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Policy Contribution

How good is the European Commission’s Just Transition Fund proposal?

On 14 January 2020, the European Commission published its proposal for a Just Transition Mechanism, intended to provide support to territories facing serious socioeconomic challenges related to the transition towards climate neutrality. This brief provides an overview and a critical assessment of the first pillar of this Mechanism, the Just Transition Fund (JTF).

By: , , and Date: February 26, 2020 Topic: Banking and capital markets

This Policy Contribution was prepared for the European Parliament’s Committee on Regional Development (REGI) as an input to a REGI workshop on the Just Transition Fund on 19 February 2020. The original paper is available on the European Parliament’s webpage (here). Copyright remains with the European Parliament at all times.

  • The JTF is supposed to rely on €7.5 billion of ‘fresh money’ from the EU budget, to be complemented by funds from member states’ European Social Fund Plus (ESF+) and European Regional Development Fund (ERDF) envelopes, and by co-financing at the national level. All member states are eligible for the JTF, following the approval of their Territorial Just Transition Plans by the Commission. Funds are pre-allocated on a national level. Projects eligible for financing currently include projects aimed at economic revitalisation, social support and land restoration.
  • Given its small size, the JTF will not realistically be able to tackle effectively all three priorities. That is why we believe that it should fundamentally be amended to maximise its impact: funds should be allocated on a project basis (similar to the European Globalisation Adjustment Fund) rather than sprinkled all across Europe on a geographical basis.
  • To be sure that the JTF fulfils its objective on mitigating the social and economic costs of the transition to a climate-neutral economy, we also recommend the following amendments to the regulation:
    − Restrict eligible activities to social support and, to a lesser extent, land restoration;
    − Under social support, upskilling and reskilling policies should be combined with efforts to collect, harmonise and disseminate regional labour data; pension-bridging grants and mobility grants could also be added to the list of eligible activities;
    − Eligibility for land restoration support should be restricted to sites where a company is no longer able to pay for restoration itself, to respect the polluter-pays principle;
    − Use NUTS3-level data in the allocation formula rather than NUTS2-level data, to ensure that all territories in need of help are counted in the JTF allocation fomula;
    − Remove the mandatory transfer of ERDF funds into the JTF envelope and instead require member states to devote a portion of ERDF funds to the economic revitalisation of regions affected by the transition and identified by JTF allocation criteria, as a complement to the social support provided by the JTF.
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External Publication

European governance

EU borrowing—time to think of the generation after next

Financing post-pandemic recovery via EU borrowing has proved remarkably straightforward. So why keep it temporary?

By: Grégory Claeys, Rebecca Christie and Pauline Weil Topic: European governance, Macroeconomic policy Date: December 9, 2021
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Policy Contribution

European governance

Next Generation EU borrowing: a first assessment

The Next Generation EU programme is radically changing the way the EU finances itself and interacts with financial markets. This paper assesses the first design decisions made by the European Commission and the issuances that have taken place so far. It also outlines the potential risks and opportunities linked to this upgrading of the EU borrowing.

By: Rebecca Christie, Grégory Claeys and Pauline Weil Topic: Banking and capital markets, European governance, Macroeconomic policy Date: November 10, 2021
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Parliamentary Testimony

European governanceEuropean Parliament

An overview of the Recovery and Resilience Plans

Testimony before the European Parliament’s Committee for Budgetary Control (CONT) on the topic "Capacity for proper expenditure controls of the increased budget of the MFF and NGEU".

By: Zsolt Darvas Topic: European governance, European Parliament, Macroeconomic policy, Testimonies Date: November 2, 2021
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Podcast

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The EU recovery fund - state of play and outlook

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By: The Sound of Economics Topic: Macroeconomic policy Date: September 1, 2021
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Past Event

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The EU recovery fund - state of play and outlook

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Speakers: Nadia Calviño, Karolina Ekholm and Guntram B. Wolff Topic: Macroeconomic policy Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: September 1, 2021
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Blog Post

Fit for 55 marks Europe’s climate moment of truth

With Fit for 55, Europe is the global first mover in turning a long-term net-zero goal into real-world policies, marking the entry of climate policy into the daily life of all citizens and businesses.

By: Simone Tagliapietra Topic: Green economy, Macroeconomic policy Date: July 14, 2021
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Past Event

Past Event

Investment firepower for the recovery: a conversation with Philippe Donnet, CEO of Assicurazioni Generali

At this event the CEO of Assicurazioni Generali, Philippe Donnet will be in conversation with Guntram Wolff, Director of Bruegel.

Speakers: Philippe Donnet and Guntram B. Wolff Topic: European governance, Macroeconomic policy Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: July 8, 2021
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Past Event

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How to spend it? A closer look at the recovery plans

In this event, participants will take a closer look at the recovery plans submitted by EU countries.

Speakers: Zsolt Darvas, Alex Patelis and Maarten Verwey Topic: Macroeconomic policy Date: June 23, 2021
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Blog Post

Setting Europe’s economic recovery in motion: a first look at national plans

Plans for spending European Union recovery funds submitted by the four largest EU countries reflect rather different priorities. So far, only Italy is interested in borrowing from the EU.

By: Zsolt Darvas and Simone Tagliapietra Topic: Macroeconomic policy Date: April 29, 2021
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Blog Post

Do citizens care about Europe? More than they used to

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By: Enrico Bergamini, Emmanuel Mourlon-Druol, Francesco Papadia and Giuseppe Porcaro Topic: Macroeconomic policy Date: April 26, 2021
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Podcast

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Keeping momentum on good governance

Transparency, human rights and good governance: a conversation with Katalin Cseh MEP

By: The Sound of Economics Topic: European governance Date: March 17, 2021
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External Publication

When and how to unwind COVID support measures to the banking system?

Study of regulatory measures and supervisory practices that have supported public guarantee schemes and moratoria in euro-area countries prepared for the ECON committee of the European Parliament.

By: Alexander Lehmann Topic: Macroeconomic policy Date: March 9, 2021
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