In response to the problems caused by the war in Ukraine – unprecedented migration of Ukrainians to Europe and the risks for successful completion of activities of the Cohesion plan – Latvia and nine other European Member states have agreed to submit to the European Commission a report on urgent solutions to the problem.
These countries are Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Lithuania, Poland, Romania and Slovakia. Minister of Finance Jānis Reirs signed the joint report on Latvia’s behalf, as BNN was informed by the Ministry of Finance.
In this report, member states admit they have limited financial capabilities to help Ukrainian refugees.
Additionally, member states outline problems with Cohesion policy’s projects in relation to complications with supply lines, which results in a shortage of many important construction materials and labour force, because Ukrainians who were previously employed member states as construction workers are gradually returning home to fight in the war.
At the same time, member states express gratitude to the European Commission for already implemented initiatives to support refugees (REACT-EU, CARE, etc.). However, member states also admit these programmes do not resolve the problems caused for member states by the war.
This is why ten member states urge the European Commission to come up with additional solutions for the aforementioned challenges and propose specific directions. The main proposed solution is extending the EU funds 2014-2020 planning period’s payment distribution term for one more year – until 2024. Member states also urge extending EU funds 100% co-financing rate for one more accounting year that will last from 2022 to 2023.
Member states propose EC to reduce financing limits for cases when specific project activities of the 2014-2020 are permitted to be completed using financing of the 2021-2027 period’s financing. Currently this is only permitted in cases when the costs of the project reach at least EUR 5 million.
The report also details a proposal to include a 5% financial reserve for future challenges in the 2021-2027 planning period’s planned financing package. This would provide an opportunity for quick operational solutions without unnecessary bureaucracy.
Considering that the financing available to member states from the Cohesion Policy fund is already planned out and in most cases contracts with financing recipients have already been signed, the EC is invited to ensure flexibility for the EU multi-year budget to find financing for member states that face the biggest influx of Ukrainian refugees.
Member states also mention in their joint announcement the importance of EU funds 2021-2027 planning period in resolving challenges caused by the war and invite EC to approve member states’ next planning period’s partnership contracts and cooperation programmes in order to commence their implementation as quickly as possible.