In response to the challenges caused by Russia’s invasion in Ukraine, namely, unprecedented migration of Ukrainians to Europe and risks to successful completion of the commenced Cohesion Policy measures, Latvia and nine other European Union (EU) Member States* have mutually agreed and signed a joint political statement to the European Commission (EC) regarding urgent solutions to the problems. The statement was signed on behalf of Latvia by the Minister of Finance Jānis Reirs.
In the statement, the Member States recognise that they have limited financial possibilities to help Ukrainian refugees. Also, the Member States point towards problems in the implementation of the Cohesion Policy projects in connection with disturbances in supply chains, which result in shortage of many important construction materials and a substantial increase of the prices thereof, as well as labour shortage, as Ukrainians who have been employed in construction in Member States are returning to Ukraine to fight, as well as other challenges. At the same time, the Member States show appreciation to the EC for the initiatives already implemented for the support of refugees (programmes REACT-EU, CARE), while recognising that they actually don’t solve the most significant problems caused by the war in these Member States.
Therefore, in the statement, the Member States invite the EU to present additional solutions to the challenges referred to above, and offer concrete courses of action. The main solution proposed is to extend the duration of eligibility of costs under the EU funds programming period of 2014-2020 by at least one year, i.e. until 2024. The Member States also jointly call for an extension of the 100% co-financing rate for EU funds by another financial year, which would be from 2022 to 2023.
Also, the Member States suggest the EC to reduce financing limits in cases where certain project activities under the 2014-2020 period are allowed to be completed with the financing of the 2021-2027 period. At present, this can only be done in the cases where the total costs of a project amount to at least five million euros.
The statement also includes a suggestion to provide for, in the financing envelopes of the programming period of 2021-2027, a 5% financing reserve for future challenges caused by the war, which would ensure the possibility to act quickly and operationally, without undue bureaucracy.
Considering that the remaining financing of Cohesion Policy funds has already been planned by the Member States and that, in most of the cases, contracts with beneficiaries have been concluded, the EC is invited to look for flexibilities in the EU multi-annual budget to find additional financing for the Member States which face the greatest inflow of Ukrainian refugees.
In their joint statement, the Member States point towards the significance of the EU funds programming period in solving the challenges caused by the war and invite the EC to swiftly approve the Member States’ partnership agreements and operational programmes of the next programming period of 2021-2027 in order to start their implementation as soon as possible.
* Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Lithuania, Poland, Romania and Slovakia.