REACT-EU Initiative: EC Approves Additional 580 Million Euros for Croatia

July the 22nd, 2021 - An additional 580 million euros has been approved by the European Commission (EC) for use by the Republic of Croatia as part of the wider REACT-EU initiative.

As Novac/Iva Badanjak writes, the European Commission has approved an additional 580 million euros for use by Croatia to preserve jobs during the ongoing pandemic and after two major earthquakes during the spring and winter of 2020 (in Zagreb and Sisak-Moslavina) that had a serious impact on the Croatian economy.

The funds have been sourced from the operational programme of the European Social Fund (ESF) within the REACT-EU initiative.

This additional financial support is aimed at supporting the resilience of the Croatian labour market, employment, small and medium-sized enterprises and low-income families, as well as building a sustainable foundation for the green and digital transition and a sustainable form of socio-economic recovery.

The funds from this new programme will be used for job preservation programmes for about 280,000 people in sectors disproportionately affected by the coronavirus crisis, such as the tourism sector, the health sector and the food production sector.

Belgium will also receive three million euros from the same fund and for a similar purpose, and Germany will get 48.5 million euros.

The European Parliament and individual EU member states reached an agreement on the REACT-EU initiative and fund back in November 2020, and MEPs and the Council approved the content of the agreement in plenary in December.

It is a package worth as much as 47.5 billion euros (50.5 billion euros in current prices) that will be distributed to the bloc's member states over the next two years. Resources will be available through the EU Structural Funds, with 37.5 billion euros allocated for 2021 and 10 billion euros for 2022. The funds are being made available to member states in full.

MEPs have called for countries to be allowed to use additional funds until the end of 2023, instead of 2022, which was the European Commission's proposal. These resources will be allocated to countries in accordance with the partnership principle, including local and regional authorities, as well as relevant bodies representing civil society and the social partners.

Co-rapporteur Andrey Novakov (EPP) said that the REACT-EU initiative was a textbook example of cohesion policy as part of recovery immediately after the agreement was reached, and before the legal texts were approved by the Council and the European Parliament in plenary.

"2020 was a year of interruption, but also a year of recovery, companies and the healthcare sector have all been hit hard and this funding will bring a breath of fresh air to them. We hope the Council will overcome its internal divisions to allow the flow of these recovery funds across EU.''

MEPs also insisted that a stronger focus being placed on the people most affected by the coronavirus crisis, including but not limited to various cross-border projects. Social Democrat co-rapporteur Constanze Krehl added that she was glad that member states had agreed with MEPs' view that the REACT-EU initiative must focus on the social consequences of the pandemic, as well as on the regions and people most affected by this continuing crisis.

"This includes cross-border projects and support for the most vulnerable people and young people. All spending must respect the goals of sustainable development, as well as the Paris Climate Agreement - that should be self-evident, but it is good to remind member states of these commitments," Krehl said at the time.

Two Croatian members of parliament, Tomislav Sokol and Karlo Ressler, also took part in drafting the package for repairing the damage caused by the crisis, advocating that funds be allocated primarily to the least developed EU member states.

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