European Union External Action

The Commission proposes the creation of a Brexit Adjustment Reserve

11/01/2021 - 13:50
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The reserve – up to a total amount of Euro 5 billion - will support Member States and economic sectors that are worst affected by the changes after the end of the transition period, including the fisheries sector.

Signature of EU UK Trade and Cooperation Agreement

Over a period of 30 months, the Brexit Adjustment Reserve will support: economic sectors, businesses and local communities, including those dependent on fishing activities in the UK waters; employment, including through short-time work schemes, re-skilling and training and the functioning of border, customs, sanitary and phytosanitary and security controls, fisheries control, certification and authorisation regimes for products, communication, information and awareness raising for citizens and businesses.

Commissioner for Cohesion and Reforms Elisa Ferreira said: “The end of the transition period on 31 December 2020 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 Brexit Adjustment Reserve, the Commission puts again solidarity and cohesion as key elements of its response, making sure that those most impacted receive the necessary support.

The fund is set up as a special instrument outside the budget ceilings of the Multiannual Financial Framework 2021-2027 and will make available a total of €5 billion to be disbursed in two allocation rounds. The main part of the funding will be activated in 2021 as pre-financing. This means that each Member State will receive an amount, based on the expected cost of the UK’s withdrawal on its economy. These allocations will also consider among other things trade in goods and services and the negative effects on the fisheries sector.

The second, smaller tranche will be disbursed in 2024 in case the actual costs incurred by Member States exceed the initial allocation. To qualify for reimbursements from the Brexit Adjustment Reserve, Member States have to demonstrate their claims' direct relation to Brexit.

The proposal Regulation will have to be adopted by the European Parliament and the Council.

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