The time to make a difference is now

Elisa Ferreira, Commissioner for Cohesion and Reforms

They say that greatness is forged in crisis. If so, today the forge is working overtime: the worst pandemic in a century, the worst economic and social crisis in decades – and this is before we reckon with challenging long-term transformations, from the digital revolution to the carbon neutral economy.

In this situation we need to ask ourselves some important questions: “What future do we want, for Bulgaria and for Europe? How can we adapt to the new, while keeping the best of what we have?”

As Europeans, we must answer these questions together, because one thing is clear: no country can face this alone. We need Europe in the crisis - vaccine procurement as a block gave us a buying power far beyond that of any single country.

We also need Europe in the recovery – we are using Europe’s triple-A credit rating to borrow on the financial markets. The result will be a 672.5 billion euro (312,5 bn in grants and 360 bn in loans) - recovery investment fund: the Recovery and Resilience Facility (RRF).

With some 375 billion of grant investment in the period 2021-2027, Cohesion Policy remains one of Europe’s largest investment policies. So, we will play a key role, hand in hand with the RRF, in both crisis and recovery.

The story of the European Union is one of convergence between countries. However, experience shows that convergence can slow down, pause or even reverse during crises.

Already, we see indications that the symmetric shock of Covid-19 is producing an asymmetric impact in our regions. This illustrates the importance of cohesion as a long-term development tool, not just in “normal times”, but also during a crisis and its aftermath.

From the beginning of the crisis, from April last year, through the Coronavirus Response Investment Initiative, we have been delivering support in the regions that needed it most. And we are still delivering: ventilators in Spain, lab tests for Corona in Italy, infrastructure and training for digital schooling in Poland, etc. To date, we have already mobilised more than 22 billion euros all over Europe. You can follow the investments in near real time on our dedicated website.

In Bulgaria, EUR 20 million from cohesion policy funding in support of the health sector helped to purchase 317 ventilators, over 2 million masks, 177 000 test kits, etc., and over EUR 500 million were relocated to the economy, including for support to more than 22 000 micro enterprises.

But while we still struggle to contain the pandemic, we also need a plan for solid, long term recovery. With the funding from Cohesion policy and the new Recovery and Resilience Facility (RRF), many countries and regions will, in the coming years, have a European investment budget 2 or 3 times the usual size.

Bulgaria continues to benefit from substantial support - EUR 10 billion provided under the regional policy funding. It is essential that these funds are used to reduce the regional disparities, especially in the northern part of the country and in other low-income regions.

Access to healthcare and education for vulnerable groups should also be a priority. REACT-EU funding of over EUR 400 million can provide real support for workers and small businesses. There is a need to focus on digitalisation and innovation, to improve transport and water and sewerage systems, while respecting environmental requirements. The new Just Transition Fund will provide additional support of EUR 1 billion to coal regions.

When implementing the green and digital transition, Bulgaria should provide workers and businesses with the necessary skills and modernisation and competitiveness capacity in the European single market. Two additional factors will contribute to the success of the investments: the completion of key reforms and the involvement of social, regional and industrial partners in programme decision-making.

With this once-in-a-generation opportunity, how will we invest? How will we draw up the 7-year cohesion programmes, starting this year? What Bulgaria and what Europe do we want in 10 years’ time? I propose 3 key priorities.

First, the recovery must be for all Europeans and all regions. The lesson of economic history is clear: in every crisis, some regions bounce back, while others may stagnate for a decade or more.

As I meet decision makers at all levels, I always insist that we cannot have a recovery for half of Europe, while the other half is left behind! But I am still concerned about long term trends: for over a decade now, we in the Commission have regularly published a regional competitiveness index. For several Member States, the index shows a persistent and growing gap between a few large cities, often capitals, and the rest of the country – without action, we risk a very imbalanced future.

Risking everything on a single development pole reduces the resilience of the economy and is a source of social division. Countries must invest strategically in different regions, in a balanced network of big centres and smaller and mid-sized cities, so that the whole territory remains economically vibrant with local businesses and quality jobs, public transport, energy networks, recycling and waste systems, healthcare, education and skills infrastructure. 

Second, investment must target the drivers of long-term economic transformation. Europe is on the verge of a great twin transformation: the digital revolution and the transition to a carbon neutral economy. Therefore, in rebuilding the house of our European economy after the fire of Covid-19, we cannot simply return to the old: we must take the opportunity to build anew.

Member States must formulate future-proof strategies for the development of their countries. Building on the comparative advantages of their different territories and developing new competences. At least half of new cohesion investments will target smart and green projects, from innovation networks and digital enterprises to renewable energy. There are also special provisions for specific challenges, such as regions heavily dependent on fossil fuels, notably coal mining or coal power stations: the new Just Transition Fund will support them through the transition.

Third, local actors and citizens must be full partners. We are making fundamental decisions about the future: such broad decisions require broad consultation. In cohesion policy, we are committed to the “Partnership Principle”, bringing together regional and local actors, social partners, communities. I am personally committed to ensuring that, as cohesion policy programmes are prepared, rapid action is combined with genuine partnership.

Europe closer to citizens goes beyond the partnership principle: it also means making sure that the available funding reaches people. Citizens must see the benefits of EU membership, the tangible results of European solidarity in their daily life.

As we are tested in the forge of history, we have a unique opportunity to rebuild and plan the Europe we want. Let it be inclusive, where all regions share in the recovery and no Europeans are left behind. Let it be future proof, laying the ground for a successful digital revolution and transition to the carbon neutral economy. And let all this be decided in full democratic consultation and partnership.

This is the cohesion policy I want to see, in the programming of the coming months. And this is the Europe I want to see in 10 years’ time and beyond. If you feel the same, I urge you to get involved in the discussion. The time to make a difference is now.

This article has been provided by the Cabinet of Commissioner Elisa Ferreira. TheMayor.EU publishes it with minor corrections for style.