The Just Transition Fund and the European Social Fund Plus are key financial buttresses of the EU’s social agenda. In view of the challenges of a preferably green, digital and social recovery within the course of the Covid-19 crisis, the Commission now intends to increase both funds – compared to the original Commission proposal.
The proposal by the Commission for a recovery plan in the wake of the Covid-19 crisis presented on 27th May 2020, supports, apart from the digital agenda, also the continuation of the Green Deal. Already before, the majority in the European Parliament had demanded an ambitious green recovery plan, and a Green Recovery Alliance of MEPs, the European Trade Union Confederation, industrial associations, CEOs, NGOs and Think Tanks was formed. Commission President Ursula von der Leyen and Vice-President Frans Timmermans also let it be known during the past weeks, that any recovery must not be allowed to take place at the expense of climate and environment. This does not only require investments to ensure a socially just transition, but also the commitment to continue the implementation of the European Pillar of Social Rights.
Increasing the Just Transition Fund
The recovery plan, now presented by the Commission, provides for additional 750 billion, of which the Just Transition Fund (JTF) will receive additional 32.5 billion. According to this, its volume shall be EUR 40 billion in total. The Commission already announced at the presentation of the JTF in January 2020, that the originally planned 7.5 billion could be increased if required.
Regional Development Committee of the European Parliament
During the last meeting of the Committee on Regional Development (REGI) on 12th May, a clear majority of MEPs came out in favour of a significant increasing of the JTF. Both European Trade Union Confederation and AK did not regard the amount to be sufficient. Furthermore, from the point of view of AK, it is necessary that in case of crisis situations, target regions can also be determined at a later date. Regarding the envisioned plans, it is important to integrate the social partners for the implementation of a socially just transition. Apart from that, one has to be critical of the planned co-financing with resources from other funds, such as the European Social Fund Plus (ESF+). The Committe for Regional Development also demanded “fresh money” and the majority criticised and rejected any funding of the just transition from other sources.
Another controversial issue of the debate in the European Parliament was the question regarding investments in the infrastructure of natural gas. Originally, the Commission proposal of the JTF from January, expressly excluded projects based on fossil fuels. However, the draft report of the Committee for Regional Development, which was prepared by MEP Manolis Kefalogiannis (EPP), proposes to cancel this exclusion. This found little favour with other Committee Members. However, holding on to natural gas would be very much to the liking of eight Member States, which previously had defended its role regarding the transition to climate neutrality.
Giving ESF+ a financial injection
Apart from that, the recovery plan provides for Recovery Assistance for Cohesion and the Territories of Europe (REACT-EU) in the amount of EUR 310 billion, of which 55 billion shall be made available to cohesion programmes, whereby no clear separation of resources between funds has been provided for. Apart from the European Fond for Regional Development (ERDF), this would also benefit the European Social Fund (ESF+), the successor of the European Social Fund and the Fund for European Aid to the Most Deprived (FEAD). The fight against youth unemployment and for better access to social benefits and education opportunities is still at the centre of the ESF+. Some changes were made to adjust the ESF+ to changed circumstances. As was already announced by EU Commissioner Nicolas Schmit, particular focus shall be placed on youth unemployment. For example, within the scope of the ESF+, Member States, where the share of young people not in education, employment or training (NEET) is above EU average, shall now invest at least 15 % instead of the originally intended 10 % of their ESF+ resource to increase youth employment. Apart from that, all Member States shall invest at least 5 % of the ESF+ in the fight against child poverty. Flexibility shall also be improved: according to the Commission proposal, in future, faster access to the fund shall be made possible in cases of “exceptional and unusual circumstances”. This shall give Member States more flexibility in absorbing socioeconomic consequences of future crises.
Agreement of Council and EU Parliament required
The present Commission proposal represents a key basis for the negotiations between EU Parliament and Council. While in general, some Member States have already given a first positive response to the Commission proposal, the further course of the negotiations remains open. So far, the so-called “Frugal Four” have presented themselves as a blockade alliance to comprehensive concepts of overcoming the Covid-19 crisis – even if the joint coalition gradually begins to crumble. However, a joint agreement requires unanimity among Member States. The Commission is now urging for a political agreement reached by heads of state and government by July of this year.