EU outlines adjustment fund for sectors potentially impacted by Brexit

Reserve will have an overall budget of €5bn and support businesses and workers worst affected by the UK leaving the EU.
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By Martin Banks

Martin Banks is a senior reporter at the Parliament Magazine

30 Dec 2020

The European Commission has published a proposal for a “Brexit Adjustment Reserve” to help counter adverse economic and social consequences - at the end of the transition period on 31 December - in Member States and sectors worst affected by the UK leaving the EU.

The reserve will have an overall budget of €5bn and support businesses and employment in affected sectors.

With the UK’s membership due to finally end after 47 years on New Year’s Eve, the new funding also aims to assist regions and local communities, including those dependent on fishing activities in UK waters.

The commission says it can also assist public administrations in the “proper functioning” of border, customs, sanitary and phytosanitary controls and to ensure essential services to citizens and companies affected.

Elisa Ferreira, European Commissioner for Cohesion and Reforms, said the end of the transition period will have an "important economic and social impact" on regions and local communities that are most linked to the UK's economy and trade.

"By proposing the Reserve, " she explained, "the Commission will make sure that those most impacted receive the necessary support“.

"I now count on the Council and European Parliament to convert our proposal into concrete financial support without delay. Of course, adapting structurally to our new relationship with the UK will require much more long-term adjustment than this reserve alone will ever be able to provide" Johannes Hahn, European Commissioner for Budget and Administration

Further comment came from Johannes Hahn, European Commissioner for Budget and Administration who said the Reserve will give "swift and uncomplicated help, focusing on those Member States most adversely affected by Brexit."

"I now count on the Council and European Parliament to convert our proposal into concrete financial support without delay. Of course, adapting structurally to our new relationship with the UK will require much more long-term adjustment than this reserve alone will ever be able to provide."

Elsewhere, more MEPs gave their reaction, to this website, to the Brexit deal agreed on Christmas Eve.

Polish MEP Danuta Hübner said, “Nobody from London called it all off so here we are. This is the result of the consultative referendum of 2016 based on a tiny majority which in turn was a result of a promise made in 2012 by David Cameron to his party.

“It has led to this deal entering into effect in 2021 and determining the life for generations to come.  The agreement is unprecedented in many ways but the most important is that it is reducing relations between the UK and EU of today and tomorrow which had been jointly built for more than 45 years.

The former Regional Policy Commissioner added, “The act of leaving takes place in a moment when it is rather obvious that the world will be shaped by three major global powers – the US, the EU and China. All we can do today at this moment of Covid related sadness is to live with a hope that future relations between the EU and UK will be about cooperation rather than fierce competition.”

Also speaking to this site, Irish MEP Deirdre Cluny said, “I am relieved that an agreement has been reached as this will now avoid total disruption for those trading in and out of the EU. At last we have some certainty for EU and UK citizens. It is in the best interests of both sides because of our close proximity to each other that a harmonised relationship is developed. I look forward to scrutinising the text along with my colleagues in the New Year.”

“The act of leaving takes place in a moment when it is rather obvious that the world will be shaped by three major global powers – the US, the EU and China. All we can do today at this moment of Covid related sadness is to live with a hope that future relations between the EU and UK will be about cooperation rather than fierce competition” Polish MEP Danuta Hübner

German Socialist member Udo Bullmann, a member of the European Parliament’s Trade Committee, said MEPs would “put the agreement through its paces over the next few weeks and then decide on its value”.

“The rules on competitive conditions and market access will be examined in particular so that no new loopholes for dumping practices and tested EU standards arise”, he added.

Another German deputy, David McAllister, chair of the Parliament’s Brexit-focussed UK coordination group, said the deal “would have far reaching consequences for people, companies and public administrations. Trade between the EU and the UK will no longer run as smoothly as it would when we jointly tackled the internal market and the customs union.”

The Parliament’s Socialist Group leader Iratxe García called the deal, “a unique situation and there has and never will be an agreement quite like it, either in its nature or its procedure”.

Her colleague Pedro Silva Pereira, also a member of the UK coordination group, said, “We will now analyse the final outcome of negotiations but, having had regular contact with the EU negotiating team, we believe that this agreement deserves our full support since it ensures a new relationship based on fair trade and high standards, avoiding social, environmental and regulatory dumping, and protecting our fishing communities.”

Giles Merritt, founder of the Friends of Europe think tank, told the Parliament Magazine that "No amount of hot air from Boris Johnson can disguise the fact that the UK has had to accept the bulk of the EU's terms.”

“As the smaller, supplicant party to the negotiations that was always inevitable once Britain ruled out the customs union that even Turkey is part of. What remains inexplicable is the Brexiteers' failure to insist that financial services should be central to any deal, and the refusal to stay in Erasmus. Perhaps they didn't want British university students to be 'tainted' by exposure to other Europeans.”

Roger Casale, a former Labour MP and founder of New Europeans, told this site, "The road will still be long and winding and in the end it may well lead back to the door of the EU. Free movement has brought huge benefits to people in the UK and in the EU and it is a tragedy, that it is coming to an end."

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