Progressive cities and regions united for a local and sustainable recovery

29 May 2020
Progressive cities and regions united for a local and sustainable recovery

On Wednesday the 27th of May, the European Commission unveiled its proposal for a revised Multiannual Financial Framework (MFF), a recovery plan for Europe and an updated Commission work programme.

The proposal for a recovery plan, worth €750 billion (of which €500 billion will be given in the form of grants and €250 billion in the form of loans), is a remarkable step in the right direction.

Such a proposal would have been unthinkable only a few weeks ago. The increase of the ceiling of the EU’s own resources and the step towards a common health programme in the European Union are necessary steps to recover from this crisis.

EU citizens were waiting for a sign of solidarity from the European Union. This message has finally arrived. The proposed grants of €500 billion and loans of €250 billion are the minimum needed amounts to help the regions and cities most affected by the pandemic by providing a sigh of relief to the local communities that are struggling to get out of this health, economic and social crisis.

We also welcome the major shift in the economic paradigm that has been adopted to confront such a crisis: austerity is not a solution for economic and social recovery. In times of crisis, we should make full use of our investment capacities to avoid a collapse of our economic and social standard.

The new package also includes an additional €55 billion in support to the cohesion policy (of which €5 billion for 2020 and €50 billion for 2021 and 2022) that is in line with the position expressed by the European Committee of the Regions in its last declaration to ensure an ambitious cohesion policy also in the next funding period. However, it must be guaranteed that cities and regions are involved in this recovery plan, as it is normally the case with the cohesion policy. The PES Group will not accept a centralisation of the cohesion policy because of this crisis. As the PES Group in the European Committee of the Regions, we fully believe that the respect of the partnership principle and a place-based approach are paramount for an efficient and legitimate use of European funding.

To find those new resources, the EU has chosen to use the financial leverage at its disposal to help our cities and regions recover from this unprecedented crisis. No Member State is responsible for this crisis. It would thus be unfair and against the basic values of the European Union to let Member States, which are more affected by the COVID-19 pandemic, bear the burden of this crisis alone. When we have common problems, we need common solutions. This was the fundamental idea behind the foundation of the European Union.

This crisis has shown once more why it is more urgent than ever to equip the EU with a substantial amount of real own resources. The PES Group has repeatedly called for a fundamental reform of the own resources system. In 2017, the European Committee of the Regions adopted an opinion on the “Reform of EU own resources within the next MFF post-2020” (Rapporteur Isabelle Boudineau, PES Member and Chairwoman of the COTER commission in the European Committee of the Regions), that called for a new budget based on a larger proportion of new own resources.

However, we would like the European Commission to be more concrete and precise on the issue of own resources. As our President Christophe Rouillon underlined:

The European Commission also needs to be clear on how these proposals will be financed. I had hoped for concrete proposals on own resources by the European Commission. Now, Member States will have to take up these ideas and agree to a sustainable financing based on own resources as soon as possible.”

In a context in which the COVID-19 pandemic is putting a heavy burden on local and regional finances, an agreement to an ambitious EU budget for the next coming years needs to be found in no time. This unprecedented economic crisis poses a threat to the investment capacities of local and regional authorities and European support is needed more than ever.

As Manuela Bora, PES Coordinator for the commission for regional policy and the EU budget (COTER) pointed out:

Our regions need European investments to restart. The only way forward is together and national governments cannot waste a minute to deliver on a common European solution.”

Cities and regions need Europe to deliver. The PES Group calls on national governments to rapidly find an agreement – time for discussions and disagreements are over.

However, one should not only focus on the level of financing that will be invested to kick-start our economy but also on the political priorities according to which those new vital resources will be spent. The European Commission has identified three main pillars that will guide the use of these resources: the Green Deal, the digital transition and the implementation of the European Pillar of Social Rights. We, as progressives, have always fought to make Europe greener, just and fit for the future and we are glad that the European Commission has joined us in our fight.

Even if the proposal is an important step in the right direction, there are still open questions that are of crucial importance for the future of our cities and regions.

With the strong link the European Commission made between the new recovery package and the European Semester, we will not accept the introduction of new macroeconomic conditionalities through the backdoor. This would further reinforce the existing territorial divisions within the European Union. Those territorial imbalances, if not timely addressed with an important fiscal stimulus, could jeopardize the integrity of the Single Market and of the cohesion within the European Union.

Isabelle Boudineau, Chairwoman of the COTER commission in the European Committee of the Regions, has stressed the risk of a top-down recovery:

Beyond the numbers of the new proposal, it is essential that European resources arrive quickly and are invested usefully on the ground. Regions and cities know best in which areas or sectors we need to urgently invest to tackle the consequences of the crisis and prepare the future. This cannot be a top-down exercise, so we need a reformed European Semester that involves local and regional authorities and focuses on the localisation of the Sustainable Development Goals. If the European Union fails us by delaying the decisions on the MFF and the recovery plan, the consequences will be disastrous socially, economically and moreover politically".

Our cities and regions, which have been at the forefront of the fight against the COVID-19 pandemic, will be essential also in the common struggle for a full European recovery.



Photo by Adrienguh on Unsplash.