and assessing the longer-term assessment needs of the impact of Brexit, supporting the Member States’ regions and economic sectors, including job creation and protection, such as short-time working schemes, reskilling and training and scoping out new markets;

13.

the CoR therefore insists that the provisions of the BAR Regulation relating to the involvement of regions and local communities in the implementation of the BAR and the reporting at NUTS 2 level are fully respected. The CoR also recalls that, with a view to the programming of BAR funds, it had requested a focus on SMEs, on measures aimed at the reintegration of EU citizens and on technical assistance. In terms of distribution of funds, the CoR advocated a minimum coverage/threshold for the new maritime border regions with the UK and an allocation of the envelope on fisheries without national indexation;

14.

at present, the CoR shares the concern of regional counterparts in the UK suggest that the strategic planning of regional policy suffers from the loss of EU Cohesion policy funding and the lack of multi-annual programming security;

Charting new avenues of cooperation beyond the TCA

15.

stresses the willingness from the grassroots of local government associations and local authorities across the UK and in particular the devolved nations for ongoing, even enhanced, relationships at the sub-national level with EU counterparts in this post-Brexit era;

16.

points out that there is real merit in recognising and fostering the subnational relationship, which is important, as local concertation can contribute to better relationships at the macro level; For example, the re-establishment of a local technical concertation on fisheries in the Channel Islands area could contribute to an improvement in EU/UK relations at the macro level;

17.

welcomes the fact that even if the UK no longer participates in EU funding programmes, it continues to participate in four technical EU programmes: Horizon Europe, Copernicus and satellite surveillance, Euratom research and training and ITER. In particular, the first two programmes mentioned are relevant to local and regional authorities. Notes that there are a number of initiatives that regions of the UK continue to participate in, including Scotland and Wales continuing to participate in the Horizon Europe-financed Vanguard Initiative (7), (which accompanies industrial transformation following an inclusive, interactive, and entrepreneurial process built on the Regions RIS3/I3), and Kent County Council participates in the Straits Committee initiative (8);

18.

recalls that some UK regions are still involved in the current programming period (up until the end of 2023) including Interreg North Sea, the Channel Interreg and the Interreg Ireland Wales, and notes that the UK is a major budget contributor to these cross-border programmes of up to a third of the budget. The CoR notes that local and regional authorities will most likely not be able to compensate for the loss of Interreg funding by using regional or local funds;

19.

recognises that in relation to programme closure, particularly where the Managing Authorities are based in the UK (Interreg France (Channel) England, and Ireland Wales) these must be closed under the best possible conditions in the interest of the British and EU beneficiaries and in line with EU requirements;

20.

recognises that the only cross-border cooperation programme surviving Brexit after 2023 will be the PEACE PLUS programme for the period 2021–2027, financed by the EU with approximately EUR 1 billion. PEACE PLUS will combine the existing EU PEACE and Interreg funding components into a single coherent cross-border programme for Northern Ireland and the border counties of Ireland. The programme remains an essential contribution for the implementation of the Good Friday Agreement;

21.

notes that the participation of the UK in Interreg programmes — which already have strong third-country participation, such as the Northern Periphery and Arctic Programme, the North Sea Region Programme and the North West Europe Programme — may be possible if the UK government agrees to fund participation;

22.

stresses that setting up a European Grouping of Territorial Cooperation (EGTC) involving a partner from only one EU Member State, including its outermost regions, and one local or regional authority from the UK may be possible and suggests that EU Member States may consider this tool, if consistent with its territorial cooperation, in seeking collaborations with the UK;

23.

regrets that the impact of Brexit has not been taken into account by the European Commission in the 8th Cohesion Report. The impact has contributed to the disruption of the economy, interregional cooperation, research ecosystems, training systems and demography for a certain number of EU regions. The European Committee of the Regions would like to see geopolitical developments better taken into account in the prospective approach to the post-2027 period;

24.

welcomes the fact that UK cities and regions are still actively involved in many EU networks and associations, such as the Congress of Local and Regional Authorities of the Council of Europe and are expected to remain within certain European associative frameworks such as the Conference of Peripheral Maritime Regions (CPMR), Eurocities and the Council of European Municipalities and Regions (CEMR) and that these mechanisms provide for excellent exchange of experiences between UK and EU LRAs;

25.

expresses confidence that cooperation between EU and UK LRAs will continue through twinning, considering that around 100 UK towns and cities (9) have a twinning link with towns and cities in EU Member States; urges the partnerships to continue to explore possible funding methods to support this work, as these partnerships foster sharing of best practices, mutual understanding and common values and are essential to a European way of life;

26.

recognises the importance of educational exchanges for students’ mobility and joint research, as well as the development of language skills and human ties and supports the efforts of UK devolved administrations to open new avenues for cooperation beyond the TCA framework;

27.

pays particular tribute to the Welsh ‘Taith’ programme (10) and welcomes both the Welsh and Scottish international learning exchange programmes, which may at least in part compensate the withdrawal of the UK from Erasmus+ and fill in the gaps left by the UK national Turing Programme (11);

28.

notes that there is a visible trend towards a bilateralisation of relations at subnational level as illustrated by the opening of representations of EU regions in London and elsewhere in UK. The devolved nations in the UK also pursue agendas of ‘global nations’, which prioritise bilateral relationships with European regions. In England, cities and metropolitan areas also initiate bilateral cooperation projects as evidenced, i.e. by the Greater Manchester and North Rhine-Westphalia partnership. While welcoming bilateral relationships, the CoR suggests that this bilateralisation should not be at the expense of local and regional authorities in countries with weaker capacities at subnational level and this support should not be perceived as competing with the CoR’s objective to obtain an institutional recognition of the subnational dimension of the EU-UK relationship;

29.

sees untapped prospects for cooperation between EU and UK local and regional authorities in jointly engaging on common challenges, such as providing humanitarian assistance, the sustainable management of the North Sea, the Channel and the Irish Sea, as well as the global fight against climate change, the implementation of the Sustainable Development Goals at local and regional level and the shift towards more sustainable and digital tourism. In this regards, supports the idea launched by the United Kingdom and France to ensure minimum wages for seafarers and workers operating on intra-European links, i.e. also between the UK and the European Union;

30.

stresses that the relationship between EU and UK regions is also based on common cultural heritages, languages, and Celtic (language) connections, amongst others, shared European values and histories amongst our citizens.

31.

considers that there is an onus on all EU institutions to better grasp and understand the potential of relations and partnerships at the EU-UK subnational level recognising the pivotal role of local and regional authorities as the level of government closest to the citizen;

32.

considers that the creation of comprehensive advisory structures for Brexit preparedness by regional or local authorities is a useful tool for improving relations between the UK and the EU;

33.

concludes that, in considering the future challenges and direction of the EU, in the aftermath of Brexit, there is a need to further understand the challenges and priorities of citizens in the EU and recognises that the Conference on the Future of Europe (COFE) provides and opportune mechanism to do this.

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(1)  Based on Article 217 TFEU.

(2)  Based on Article 207 TFEU.

(3)  Page 61.

(4)  Page 249.

(5)  Page 23.

(6)  See Chapter VI of the CoR’s Annual Barometer 2021: https://cor.europa.eu/en/our-work/Documents/barometer-fullreport%20web.pdf

(7)  http://www.s3vanguardinitiative.eu/members

(8)  The Straits Committee is a multilateral forum for dialogue, providing a flexible framework for its members to work together within the boundaries of their responsibilities and for extending cooperation to local stakeholders such as from the voluntary sector, education or the world of business.

(9)  Office of National Statistics, UK, 2018 Data, published in September 2020: https://www.ons.gov.uk/peoplepopulationandcommunity/populationandmigration/populationestimates/datasets/twinnedtownsandsistercities

(10)  Five-year programme (2022 to 2026) programme launched in February 2022 with Welsh Government funding up to EUR 65 million.

(11)  Which offers no reciprocity, a one-year duration, and a focus on academic staff rather than students.

Opinion of the European Committee of the Regions — New European Bauhaus: Beautiful, Sustainable, Together

(2022/C 301/04)

Rapporteur: Kieran MCCARTHY (IE/EA), Member of a Local Assembly: Cork City Council Reference document: Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: New European Bauhaus — Beautiful, Sustainable, Together COM(2021) 573

POLICY RECOMMENDATIONS

THE EUROPEAN COMMITTEE OF THE REGIONS (CoR),

Introducing the New European Bauhaus

1.

welcomes the European Commission’s interdisciplinary initiative on the New European Bauhaus (NEB), which helps to deliver the EU Green Deal by adding a vital cultural dimension and bringing it closer to citizens. The NEB does so by creating beautiful, sustainable and inclusive spaces and places, products and ways of living which bring out the facilitation of partnerships and the benefits of the environmental reconfiguration and transition using tangible experiences at local level;

2.

acknowledges the enthusiasm and groundswell of support for the NEB from a range of friends, actors, civil society organisations, networks, collectives, regional hubs and platforms and Living Labs, along with the ongoing interest in and work on stimulating creativity and participating in, connecting and shaping the value and principles of the future NEB;

3.

is pleased that the role of LRAs in implementing the principles of the NEB is acknowledged, as they are well placed to contribute to policy development and the implementation of the NEB, in line with the subsidiarity principle;

4.

considers that throughout the EU, cities and regions are at the forefront of culture-led development, and that the local and regional levels have key responsibilities for sustainable urban, regional and cultural policies; therefore, local and regional elected representatives are pivotal when it comes to making the NEB more accessible and engaging members of the public in the transformation process in order to advance the implementation of the NEB;

5.

strongly supports the NEB as a key opportunity to harness the creative potential of regions and municipalities, and thereby create accepted and sustainable solutions that will make the Green Deal a success;

6.

acknowledges the cross-disciplinary nature of the NEB which is woven into a range of EU programmes and funding strands; however, outlines that continued buy-in from current and future partners will be needed;

7.

reaffirms the first key principle of the NEB endorsing a multi-level and place-based approach. In this regard, the CoR points out that change is happening at local and regional level, where a sense of place is also anchored;

8.

is pleased that the Commission’s vision is for rural areas to be represented in the NEB. The various declarations (1) and the Rural Pact provide a framework for the future of rural development policy and action in Europe and are a crucial tool for the NEB to connect with rural areas, which can also be considered as ‛testing grounds’ for small-scale transformative projects;

9.

stresses that the NEB has the potential to be an important instrument in the recovery, providing jobs locally and promoting a mindset change to sustainable and efficient territorial planning, which will affect and improve societal behaviour and mobility;

Areas of concern

10.

is concerned that the Communication remains vague on how LRA engagement will be ensured; the CoR calls for specific proposals on how LRAs and the CoR will be involved in the implementation of the initiative, at the same time taking into account the principle of geographical balance, thus representing local and regional authorities of the whole EU;

11.

stresses that the CoR, together with the other EU institutions, should be part of the enabling network of NEB key partners which will develop and test policy and funding instruments;

12.

calls for the involvement of the CoR and other EU institutions in the High Level Round Table on NEB;

13.

points out that the subsidiarity and proportionality principles will determine at what level the EU and the Member States will make use of the policy tools and legislative measures proposed for the implementation of the NEB;

14.

emphasises that COVID-19 will continue to have an impact in the medium and longer term and that this should be acknowledged in the implementation of the NEB; notes that the pandemic’s negative effects on poverty, social issues and employment must be noted in the implementation of the NEB;

15.

calls on the Commission to ensure that local and regional authorities are at the centre of the strategy, providing technical assistance, appropriate funding and flexibility. The success of the NEB will depend on sustainability and feasibility, taking into account the differences between rural areas and cities;

Financing the New European Bauhaus

16.

calls for sufficient resources from state budgets and EU cohesion policy programmes to be allocated at local and regional level. However, calls for a balance to be struck between creative synergies within the NEB cultural movement and the parameters of EU-funded programmes;

17.

considers that additional funds could be used to pay for external assistance to help with knowledge exchange and to explore the competences of existing public sector staff in a reciprocal and fluid exchange with private, local and third-sector actors;

18.

believes previous experiences, awards and resources that focus on quality, aesthetics and community issues in a circular way could provide incentives for investors and crowd-funders;

19.

calls for public-private partnerships and investments in the broader field of culture and cultural heritage, as called for in Europa Nostra’s Venice Call to Action (2);

20.

points out that the Recovery and Resilience Facility is also an opportunity to support the NEB within the Member States and local authorities;

21.

points out that NEB should be aligned with the 2021-2027 MMF and the EU Urban Initiative and adequate funding to cover the operational costs of local and regional authorities contributing to the NEB should be available; calls for ambitious roadmaps for the implementation of the NEB to be used within the framework of the SDGs;

22.

asks that geographical balance, as well as the climate, economic, social and cultural diversity of the EU be taken into account, as well as funding opportunities and the allocation of funds, when designing and implementing NEB strategies, projects and actions and territorial cohesion should remain one of the key objectives;

Indicators

23.

stresses that local and regional authorities should, in the limits of their competencies, monitor to what extent national governments use the NEB in the various programmes, tools and procedures and expects the European Commission to present clear indicators for such monitoring;

24.

is concerned that there are no indicators in the current EU funding cycle (2021-2027) and this is a missed opportunity for measuring success;

25.

considers that the NEB core principles should be developed in partnership with local and regional governments and considers that the NEB core principles should be mainstreamed as quality criteria for EU funding programmes with a direct or indirect impact on the built environment, urban and rural development, cultural heritage and cultural landscapes;

26.

suggests that a NEB regional scoreboard should be created to establish a strong regional monitoring policy that will ensure that the NEB is implemented at all levels and that regional investments act on the NEB’s principles;

27.

notes that LRAs are responsible for large stocks of local public buildings and urban public spaces and play an important regulatory and funding role in the renovation of these buildings and urban areas. Accordingly, LRAs should focus on identifying regulatory bottlenecks and contribute to simplifying regulation and devising new regulatory approaches;

28.

highlights that the CoR has been involved in developing and supporting climate, energy and environment strategies at local and regional levels. The Green Deal Going Local Working Group could be used to promote the NEB principles and to monitor success;

29.

underlines that dialogue between LRAs on open innovative concepts and processes, interdisciplinary approaches and competences is crucial. This should include the NEB on the CoR’s Knowledge Exchange Platform (KEP), the Science Meets Regions programme and cooperation projects funded by other EU programmes;

30.

emphasises that the NEB should promote gender equality. Gender equality should be a cross-cutting criterion and is a powerful and necessary factor in the sustainable and balanced development of cohesion policy;

The NEB Festival, prizes and lab concept

31.

welcomes the first NEB prize and suggests that synergies be identified with existing awards for housing, cultural heritage, contemporary architecture and landscapes. Also calls for good practices from the 2018 European Year of Cultural Heritage to be shared;

32.

acknowledges the creation of the European Seal of Excellence as a first step towards the NEB label concept, but is concerned that people may expect the NEB Label to have a funding stream. The use of a dedicated label could be considered as a tangible CoR contribution to the development of the NEB initiative, as advocated by the CoR in 2021;

33.

welcomes the NEB Lab and its co-creation methodology, but asks for further information on how it will operate and for the CoR to be an active member of the NEB Lab and its governance;

34.

asks that the Lab test the results/actions selected for the first Award, and could advance and prototype them

35.

is ready to work with national governments, through the CoR Regional Hubs, on developing regulatory sandboxes and testing new regulatory approaches;

36.

notes that the NEB should build on existing good practices across EU cities and regions and create a publically available resource platform;

37.

welcomes the NEB Festival as a tangible, visible way to further foster the engagement of LRAs and members of the public and showcase projects at local and regional level;

38.

highlights the successful work carried out by URBACT, European Territorial Cooperation (ETC) and Horizon 2020 on developing effective interactive tools which should be used when relevant;

39.

points out that the NEB should connect up with Horizon 2020 missions, particularly on Adaptation to Climate Change and Climate-Neutral and Smart Cities.

40.

reiterates the possible advantage of using the European Grouping of Territorial Cooperation (EGTC) instrument for multi-level governance projects involving several countries or a euro-region;

41.

notes that the NEB links the three pillars of the Urban Agenda for the EU (better regulation, better funding and better knowledge (3)) and aims to deliver on them;

42.

notes the ongoing Urban Innovative Actions (the Urban Lab of Europe) and the forthcoming European Urban Initiative. Calls for the NEB to be linked to EU Urban Agenda partnerships, as this Agenda has been working on concepts related to the Green Deal and the NEB for nearly four years;

43.

considers that the NEB has a role to play in the implementation of the 2021 Leipzig Charter and the 2021 Ljubljana Declaration, which call for integrated approaches, a place-based approach, multi-level governance, participation and co-creation methods;

44.

believes that the European Capitals of Culture, EU iCapitals, European Youth Capitals and European Green Capitals can play a strong role in championing the NEB;

45.

welcomes the establishment of NEB national contact points and calls for them to work closely with LRAs and other stakeholders, including civil society, to ensure that the NEB movement can continue to grow in a bottom-up way;

46.

suggests that a training programme for 100 interested cities could be created based on the principles of the NEB. This could use the methodologies of the Digital Cities Programme or the 100 Intelligent Cities programme and its market place concept;

Built environment, architecture and renovation concepts

47.

underlines that the built environment is a reflection of a community, and responsibility for its overall quality rests in the hands of public sector bodies and stakeholders, including civil society, in close cooperation with the public;

48.

points out that Europe’s rich and diverse cultural and architectural heritage is an important benchmark for the quality of our built environment, in terms of user experience and physical assets;

49.

is pleased that the NEB acknowledges the crucial role of urban spatial planning in achieving sustainable urban development;

50.

is pleased that the NEB acknowledges the need for a shared culture of high-quality architecture. This will require raising awareness, disseminating information and promoting the role of culture and cultural heritage, high-quality architecture and built environment;

51.

stresses that the Commission should help the building and construction sector to tackle unsustainable resource use and waste and promote circularity, with a focus on the reuse and recycling of materials. This could be done by closing gaps in knowledge and skills and digitising design;

52.

notes that the NEB can find ways to reduce red tape with a view to making renovation easier and more cost effective; addressing the challenges involved in retrofitting very old buildings and cultural heritage requires the services of architects and other experts as well as highly skilled craftspeople (4);

53.

has no hesitation in saying that LRAs play a pivotal role in ensuring that building renovation meets land use and town planning requirements, promotes policies to counter depopulation and is in line with social equity and green criteria. Points out that Member States’ methodologies for the Renovation Wave must not undermine this fundamental coordination role;

54.

once again calls for the European Semester to take better account of urban issues: economic and social policy coordination in the EU must cover affordable housing, inequality and long-term investments;

55.

welcomes the NEB narrative on exploring solutions to enable access to affordable and decent housing, particularly for young people and other vulnerable social groups;

56.

stresses that the NEB needs to connect up with the European Pillar of Social Rights (EPSR) Action Plan and the 2021 Porto Social Summit Declaration in order to contribute to the reflection on post COVID-19 social and affordable housing at EU level;

57.

calls for the promotion of synergies between art, architecture, landscape and interior architecture, spatial planning, design and craftsmanship, as well as innovative training models for architects and other professionals;

58.

calls for the engagement with the European Skills Agenda as well, therefore to contribute to the promotion and better understanding through the NEB of regional skills-related needs and opportunities in the area of urban planning, construction, sustainable use of construction resource materials, as well as to reduce the migration of skilled workforce that could result in the decrease of local economy in terms of manufacture. In this regard, the Digital Agenda for Europe plays an important role as digital technology can provide citizens with opportunities to co-create their environment and is a vitally important tool in all steps of the development of NEB initiatives;

59.

calls for the NEB to engage with past EU Urban Agenda partnerships, especially in relation to climate action capacity, the Greening Cities proposal and use of public spaces; the partnerships on Sustainable Use of Land and Nature-Based Solutions, the Circular Economy and the Culture and Cultural Heritage are particularly relevant;

60.

highlights that the NEB is a strong tool for unlocking social economy initiatives, as it is based on cooperation and civic engagement. Such initiatives boost social, economic, territorial and cultural cohesion and raise the level of trust at local level throughout the EU;

Cultural heritage quality principles

61.

supports Europa Nostra’s Venice Call to Action, For a New European Renaissance paper and its declaration on shared heritage and memory;

62.

calls for synergies to be identified between the Davos Baukultur Quality Principles, the NEB and the European quality principles for EU-funded interventions with potential impact on cultural heritage, and for these synergies to be mainstreamed in all European policy and funding programmes;

63.

believes that cultural heritage is a vital dimension of the NEB; the Renovation Wave must have a ‘sou’ and an identity, while promoting a holistic view of how we want to develop our cities and regions;

64.

calls for the CoR to work with stakeholders to promote an NEB and ‛Heritage Mayor of the Year’ award;

65.

calls for cultural heritage and the EU Green Deal to be closely interconnected, as demonstrated by the EU Cultural Heritage Green Paper (5);

66.

agrees that public funds for culture-based green strategies need to be mobilised through NEB pilot projects and initiatives addressing the vital cultural dimensions of the green transition and building on the various capacities of local communities and regions;

Conclusions

67.

asks the European Commission to establish better links between the NEB and existing conceptual, culture-related, aesthetics-oriented and design-oriented frameworks. This would translate principles into action and enable the NEB to harness the creative, cultural and cultural heritage potential of local and regional authorities to renovate and revitalize neighbourhoods across the EU. Proposes therefore a NEB Lab voucher scheme whereby interested cities and regions could receive such a voucher which would entitle them to get the necessary support for organising a NEB Lab in their constituency. A condition for receiving such a voucher would be, that (1) the NEB Lab should ‛co-create, prototype and test the tools, solutions and policy actions that will facilitate transformation on the ground’; and (2) the results of the NEB Lab will be presented to the regional or city council;

68.

calls for synergies to be identified between the NEB initiative and processes engaging people in Europe (such as the Conference on the Future of Europe) and strategies and action plans promoting architectural and aesthetic quality (such as the Renovation Wave of the EU Urban Agenda);

69.

believes that the NEB must become a real movement which involves LRAs and is not just another top-down project. Creating a European eco-conscious way of life is crucial for all EU cities and people. It must be a project for everyone, not just the few. Ownership must start with individuals at grassroots level and go beyond large urban areas. Accessibility to ordinary people and civil society organisations is an important positive aspect of the NEB initiative. To be successful, this exercise must be socially, culturally and territorially inclusive.

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(1)  Such as the Cork 2.0 Declaration 2016: A Better Life in Rural Areas.

(2)  Venice Call to Action, For a New European Renaissance which seeks to ‛enable closer and stronger synergies between the business community and the wide cultural, heritage and creative ecosystem, among others through strengthening a strategic alliance between the European heritage movement and the European Investment Bank and its institute’.

(3)  As identified in the Pact of Amsterdam.

(4)  As outlined in Europa Nostra’s European Heritage Green Paper.

(5)  ‘Putting Europe’s Shared Heritage at the Heart of the European Green Deal’, published by Europa Nostra.

Opinion of the European Committee of the Regions — European Missions

(2022/C 301/05)

Rapporteur: Markku MARKKULA (FI/EPP), President of the Helsinki Region Reference document: Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on European Missions COM(2021) 609 final

POLICY RECOMMENDATIONS

THE EUROPEAN COMMITTEE OF THE REGIONS (CoR)

1.

welcomes the EU Missions, as a coordinated effort by the Commission to pool the necessary resources in terms of funding programmes, policies and regulations, as well as other activities to mobilise and activate public and private actors, to co-create real and lasting impact to boost societal uptake of new solutions and approaches. The CoR stresses the need for an inclusive approach whereby the EU Missions, alongside EU-wide cohesion policy, and all other EU financing instruments, should be used to promote territorial cohesion and to reach the Sustainable Development Goals;

2.

emphasises (1) that, in the light of the Conference on the Future of Europe, the European Missions, as a new and vital instrument in tackling burning societal challenges, are a real test of the EU’s impact and credibility. They need to have widespread legitimacy and acceptance. As the European Commission has highlighted, the role of cities and regions with all their stakeholders and citizens is crucial in achieving the ambitious targets of the EU Missions;

3.

reiterates the CoR statement (2) of support for the implementation of the EU Missions as a bold step towards addressing societal challenges, and underlines the need for an effective system of multilevel governance that combines the EU Missions with local and regional development strategies, smart specialisation strategies, the COVID recovery measures and innovation funding through the structural funds;

4.

urges the key decision-makers in the EU and the Member States to react with a swift and decisive response to the situation in Ukraine, including in the launch of the EU Missions, especially the City Mission. Funding criteria in NextGenerationEU Funds and other public financing sources need to be flexibly geared towards getting part of the City Mission activities to form European energy transformation highways. These should support public-private research in the development of new energy system solutions. In particular, cities and other public actors can use innovative public procurement, together with companies, to accelerate the deployment of renewable energy sources and create sustainable, innovative energy solutions to replace fossil fuels now purchased from Russia to EU countries;

5.

welcomes the fact that the European Missions Communication (3) duly acknowledges the relevance of local and regional authorities in the delivery, as well as in the design and communication phases of the European Missions;

6.

emphasises that, in the light of co-creating knowledge and know-how, the EU Missions’ implementation needs to be rooted in the everyday work focusing on developing and renewing the processes of cities and regions. This will build systematic synergies with EU Cohesion policy, the use of Structural Funds and other dedicated instruments. This will also showcase globally the potential of regions and local communities and the role of municipalities in making the targeted transformations happen;

The EU Missions as an ambitious new instrument to tackle grand societal challenges

7.

acknowledges that the EU Missions are planned to be a ‘new’ and vital’ instrument as stated by the European Commission: ‘EU Missions are a new way to bring concrete solutions to some of our greatest challenges by delivering concrete results and impact by 2030 by putting research and innovation into a new role, combined with new forms of governance and collaboration, as well as by engaging citizens’ (4);

8.

reminds that each EU Mission should define a clear roadmap and create a systemic new multi-governance approach and methodologies on experimenting, prototyping, monitoring, and scaling-up activities at all governance levels. Special attention is needed for creating portfolios of actions both at the EU and regional/local levels and disseminating these effectively in all phases of planning and implementation. This requires the involvement and engagement of local and regional authorities and partnerships in sharing the effective innovative governance experiences;

9.

points out the need to allocate Mission funding to local and regional levels for co-creating non-standard breakthroughs in many ‘stuck situations’ which too often block adequate progress in achieving new solutions and impact. This requires new European partnerships based on local and regional interests defined in Smart Specialisation Strategies. The EU Missions should use the experiences the CoR and JRC joint piloting exercise ‘Partnerships for Regional Innovation’ will bring;

10.

encourages the EU Missions to stress the progress toward humanity and human-centricity on which sustainability in all its dimensions — ecological, economic, social, and cultural — is the driver of change in reaching the ambitious targets of the EU Missions. The quality of life can be increased only by working together consciously in complex entities. In this, we need to find a better balance between material and intangible well-being in Europe and globally. Nature makes it possible to live on this planet. We must respect the human dependence on nature;

11.

stresses that the EU Missions need to co-create new ways to operate. The development requires all the actors to learn new competencies by integrating technology and research with a human-centric approach, committing to implement joint green and digital transformation processes, and securing access to the needed resources. The requirements are essential in creating well-functioning regional and local RDI ecosystems which build new innovative knowledge bridges to connect top-level European knowledge creators with regional and local living labs and other experimentation centres, as well as demonstration activities such as lighthouses. With the help of these, all cities and regions can create bench-learning processes and peer networking to use the concepts and solutions of forerunners in smart and sustainable practices;

12.

points out that regional and local governance, foresight, and increasing RDI investments are the cornerstones of the EU Missions’ portfolios, consisting of professionally orchestrated actions at the European, national, regional, and local level. Orchestration in the EU Missions increases collaboration, motivation, and capabilities, in other words, competitiveness by co-creating new portfolios and actions. Orchestration involves many parallel steps and multi-governance activities across disparate systems. The financial instruments, both public and private, need to be engaged, and support needs to be provided especially to less developed regions to encourage all regions to improve their RDI systems and contribute to the implementation of the EU Missions;

13.

recalls its instrumental role, based on its experience with its six commissions and campaigns such as the Green Deal Going Local and the EER European Entrepreneurial Regions, in the implementation of the EU Missions — noting that the CoR provides a natural access point for cooperation with the public and private sector, industry and services as well as with citizens;

The role of cities and regions in the EU Missions

14.

underlines, in accordance with the Joint Action Plan signed 2020 by Commissioner Mariya Gabriel and the CoR, that the CoR with the Member States and European regions and cities is ready to have an active role in co-creating a multi-level governance system to reach the EU Mission targets. Measures to ensure the necessary development will be based on regional place-based innovation ecosystems, and Smart Specialisation Strategies (S3/S4);

15.

can influence the overall EU Missions processes, inform decision-makers, and mobilise regions and cities to become active contributors in different ways, etc. The EU Mission plans have a powerful regional and local place-based dimension, and the implementation mechanisms include proposals putting regions and cities — and their RDI ecosystems — at their centre. Thus, the CoR can cooperate extensively with all partners to ensure that this new, bottom-up policy instrument creates the desired impact;

16.

agrees — employing all the CoR commissions responsible for various mission topics — to assist in engaging as many cities and regions as possible to ensure that regional and local levels support the EU Missions by: a) implementing information campaigns, direct dialogue, and other joint open and interactive engaging processes targeted to different groups including also children under the age of 18, b) getting the forerunner communities to sign in for experimenting with innovative solutions in their real-life practices, c) getting the demonstrator communities to contribute to large-scale deployment processes of innovative solutions and scaling-up the best solutions for European-wide use, d) ensuring that the European diversity of regions with their multiple communities of stakeholders and citizens is broadly in the mission implementation activities;

17.

calls on the Member States to support the implementation of the EU Missions by creating synergies with national and regional programmes and facilitating access to EU and national financing;

18.

urges the ensuring that all urban and rural areas and regions (top, average and laggard performers) have sufficient capacity and capabilities to innovate in their communities and are supported through relevant learning processes that allow them also to operate as platforms for multi-actor service providers supporting others, including all actor groups. The local/regional value-creation processes need to be orchestrated at the level of efficient collaborative value-chains and value-streams developing further the ecosystems;

19.

emphasises that the ambitious targets require, as a crucial precondition, decision-makers, civil servants, and innovation professionals to gain competencies to operate as change agents in acquiring new knowledge and capabilities. The three critical processes are: a) the operational learning processes of cities and regions, with a focus on integrating mission-related activities into other local activities to be part of the normal strategic and operational decision-making, b) motivating and supporting companies and research institutes, universities, vocational institutes, and their place-based and thematic ecosystems to contribute to co-creating new innovative frontrunning solutions, and c) using new inclusive methods in innovation. The means in these processes should include broad-scale partnerships, innovative public procurement, rapidly developed prototypes and experimentation with new solutions;

20.

reminds that proven processes are available, but they require the commitment of individual cities and regions and the dedicated cooperation arranged by the EU Mission teams. Allocating funding for European-wide partnerships will boost acquiring these critical factors across a multitude of European cities and regions. Several existing EU instruments, such as JRC, Interreg, JPIs, EIT and its KICs can have an essential role in this;

21.

stresses the need to review all the EU financial instruments to support Mission activities, especially on the local and regional level. The Horizon funds are not easily accessible by regions and cities and are not yet aligned enough with the new strategic objectives of the EU Missions. Many regions have considerable difficulties accessing funding with multiple calls, highly specialised criteria and complex systems. For instance, many regions face problems in relation to financing for upskilling their workforce to accelerate the green transition essential in the EU Missions. This will require a review to simplify access to EU funds;

Guidelines for more influential EU Mission implementation

22.

underlines the need to help to create dynamic partnerships, which need to be partly formalised reciprocal engagements yet also partially flexible, for the partnership contracts between the EU Missions and the demonstrating cities and regions to increase the European-wide impact of the significant assignments and the work of distributed demonstrators;

23.

supports the flexible use and underlines the active conceptual development of city and region contracts which are proposed in the implementation plans of the EU Missions;

24.

proposes creating the concept of the EU Mission Label for those cities and regions which will take the responsibility as demonstrating forerunners and supporters of the European green and digital transition in reaching the EU Mission targets and scaling-up the results of their innovative solutions, and calls for learning from already existing practices, such as the Covenant of Mayors;

25.

proposes different ways to use the EU Mission Label to add synergy with other relevant EU and other related initiatives and the use of financing instruments, such as InvestEU Fund, Recovery and Resilience Facility, Interregional Innovation Investments I3, Interreg Europe, the Connecting Europe Facility, Digital Europe, EU4Health, EIB and EIT. The CoR proposes creating a European-wide system by which both the EU and the Member States use the EU Mission Label to simplify the application processes. The Label should help access EU and national funds to support local and regional level activities in reaching the ambitious EU Mission targets and at the same time improving local and regional procedures;

26.

points out that, at local and regional level, ERA Hubs can be one of the most effective tools for aligning regional R&I strategies, including smart specialisation strategies (S3/S4), with national and European strategies, the ERA, Horizon Europe and the EU Missions. The ERA Hubs can thus contribute to the emergence of structuring projects that feed in particular into the EU Missions and mobilise the different sources of funding around them, so it would be useful to link up whenever possible the EU Missions Label with the ERA Hubs;

27.

recalls the need to create and use effective knowledge management procedures to enforce the EU Missions by using the best global and regional knowledge, while taking into account the ethical criteria of the Commission’s new internationalisation strategy for research and innovation. To take-up and scale-up the results, Horizon Europe and other instruments need to be more dynamic for experimenting and prototyping in real-world settings;

28.

stresses that the EU Missions should be implemented through an open and participatory process, involving all relevant stakeholders at local, regional, European, and global levels (5). Engagement by regions, municipalities and citizens in particular will be crucial for the successful implementation of the EU Missions. In this regard, direct dialogue with these stakeholders must be ensured in every Mission. The CoR is ready to be a strong ally of the EU Missions;

29.

points that the EU Mission experiments and demonstrations should focus on orchestrating activities to push further the frontiers of science, mastering deep technologies, and combine digital, physical, environmental, and biological innovations — and regularly review and share the outcomes at the forefront level. The Smart Specialisation Strategies as concepts for regional collaboration with industry and research should have a high profile in the EU Missions;

Foresight and societal innovations crucial for and created by the EU Missions

30.

reaffirms that the challenges are complex, and only part of the necessary scientific and technological knowledge exists. Reaching the targets is possible with extensive foresight activities, increasing R & D investments, real-world prototyping, experimenting, and scaling-up of the results;

31.

acknowledges the significant potential of research for all kinds of innovations and tackling grand societal challenges. Expects to this effect political decision-making, in general, to be more evidence-based, research-supportive, and targeted on creating favourable conditions for societal innovations, while implementing those fast enough in real-life practice and processes;

32.

reminds that the ambitious targets of the EU Missions can be achieved only by supporting effective learning processes for regional and organisational political leaders, managers, experts, and citizens. European city/region-driven concepts must be tailored to the region’s situation by a systemic professional development anchored in local learning-by-doing for all;

33.

emphasises that the EU Missions should focus on using the potential of intangible assets and intellectual capital. Embedding this knowledge in political decision-making, especially to create intelligent and human-centric cities where the focus is on sustainability can be instrumental in catalysing investments in human capital, structural capital, relational capital, and RDI in general;

34.

highlights the importance of moving to action, based on the main statements in European R & D and technology policy as defined in the EU Strategic Foresight 2021 report (6), especially: a) The coming decades will be marked by an increasing redistribution of global power, with its geo-economic centre of gravity shifting eastwards. b) The EU is in global competition for ‘first mover’ advantage in standard-setting. c) The EU needs to position itself more firmly in the development and production of next-generation inclusive technologies. d) Beyond specific technologies, hyperconnectivity is driving the transformation. e) Critical raw materials are essential for the EU’s twin transitions. f) The EU’s digital sovereignty will depend on capacity to store, extract and process data, while satisfying the requirements of trust, security and fundamental rights. g) The EU’s strategic autonomy must be promoted. h) A smart mix of industrial, research and trade policies with international partnerships could ensure sustainable and diverse supply;

35.

points out that in moving to action, technology development should, more than so far, be aligned with socioeconomic developments and happen in a real-world context, thus ensuring rapid take-up and scale-up of the results;

36.

proposes increasing the EU interinstitutional collaboration on foresight with special roles for the JRC, European Parliament Research Services and the CoR. The CoR proposes considering at national, regional and municipal levels arranging participatory citizen science activities in general and above all for youth, especially university and secondary school students, for entrepreneurs, and for political decision-making by establishing committees for the future focusing on foresight and technology assessment;

New approach to technology and R & D policy by the EU Missions

37.

underlines that the societal and behavioural transformation supporting the EU Mission goals needs to be inclusive and positive by applying prototyping widely and experimenting as methodological approach;

38.

reminds all that the core of the EU Missions is research and innovation. The complex societal challenges can only be tackled through increasing RDI investments. Both ERA and industrial studies give clear evidence (7) that the EU is lagging behind its main global competitors in business R & D intensity, particularly in high-tech sectors, and in scaling-up innovative SMEs, which yields negative effects on productivity, job creation and competitiveness;

39.

agrees with the ERA targets (8) to boost Europe’s recovery and to support its green, digital and social transitions by supporting innovation-based competitiveness and fostering technological sovereignty in key strategic areas (e.g. artificial intelligence, robotics, cyber security, data ecologies, microelectronics, quantum computing, 5G, next generation batteries, renewable energy, hydrogen technologies, zero-emission built environments, smart mobility, etc.) in line with the model of open strategic autonomy;

40.

calls for demand-based carbon neutrality policies covering carbon footprints and handprints as the criteria for sustainable public procurement. In addition to the carbon footprint, the CoR points out the importance of the carbon handprint, a new approach to creating and calculating climate impact by showing the positive impact that climate-friendly products and services make (9);

41.

endorses industrial RDI carbon handprint measures in creating new extended products, systems, and other innovative solutions playing an essential part in reaching the climate targets and points out that without a significant acceleration in clean energy innovation, net-zero emissions targets will not be achievable;

42.

reiterates the need for new technology. The International Energy Agency (IEA) report (10) shows analytical evidence that 25 % of the reduction in carbon emissions needed to put the Earth’s climate on a sustainable path will come from mature technologies. In comparison, 41 % of the necessary tech will come from new technologies in the early adoption phase, and 34 % will come from technology at the demonstration stage, the prototype stage, or those not even conceived yet;

43.

points out the importance and complexity of measuring GHG emissions. The basic measuring of GHG emissions uses scopes 1 and 2. By also using scope 3, the net-zero and net-negative targets can be reached. Scope 3 includes all other indirect emissions occurring throughout the whole value-chain;

44.

emphasises the role of the EU Missions at the heart of the EU’s priorities in making the green and digital transition a reality. The European Commission has launched the piloting phase of the ERA Hubs initiative to facilitate regional RDI collaboration and exchange of best practices, with the incentive of maximising the value of knowledge production, circulation, and use. The CoR encourages the EU Missions to explore the use of the ERA Hubs as a tool to connect local and regional R&I ecosystems and to actively partner with local and regional decision-makers in piloting the ERA Hubs in order to develop concrete cooperation;

45.

stresses that the system of ERA Hubs tries to bring missing elements to the ERA and EEA landscapes to create strong European knowledge societies throughout Europe to accelerate the transformation of societies for green sustainable and digital growth. The ERA Hubs network ideally ensures that local and regional RDI ecosystems become an integral part of the European-wide RDI ecosystem;

46.

supports enabling active local contributions for integrated implementation of the ERA Hubs, other experimentation of regional ecosystems, and the EU Missions in experimenting, rapid prototyping, testing, demonstrating, and scaling-up research and innovation effectiveness in cities and regions;

47.

recognises that orchestrating diverse regional and local insights, ideas and learning is essential for creating a pan-European approach to innovative action. Sharing the learning across cities and regions, as well as across the five EU Missions, is essential. The CoR recommends the early creation of a co-learning network through which essential insights about both process and content can be shared and scaled — downscaled to other cities/regions, and upscaled to other EU Missions, and to Europe as a whole;

48.

calls for the Council conclusions on the EU Missions to be published during the French Presidency to also provide an opportunity to strengthen the concept of ERA Hubs, on which Missions need to rely in order to be successfully anchored at local and regional level. These conclusions should also underline the importance of research infrastructure which is strongly supported by cities and regions, and crucial for the deployment of the EU Missions;

49.

affirms that, while it is a priority to implement the Missions already decided upon, reflection must continue without interruption on the prospect of creating new missions when major new collective challenges arise. The crucial issue of preparing European societies to address preparedness for and management of health threats and crises should, following the creation of the European Health Emergency Preparedness and Response Authority (HERA), feed into a reflection on a new mission focusing on this challenge given its systemic, cross-cutting and multi-stakeholder nature;

The CoR’s experiences: Synergy between the EU Missions and other main policy instruments

50.

urges that the EU Missions should build on the experience and knowledge of the existing EU initiatives and programmes to operate in synergy. Systemic change requires co-creation of transformational ecosystems based on learning and RDI with interdisciplinary scientific and operational synergy across Europe and covering all five EU Missions;

51.

reiterates the need to increase the mentality to work openly together and increase local collaboration and European partnerships in inventing the new human-centric sustainable future for Europe. The potential capacities rely much on local and regional levels in all parts of Europe. Speed is essential. The grand societal challenges need to be tackled in the next few years. Knowledge and learning are the core;

52.

proposes giving special attention to the steps in the EU Missions’ implementation by the cities and regions with the supporting role of the CoR, including multi-level governance, funding, and successful execution on how the ambitious targets can be achieved by integrating them effectively into EU research and innovation policies, especially Smart Specialisation Strategies (S3/S4), ERA Hubs, New European Bauhaus, and other most relevant initiatives, programmes and instruments provided for under EU multilevel policies;

53.

is committed to organising learning activities in collaboration with the JRC to support the EU Mission activities under the headings ‘City Science’ and ‘Science Meets Regions’ by boosting broad-scale impact activities and sharing the results of the EU Missions. Short-term measures are not an adequate response for addressing what is really needed. A useful activity is to support the creation of the network of regional Future Centres to stimulate creativity and an entrepreneurial mindset and link these to the New Bauhaus, the UN SDG work and the Unesco’s Futures Literacy Labs to ensure both the short- and long-term sustainability of the initiatives undertaken;

54.

encourages deepening the collaboration with European networks that are active in enhancing RDI in tackling societal challenges, such as EUA, EARTO and ERRIN. In addition, each EU Mission should collaborate effectively with its theme-specific networks, such as CEMR, Eurocities and CPMR. The CoR collaborates extensively with all these stakeholder networks to ensure that the EU Missions as a new, bottom-up policy instrument creates the desired impact;

55.

urges the importance of enhancing the capabilities of regions and cities to apply for the EU Mission funding and using the experiences of EU-financed, large-scale initiatives such as European Network of Living Labs (ENoLL), Vanguard Initiative, Digitalising Cities, Open & Agile Smart Cities, City Science Initiative, and Living-in.EU (the European way of digital transformation in cities and communities). This will enhance the resilience, responsiveness and active participation of cities and regions in European reforms, and bolster inclusion of the citizens all over the EU. This in turn will act as a multiplier of the impact of EU initiatives and ensure a broader and fairer distribution of resources, so that conditions everywhere are better suited to raising funding from EU and non-EU sources and reaching the forefront of development;

Mission-specific recommendations

56.

stresses the importance of cross-mission cooperation at all governance levels. The CoR emphasises that the EU Missions together have a clear joint focus in inventing a sustainable smart future. This can be manifested by addressing co-creation and RDI-based solutions: — Climate adaptation: management of floods, forest fires and other disasters, nature-based solutions, climate proofing of critical infrastructure, systems to monitor and warn of any public health impact; — Cancer: health in general, increasing prevention measures, in particular by promoting healthy living habits; — Oceans and water: protecting and restoring aquatic ecosystems, reduction of pollution, and making the blue economy climate neutral; — Climate Neutral Cities: progress in cross-cutting environmental, infrastructure, and industrial solutions that contribute to cities’ climate neutrality; — Soil: prevention of land-use pollution, and safeguarding in all circumstances fresh and healthy groundwater;

57.

proposes the following mission-specific activities to increase the impact of the EU Missions:

a)   Adaptation to Climate Change

The CoR emphasises that the Climate Adaptation Mission should have an essential overall role, especially on foresight and motivating all the actors of Europe to actively contribute to the EU Missions. This Mission should focus on social and societal awareness and to achieve a general commitment to create large-scale systematic solutions. In particular, it should address the challenges of the green transformation of industry, housing and mobility. The losses due to climate change already average 12 billion euros per year, and the EU should do macro-fiscal analyses on climate to convince accelerating adaptation measures parallel with mitigation. The approach to protecting people against climate change must also include social aspects and cohesion issues.

b)   Cancer

The CoR highlights the importance of top global research and encourages researchers and innovators to increase European and cross-sectoral collaboration among stakeholders for the success of this Mission. The CoR stresses the importance of expanding HPV vaccination and biobanking and access to the most innovative therapies, as well as the importance of disseminating best practices among countries and regions. One of the main challenges is the disparities in access to cancer care between and within EU countries and regions, as well as the quality of life of patients. Therefore, improving access to early screening, new diagnostic tools, and innovative cancer treatments in European countries and regions is vital and requires investment in infrastructure, equipment, digital transformation of healthcare, healthcare workforce, and new care models. Another challenge is access to affordable treatment and medical products, as is the quality of individualised patient support and social innovation in support of carers.

c)   Restore our Ocean and Waters by 2030

The CoR highlights that the recovery of healthy oceans and waters and securing freshwater are the global questions of fate, short and long term. The pollution problems can only be solved by stressing the international dimension: the sea basin dimension such as the Mediterranean, the Atlantic, the Baltic Sea, the Black Sea, and the Danube River basin, and increasing collaboration between regions. The particular focus on the Arctic is needed. The CoR calls for the sea and waters to become a new common ambition at the heart of the relaunch of the European project; it stresses that the specific focus on research and clean water technologies and on more efficient supply is vital for the Mission, as well as the blue ocean economy, with an emphasis on entrepreneurship, sustainable tourism, decarbonisation of maritime transport and marine renewable energy. These will create new extensive opportunities for cross-border and out-of-the-box business collaboration. The CoR stresses the need to mobilise cities and regions to build European networks that bring local maritime innovation ecosystems together around value chains and create innovations in maritime industries.

d)   Climate-Neutral and Smart Cities

The CoR urges that Europe needs active frontrunner cities to co-create new urgent solutions and share the results of their experiments with the others — all cities and regions throughout Europe need to be engaged and supported. The frontrunner cities should be used as innovation hubs co-creating replicable and directly applicable solutions to be scaled-up for all other European cities in their transition to climate neutrality by 2050. Cities that have applied but have not been selected should be brought together into an extended group by the EU Commission so that they can in many ways use the progress and outcomes of the frontrunner cities, including directly applying reproducible solutions. Already existing successful programmes and projects or related ‘green initiatives’ are listed in the Addendum to this Mission’s implementation plan. The lessons learnt should be taken as a basis for creating multilevel roadmaps towards the climate neutrality of cities. Multi-actor transformation communities with joint instruments should be applied, preventing every community from operating on its own. The CoR stresses the preparation of Climate City Contracts by participating cities as a demand-driven process that should allow for local solutions but needs strong support from the national and regional levels.

e)   A Soil Deal for Europe

The CoR emphasises the need for systems thinking and instrumental transformation management, including RDI and learning, to reach the targets of the Soil Mission, which covers all types of land uses, and to explore new paths for a more ambitious EU CAP policy transformation. To increase carbon farming and carbon sequestration in forests, the re-designing of agricultural production systems and setting-up of transnational clusters of living labs are crucial for the success of the Mission. Supporting biodiversity and citizens’ preference for forest-based bioproducts and sustainable and locally sourced food are necessary actions in rural and urban environments. Another vital point is how to make the forest activities attractive and economically sustainable without losing lucrativeness in supporting the Soil Mission targets.

The CoR’s role in supporting a European and worldwide transformation

58.

emphasises that the people live and work in the cities and regions and all EU Mission activities should focus on people: from business, academic and governmental stakeholders to individual citizens of all ages and backgrounds. The CoR, the JRC, and other relevant players know diverse effective and proven technologies for citizen-participation, from entrepreneurial discovery to societal innovations camps to be employed to ensure citizens’ engagement;

59.

stands ready to deliver on reaching out to local communities to raise the awareness of the EU Missions as such and help them engage with Europe’s citizens and businesses;

60.

underlines that the EU Missions will be successful only if closing the knowledge and innovation divide in Europe and the innovation gap between Europe and the US are highlighted. The focus needs to be on ambitious concrete and inclusive real-life measures using the RDI outcomes;

61.

stresses that the new developments in RDI are a requirement for the success of the EU Missions. This means new extensive solutions in ensuring complementarity and fostering synergies with the Union research and innovation framework programmes and other Union and global programmes and funds. A new step is piloting the system of ERA Hubs, which should promote the use of all relevant EU RDI initiatives as an essential part of regional policymaking;

62.

points out that implementing the EU Missions will foster local and regional leadership within the EU, but also worldwide. The CoR in enhancing the role of cities and regions within the Covenant of Mayors and other global networks, should create synergy between the EU Missions and the UN SDG activities and campaigns Race to Zero and Race to Resilience. Reinforcing the global leadership of EU cities and regions can also support the effort of the CoR towards formal recognition of subnational governments in the UNFCCC framework and in preparing for the COP27;

Summing-up of the critical success factors

63.

recalls that Europe needs to strengthen its global competitiveness based on knowledge, European-wide partnerships, capacities, and talents to work for the future — an inclusive approach to take everybody on board. Europe has an opportunity to take the role of a global leader implementing collaborative policies to achieve SDGs, and tackling climate change;

64.

underlines that real-life action is the key for the EU Missions. Research is essential for creating new solutions and determining the best ways forward — the appropriate applications are vital for achieving results. The EU Missions will be successful if they meet a local enabling ecosystem. This is not just about technology and research; this is, above all, a human-centric approach building competencies, addressing local risks, and accessing the best European-wide resources. Human aspects in innovation are essential to co-creating sustainable solutions;

65.

states that the EU Missions are essential in supporting Europe’s transformation into a greener, healthier, more inclusive, and resilient continent. To reach the ambitious targets, each EU Mission needs to operate as an extensive portfolio of actions. These European portfolios need to be formed based on comprehensive regional and local orchestrated portfolios of actions, including integrated research projects, policy and legislative measures, and local implementation activities;

66.

urges the need to co-finance and support the daily work of cities and regions in their value-creation and bench-learning to scale up the best processes and actions for the everyday well-being of citizens. The role of the demonstrator communities is to act as pioneers, developers, and frontline testers of systemic change for all the others;

67.

is ready to cooperate with the EU Missions to make the benchmarking and bench-learning processes between demonstration cities/regions and others attractive. The financing instruments need to be flexible and innovative, and encourage the real interests of cities/regions;

68.

highlights that the key questions are how the cities and regions learn to orchestrate necessary activities and how the activities attract private industrial and other investments. The ERA Hubs network ideally ensures that local and regional RDI ecosystems become an integrated part of the European-wide RDI ecosystem;

69.

calls for better societal and technological predictability and increased collaboration as the critical success factors to accelerate industrial and other investments for reaching carbon neutrality and other EU Mission targets. The mission-oriented policy suits well in strengthening the bottom-up dimension in the EU’s unique multilevel governance system: the lessons learned can and will be actively shared across the Member States. More substantial consideration and integration of the EU Missions’ objectives within developing future legislation is necessary; carbon pricing and the Fit-for-55 package are examples of this;

70.

highlights that the latest EU-level industrial and innovation policy guidelines, plans, and necessary new scientific and technologic knowledge and innovations need to be integrated into the EU Missions and developed and transferred to real-life solutions and practices by effective bottom-up knowledge management and other actions;

71.

has acknowledged the need for the EU Mission digital platforms: to accelerate knowledge transfer and management, support virtual collaboration and partnership match-making, simplify funding processes, etc. These need to be co-created with the representatives of cities and regions;

72.

sums up that new adequate and effective work processes are essential for ensuring the success of the EU Missions. These processes must reflect the lessons of Open Innovation 2.0, diverse Quadruple Helix initiatives, and many others in co-creating attractive next-generation participative governance. The full range of citizens must be involved, from youth to the elderly. The mission activities should consider various aspects of different generations and create innovative and responsible ways to achieve the engagement needed for inventing a sustainable future for Europe.

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(1)  CoR Plenary 27 January 2022, Resolution on the Conference on the Future of Europe (OJ C 270, 13.7.2022, p. 1).

(2)  CoR Plenary 1-2 December 2021, Resolution on the 2022 Work Programme of the European Commission (OJ C 97, 28.2.2022, p. 1).

(3)  Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on European Missions — COM(2021) 609 final.

(4)  European Research Area Policy Agenda — Overview of actions for the period 2022-2024, European Commission 2021.

(5)  CoR opinion on Horizon Europe: The Framework Programme 9 for Research and Innovation (COR-2018-03891) (OJ C 461, 21.12.2018, p. 79).

(6)  EU 2021 Strategic Foresight Report (COM(2021) 750 final).

(7)  A new ERA for Research and Innovation (COM(2020) 628 final).

(8)  A new ERA for Research and Innovation (COM(2020) 628 final).

(9)  CoR Plenary 1 July 2021, Opinion on Forging a climate-resilient Europe — the new EU Strategy on Adaptation to Climate Change (OJ C 440, 29.10.2021, p. 42).

(10)  IEA Energy Technology Perspectives 2020.

Opinion of the European Committee of the Regions — Health Emergency Preparedness and Response Authority

(2022/C 301/06)

Rapporteur: Christophe CLERGEAU (PES/FR), Member of the Pays de la Loire Regional Council

POLICY RECOMMENDATIONS

General comments

1.

The European Committee of the Regions points out that in March 2020, its presidency called on the European Commission and the Member States to establish a European health mechanism (1), and that it developed this idea in its subsequent opinion, also of 2020, on an EU Health Emergency Mechanism (2); it draws attention to the fact that Commission communication COM(2021) 576 took inspiration from the points made therein.

The debate on establishing HERA is taking place against the backdrop of the ongoing COVID-19 epidemic, which is more reason than ever to make health a priority for the European Union. However, HERA is being established with a broader aim relating to all types of risk to human health, large-scale and/or cross-border, the phases of both crisis preparedness and management and the challenges of prevention and resilience of societies and areas and all this in the broader context of the war in Ukraine, which is having a huge impact on health services, infrastructure, and cross-border cooperation that were already severely strained and depleted during the worst of the COVID pandemic.

2.

The European Committee of the Regions supports the creation of HERA as the authority responsible for preparing for and managing health crises, taking into account, on the one hand, Member States’ primary responsibility for prevention, public health and healthcare, crisis preparedness and crisis management, and, on the other, the key role played by the regions, as in Europe two thirds of the Member States have decentralised health systems that follow different procedures. It stresses the need for an overall approach to protecting people, while the Commission’s action is still split between multiple decision-making centres, and the support the EU must provide for states and regions.

3.

Health crises, whatever their origin, are a danger to communities, which they affect in a very unequal way, but they are also threatening to European integration itself if it is unable to respond to them in a rapid, effective, coherent and inclusive manner. The COVID-19 crisis has put the solidarity between Europeans, the integrity of the internal market and cooperation on the Schengen area to the test. The European Committee of the Regions considers that the crisis has also shown that the objectives of securing EU health and protecting the population ‘cannot be sufficiently achieved by the Member States, either at central level or at regional and local level,’ and that greater EU intervention in this area is therefore in line with the principle of subsidiarity (3).

4.

While management of health and care systems is under national remits, the European Commission has an important role to play in protecting the health of the population and upholding the single market in line with the Treaties, which include protecting the health of the population as an essential requirement and entrust it with the role of protecting the Community acquis. This must be carried out working closely with the Member States, and there is good reason to involve the European Parliament. The European Committee of the Regions intends to make its voice heard in this debate, firstly because in this crisis local action is essential to protect communities, secondly because many regions have significant powers in the field of health and, lastly, because regions’ support for innovation and industry is key in making countermeasures available to deal with crises.

HERA’s scope for action, governance and scale-up path

5.

The European Committee of the Regions advocates giving HERA very broad scope for action, as proposed by the Commission, while respecting the remits of other existing bodies (4). The aim is to tackle threats to human health caused naturally, accidentally or deliberately, including as a result of terrorist acts, whether from pandemics or of biological, environmental, nuclear or unknown origin.

6.

It stresses that, over and above its scope for action, the extent of HERA’s activities is also very broad, including identifying and analysing the risks ahead of crises, encouraging proactive measures, increasing societies’ and regions’ capacity to deal with crises, defining management scenarios including appropriate responses, strengthening the industrial and research and innovation (R&I) ecosystem to develop and produce appropriate countermeasures, and finally to ensure that these countermeasures are available in all EU cities and regions and to all communities.

7.

Given these huge challenges, the European Committee of the Regions is concerned about HERA’s ability to succeed in its tasks.

8.

While establishing HERA as an internal Commission department has to be seen as a pragmatic choice allowing rapid progress and coordination between the different activities of the Commission, this should only be a temporary solution, to be reviewed in due course. Giving it the status of internal Commission department must not hold up recruitment of the specialised and high-level staff needed to prepare for and manage health crises. It is important to guarantee decision-making autonomy in line with principles of subsidiarity and proportionality, which is essential to analyse risks independently and to take the necessary measures to protect human lives without delay.

9.

The 2022 action plan published on 10 February provides for an annual budget of EUR 1,3 billion, which sends out a positive signal, but is not consistent with the budget forecast of EUR 6 billion over six years. A close look at this annual budget shows the importance being attached to countermeasure purchases and to setting up and managing European stocks (EUR 675,5 million), but there is no mention of the impact on the financing of other European civil protection measures, of the support for new production capacities (EUR 160 million) or of the Horizon Europe research programmes (EUR 350 million), most of which are not new. That leaves only EUR 100 million for measures to anticipate risks and adapt health systems;

10.

HERA’s governance is a third weak point. It is strictly limited to the Commission and the Member States, confining the European Parliament to an observer role and excluding all stakeholders, cities and regions as well as civil society players from HERA’s permanent bodies. This governance is neither adequate nor effective, as crisis preparedness and management require a wide variety of players and expertise. Cities and regions, health professionals of all types, patients’ associations, other key science and research players and health and solidarity NGOs are vital players in successfully tackling crises, and need to be fully taken into account. At the very least, the various stakeholders should be permanent members of the advisory forum, which should be able to provide recommendations to HERA’s governing bodies and be involved in the various aspects of its work.

11.

The European Committee of the Regions recognises the primacy of national powers and the crucial importance of the joint work of the Commission and the Member States, but calls on the Commission and the Council to return to an open and inclusive method of coordination with stakeholders and to give local and regional government representatives and the European Parliament their full say independently of legal considerations.

12.

HERA’s operational action seems to focus on the provision of medical countermeasures. However, there are many other significant aspects of crisis management, particularly in the areas of prevention and civil protection. The European Committee of the Regions considers that the term countermeasures should cover all medicines and drugs (including their active ingredients), and all antibiotics, vaccines, tests and diagnostics, medical devices and supplies, personal protective equipment and hospital and local equipment, but also information systems, and systems monitoring infectious diseases and emerging contaminants. All these resources are necessary to deal with crises and protect people and their health.

13.

It calls for equal attention to be paid to developing resilient societies and a common culture of crisis and disaster management. Within this framework, greater support should be given to the European Civil Protection Mechanism, whose budget should not be undermined by the establishment of HERA. Including the word ‘emergency’ in HERA’s title should not create confusion or lead HERA to duplicate the crisis management arrangements already developed within the EU’s Civil Protection Mechanism, the cornerstone of which is the Commission’s Emergency Response Coordination Centre (ERCC). There is a need for very close coordination and a clear division of roles between these two Commission tools, which could be aligned in the future. It is also necessary to draw a distinction from the measures under the revised legislative act on cross-border health threats currently being negotiated between the Council and Parliament, and from the tasks of the European Medicines Agency (EMA) and, in particular, the European Centre for Disease Prevention and Control (ECDC).

14.

Drawing up HERA’s multiannual strategic plan is a top priority and must also involve the European Parliament, cities and regions, as well as stakeholders. This plan should set out the level of resources needed for HERA to carry out its numerous tasks effectively, describe the stages of its scale-up and establish monitoring indicators. The strategic plan should also specify the mechanisms for cooperation between HERA and other EU intervention instruments, including the European Medicines Agency (EMA), the European Centre for Disease Prevention and Control (ECDC) and the Civil Protection Mechanism, and state how they can also be strengthened to fully play their role in coordination with HERA.

Preparing Europe for crises and disasters, protecting all people in all EU cities and regions effectively

15.

The COVID-19 experience shows that there is no effective action without a common response at European level, which should be tailored to different national, regional and local needs and circumstances. HERA must also promote high, increasingly aligned European ambitions when it comes to protecting people from crises. However, COVID-19 currently highlights the inequalities between regions and social inequalities in access to care and inoculation, which undermine the response to health crises and endanger Europe as a whole.

16.

The European Committee of the Regions would like HERA to have the role of analysing regions’ and communities’ vulnerabilities to health crises. This role of analysing vulnerabilities must factor in the availability of stocks across Europe and the operational capacity to reach all communities, prioritising those whose health is most fragile and those living in a situation of exclusion and instability. It must also cover the ability of health systems, hospitals and other healthcare facilities to increase their capacity in the event of a crisis in order to keep planned care going as much as possible while accommodating additional patients arising from the crisis.

17.

It therefore considers it essential for HERA to develop, in partnership with the other relevant EU bodies, a health security vulnerability scoreboard and to build, together with the Member States and regions, response programmes for the various kinds of emergencies and stress test programmes for health systems. On the basis of the results of these tests, the Commission and the Council should draw up recommendations for Member States and regions, which should be followed up, to strengthen their health systems and consolidate, where necessary, the health response capacities of regions and equality in the protection of the various communities.

18.

Similarly, HERA should help to develop research programmes under Horizon Europe to address the most vulnerable communities (people experiencing poverty or exclusion, minorities, refugees, female victims of violence, older people and people with disabilities, people with co-morbidity factors, etc.), who the COVID-19 experience has shown are often the first victims. These research programmes should also specifically address inequalities in access to healthcare for older people, children and young people’s mental health, complementarity between hospital and community-based healthcare, and innovations, including digital innovations, in the way health systems are organised. They must incorporate a permanent gender-sensitive approach, ensuring appropriate representation of women’s needs.

19.

Preparing people for future disasters and epidemics is a key challenge which HERA must help to meet. At European level we also need to reinforce and coordinate public health prevention programmes and programmes for promoting public health and for combating the digital divide and disinformation. These health prevention measures must span all public policies. HERA’s activities must be part of a more ambitious European prevention policy set out in the framework of EU4Health, which should be strengthened and take better account of the challenges of mental health, disability and fighting chronic diseases as well.

20.

It is also necessary to draw specific lessons from both the COVID-19 crisis and the war in Ukraine through research. Actions should thus be initiated focused on the rapid response of health systems and the accelerated deployment on the ground of countermeasures (modular hospitals, mobile and simplified medical devices, mobile medical units, small vaccination centres, enlisting sufficient qualified medical staff, etc.).

21.

Particular consideration should be given to the specific challenges of remote rural areas, mountain areas and outermost regions. It should be noted that this set of measures is largely absent from the HERA work programme for 2022, which the European Committee of the Regions regrets, and it calls for this matter to be reviewed as of 2023;

22.

The European Committee of the Regions believes that this set of measures is not a threat to the powers of the Member States but, on the contrary, is an opportunity for each Member State, in coordination with the regions, to be more effective in protecting its population.

23.

An in-depth analysis by the European Commission of the health spending from Cohesion Funds and the Recovery and Resilience Facility during the pandemic could be useful for managing future crises. It could identify good national, regional and local practices to help design future health crisis prevention and management measures.

24.

The European Committee of the Regions calls for a specific approach to expenditure for strengthening health systems and crisis preparedness, which can only increase, to be established in the context of the European Semester and for this expenditure to be permanently eligible for cohesion policy funds following the Coronavirus Response Investment Initiative. It is concerned that health expenditure has so far been only a very minor part of the recovery plan and calls for greater support for cities and regions as regards resilience and equipment in the area of health and civil protection.

25.

It points out that cities and regions have to play an active role alongside the EU and Member States in developing these new approaches to protecting communities. This is even more true where they have specific powers in the area of health and where they manage the hospital and health system. This role must be recognised at national and European level in accordance with the principle of active subsidiarity.

Lessons to be learned from the war in Ukraine

26.

The European Committee of the Regions welcomes HERA’s involvement in the vaccination campaign for Ukrainian refugees in the EU and its support for the EU Civil Protection Mechanism, which provides vaccines for children and other essential medical supplies thanks to support from the pharmaceutical industry and health ministries;

27.

The European Committee of the Regions considers that the war in Ukraine is a powerful reminder that Europe must be prepared for all kinds of crises: just as COVID-19 struck our regions without warning, armed conflict in the Union’s direct neighbourhood was not expected either. Its impact on health systems, especially in Central and Eastern Europe, is constantly growing and needs to be closely monitored in order to prevent a tipping point being reached. HERA’s analytical and predictive capacities need to be developed rapidly to ensure that the next impending disaster does not take the European Union by surprise;

28.

therefore reaffirms that priority must be given to boosting the capacity of health systems in all EU Member States and regions to adapt rapidly to unforeseen events. For this to happen, the ‘health security vulnerability scoreboard’ and stress test programmes for health systems therefore, now more than ever, appear to be priority measures;

29.

The European Committee of the Regions draws attention both to the risk of radiation exposure due to possible damage to civil nuclear infrastructure and to the risks inherent in delays in the treatment of chronic diseases, including cancer and HIV (Ukraine has one of the highest rates of HIV prevalence in Europe); these risks are also likely to have an impact on the health systems of host countries;

30.

The war in Ukraine, which has resulted in the influx of millions of unvaccinated people into the EU, is prompting us to develop closer international cooperation on access to countermeasures, particularly vaccines, with priority given to our neighbouring countries. The European Committee of the Regions is therefore concerned at the inadequacy of these measures in the 2022 HERA work programme;

An industrial and public procurement policy for health

31.

The European Committee of the Regions welcomes the initiatives taken since the beginning of the crisis to make countermeasures available faster and the draft Council Regulation on crisis management measures. However, it feels that the current proposals as yet fail to provide a sufficient mechanism for preparing effectively for health crises.

32.

It stresses the need for an industrial and innovation policy ahead of crises, and the imperative need to create a new regulatory and support framework to give the EU sovereignty in the field of health and capacity to manufacture the products of R&I industrially.

33.

It believes that the European Union must give itself the means to produce the ‘essential’ countermeasures largely common to the management of various types of crisis on its own soil. These medicines (including their active ingredients), medical devices, tests, diagnostics and basic equipment cannot be produced in Europe without a proactive public purchasing policy that absorbs potentially higher supply costs. There is currently no indication of how the European rules and principles for action are going to enable this essential objective to be achieved.

34.

It is deeply concerned about the difficulties faced by many companies that invested at the request of public authorities at the beginning of the crisis to address shortages and are now being abandoned in favour of purchases from outside the EU. It feels that the lessons of the crisis have not been learned and that this issue should be dealt with as a matter of urgency. In particular, it calls for national and European strategic stocks to be built up and renewed wherever possible with goods produced in Europe.

35.

The European Committee of the Regions therefore calls on the European Commission to research and propose an appropriate legislative framework allowing exemption from State aid and public procurement rules, particularly when it comes to ‘essential’ countermeasures. What is currently happening in the field of semiconductors (European Chips Act) should be conceivable in the field of health.

36.

This new legal framework should relax the rules on public procurement, particularly in the area of innovation, step up screening of foreign investment and make it possible to provide sufficient direct aid to contribute effectively to accelerating the development of medical innovations such as vaccines and placing them on the market. As things stand, the European Union cannot legally make the same kind of intervention as the United Kingdom or the United States, and this is endangering its access to vaccines.

37.

The European Committee of the Regions is concerned at the amount of time lost, regrets that the publication of the 2022 HERA work programme was not accompanied by the launch of an associated initiative, and calls on the Commission to submit a proposal to the Parliament and the Council without delay;

38.

The European Committee of the Regions takes note of the recent progress made in structuring R&I in the area of preparedness for health crises. Indeed, the French presidency is strongly in favour of an important project of common European interest (IPCEI) ‘in order to strengthen the EU’s industrial policy and strategic positioning in the health sector by fostering innovation in the various segments of the healthcare industry.’ Furthermore, in April 2021 the Commission began consultations with a view to launching a public-public European partnership on pandemic preparedness in the framework of Horizon Europe’s 2023-2024 work programme in order to coordinate research carried out by the Member States. However, there is currently no framework for ensuring the consistency of all Horizon Europe actions that can contribute to the tasks of HERA and the planned budget of EUR 1,7 billion, whereas EUR 4 billion was mobilised under the previous two framework programmes for pandemic and vaccine research. The European Committee of the Regions therefore calls for: — the creation of a scientific council for HERA which is pluralist and involves stakeholders, to establish scientific priorities and an R&I roadmap which Horizon Europe should address; — an increased budgetary mobilisation under Horizon Europe to meet HERA’s R&I needs; — the launch of a reflection on the creation of a future ‘mission’ dedicated to health crisis management and preparedness that would allow for a cross-cutting approach within Horizon Europe, scientific and operational coordination, and the involvement of all stakeholders, with particular emphasis on promoting public-private collaboration.

39.

Research on antimicrobial resistance would seem to be a top priority for HERA. The overuse of antimicrobials, in livestock farming and in human healthcare, is a ticking time bomb. Unless a solution is found rapidly, the ‘no cure, no treatment’ scenario is likely to happen soon. Almost all of the new antibiotics that have been marketed in recent decades are variations of antibiotic families that were discovered in the 1980s.So far, no conclusive results have been obtained by the Commission in this area, as demonstrated by the Court of Auditors’ 2019 report (5). It is therefore necessary to reinforce preventive health services so that they can coordinate all those involved in controls on the use of antimicrobials locally, in hospitals and in the community and to invest in research into new antibiotics and alternative preventive methods.

40.

A new legislative framework would enable a strategic partnership to be developed between the EU and the pharmaceutical industry, in order to take better account of public health objectives of general interest. The direct support of the EU must be met by industrialisation in Europe, privileged access to products, and a right of scrutiny with regard to the price of countermeasures and licensing policies.

41.

Consideration should also be given to the R&I measures envisaged and the role of HERA there. The implementation of this strand within Horizon Europe needs to be improved fast so that HERA can quickly be given an R&I roadmap to clarify the procedure for deploying the EUR 1,8 billion in its budget that come from the programme.

42.

The European Committee of the Regions stresses the need to strengthen without delay the fabric of innovative SMEs in the field of medical countermeasures and all types of devices and equipment to protect people and cope with crises. The first priority is to support business creation and innovation, which is the remit of cities and regions, and then to help them grow and build up the capacity to conduct clinical trials and manufacture products in Europe.

43.

This will involve considerable investment and increasing the capital of the businesses concerned. The European Innovation Council (EIC) needs to be brought into play, in order to better structure a European innovation ecosystem around developing countermeasures and managing health crises and to strengthen risk and development capital intervention tools to enable innovative companies to grow while keeping their roots in Europe. These measures should also make it possible to share the industrial risk of developing and producing countermeasures.

44.

The effectiveness of the medical countermeasures goes hand in hand with a more flexible management of clinical trials, while ensuring compliance with rules on ethics and the protection of personal data. HERA must propose a stronger framework for cooperation with the EMA for the coordination of medium and large-scale clinical trials, which was sorely lacking at the height of the COVID-19 crisis. The ‘Vaccelerate’ and ‘HERA incubator’ initiatives are a promising start in making up for these shortcomings, but clearer operational links must be established with national authorities in order to remove any regulatory or protocol barriers faster. The review of the new European Pharmaceutical Strategy should facilitate significant developments, in particular the centralisation of clinical trial authorisations for medicines requiring EU marketing authorisations.

45.

Research infrastructure is also crucial. When it comes to combating major cross-border health scourges, proper analytical facilities, high-performance computers, repositories of data from epidemiological studies and comprehensive cohort studies are essential so that emerging threats and model response scenarios can be analysed.

International action based on prevention and solidarity

46.

The European Committee of the Regions considers that it is in Europe’s interest to act where new health risks are emerging to limit the EU’s exposure to risks. HERA must therefore have the means to network with many partners (including, at international level, the United Nations and the Council of Europe) and to participate in action outside the EU, in collaboration with the countries concerned, as soon as risks are identified, with significant resources to draw on. This cooperation must also cover the preparatory phase and, in particular, prevention measures, reducing vulnerabilities, and preparing societies for crises. To this end, HERA should forge partnerships with civil society players, local and international NGOs and multilateral organisations involved in risk prevention programmes.

47.

Releasing intellectual property for vaccines and other medical products will not be a sufficient solution if less-developed countries do not have the capacity to develop production on their own. The European Committee of the Regions calls for the price of certain medicines to be regulated where needed and for the pharmaceutical industry to be required to grant manufacturing licences as suggested by the WTO. It calls for EU policies to contribute to the development of products adapted to the specific context of less-developed countries. It calls on the EU to commit to an active policy of technology transfer and support for local production, and to provide appropriate direct aid to help ensure health coverage for communities wherever it is needed.

48.

The European Committee of the Regions notes and shares European citizens’ very high expectations as regards giving the EU a greater role in the area of health. It notes that the current, very restrictive wording of Article 168 of the Treaties is, at present, an obstacle to this, and considers that the issue of strengthening European competences in the field of health should be on the agenda following the Conference on the Future of Europe. The EU’s competences in the field of the internal market should already make it possible to go further in Community action in the field of health; it should be possible to strengthen the EU4Health programme; and EU health ministers should meet very regularly in a dedicated Council formation, rather than only twice a year as an afterthought at the Employment, Social Policy, Health and Consumer Affairs Council (EPSCO).

---

(1)  https://cor.europa.eu/en/news/Pages/COVID-19-CoR-President-calls-for-a-EU-Health-Emergency-Mechanism-to-support-regions-and-cities.aspx.

(2)  OJ C 440, 18.12.2020, p. 15.

(3)  https://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:12008M005:EN:HTML.

(4)  In particular, the Emergency Response Coordination Centre (ERCC — Civil Protection), the European Medicines Agency (EMA) and the European Centre for Disease Prevention and Control (ECDC).

(5)  https://www.eca.europa.eu/en/Pages/DocItem.aspx?did={8892C8C4-6776-4B27-BE36-C181456EED71}.

Opinion of the European Committee of the Regions — The EU economy after COVID-19: implications for economic governance

(2022/C 301/07)

Rapporteur: Elio DI RUPO (BE/PES), Minister-President of Wallonia Reference document: Communication from the Commission to the European Parliament, the Council, the European Central Bank, the European Economic and Social Committee and the Committee of the Regions — The EU economy after COVID-19: implications for economic governance COM(2021) 662 final

POLICY RECOMMENDATIONS

THE EUROPEAN COMMITTEE OF THE REGIONS (CoR),

1.

welcomes the European Commission’s communication The EU economy after COVID-19: implications for economic governance, and the willingness it shows on the part of the Commission to reform the economic and budgetary rules, including taking into account the impact of the COVID-19 crisis; also welcomes the announcement to present a legislative proposal for mid-2022;

2.

considers that the European economic governance reform must also take into account citizen proposals discussed in the context of the Conference on the Future of Europe;

3.

recalls the findings, most notably those established by the Barometer 2020 and 2021 reports (1), which show that the multi-faceted impact of the COVID-19 crisis is asymmetric and has territorial dimensions; this impact reinforces certain pre-existing differences between regions across and within the Member States, as local and regional authorities are still at the frontline, not only to fight the pandemic and its effects, but also to implement measures to support people and companies, and to prepare for a gradual and sustainable recovery;

4.

notes that throughout the EU, citizens are calling on public authorities, Member States, regions, and on local and regional authorities to help them face not only the consequences of the COVID-19 pandemic, but also the green and digital transitions called for by EU and, currently, the consequences of the war in Ukraine;

5.

highlights that some Member States already had a significant investment backlog even before the COVID-19 crisis, for example in infrastructure renewal and building renovation, and that public investment has been put on hold in order to fund efforts to cope with the crisis; the longer this investment is delayed, though, the more expensive it will become;

6.

notes that the EU has arrived at a critical moment, and needs to find ways and means to ensure cohesion and the prosperity of European citizens;

Response to the crisis

7.

welcomes the success of the SURE programme, financed by bonds issued by the European Commission, and asks the Commission to ensure its proper follow up by submitting a White Paper, which, based on an assessment of the SURE programme, would present the policy options for a permanent European unemployment reinsurance scheme;

8.

also welcomes the success of the green bonds issued under NextGenerationEU — the largest green bond issuance in the world — which contribute to financing climate investments through the Recovery and Resilience Facility (RRF);

9.

reiterates its support for the activation of the general escape clause of the Stability and Growth Pact (SGP), for the first time in the history of the euro area; this activation has played an important role in the response to the crisis from Member States, regions, and local and regional authorities by enabling full use of public budgets to mitigate the consequences — most notably social — of the COVID-19 pandemic;

10.

underlines that the war in Ukraine has demonstrated the importance of energy independence for the European Union and stresses that the energy transition must be accelerated; fears, however, that the classification of gas and nuclear power as sustainable energies in the Taxonomy Regulation will provide incentives that are at odds with the rapid expansion of renewable energies;

11.

regrets that public debts have increased due to these measures: public debt levels rose by 13 percentage points in 2020, reaching 92 % of GDP in the EU as a whole, and 100 % in the euro area (2);

12.

believes that if the escape clause of the SGP were to be deactivated in the economic governance framework’s current state and against the backdrop an energy crisis, geopolitical instability and the recovery from the Covid-19 pandemic, the required debt reduction would lead to a return to austerity policies, and consequently result in great economic, social and environmental costs; therefore calls for the general escape clause to remain active until a revised economic governance framework is put in place as quickly as possible;

13.

supports the European Fiscal Board’s assessment on the need for an SGP reform to achieve public debt sustainability, with one main operational rule — a public expenditure benchmark — to target a gradual reduction of the debt ratio towards the anchor, at a pace tailored to country circumstances (3);

A revised governance framework

14.

emphasises that the European economic governance framework has major effects on all levels of government, and more specifically on local and regional governments, which are responsible for almost a third of public spending and more than half of public investment in the EU as a whole, with wide variations between Member States (4);

15.

reiterates that the SGP and other aspects of the current European economic governance framework have five major flaws: adverse procyclical effects, complexity, a lack of efficiency and effectiveness, insufficient consideration given to indicators linked to sustainable development and well-being, and finally, a lack of transparency and democratic legitimacy;

16.

believes that a revised EU economic governance framework must ensure transparent policy-making by involving European and national parliaments and, depending on the internal competences of the Member States, parliamentary assemblies with legislative powers. This involvement must also include local and regional authorities, social partners, civil society, and the academic community;

17.

believes that the revised framework also needs to consider the very high level of public debts, which need to be reduced gradually as they cannot be substantially reduced overnight following: the COVID-19 crisis, the cost of natural disasters and other extraordinary circumstances, the great disparities between and within Member States, the new macroeconomic deal (very low bond rates, constrained monetary policy as well as major uncertainty concerning inflation, interest rates and the labour market), the need to avoid austerity policies, and environmental, energy, technological and social priorities;

18.

reiterates its position in favour of abandoning unanimous decision-making in taxation, in order to allow the European Union to take the necessary decisions by qualified majority, as in other areas of action as it allows for progress in the fight against tax abuse and information sharing between Member States. This provision continues to respect the competence at national, regional or local level for collecting taxes or setting tax rates;

19.

once again insists that national, regional and local governments and the public should be able to clearly understand the rules to be applied; welcomes, in this regard, the Commission’s position in support of simpler fiscal rules using observable indicators; recalls that it is of utmost importance to incorporate cyclically adjusted countercyclical stabilisation;

20.

believes that a governance framework aimed at ensuring sound budgets must be based not only on wise spending but also on sound and balanced revenues; recalls that in the EU, tax avoidance and fraud deprive public budgets of several hundreds of billions of euros each year, and that the fight against tax fraud is one of the key areas in which more Europeans would like to see greater EU intervention;

21.

believes that economic governance must strike a balance between indicators related to budgetary discipline, and those related to social cohesion and the provision of infrastructure and services of general economic interest to all citizens, such as public health and well-being; therefore believes that, in keeping with the macroeconomic imbalance procedure (MIP), which encompasses more varied indicators, including unemployment rates, reformed economic governance must also take into account other environmental and social goals; these concerns cannot remain of secondary importance compared to indicators linked to budgetary discipline;

22.

again suggests that the MIP be extended to auxiliary indicators relating to regional disparities, and thinks that it could also take into account the progress made in the implementation of the Sustainable Development Goals (SDGs) that cover not only environmental protection but also social, economic and governance criteria, and which are supported by 193 states worldwide;

23.

points out that the corrective measures taken as part of the Member States’ macroeconomic imbalance procedures have different effects in different regions, and are particularly detrimental in regions with less diversified economies, such as outermost regions, who have structural and exceptional constraints identified in Article 349 TFEU. These regions are highly sensitive to exogenous shocks and contractionary economic policies have a greater impact on reducing investment and employment there;

Rational promotion of public investment

24.

continues to believe that the European economic governance framework is partly responsible for the sharp drop in public investment that occurred following the euro area crisis because it does not sufficiently take into account the distinction between current expenditure and long-term investment expenditure; between 2009 and 2018, public investment as a whole fell in the EU by 20 % (as a share of GDP); investment by local and regional authorities decreased by almost 25 % and by 40 % or more in some of the Member States worst affected by the crisis (5); believes that it is imperative to avoid repeating such events in the aftermath of the COVID-19 crisis; notes that investment at local and regional level could play a decisive role in economic recovery;

25.

stresses that the European Fiscal Board established that Member States with a high public investment rate tended to significantly reduce it during excessive deficit procedures (EDPs) (6), and that the Commission itself noted that the budgetary framework has not prevented a drop in investments (7);

26.

emphasises that the CoR already felt in its opinion on the 2015 interpretative communication on the matter (8) that the existing flexibility for investments in the SGP was too restrictive and limited. Furthermore, it was only requested by two Member States, and even then, only resulted in minimum impact;

27.

stresses that at the same time, the EU is facing immense funding needs in order to address major current challenges: 650 billion per year according to the Commission for the green and digital transitions alone (9), as well as nearly 200 billion per year for social infrastructure (10);

28.

believes that in this current context of extraordinary investment needs, discouraging deficit financing for public investment (as the current financial framework does), including investment by local and regional authorities, could encourage underinvestment, to the detriment of future generations and future goals, such as the EU climate goals;

29.

welcomes the fact that the Commission has finally clearly acknowledged the need for the governance framework to encourage investments, especially green, digital and resilience-enhancing public investments;

30.

reiterates its repeatedly-expressed request for a ‘golden co-financing rule’ which states that: public spending by Member States and local and regional authorities as part of Structural and Investment Fund co-financing in line with the respective EU co-financing limits should not be considered as national or equivalent structural expenditure as defined within the SGP; underlines that public government investments, such as the sustainable green, digital and social transition and maintaining European competitiveness are important for future generations and should therefore be treated adequately when it comes to public government investments;

31.

stresses that, due to the type of project supported by Structural and Investment Funds, such a ‘golden’ co-financing rule would automatically be particularly supportive of efforts to address current major challenges and implement European priorities. These include economic, social and territorial cohesion; strengthening resilience; implementing social, environmental and digital policies, etc. Granting them favourable treatment within the financial framework would thus strengthen the overall coherence of European policies;

32.

calls on the Commission to present a white paper on an overhaul of economic governance based on the potential establishment of a golden rule in line with the respective EU co-financing limits, after it has reformulated its proposals to take account of the economic and budgetary damage caused by COVID-19. The Commission should in its assessment also consider other instruments such as an expenditure rule, which on the basis of trend economic growth and the level of debt imposes a limit on the annual growth of total government expenditure, and can serve to safeguard public trust by boosting transparency, reducing administrative burdens and striking a balance between budgetary discipline and preserving sufficient capacity for public investment;

33.

recalls that this expenditure is, by definition, investment in the general European interest with a proven leverage effect in terms of sustainable growth and strengthening territorial cohesion;

34.

furthermore, calls for a ‘golden’ green and social cohesion rule, excluding public investments in projects aimed at encouraging the transition to an environmentally, economically and socially sustainable society, as defined in the SDGs and the Green Deal, from the accounts, as these investments are recognised as essential not only with regard to the recovery following the COVID-19 crisis, but also for the prosperity and quality of life of future generations;

35.

suggests that another solution could be to exempt the local and regional government sector from having to apply the Stability and Growth Pact rules. In 2019, public investment in this sector at the European Union level totalled 49,2 % of total public investment (11), while the gross debt of the European Union’s local government sector represents only 6,0 % of the European Union’s gross domestic product (12) and is therefore not the cause of high public debt. Moreover, the local government sector only takes on debt for investment and not for macroeconomic stabilisation with current expenditure, and local governments are subject to internal budgetary oversight by the regional or national government. The Committee strongly urges the Commission to examine the possibility of exempting local authorities from having to apply the rules of the Stability and Growth Pact;

36.

considers it necessary, in general, that the ‘do no harm to cohesion’ principle, which is included in the Commission’s Communication on the 8th Cohesion Report, be taken into account in order to ensure complementarity and synergies between cohesion policy and other EU policies, thus avoiding both hampering the process of convergence and an increase in regional disparities;

37.

calls on the Commission to submit, between now and the end of 2022, a legislative proposal for a recast of the economic governance framework, based, in particular, on the implementation of these ‘golden’ rules combined with the expenditure rule, which can strike a balance between budgetary discipline and preserving sufficient capacity for public investment;

38.

nevertheless, in order to ensure compliance of expenditure identified by the governments as falling under one of these ‘golden’ rules, proposes that the application of these rules be subject to strict surveillance on two levels: from the national independent fiscal councils, and the European fiscal board, which will submit public annual reports to the Council and to the European Parliament;

A substantially revised European Semester

39.

stresses that economic governance, which is implemented in practice through the European Semester coordination cycle, lacks efficiency and effectiveness in terms of carrying out reforms;

40.

also stresses that the scope of the reforms considered under the European Semester has never been defined in EU legal texts, particularly with regard to their relevance and their added value at EU level. This lack of definition limits potential interactions between reforms undertaken at national level and EU policies (financial legislation and programmes) and is problematic with regard to the principle of subsidiarity;

41.

considers it necessary that the European Semester be — on an equal footing and in synergy with its economic and financial objectives — the framework for implementing the environmental and social cohesion requirements defined in the United Nations Sustainable Development Goals (SDGs), which the EU and the Member States have committed to achieving by 2030;

42.

firmly believes that its proposed code of conduct for the involvement of local and regional authorities in the European Semester (13) is likely to rectify the Semester’s lack of efficiency and effectiveness, as local and regional realities would be better taken into account, and that its implementation remains necessary, especially as the national plans in the context of the RRF are, in part, based on the country-specific recommendations of the European Semester;

43.

believes that such a double reorientation of the Semester, regarding its objectives and also its operating processes, would strengthen its democratic legitimacy and that of the EU economic governance system as a whole, which is currently far too weak.

---

(1)  European Committee of the Regions, EU Annual Regional and Local Barometer 2020, 12 October 2020, and EU Annual Regional and Local Barometer 2021, 12 October 2021.

(2)  European Commission, European Economic Forecast for Autumn 2021, Institutional Paper 160, November 2021.

(3)  See the Board’s Annual Report for 2021: https://bit.ly/3HqqvIQ

(4)  2018 figures. Source: Eurostat, data codes: TEC00023 and TEC00022.

(5)  Eurostat, data code: TEC00022.

(6)  European Fiscal Board, Assessment of EU fiscal rules with a focus on the six and two-pack legislation, p. 76.

(7)  European Commission, Economic governance review (COM(2020) 55 final of 5 February 2020).

(8)  CoR opinion on Making the best use of the flexibility within the existing rules of the stability and growth pact (COR-2015-01185) (OJ C 313, 22.9.2015, p. 22), rapporteur: Olga Zrihen (BE/PES), adopted on 9 July 2015.

(9)  European Commission, The EU economy after COVID-19: implications for economic governance (COM(2021) 662 final of 19 October 2020).

(10)  European Commission, Commission Staff Working Document: Identifying Europe’s recovery needs (SWD(2020) 98 final of 27 May 2020).

(11)  Source: Eurostat National Accounts.

(12)  Source: Eurostat National Accounts.

(13)  CoR opinion on Improving the governance of the European Semester: a Code of Conduct for the involvement of local and regional authorities (COR-2016-05386) (OJ C 306, 15.9.2017, p. 24), rapporteur: Rob Jonkman (NL/ECR), adopted on 11 May 2017.

Opinion of the Committee of the Regions — ensuring a global minimum level of taxation for multinational groups in the Union

(2022/C 301/08)

Rapporteur-general: Federico BORGNA (IT/PES) Reference document: Proposal for a Council Directive on ensuring a global minimum level of taxation for multinational groups in the Union COM(2021) 823 final

I.   RECOMMENDATIONS FOR AMENDMENTS

Amendment 1

Recital 7

Text proposed by the European Commission

CoR amendment

While i t is necessary to ensure that tax avoidance practices are discouraged, adverse impacts on smaller MNEs in the internal market should be avoided. For this purpose, this Directive should only apply to entities located in the Union that are members of MNE groups or large-scale domestic groups that meet the annual threshold of at least EUR 750 000 000 of consolidated revenue. This threshold would be consistent with the threshold of existing international tax rules such as the country-by-country reporting rules. Entities within the scope of this Directive are referred to as constituent entities. Certain entities should be excluded from the scope based on their particular purpose and status. Excluded entities would be those that are not profit-driven and perform activities in the general interest and which are, for these reasons, not likely to be subject to tax in the Member State in which they are located. In order to protect those specific interests, it is necessary to exclude from the scope of the Directive governmental entities, international organisations, non-profit organisations and pension funds from the scope of this Directive. Investment funds and real estate investment vehicles should also be excluded from the scope when they are at the top of the ownership chain, since, for those so-called flow-through entities, the income earned is taxed at the level of the owners.

I t is necessary to ensure that tax avoidance practices are discouraged. At the same time, adverse impacts on smaller MNEs in the internal market should be avoided. For this purpose, this Directive should only apply to entities located in the Union that are members of MNE groups or large-scale domestic groups that meet the annual threshold of at least EUR 750 000 000 of consolidated revenue. This threshold would be consistent with the threshold of existing international tax rules such as the country-by-country reporting rules. Entities within the scope of this Directive are referred to as constituent entities. Certain entities should be excluded from the scope based on their particular purpose and status. Excluded entities would be those that are not profit-driven and perform activities in the general interest and which are, for these reasons, not likely to be subject to tax in the Member State in which they are located. In order to protect those specific interests, it is necessary to exclude from the scope of the Directive governmental entities (including local and regional authorities and their associations) , international organisations and non-profit organisations and pension funds .

Reason

Self-explanatory.

Amendment 2

Article 2(3)(a)

Text proposed by the European Commission	CoR amendment
(a) a governmental entity, an international organisation, a non-profit organisation, a pension fund, an investment entity that is an ultimate parent entity and a real estate investment vehicle that is an ultimate parent entity; or	(a) a governmental entity (local and regional authorities and their associations) , an international organisation, a non-profit organisation , a pension fund ;

Reason

Clarification. Self-explanatory.

Amendment 3

Article 3(31)(d)

Text proposed by the European Commission	CoR amendment
(d) to a governmental entity, an international organisation, a non-profit organisation , a pension fund, an investment entity that is not part of the MNE group or a life insurance company to the extent that the dividend is received in connection with pension fund activities that is subject to tax in the same manner as a pension fund;	(d) to a governmental entity (including local and regional authorities and their associations) , an international organisation, a non-profit organisation , a pension fund ;

Reason

Clarification. Self-explanatory.

Amendment 4

Article 11

Text proposed by the European Commission	CoR amendment
Application of a UTPR across the MNE group	Application of a UTPR across the MNE group
Where the ultimate parent entity of an MNE group is located in a third country jurisdiction that does not apply a qualified income inclusion rule, Member States shall ensure that its constituent entities located in the Union are subject, in the Member State in which they are located, to a top-up tax for the fiscal year (a ‘UTPR top-up tax’) for the amount allocated to that Member State in accordance with Article 13. Constituent entities that are investment entities and pension funds shall not be subject to the UTPR top-up tax.	Where the ultimate parent entity of an MNE group is located in a third country jurisdiction that does not apply a qualified income inclusion rule, Member States shall ensure that its constituent entities located in the Union are subject, in the Member State in which they are located, to a top-up tax for the fiscal year (a ‘UTPR top-up tax’) for the amount allocated to that Member State in accordance with Article 13. Pension funds shall not be subject to the UTPR top-up tax.

Reason

Self-explanatory.

Amendment 5

Article 12

Text proposed by the European Commission	CoR amendment
Application of a UTPR in the UPE jurisdiction	Application of a UTPR in the UPE jurisdiction
Where the ultimate parent entity of an MNE group is located in a low-tax jurisdiction, Member States shall ensure that its constituent entities located in a Member State are subject to UTPR top-up tax for the fiscal year and for the amount allocated to that Member State in accordance with Article 13 in respect of the low-taxed constituent entities that are located in the jurisdiction of the ultimate parent entity, irrespective of whether that jurisdiction applies a qualified income inclusion rule. Constituent entities that are investment entities and pension funds shall not be subject to the UTPR top-up tax.	Where the ultimate parent entity of an MNE group is located in a low-tax jurisdiction, Member States shall ensure that its constituent entities located in a Member State are subject to UTPR top-up tax for the fiscal year and for the amount allocated to that Member State in accordance with Article 13 in respect of the low-taxed constituent entities that are located in the jurisdiction of the ultimate parent entity, irrespective of whether that jurisdiction applies a qualified income inclusion rule. Pension funds shall not be subject to the UTPR top-up tax.

Reason

Self-explanatory.

Amendment 6

Article 36(2)(b)

Text proposed by the European Commission	CoR amendment
(b) a governmental entity, an international organisation, a non-profit organisation or a pension fund other than a pension services entity that is tax resident in the jurisdiction where the ultimate parent entity is located and that holds ownership interests representing a right to 5 % or less of the profits and assets of the ultimate parent entity.	(b) a governmental entity (including local and regional authorities and their associations) , an international organisation or a non-profit organisation or a pension fund .

Reason

Clarification. Self-explanatory.

Amendment 7

Article 37(3)(c)

Text proposed by the European Commission	CoR amendment
(c) a governmental entity, an international organisation, a non-profit organisation or a pension fund other than a pension services entity that is tax resident in the jurisdiction where the ultimate parent entity is located and that holds ownership interests representing a right to 5 % or less of the profits and assets of the ultimate parent entity.	(c) a governmental entity (including local and regional authorities and their associations) , international organisation or a non-profit organisation or a pension fund .

Reason

Clarification. Self-explanatory.

Amendment 8

Article 53a (new)

Text proposed by the European Commission	CoR amendment
	Three years after the entry into force of this Directive, the European Commission shall review the results and may propose an amendment to this Directive, in particular with regard to adapting the definitions relating to turnover threshold and minimum tax rate, in line with international developments.

Reason

In the absence of an impact assessment by the European Commission when drafting this Directive, a review is even more important in order to analyse the results and consequences of its implementation.

II.   POLICY RECOMMENDATIONS

THE EUROPEAN COMMITTEE OF THE REGIONS

General observations

1.

welcomes the proposal for a Council Directive on ensuring a global minimum level of taxation for multinational groups in the Union (1);

2.

reiterates that Article 3 of the Treaty on European Union (TEU) includes the sustainable development of Europe based on balanced economic growth and price stability, a highly competitive social market economy, aiming at full employment and social progress, and that Article 113 of the Treaty on the Functioning of the European Union (TFEU) provides that the Council must, acting unanimously, ensure the establishment and the functioning of the internal market and avoid distortion of competition;

3.

considers that the work done so far by the OECD in the preparation of legal measures to combat tax base erosion and profit shifting outside the EU could also have beneficial effects for local and regional situations as well, not only in terms of higher tax revenue available to the Member States, but also with a view to ensuring greater fairness and competitiveness of SMEs which, at national and local level, are currently experiencing less favourable tax conditions and positive consequences for employment and workers;

4.

is convinced that adopting a proposal for a minimum level of taxation would be the first step in creating a single taxation scheme within the EU, which is needed now more than ever in order to move towards adequate competition between companies on the internal European market, increase Europe’s competitiveness, and to prevent the relocation or arbitrary closure of production centres, which greatly impacts workers, who are forced to look for new jobs or cope with travelling considerable distances to avoid losing their jobs;

5.

considers it absolutely essential that the rules do not entail more red tape for businesses, thus holding back their development, particularly in the research and innovation sectors, and climate neutrality, which are crucial for ensuring the necessary digital and green transitions.

Complete harmonisation of the rules within the EU

6.

calls for the Directive to be applied comprehensively and consistently among the EU Member States, but also fully in line with the OECD agreement: the lack of harmonisation between minimum tax rules within the EU, or between the EU and third countries, could give rise to potential disputes on double taxation, with a direct negative impact on a large number of leading global companies and potential consequences for their suppliers (who are often SMEs), as regards to tax income, trade and investments;

7.

considers it essential that the OECD’s comments and further technical details on the model rules are included in the EU Directive in a comprehensive manner, and are not subject to hasty transposition, without excluding the possibility of measures being triggered by regulation in the future;

8.

highlights the importance in the final drafting of the Directive and its subsequent application, of shared, unambiguous terminology: some of the new definitions used in the Directive may not be fully aligned with the definitions already established in international tax law; to ensure greater legal certainty, a cross-check of the translations of the EU Directive will be essential, in order to achieve precise alignment with the tax law concepts of individual countries;

9.

with regard to large national groups, calls for every effort to be made to ensure that the new minimum taxation level complies with EU law to avoid legal uncertainty, and strongly encourages the establishment, where possible, of simplification measures for these entirely national groups. Currently, it is not clear how many large, exclusively national groups exist in the EU, and what the fiscal and administrative cost of such a measure would be.

Interaction and a level playing field with third countries

10.

calls on the EU, when transposing the OECD’s minimum tax rate into law, to constantly engage with its global partners and uphold its political guidelines, in order to avoid European companies facing stricter rules than their direct competitors, relegating the EU to a less open business environment with lower economic growth, fewer jobs, limited capacities and resources to respond to innovation challenges. It considers, in particular, that the failure of the US to participate in Pillar 1 could undermine the purpose and balance of the OECD agreement as a whole;

11.

calls on the EU to closely monitor the influence of the introduction of the second pillar system on the behaviour of investors and companies, to understand how the new rules will affect investment, jobs, growth, trade and the fiscal impact. This monitoring is essential to avoid negative spill-over effects on workers (through lower wages), consumers (through higher prices) or shareholders (through lower dividends). Since it is vital that all the EU’s main trading partners apply the minimum taxation level, it is essential that third countries comply with international rules in order to avoid subjecting EU companies to a stricter regime than other companies, leaving them at the mercy of an uncoordinated global system;

12.

stresses that the Undertaxed Payments Rule (UTPR) may, to some extent, limit the uneven playing field between companies, but this would not fully resolve the situation, particularly because the rule is very complex to apply in practice and could make the EU less attractive, for example for R & D activities or investments in the energy and climate transition;

13.

considers it essential to prevent the possibility of EU companies being double taxed, due, for example, to the lack of coordination between Base Erosion and Profit Shifting (BEPS) or the European Income Inclusion Rule (IIR) and the US rules BEAT or GILTI.

Harmonisation with incentives and other EU tax rules

14.

suggests launching, as part of the considerable reduction to the taxation of business profits at European level (halved over the last 25 years), an evaluation of the many anti-avoidance measures taken over the last 10 years, and assessing their efficiency, effectiveness, coherence and EU added value in terms of tax revenue (including how Member States have implemented this legislation in their audit work);

15.

calls on the Commission to assess whether the 2017 EU dispute resolution mechanism could be used for the second pillar, or whether changes are needed;

16.

believes that the Commission and the Member States’ tax authorities should update and redesign their tax systems to ensure that they are still able to encourage (green) innovation, growth and jobs. Countries have designed and implemented various national taxes and numerous incentives in recent decades to stimulate employment and innovation in local economies. The most recent and important trend is the increase in tax incentives specifically designed to encourage climate protection, security of energy supply and R & D, as part of the EU Green Deal; certain tax incentives currently used in the Member States will no longer be accessible, or will be less attractive from an investment point of view after the adoption of the Directive. Therefore, it would be useful for the Commission to prepare a guide explaining how to design future tax incentives in line with Pillar 2 requirements (e.g. incentives offering tax breaks on salaries or the social security contributions of researchers, or accelerated depreciation schemes to encourage investment);

17.

considers it essential that the EU Member States still provide incentives to attract foreign investments, provided that they encourage the activity of the real economy through the hiring of more employees, paying workers more or investing in tangible assets: multinational enterprises (MNE) also rely on local SMEs for input products in their value chains, and their presence could lead to further positive spill-over effects for the local business environment;

18.

supports the call made by the business community to introduce a testing phase for the application of the penalties provided for: for example, for the first year of implementation all companies could be given the chance to go through the necessary process of learning the new rules, so that the penalties applied to non-compliant entities are proportionate and do not involve those whose non-compliance is due to the late adaptation of the procedures rather than specific wilful intent;

19.

suggests, with regard to deposit requirements, that company-related information should only be disclosed through an official exchange of information between tax authorities, subject to strict compliance with confidentiality rules and appropriate conditions of use, in order to prevent the uncontrolled leakage of sensitive information, without compromising transparency requirements as laid out in the OECD Recommendation of the Council on Common Approaches for Officially Supported Export Credits and Environmental and Social Due Diligence;

20.

calls for red tape to be cut in order to limit the costs of adapting to the new rules, for companies as well as tax authorities: every effort should be made to keep the administrative burden as low as possible. Legislation that is not overly convoluted can make it easier for companies to learn about the new rules, shortens the necessary transition period and will make it easier for tax authorities to verify the effective application of these new rules.

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(1)  COM(2021) 823 final.

Opinion of the European Committee of the Regions — European Strategy for Universities

(2022/C 301/09)

Rapporteur: Emil BOC (RO/EPP), Mayor of Cluj-Napoca Reference document: Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on a European strategy for universities COM(2022) 16

POLICY RECOMMENDATIONS

THE EUROPEAN COMMITTEE OF THE REGIONS (CoR)

1.

endorses the EU’s engagement in and support for promoting excellence in education; in connection with this, highlights the key role played by the European strategy for universities, part of the higher education package which will deliver the European Education Area by 2025;

2.

stresses that a civilisation that strengthens European democratic values can only endure if it invests in human capital. An excellent education system with strong universities at its core is the cornerstone of lifelong learning;

3.

flags up both the importance of raising the standard of European university education and research and boosting the availability of local and regional support for the objectives identified in this strategy;

4.

acknowledges that universities play a crucial role in society and contribute to the sustainable, resilient and inclusive development, founded on democratic values, of Member States, local communities and regions alike. Universities are even more important during times of crisis, when they can help overcome the crisis and contribute to post-crisis recovery (1);

5.

underlines the crucial role of universities in addressing global challenges. The EU has long stressed the need to strengthen the close link between research, teaching, learning and innovation in universities, while better financing universities to consolidate the required level of quality. The role of universities in generating new research knowledge and promoting new innovation is vital in addressing the pressing societal challenges identified in European Union missions;

6.

points out that universities must be seen as a fundamental component of European culture and that the diversity of the university sector, which brings together teaching bodies, research institutes and vocational training institutions, etc., is a strategic advantage;

7.

notes that at local and regional level, the presence of universities generally gives a significant competitive advantage to the communities hosting them (2). For instance, investors are interested in and attracted to communities with a highly qualified labour force and opportunities for both cooperation with academic circles and the transfer of technology and know-how from universities to the business sector. The presence of a university also generates significant local income (3), as students and staff, both teaching and otherwise, spend considerable amounts of money at local shops and businesses (there is a significant multiplier effect as regards university-generated consumption). Above and beyond these advantages which are economically quantifiable, university towns tend to be cosmopolitan due to the presence of students and teaching staff from various countries and the promotion of values such as tolerance and cultural, religious and ethnic diversity (4);

8.

welcomes the multilevel approach taken by the European strategy for universities, which seeks to align policy objectives with EU, national, regional and local investment; would however point out that a stronger local and regional dimension in the design and implementation of the ideal model for universities in future would be beneficial;

9.

notes that strategic partnerships need to be built between local and regional authorities (LRAs) and universities, including as regards framing local and regional development strategies. Universities play a crucial role in the development of place-based ecosystems, for which regional smart specialisation strategies have provided a good basis;

10.

acknowledges that LRAs can support universities by creating and improving local and regional conditions (such as access to all types of infrastructure and services, quality of life, and an inclusive environment) which can make universities more globally competitive;

11.

notes that within the EU, there is already an excellent tradition of universities from various Member States cooperating through the ERASMUS+ programme, and this must be continually developed and strengthened;

12.

notes that the role played by universities in society is changing, and that they are taking on new functions alongside their traditional ones (which focused largely on teaching and research) (5). Universities are redefining themselves as major players in fields such as technological and social innovation, entrepreneurship and transferring technology to the economy. They are no longer standing apart from communities and society: they are engaged in the community, becoming stakeholders which are able to help identify answers to some of the problems facing society (6);

13.

points out that universities play a pivotal role in promoting objectives which are vital for the EU, such as the green and digital transitions. Universities have a solid pool of expertise in these fields, but at the same time they can enact and spread relevant good practices within and towards their host communities;

14.

notes that universities can provide solutions and tools for tackling some of the major problems facing the EU, such as brain drain (7) and rural exodus. The detrimental effects associated with brain drain and the key role of brain circulation are closely linked to cooperation and partnerships between universities, LRAs, the business environment and civil society. Stresses that efforts should be significantly stepped up to narrow the knowledge and innovation divide within Europe and close the innovation gap between Europe and the US;

15.

would suggest that it is important to identify and ensure the permanent, large-scale take-up of good practices at local and regional level as regards LRA-university cooperation. Forging transnational networks focused on spreading good practices, with broad participation by higher education stakeholders, is therefore a priority for Member State LRAs. This network could be incorporated into the European strategy for universities;

16.

points out that universities are encountering significant problems and obstacles as they change and take on new responsibilities. Financial challenges are in all likelihood being encountered in every Member State. Therefore proposes that an investment strategy be devised which takes account of regional, national and European financing and calls for cooperation between the public, private and non-profit sectors to be taken into consideration with a view to building the capacities of European universities. Also notes that there are challenges relating to issues such as the degree of university autonomy and/or political intervention in major decisions on university financing, recruiting and selecting teaching staff, freedom of expression and choice of subjects and direction of research, and opportunities for free communication without any censorship of the outcome of research;

17.

emphasises that Member State LRAs need to engage in consolidating a broad range of local and regional ecosystems and to promote cooperation and trust between different community sectors. Points out that at local and regional level, universities must be seen as part of wider ecosystems incorporating a wealth of stakeholders (8). Cooperation between universities and relevant community stakeholders is key to enabling universities to offer new skills focusing on creative problem solving, technology use and efficient communication in the community;

18.

notes that deepening transnational cooperation between universities and developing the European dimension of higher education are fundamental priorities of the European strategy for universities. Accordingly, considers that LRAs can act in support of transnational cooperation between universities wherever possible (the Erasmus+ European Universities Initiative is a key mechanism for university alliances aiming to achieve excellence). LRAs can adopt good practices set out in the strategy, such as the European Student Card. As well as serving academic purposes, the card could be used by transnational students, researchers and teaching staff when communicating with local administrations (for instance, for residence permits, public transport passes and access to museums);

19.

points out that within the European strategy for universities, Member State LRAs must act as facilitators able to bring various community stakeholders together around initiatives and projects which are relevant to universities. Also notes that in many Member States, LRAs do not have direct responsibility for university financing. Nonetheless, LRAs can promote financing from a range of sources for universities and their various initiatives, generating synergies at local and regional level;

20.

acknowledge the need for universities to reshape study programmes to respond as effectively as possible to fast advances in technology, to the green and digital transitions and to structural changes to European labour markets requiring new skills (9). Would also point out that LRAs can play an important role in the process of reshaping study programmes and developing such new skills. Underlines at the same time that, while universities greatly contribute to enhancing employability and economic competitiveness within a globalised economy, the autonomous nature of tertiary education must be preserved;

21.

flags up LRAs' role in creating and consolidating local and regional ecosystems promoting active cooperation and networking between infranational public authorities, businesses and industry, and universities. LRAs must act as initiators and facilitators in these ecosystems, identifying opportunities for cooperation, allocating resources (financial and otherwise) for networking and cooperation activities, and supporting the establishment of hubs such as education clusters at local and/or regional level. Education clusters are excellent tools, designed to provide space for dialogue and cooperation between the main formal education stakeholders with a view to supporting young people as they prepare to enter the labour market. Through education clusters, LRAs can work with other ecosystem stakeholders to implement mechanisms such as innovation funds and mini grants for start-ups in certain key fields;

22.

considers that students now need to learn using methods which are in some cases radically different from those used in the past. They need opportunities to apply theoretical concepts to real-life situations, to use them to solve problems in their local and regional community. Together with universities and other local and regional ecosystem stakeholders, LRAs can foster these learning experiences, for instance by supporting living laboratories, forwarding policy issues for analysis, developing joint strategic projects for the community and facilitating cooperation with other local and regional stakeholders;

23.

considers that LRAs, in partnership with universities and other local or regional ecosystem stakeholders, can do a lot to support young entrepreneurs, including students and graduates, by helping them gain access to key resources needed for innovation. Many young people and students need resources such as laboratories, new technologies and new connections to develop business ideas and/or products and services. Together with other bodies which have these resources, LRAs can enable young entrepreneurs to access the resources they need to innovate (office space, training, advice, etc.);

24.

points out that LRAs can develop smart relationships with universities to develop the local and regional community. Universities need to produce knowledge and services for their host communities. LRAs can facilitate this relationship by establishing programmes through which universities are involved on a permanent basis in finding answers to local and regional problems, providing advice and know-how and spreading good practices when they arise so that more communities and authorities can act on them as well. Public recognition and incentives for universities to get involved play a major role in proving the value of various academic and/or professional paths, encouraging universities to attach greater value to teacher, researcher and student engagement in the community;

25.

emphasises that local and regional communities of all sizes can benefit equally from hosting a university. LRAs can make a significant contribution to developing universities and making them more attractive by laying the groundwork for high quality of life and encouraging attitudes and behaviour geared towards tolerance, inclusion, multiculturalism and public safety. Universities can locate some of their activities and structures in smaller towns, as well as in cities. LRAs can help establish university structures and/or research institutes in smaller towns by providing services such as affordable housing for students, allowing certain public buildings to be used for teaching, research and communication activities, and producing reliable quality of life indicators, capitalising on what smaller towns can offer in contrast with cities;

26.

considers that the local and regional-level digital transition can be accelerated by cooperating with universities and optimising use of relevant university resources. Together with LRAs, universities can provide advice or devise digital transition strategies geared to local or regional circumstances. In partnership with LRAs, universities can lay on short-term digital skills courses or training sessions for the general public, with a particular focus on groups at risk of exclusion (such as older and less educated people);

27.

LRAs can support the development of hybrid campuses which will act as a driver of the digital transition in both communities and universities, ensuring equal opportunities, promoting social integration, improving the competitiveness of young people on the labour market, strengthening of youth work, non-discrimination and intercultural understanding. Hybrid campuses should pay attention to communication in ensuring equality of opportunity and to the penetration of information, to ensure that it is genuinely accessible to all eligible young people, particularly those living in peripheral regions. LRAs can provide support, financial and otherwise, for measures to open up these hybrid campuses to various community stakeholders, including at-risk and disadvantaged groups, vulnerable and at-risk young people such as NEETs, young job seekers, women, refugees, persons with disabilities and retired people. The EU and Member State policies need to give priority to the inclusion of at-risk young people;

28.

considers that universities have a major pool of knowledge and know-how regarding the green transition. Universities can also be a model for good practices — along with education and information — for the green transition. In partnership with LRAs, universities can develop green campuses and get involved in urban renewal, providing the community with green campuses and exemplary energy efficient buildings which comply with eco-design principles;

29.

welcomes the clear roadmap, annual indicators and benchmarks for the delivery of the strategy, which the CoR has already called for, which will be used to evaluate the progress made towards meeting the objectives of the European Education Area. Nonetheless, would point out that the local and regional dimension must be factored into the European Higher Education Sector Observatory, as this would ensure that the planned scoreboard is also geared to the local and regional level;

30.

notes that LRAs can help European universities to go international and to promote the European Union on the global stage. This assistance should include supporting European universities in joining ambitious transnational alliances developing systemic, long-term cooperation on excellent education, research and innovation and providing students, teachers, researchers and staff with permanent opportunities for academic mobility.

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(1)  Howard, G., Weinstein, R., Yang, Y. (2021), Do universities improve local economic resilience?, IZA DP No. 14422, online at https://docs.iza.org/dp14422.pdf.

(2)  Fonseca, L., Nieth, L. (2021), The role of universities in regional development strategies: A comparison across actors and policy stages, European Urban and Regional Studies, 22(3); Goddard, J, Puukka, J. (2008), The engagement of higher education institutions in regional development: an overview of the opportunities and challenges, Higher Education Management and Policy, 20(2): 11–41.

(3)  Chirca, A., Lazar, D.T. (2021), Cluj-Napoca without students: an estimation of the gap in the city’s economy, Transylvanian Review of Administrative Sciences, 66E: 44-59.

(4)  Goddard, J., Vallance, P. (2014), The university and the city, Higher Education, 68(2): 319–321.

(5)  Liddle J., Addidle G.D. (2022), The Changing Role of Universities in Society: Key Influences in The Role of Universities and HEIs in the Vulnerability Agenda. Rethinking University-Community Policy Connections. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-89086-5_3.

(6)  Myklebust, J.P., Smidt, H. (2021), What is the role of universities in global upskilling?, University World News, online at https://www.universityworldnews.com/post.php?story=20210129110449887.

(7)  Hammerbauer, M., Pavletić, P., Vespa, M. (2021) Brain drain in higher education in European context, Final report- ESC41, online at https://www.esu-online.org/wp-content/uploads/2021/03/Brain-Drain-final-report-ESC41-Google-Docs.pdf.

(8)  Reichert, S. (2019), The Role of Universities in Regional Innovation Ecosystems, EUA Study, online at https://www.eua.eu/downloads/publications/eua%20innovation%20ecosystem%20report_final_digital.pdf.

(9)  Jackson, N. J. (2011) Learning for a complex world: A lifewide concept of learning, education and personal development. Bloomington, IN: Author House; Williams, S., Dodd, L. J., Steele, C., & Randall, R. (2015), A systematic review of current understandings of employability, Journal of Education and Work, Vol. 29, No. 8, pp 877-901.

Opinion of the European Committee of the Regions — Future EU State aid in the agricultural and forestry sectors and in rural areas

(2022/C 301/10)

Rapporteur: Guido MILANA (PES/IT), Member of Olevano Romano Municipal Council

POLICY RECOMMENDATIONS

THE EUROPEAN COMMITTEE OF THE REGIONS,

1.

welcomes the European Commission’s recent new proposals for granting State aid in agriculture, which will apply from 1 January 2023;

2.

points out that Article 107(1) of the Treaty on the Functioning of the EU provides that State aid granted to undertakings which could distort competition between Member States is incompatible with the internal market, with the article then introducing certain derogations;

3.

points out that, for the agricultural and forestry sectors and rural areas, the Commission assesses whether such a distortion exists on the basis of the Guidelines for State aid in the agricultural and forestry sectors and in rural areas, and that those guidelines cover the 2014–2022 programming period;

4.

stresses that Article 81 of Regulation (EU) No 1305/2013 of the European Parliament and of the Council (1) on support for rural development by the European Agricultural Fund for Rural Development stipulates that funding for measures not covered by Annex I to the TFEU must be implemented under State aid rules;

5.

stresses that aligning the two texts ensures that the State aid rules apply for the same length of time as the rural development rules;

6.

notes that, to this end, the Commission launched a consultation in 2019 and that the findings of that consultation are set out in working document SWD(2021) 107 final (2);

7.

points out that, in the meantime, the Parliament and the Council of the EU have adopted the new CAP regulations, in particular Regulation (EU) 2021/2115 of the European Parliament and of the Council (3) establishing rules on support for strategic plans, taking into account the opinion of the Committee of the Regions on the new common agricultural policy (CAP);

8.

stresses that the new proposals for granting State aid must take into account and remain in line with the new CAP;

9.

stresses that agricultural holdings will be required to implement the Green Deal strategies, in particular the Biodiversity Strategy and the Farm to Fork Strategy;

10.

stresses that it is essential to support agricultural and forestry holdings through the green transition, especially smaller agricultural holdings which are located in strategic areas and which are active in safeguarding and protecting the landscape;

11.

urges the Commission to lay down binding European production standards and reciprocity or mirror clauses for imports, like those imposed on EU producers;

12.

calls on the Commission to increase the number of border checks and to enforce procedures such as cold treatment of imported products;

13.

points out that the European Committee of the Regions has already given its views on the two strategies, in the opinions on Bio-diverse cities and regions beyond 2020 at the UN CBD COP 15 and in the EU Biodiversity Strategy for 2030 (4) and From farm to fork — the local and regional dimension (5);

14.

stresses the key role played by local authorities in defining and managing certain procedures linked to certain kinds of aid, in particular aid linked to risk management in agriculture;

15.

points out that regions, provinces and municipalities not only help draw up the national strategic plans provided for in Regulation (EU) 2021/2115; they are also recipients of rural development support and help establish the bottom-up approach provided for by the LEADER initiative;

16.

notes that from 2014 to 2019, State aid granted in the agricultural sector at European level fell from EUR 7,6 billion to 6 billion, but then increased during the COVID-19 pandemic;

17.

stresses that, during this period, agricultural and agri-food holdings and the forestry sector never ceased to produce, ensuring security of supply as required by Article 39 TFEU;

18.

stresses that the war between Russia and Ukraine has created instability on the commodity and food supply markets;

19.

highlights the role that the CAP should play in this regard, in terms of self-supply and guaranteeing food security;

20.

points out that this supply was also made possible because holdings could receive aid defined as ad hoc by the Commission in response to the economic crisis caused by COVID-19;

21.

notes, furthermore, that most of the State aid, with the exception of specific aid for the COVID crisis, was granted primarily under rural development plans and, in particular, for measures not included in the objectives of Annex I to the Treaty (agricultural products);

22.

notes the complex procedure for including State aid in the RDPs;

23.

notes that, although Regulation (EU) No 1305/2013 on EAFRD support for rural development and the Guidelines for State aid in the agricultural and forestry sectors and in rural areas 2014 to 2020 are very similar, the rural development measures are not always fully in line with State aid rules;

24.

notes that the consultation launched by the Commission revealed that some aspects of current State aid rules have become obsolete;

25.

stresses that ensuring a level playing field for all businesses in the European Union remains a key objective;

26.

notes that some measures need to be maintained and adapted, in particular as regards risk management;

27.

notes that for the forestry sector aid has mostly been used for rural development measures and that, given the important role played by forests, it will be necessary to make aid easier to implement;

28.

considers it necessary to support agricultural and forestry holdings through the green transition, especially microenterprises, local small farmers and short food supply chains, which, including in the light of high food prices and input costs, such as energy and fertilisers, which have been impacted by the war in Ukraine, would not be able to cope with these consequences alone; in this regard, welcomes the European Commission’s Communication on Safeguarding food security and reinforcing the resilience of food systems;

29.

harmonising the criteria concerning information and publicity requirements, in particular as regards the deadlines for communicating the details of the aid schemes covered by the Block Exemption Regulations;

30.

stresses that the CAP reform which has just been adopted is based on the subsidiarity principle, and that it is therefore important that State aid rules uphold this principle without undermining competition between farmers in different Member States;

31.

considers it essential to preserve the subsidiarity principle, especially when it comes to the role played by local authorities, which are closest to the regional bodies that play an essential role in managing support at local level.

Therefore suggests:

Simplification

32.

not requiring Member States to submit notifications on a yearly basis relating to events that can be assimilated to natural disasters, animal or plant diseases or infestations, as, if they are recognised as such by the national authorities, they do not need to also be notified to the Commission;

33.

not requiring Member States to publish information on individual beneficiaries of aid under EUR 75 000 for agricultural production, and under EUR 500 000 for the processing and marketing of agricultural products;

34.

not making procedures linked to the part of the common evaluation for notified aid more cumbersome;

35.

providing for the possibility of granting investment aid through the Agricultural Block Exemption Regulation (ABER) (6), even for products from a single sector, and particularly where the aid is intended to mitigate the consequences of events that can be assimilated to natural disasters or to provide compensation for damages caused by animal or plant diseases or pests;

36.

providing for a single window approach for notifying State aid in the NSPs referred to in Regulation (EU) 2021/2115;

37.

defining a lex specialis for implementing the De minimis Regulation in agriculture, given the sizeable differences between the agricultural sector and the other sectors. In particular, we call for the de minimis aid ceiling to be raised to EUR 50 000 over a period of three years, and for an amount (e.g. EUR 1 000) to be set, below which the De minimis Regulation would not apply (very limited amounts of aid);

38.

amending the De minimis Regulation for the agricultural sector in such a way as to make it simpler, in particular to remove monitoring of the single undertaking requirement;

39.

leaving it up to the Member States to define an undertaking in difficulty;

40.

simplifying administrative procedures for aid to local authorities, especially when they are recipients of State aid support. In particular, we ask for them not to be considered large undertakings;

41.

establishing simpler procedures for local and regional authorities to manage local and regional needs and emergencies in the first instance;

42.

simplifying the procedures for granting State aid for advertising and promotion campaigns, in particular considering general institutional promotion activities which do not refer to specific brands and do not encourage consumers to purchase a product as NOT being aid;

43.

simplified costs are currently deemed compatible with State aid rules only in the context of aid benefiting from co-financing from EU sources. We call for it to be possible to use simplified cost options irrespective of European co-financing. There seems to be no valid justification for continuing to stipulate different methods for calculating eligible costs depending on where the aid scheme’s funding comes from;

Greening

44.

supporting agricultural and forestry holdings, especially microenterprises, in the green transition;

45.

ensure adequate flexibility in the application of State aid rules in the event of crises, such as the ones created by the COVID-19 pandemic and the war in Ukraine, by providing for appropriate and consistent aid ceilings so that farmers can continue to produce food and consumers can benefit from fair consumer prices; this can also be achieved by simplifying the procedures for the implementation and granting of aid, while reducing red tape, in particular for final beneficiaries;

46.

simplifying certain procedures for granting State aid for investments in renewable energy production, particularly with regard to the size of the incentive:

47.

introducing higher investment rates for agricultural SMEs investing in the green transition;

48.

creating ad hoc aid for carbon farming to pay farmers for this important task;

49.

considers that the dispersed nature of agricultural holdings makes it difficult for them to be market players and start the green transition which agriculture has to effect;

Territorial cohesion

50.

considers it essential to redefine the concept of SMEs in the agricultural sector, and revise the definition of microenterprise set out in Annex I, Article 2(3) of Regulation (EU) No 702/2014, to create an ad hoc definition for the agricultural sector, given the specific nature of the sector, and therefore proposes defining a new type of microenterprise in agriculture;

51.

supporting agricultural and forestry SMEs in mountain and inland areas and in the outermost regions in their role of safeguarding and protecting the landscape;

52.

rewarding SMEs in the agricultural sector which comply with the parameters set out in point 50, which are located in mountain, inland or disadvantaged areas as defined by the Member States in their National Strategic Plans for their role in preserving and protecting habitats;

53.

calls for it to be possible for holdings in high mountain areas to purchase land for an amount exceeding 10 % of the total eligible expenditure for the operation concerned, as set out in Article 73(3)(c) of Regulation (EU) 2021/2115, in order to allow the land consolidation necessary to keep them economically active and to carry out their tasks of safeguarding and protecting the landscape;

54.

allowing the forestry sector to benefit from the notification exemption procedure outside NSP measures as well;

55.

also with regard to the forestry sector, that infrastructure support be considered NOT to be default aid where it concerns non-productive investments;

56.

amending the current risk management rules, in particular by lowering the damage threshold for defining events which can be assimilated to natural disasters to 20 %, as provided for in Regulation (EU) 2021/2115;

57.

providing for an increase in the compensation threshold for subsidised insurance and other risk management tools as provided for by Article 76 of Regulation (EU) 2021/2115; this threshold must allow current insurance prices for agricultural holdings to be maintained;

58.

that aid compensating damage caused by protected animals be exempt from notification;

59.

that, for such damage, it be possible to provide for compensation for loss of income, as is already provided for with regard to damage resulting in a loss of production equipment;

60.

that, in addition to the damage caused by protected animals, compensation for other animals also be envisaged, leaving it up to national, regional and local authorities to establish a definition of these animals, as the impact varies from country to country;

61.

considering institutional promotion campaigns which do not refer to specific brands as NOT being aid;

62.

sufficient support should be provided for non-agricultural start-ups in rural areas, with the ceiling for the limited amount of aid aligned with the ceiling for agricultural start-ups (EUR 100 000). There is no reason to make a distinction that penalises diversification in non-agricultural businesses, as the amounts in question are in any case very small;

63.

in order to help SMEs benefiting from CLLD projects or Operational Group projects, we call for: — the scope to be extended to local authorities, LAGs, universities, and other bodies regardless of their size, in view of the great diversity of these projects, which involve many different entities working together, — the total amount of limited aid granted per project to be increased to EUR 300 000 for community-led local development projects and EUR 500 000 for EIP Operational Group projects.

---

(1)  Regulation (EU) No 1305/2013 of the European Parliament and of the Council of 17 December 2013 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD) and repealing Council Regulation (EC) No 1698/2005 (OJ L 347, 20.12.2013, p. 487).

(2)  Cf. Commission Staff Working Document: Evaluation of the instruments applicable to State aid in the agricultural and forestry sectors and in rural areas.

(3)  Regulation (EU) 2021/2115 of the European Parliament and of the Council of 2 December 2021 establishing rules on support for strategic plans to be drawn up by Member States under the common agricultural policy (CAP Strategic Plans) and financed by the European Agricultural Guarantee Fund (EAGF) and by the European Agricultural Fund for Rural Development (EAFRD) and repealing Regulations (EU) No 1305/2013 and (EU) No 1307/2013 (OJ L 435, 6.12.2021, p. 1).

(4)  OJ C 440, 18.12.2020, p. 20.

(5)  OJ C 37, 2.2.2021, p. 22.

(6)  Commission Regulation (EU) No 702/2014 of 25 June 2014 declaring certain categories of aid in the agricultural and forestry sectors and in rural areas compatible with the internal market in application of Articles 107 and 108 of the Treaty on the Functioning of the European Union (OJ L 193, 1.7.2014, p. 1).

Opinion of the European Committee of the Regions — EU Forest Strategy for 2030

(2022/C 301/11)

Rapporteur: Joan CALABUIG RULL (ES/PES), Regional Secretary for the European Union and External Relations of the Government of Valencia

POLICY RECOMMENDATIONS

THE EUROPEAN COMMITTEE OF THE REGIONS (CoR)

General comments

1.

welcomes the fact that the EU Forest Strategy establishes a policy framework to manage and protect European forests with a view to improving their ecosystem services, securing livelihoods, especially in rural areas, and contributing to a forest bioeconomy supported by sustainable forest management as a multifunctional nature-based tool, while combining regulatory and financial measures as part of a plan for 2030;

2.

considers that the EU Forest Strategy for 2030, which replaces the Forest Strategy that was adopted in 2013 (1) and evaluated in 2018 (2), establishes a framework for European cooperation on forests, highlighting the key role of sustainable forest management in ensuring people's well-being and livelihoods, the conservation of biodiversity and the preservation of climate-resilient ecosystems;

3.

welcomes the assessment and correction of some isolated forestry practices in certain regions in order to protect biodiversity, soil and water quality and resilience to disturbances caused by climate change (water stress, hurricanes, snow, pests and forest fires);

4.

recognises the central role of the forest ecosystem in the European Green Deal (3), the European Climate Pact (4), the European Climate Law (5) and the EU Biodiversity Strategy for 2030 (6) and stresses that the various forest-based sectors — including those utilising non-extractive benefits of forests — can and should contribute to a sustainable, climate-neutral and socio-economically competitive circular bioeconomy;

5.

Notes that the forestry sector has been excluded from the first report of the Expert Platform on Environmental Criteria of the European taxonomy due to the fact that forest is a sensitive sector in which finding a balance between different needs and interests of stakeholders is difficult. Notes also that the opinion of the experts is not binding for the European Commission;

6.

calls for the Commission to deal with the climate and biodiversity objectives and the forest bioeconomy objectives in a balanced, environmentally, socially and economically fair way, which is one of the fundamental pillars of the European Green Deal;

7.

stresses that the Member States and local and regional authorities with responsibility for forests have developed and implemented national and/or regional sustainable forest management strategies, policies, programmes and tools and therefore emphasises the importance of cooperation and constructive dialogue between the Member States, the Commission, stakeholders and forest civil society;

8.

highlights that forests deliver multiple benefits to society at large through a full array of ecosystem services, including non-extractive services, so forest-related decisions are important for a wide range of citizens and forest managers;

The need to enhance dialogue with the forest stakeholders, local and regional authorities, Member States and the Commission

9.

believes that setting a framework and common objectives at European level is a very good idea, but calls for any weakening of subsidiarity and of the role of the Member States in this area to be avoided, given the diversity of forests in Europe, and for a more tailored, regional approach to be adopted. The CoR also shares the view that while the Treaties do not list ‘forest policy’ among the EU's explicit competences, the EU has a wide range of competences on related matters, which have been exercised in legal texts addressing forestry issues;

10.

also points out that forest management has a significant impact, especially in sparsely populated areas and in remote areas where the forest economy is fundamental to people's livelihood;

11.

recommends stepping up communication, dialogue and the involvement of the Member States, local and regional authorities and the sector's stakeholders (public and private owners, professional associations, forest-based companies, nature conservation experts, researchers including climate scientists etc.) in drafting documents within the existing participatory bodies, as was done with previous strategies, in order to achieve maximum consensus among all stakeholders interested in benefitting from our forests, in the CoR's view, the initial discussion was limited and could be improved. On the contrary, a final document was presented based on the argument that much of the content was already included in the 2020 Biodiversity Strategy;

12.

recommends that stakeholders specifically affected by the measures set out in the EU Forest Strategy (local and regional authorities, civil society and businesses) should be involved in their implementation, minimising administrative burdens, especially for forest owners and businesses, but also for local and regional authorities;

The need to reach a consensus at EU level

13.

regrets the lack of political consensus in the EU since, in recent weeks/months, criticism of the EU Forest Strategy as it currently stands has increased, as can be seen in statements from EU bodies such as the European Economic and Social Committee (Opinion NAT/831 on the New EU Forest Strategy for 2030 (7)), various national and regional governments and the political parties supporting them, from MEPs from various political groups and from representatives of the forestry sector (associations of public and private forest owners, local and regional authority forest administrations, business associations and national and regional sectoral platforms);

14.

regrets the failure to comply with the Council conclusions reached under the German Council Presidency on closer future cooperation in the EU, proposing a top-down approach, without taking sufficient account of existing structures (e.g. regional/national forest inventories), with specifications and measures that come exclusively from the Commission, which is not responsible for forest policy, and without sufficiently involving the advisory committee responsible;

15.

recognises that the EU Forest Strategy's overall objectives of securing forest management best practices in the Member States and local and regional authorities, but draws the Commission's attention to the need to strike a balance between the environmental, social and economic aspects of forest management including protection as a management option, and stresses the importance of respecting and maintaining the diversity of forests, and planning and sustainable forest management practices and rotation periods in the Member States and local and regional authorities;

16.

points out that, for the forestry sector's key stakeholders (private and public owners, professionals, businesses and a large part of the forest scientific community), the EU Forest Strategy's approach does not fully correspond to the realities on the ground, suggesting that sustainable forest management practices do not appear to be going in the right direction and should therefore be changed significantly;

17.

stresses that data show a decline in biodiversity in some areas and inadequate conservation in Natura 2000 habitats, partly due to the lack of a suitable incentive framework for their managers (prices, remuneration of externalities, regionally adapted and sound regulatory framework); these are key aspects that the EU Forest Strategy should address with allocation of extra resources from EU and Member States' budgets; calls for closer cooperation to promote efforts towards ecosystem restoration, including targets for restoring damaged forest ecosystems;

18.

thinks that multifunctional forestry is an established sustainable forest management tool in the vast majority of regions, especially in those most affected by the impact of climate change, and that owners and professionals who manage forests are generally committed to protecting their biodiversity and their other ecosystem services and to reducing the level of danger and the incidence of forest fires, while striving to make them more resilient, keep them in good condition and support their growth, making them active contributors to local economies and livelihoods in rural areas;

19.

recommends taking a much more systematic approach, incorporating the diversity and complexity of sustainable forest management with indicators beyond the harvest and increment ratio, property rights and the realities faced by owners, professionals, public and private companies and local and regional authorities, as well as the European forestry sector's achievements in sustainable development and believes that forest protection, in some areas, must go hand in hand with support, including economic support, for active sustainable management aimed at maximising the positive externalities of ecosystem services and avoiding the degradation resulting from neglected forest areas, including environmental degradation;

20.

in the context of biodiversity, it should be highlighted that, thanks to certain outermost regions, the EU possesses primary, Amazonian and subtropical forests, which constitute a unique laboratory for scientific research, specialisation and innovation (such as pharmaceutical research and the development of plant extracts). Biodiversity in these regions represents nearly 80 % of European biodiversity and is vital for the ecological balance of the planet. Local and regional authorities are the guardians of this priceless treasure and ought to be given adequate support for its management and preservation;

21.

believes that, although the EU Forest Strategy is closely related to the Biodiversity Strategy and can in fact create coherence in this regard, it should adopt a different, more inclusive and more systematic approach in order to effectively and consistently align its actions with the objectives of the common policies on the green transition and climate change so as to achieve the EU's environmental, social and growth objectives, including green jobs, making coherence between the relevant EU policies affecting sustainable forest management crucial for the EU Forest Strategy, and fostering the sector's potential to contribute and achieve the sustainable development goals set out in the Green Deal;

A more cross-cutting approach needed by the Commission's departments

22.

welcomes the fact that the EU Forest Strategy was the result of a joint effort by DG AGRI, DG ENV and DG CLIMA but recommends involving the various Commission departments working in the forestry sector (DGs GROW, ENER, REGIO) in order to include all social, economic and environmental aspects and implications as part of a systemic and inclusive approach; otherwise, their approach may be incomplete and biased;

23.

recommends clearly defining the role of the Standing Forestry Committee as a key player in the EU Forest Strategy, so that the views of the sector and other key stakeholders are expressed, enabling the active use of forests across the various regions of the EU;

24.

recommends taking into account the morphology of the landscape, as both innovation and investment in infrastructure are necessary to facilitate logistics and enable digitalisation that modernise forest-based value chains as levers to combat resource loss and depopulation, as is an appropriate system of incentives;

The role of the regional and local levels

25.

recommends considering the territorial dimension of forests such as land use, with forests covering an increasing proportion of land (currently 43 %), mainly in depopulated regions (in the hinterland: mountains, cold climates, flood-prone areas, poor soils), by incorporating the land management and depopulation policies of the Member States and local and regional authorities;

26.

considers it necessary to recognise the principle of subsidiarity, but also the shared competence over forest due to the various environmental and landscape conservation legislations that impact forest policy, taking into account the various guidelines relevant to forests including but not limited to forestry practices and the differences in the Member States' forest holdings, due to the biological, social, economic and cultural diversity of forests in the various regions of the EU;

27.

stresses the need for the main aspects of the EU Forest Strategy to set out principles agreed at EU level. However, the national level must be able to decide on the means needed to achieve the objectives, so that they correspond with the policies and regulations of the local and regional authorities responsible for forests; emphasises that sustainable forest management, a competitive and profitable sector in general and a suitable policy consistency are required to protect forests;

Compatibility between the environmental, social and economic functions of forests is necessary to meet the EU's main challenges

28.

believes that the EU Forest Strategy must sufficiently consider the importance of the full array of forest products and services, hence the Bioeconomy Strategy and sustainable forest management should ensure a balance between forest functions, including the provision of various ecosystem services. Only favouring one aspect upsets the balance;

29.

stresses that the forestry sector (management and harvesting, industrial processing of wood and paper) directly employed 2.1 million people in the EU in 2018, generating a gross added value of EUR 109 855 million. Moreover, 1.2 million people worked in wooden furniture manufacturing and paper printing, generating a gross value added of EUR 25 000 million and EUR 31 000 million respectively. In 2018, 397 000 companies operated in forest-based industries, representing 15 % of manufacturing companies. Finally, bioenergy, wood construction and non-timber forest products provided an additional 4 million jobs;

30.

points out that biodiversity conservation, restoration of ecosystems and an increase in carbon sinks are the fundamental aspects of the EU Forest Strategy, but that the resulting lack of coherence with climate objectives and sustainable socio-economic growth is one of the most problematic points;

31.

highlights the social dimension of forests in the EU, as 60 % of the forest area belongs to more than 16 million private owners, the vast majority of whom are small owners spread across all regions, with an average of 13 hectares each;

32.

argues that the principles of sustainable forest management consider sustainability from a global, i.e. an environmental, economic and social perspective. This means that sustainable forest management should be seen as the best way to manage through conservation or to conserve through management, and is therefore the way to resolve the supposed dichotomy between conservation and management, which is more rooted in political discourse than in actual management practice on the ground;

33.

points out that forests owned by local and regional authorities account for approximately 14 % (22 million hectares) of the total forest area. Not only are local and regional authorities forest owners, but they also manage and administer the implementation of forest policy and budgets, enforce laws and provide sustainable forest management support to private owners, which are always subject to forest policies falling within the remit of the Member States and to EU initiatives stemming from various sectoral policies, while always seeking to reconcile the environmental, social and economic functions of forests;

34.

stresses that the discussions that have run alongside the process are establishing a false dichotomy between the environmental and socio-economic functions of forests, leading to biased discussions and diverting the focus from the fundamental objective of the sustainable development: long-term protection of our forests' health, the ability to tackle the climate crisis with resilient ecosystems, sustainable management of resources and responsible and efficient processing of their products, with a view to ensuring the well-being and way of life of millions of Europeans;

35.

recommends strengthening the content of the EU Forest Strategy with regard to some environmental objectives (water, soil, landscape) while placing greater emphasis on the key contribution made by industrially and sustainably processed and managed forest products to the bioeconomy — which is a basic pillar of the Green Deal. As regards these forest products, technologically innovative processes need to be financed in order to develop various businesses, particularly first-stage processing businesses which are the weak link in the forestry and wood industry and which have the greatest potential for making the best use of local resources;

36.

advises that greater emphasis be placed on sustainable forest management definitions and measures aimed at improving water cycles and soil conservation, especially in Mediterranean and mountain ecosystems and points out that indicators need to be enhanced to improve the sustainable management of forests, which is a prerequisite for the long-term provision of ecosystem services;

37.

recommends re-establishing objectives to give greater visibility to ensuring a sustainable balance and compatibility between the environmental, social and economic functions of forests based on sustainable and multifunctional forest management in the various forest regions (boreal, continental, Mediterranean, mountain and urban forests), without abandoning the protection of biodiversity and other environmental services;

38.

believes that the EU Forest Strategy should more clearly highlight the importance of promoting inclusiveness and equality in the forest sector; also considers that, in line with the new EU Gender Equality Strategy of March 2020, the new EU Forest Strategy should work towards more equal labour market participation among genders so that the forest sector can reach its full potential;

39.

recommends highlighting the role of forests in the most remote areas, in mountain regions and in the most disadvantaged regions, where the percentage of forest area is higher and there is a greater risk of depopulation and where, furthermore, forest value chains are the main sources of employment and economic activity associated with the harnessing and initial transformation of forest resources;

40.

points out that the role of forests in the development of a circular bioeconomy is presented more from the perspective of risk rather than that of opportunity and stresses the important role that bio-based products play in decarbonisation by reducing the consumption of fossil fuels and materials derived from fossil resources, which is one of the main objectives set by the Commission; however, the decarbonisation must take into account the life-cycle assessment of forest-based products and favour the production of long-life products;

41.

recommends the promotion of processing wood products and non-timber forest products locally in order to decrease the impact on the environment;

42.

welcomes the recommendation of the Conference on the Future of Europe citizens' panel that calls for a special focus to be given to the reforestation of exploited or destroyed forests and the afforestation of the areas with degraded soil as well as more responsible solutions to be promoted for a better utilisation of the wood (8);

43.

recommends redefining the EU Forest Strategy's objectives and its synergies with the 2012 Bioeconomy Strategy, which was revised in 2018 (9), incorporating and promoting forest products, both wood (not only construction wood, but also biocomposite materials, biofuels, wood for biorefineries and products with high added value for the chemical, food, and cosmetics and perfume industries) and non-timber forest products (cork, fungi, wild fruits, aromatic and medicinal plants, and resins), taking into account their contribution to climate change mitigation as carbon sinks throughout their life cycles and the effect of substituting these products for other materials that are net emitters of greenhouse gases;

44.

advises redefining objectives and synergies with the 2020 New Circular Economy Action Plan (10), which is a basic pillar of the Green Deal, enhancing the recovery and recycling of forest products in all their waste processing and recovery chains;

45.

recommends establishing a system for transferring best practices that are in use in most companies (optimised, rational and responsible use of resources, certification of chain of custody, ecodesign, energy efficiency, material or energy recovery of waste) to the entire forest-based industrial sector;

46.

highlights that the EU Forest Strategy's objective should recognise the importance of forest not only as carbon sink, but also as carbon stock which could be increased as a major contributor to the EU climate neutrality target by 2050; stresses the substitution impact of forest-based product should take a full life-time impact into account to appreciate the full potential of the forestry sector in climate change mitigation; notes that the net effect of forests as carbon sinks also decreases with forest age;

47.

recommends that clear definitions be established for forests, at least distinguishing between primeval forests that have never been managed (0,7 % of all forests) and forests that were managed in the past but have not been in recent decades, in order to effectively protect old-growth forests, especially in some regions in central and eastern Europe and revitalising the mountains in which management has been abandoned, leading to a risk of forest fires, diseases and pests;

48.

believes that bioenergy should be considered as an opportunity for carrying out sustainable forest management action and as a renewable source, in relation to industrial by-product processing procedures and in recycling, in line with the 2018 Directive on the promotion of the use of energy from renewable sources (11); considers that bioenergy is important for Europe's energy security and independence from fossil fuels;

49.

recommends revising the proposed amendments to the sustainability criteria for bioenergy or forest treatment, as some of the proposed measures may increase the burden on local and regional authorities as forest owners and as the institutions responsible for sustainable forest management in many Member States, as restrictions related to the strict legal protection of 10 % of forests will generate significant compensation without a clear financial commitment from the Commission; considers that the sustainability criteria for bioenergy set out in the 2018 Renewable Energy Directive should apply;

50.

believes that the socio-economic role of the forestry sector is important for the development of rural areas and local economies in many regions, and regrets that the EU Forest Strategy does not include as one of its primary objectives the clear and unequivocal development of the use of timber resources and non-timber forest products, as well as their industrial processing by EU companies (the vast majority of which are SMEs located in rural regions), based on sustainable forest management and as part of the green bioeconomy;

51.

considers that the EU Forestry Strategy should promote and strengthen education on sustainable forest management at all levels, especially in schools and civil society organisations, but also in media campaigns, as a way of overcoming European citizens' lack of knowledge about sustainable forest management and its threefold environmental, economic and social dimension;

52.

thinks that the EU Forest Strategy should include an international dimension aimed at curbing global deforestation and biodiversity loss, capitalising on the experience, knowledge sharing and best practices with regard to sustainable forest management as practised in the Member States and the vast majority of local and regional authorities; welcomes against this background the Commission proposal for a regulation on the making available on the Union market as well as export from the Union of certain commodities and products associated with deforestation and forest degradation and repealing Regulation (EU) No 995/2010 (12), which intends to curb the import of commodities linked to deforestation and forest degradation globally. Also stresses that the proposal has been accompanied by a Subsidiarity Grid (13), which provides a substantial analysis addressing subsidiarity concerns;

The need to reach a consensus at scientific and technical level

53.

recommends that the EU Forest Strategy showcase forestry best practices with good outcomes in European forests in recent decades (continuous growth of the forest area, growth of carbon sinks, increase in the number of protected areas and ecosystems, increase in harvesting, development of responsible businesses and industries, better training in sustainable forest management and better training for forest operators) and that it explicitly recognise this work, which puts the EU at the forefront of global forestry best practices and serves as an example for other countries;

54.

calls for the sustainable forest management definitions, and especially the FOREST EUROPE process, derived from the international commitments made by the EU and its Member States to be used;

55.

recommends carrying out further studies on planning possible implementation in order to avoid overlap with existing systems, and clarifying the synergies, added value and cost-benefit ratio that could be offered by the proposed close-to-nature forest management certification and an independent EU certificate, as well as the strategic forest plans, in relation to the existing forest certification systems (Programme for the Endorsement of Forest Certification (PEFC) and Forest Stewardship Council (FSC)), which are recognised and implemented internationally, and to the sustainable forest management strategies, plans and programmes already available in the Member States and local and regional authorities; there is also a lack of clarity regarding whether the new scheme should be mandatory or voluntary and regarding the legal basis on which such actions would be carried out;

56.

calls on clearly referring to the full array of non-extractive benefits of forest;

57.

calls for a review and analysis of the assessments made by forest scientific experts including forest ecologists across Europe, which warn that the proposed policies may not take sufficient account of the potential increase in risks related to major disturbances (fires, hurricanes, heavy snowfall and pests), with particular attention being paid to forests, which are especially vulnerable to the climate emergency;

58.

proposes that a broader consensus be reached on the assumptions underpinning both the EU Forest Strategy and the Biodiversity Strategy, based on a rigorous scientific and technical approach involving a representative panel of scientific experts who are meticulous and have proven experience covering all aspects of the entire forest value chain and the different types of forest in Europe;

59.

considers that, under certain conditions supported by scientific analyses, protected habitats in some Natura 2000 sites that are threatened or compromised by climate change-related disturbances, can be supported in becoming more resilient ecosystems;

60.

acknowledges and welcomes the proposal for reliable data collection, stressing the importance of publishing a new legislative proposal on EU forest observation, reporting and data collection;

The strategy needs important clarifications before its implementation

61.

thinks that the EU Forest Strategy does not set a coherent and comprehensive objective for the EU forestry sector for 2030 but rather covers a number of actions and initiatives, many of which are still vague and only some of which have an indicative timetable;

62.

believes that, with regard to implementation of the EU Forest Strategy, the first step must be to clarify concepts and actions and draw up an action plan that provides clarity in terms of objectives, scope, time frame and responsibilities; this action plan must recognise the positions of the Member States, local and regional authorities and the sector's players on the EU Forest Strategy and their thoughts on the proposed way forward; it should also include the views of the CoR, the European Parliament and stakeholders from across the forestry sector;

63.

recommends clarifying how the new sustainable forest management indicators, thresholds and ranges will relate to the FOREST EUROPE sustainable forest management criteria and indicators, given that the EU and its Member States are signatories to FOREST EUROPE; believes that there is also a need for information on the legal basis that would justify this action and on what ‘starting on a voluntary basis’ would involve with regard to possible future steps, and for clarification regarding the link between sustainable forest management and the concept of ‘close to nature’;

64.

recommends that the scope and feasibility of the development of payment for ecosystem services be discussed in depth with the Member States and the sector's stakeholders, and subsequent reality checks be carried out to assess whether the financial mechanisms provided for in the EU Forest Strategy (CAP, carbon farming and carbon certification) would enable the set objectives to be achieved;

65.

welcomes the introduction of EU-wide and coordinated forest monitoring but believes that there is a need for an assessment of the added value and cost-benefit ratio of the new EU forest observation, reporting and data collection proposal, and of existing and missing data and information, with remote data, including information from satellites and other media, being recognised as a cost-effective way to improve the knowledge base in cooperation with existing and ongoing national forest inventories; in this regard, subsidiarity, costs and administrative burdens are key aspects that should be addressed. Forest monitoring across the EU could generate added value provided that it is supported by the Member States and local and regional authorities and is based on data on the ground collected by national and regional forest inventories and on the experience of Forest Focus. Moreover, the nature (voluntary or mandatory), format and exact purpose of the national strategic plans need to be clearly defined and cost-effective incentives must be created for forest owners to contribute to data collection;

Sustainable forest management requires more European funding

66.

recommends committing clear and realistic financial resources since, although a significant increase in EU funding for sustainable forest management and biodiversity conservation can be interpreted from the EU Forest Strategy, the need to depend on funds that already have other objectives and allocations (e.g. CAP) and the lack of contribution from other EU funds in a general context marked by Brexit, the post-COVID-19 economic crisis and an inflation rise, it is questionable whether the current EU underfunding of forest and biodiversity will be reversed in the short or medium term;

67.

advises the Commission to help local and regional authorities to ensure that the available EU funds (EAFRD, ERDF, NextGenerationEU) can be used more for sustainable forest management by simplifying the administrative processes;

68.

recommends committing more financial resources for training, R&D and knowledge sharing at European and international level in order to facilitate cooperation, and exchange and implement best practices in sustainable forest management and forest-based value chains across Europe and around the world;

69.

takes the view that the new EU Forest Strategy should promote initiatives to create platforms for interregional cooperation and funding relating to forests and the decarbonised economy.

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(1)  COM(2013) 659 final.

(2)  COM(2018) 811 final.

(3)  European Green Deal https://ec.europa.eu/info/strategy/priorities-2019-2024/european-green-deal_en

(4)  COM(2020) 788 final.

(5)  Regulation (EU) 2021/1119 of the European Parliament and of the Council of 30 June 2021 establishing the framework for achieving climate neutrality and amending Regulations (EC) No 401/2009 and (EU) 2018/1999 (‘European Climate Law’) (OJ L 243, 9.7.2021, p. 1).

(6)  COM(2020) 380 final.

(7)  OJ C 152, 6.4.2022, p. 169.

(8)  Recommendation of the Conference on the Future of Europe citizens' panel on climate change and the environment.

(9)  COM(2018) 673 final and SWD(2018) 431 final.

(10)  COM(2020) 98 final.

(11)  Directive (EU) 2018/2001 of the European Parliament and of the Council of 11 December 2018 on the promotion of the use of energy from renewable sources (OJ L 328, 21.12.2018, p. 82).

(12)  COM(2021) 706 final.

(13)  SWD(2021) 325 final.