The EU’s €5 billion reserve fund to offset the effects of Brexit for the worst affected member states and sectors has moved a step closer to being finalised today (Thursday, June 17).
The Council of the EU and the European Parliament have reached a preliminary agreement on the draft regulation on the fund, paving the way for the first set of funds to be paid out before the end of this year.
The reserve is aimed at the regions and sector worst affected by Brexit across all member states.
The ‘one-off emergency instrument’ will be spent on (among other things) compensating businesses for lost trade; preserving jobs; helping fishing communities; and building customs facilities at ports.
The main condition for reimbursing public authorities, as well as private companies, is that the costs incurred must be directly linked to countering the adverse effects of Brexit.
The council and the parliament have agreed that the reserve will cover – in full or in part – measures introduced by member states between January 1, 2020 and December 31, 2023.
80% of the €5 billion will allocated as ‘pre-financing’. This will be broken down as €1.6 billion in 2021; €1.2 billion in 2022; and €1.2 billion in 2023.
The remaining €1 billion will be made available in 2025. It will be shared among member states depending on how the funding has been spent in the previous years, also taking into account any unused amounts.
The allocation to individual member states will depend on three factors: the value of fish caught in the UK economic zone; the importance of trade with the UK; and the population of maritime border regions with the UK.
€600 million will be allocated on the basis of the factor linked to fishing, €4.150 billion based on trade, and €250 million under the factor linked to maritime border regions.
This preliminary agreement will now need to be formally endorsed by the full council and a plenary session of the parliament.
Minister for Foreign Affairs Simon Coveney said in January of this year that Ireland was set to receive around 25% of the whole fund – amounting to some €1.05 billion.
However, more recently, concerns emerged that other member states wanted to change the mechanism for allocating funds in such a way as to reduce Ireland’s share.
Speaking in March, Ireland South MEP Seán Kelly said that France was seeking to alter the calculations, which, he said, “threatens to delay the arrival of these vital funds even further, and is only to the benefit of the big countries”.
“Ireland is obviously most acutely affected, and we rightly stand at the front of the queue, but the fund must be implemented as soon as possible so that the Portuguese Presidency of the EU Council can endorse it,” the Fine Gael MEP stressed.