The worst pandemic in a century. The worst economic and social crisis in decades. The long-term challenging transformations we need to face, from the digital revolution to the carbon-neutral economy.
With every storm coming our way, we are learning to embrace new solutions, such as teleworking and home education. And also remembering what we had taken for granted, such as our health and our social interactions. These changes force us to ask: “What future do we want, for Malta and Europe? How can we adapt, keeping the best of what we have?”
We clearly have to answer this together: no country can face this situation alone. In this crisis, we need Europe – acquiring vaccines as a bloc gives us purchasing power far beyond that of any one country. We also need Europe for recovery – at this scale, we are using Europe’s triple-A credit rating to borrow from financial markets. The result is the Recovery and Resilience Facility (RRF): a €672.5 billion investment fund (€312.5 billion in grants and €360 billion in loans).
With around €375 billion of investment in grants for 2021-2027, Cohesion Policy remains one of Europe’s largest investment policies. We will therefore play a key role both in the crisis and in the recovery.
The European Union’s history is one of convergence between countries. However, convergence can slow down, stop or even reverse during crises. We are already seeing indications that COVID’s symmetric shock is producing an asymmetric impact in our regions. This demonstrates the importance of cohesion as a tool for long-term development, not only in “normal times” but also during a crisis and its aftermath.
Since the beginning of the crisis, cohesion has been delivering support, through the Coronavirus Response Investment Initiative, to the regions that needed it most. We have already managed over €22 billion across Europe and, to date, we have provided almost 500,000 SMEs with working capital to keep operating and supported 2.5 million people in short-time working arrangements or healthcare.
But while we still struggle to contain the pandemic, we also need to plan for a solid, long-term recovery. With Cohesion Policy and RRF funding, many countries and regions will have a European investment budget two or three times bigger than usual.
Under REACT-EU, a new emergency instrument, Malta will benefit from an additional €111 million in 2021 and 2022 to support short-time work schemes to mitigate the social impact of the crisis. In 2021-2027, EU cohesion policy will make €860 million available, a 21 per cent increase compared to 2014-2020.
These funds will mainly contribute to developing Malta’s innovative capacities and supporting its SMEs but will also support higher energy efficiency and more renewable energy, as well as better waste and water treatment. We will continue to focus on fostering Gozo’s sustainable development. In addition, substantial RRF funding (€317 million) will be available, providing the opportunity to step up Malta’s digital and green transition.
With this once-in-a-generation opportunity, I propose three main priorities for investment during the next seven years.
With history testing us, we have a unique opportunity to rebuild and plan the Europe we want- Elisa Ferreira
First, recovery should be for all Europeans and all regions. Economic history has clearly shown that, in every crisis, some regions recover while others may stagnate for 10 years or longer. Whenever I meet decision-makers at all levels, I always insist that we cannot have a recovery for half of Europe while the other half lags behind. But I am still concerned about long-term trends. The commission’s regional competitiveness index has shown that, for several member states, a widening gap persists between a few big cities, often capitals, and the rest of the country – without action, we risk a very unbalanced future.
Putting all eggs in one basket reduces the economy’s resilience and creates
social division. Countries must invest strategically in different regions, in a balanced network 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.
Secondly, investment should target long-term economic transformation. Europe is on the brink of the digital revolution and the transition to a carbon-neutral economy. We cannot simply return to what we had before: now’s the time to rebuild.
Member states should formulate future-proof strategies, developing new competences and building on their different territories’ comparative advantages. At least half of the new cohesion investments will target smart and green projects, from innovation networks and digital enterprises to renewable energy.
Europe has a common view of where we want to be by 2030. We therefore need clear national visions describing where each country wants to be in 10 years’ time. These strategies should include reforms needed to modernise national administrations, policies and frameworks. They should also detail corresponding private and public investments, including European support, to make them a reality. These integrated national development strategies are the best foundation for all European investments and maximise their effectiveness, complementarity and synergies.
Thirdly, local actors and citizens must be full partners. We are taking fundamental decisions on the future: such broad decisions require broad consultation. We are committed to bringing together regional and local actors, social partners and communities. As soon as cohesion policy programmes are prepared, rapid action will be combined with a genuine partnership.
Beyond this, a Europe closer to citizens also means ensuring that funding reaches people. Citizens should see the benefits of EU membership, the tangible results of European solidarity in their daily lives.
With history testing us, we have a unique opportunity to rebuild and plan the Europe we want. Inclusive, with all regions participating in the recovery and no European left behind. Future-proof, paving the way for a successful digital revolution and a carbon-neutral economy. Decisions taken in full democratic consultation and partnership.
This is the Europe we want to see, now and in 10 years’ time. The time to make a difference is now.
Elisa Ferreira is European Commissioner for Cohesion and Reforms.