Brexit What will become of the British EU Funds?July 1, 2016
Hat: Opinion - Lorraine de Bouchony, CEO of WELCOMEUROPE
Funding Scheme: 2016-07-02
Opinion – Lorraine de Bouchony, CEO of WELCOMEUROPE
Given that the exit of the United Kingdom from the European Union has not yet been made official, there is to this day no information on the near future of EU funds in this country.
This situation being without precedent, it is impossible for now to formulate likely scenarios. We will therefore have to innovate in this domain as well.
However, the current programming period being planned over seven years until 2020, it is predictable that the effects of the Brexit will not be known until the end of this period. Indeed, the expected complexity of the legal framework of the Brexit should monopolise the attention and time of European institutions and States.
Can we expect a transition period followed by a reform of funds post-2020?
If the official exit is to be expected within two years of the official notification of Article 50, 2020 will be just around the corner. If the United Kingdom notifies the Commission in 2016, the effective exit would take place in 2018 at the soonest. To rethink and reform the programming of the funds for the two remaining years, 2019 and 2020, would be highly prejudicial and clearly not profitable. We could imagine that the United Kingdom would go on benefiting from the structural funds until 2020, based on the respect of current agreements. Yet, that raises the legal question that would have to be settled; given these funds are exclusively marked for Member States.
The European Union has financial instruments marked for the pre-accession of candidate states. Could the EU transform the British EU funds into “post-exit funds” for the two remaining years? This would be a rather unfortunate innovation from the European project’s perspective…
The subjects of the United Kingdom are worried and we cannot blame them. Indeed, the European Structural Funds allocated to regions have become a key source of revenue, just as the Research and Innovation Funds of which the British scientists have become the top beneficiaries out of the 28 Member States.
Will the roles change?
The post-2020 future will undoubtedly lay the ground for new agreements on the participation of the United Kingdom to European programmes. It is already the case for countries such as Norway, Iceland or Switzerland, where bilateral participation agreements on contributions to major programmes have be negotiated. The United Kingdom will therefore have to contribute to these programmes in order for its nationals to benefit from them. When that happens, the bargaining chip will be in the hands of the European Union and it will then be in the position to impose certain conditions to the United Kingdom…
A few figures on the United Kingdom and the major European Funds for 2014-2020
European Structural and Investment Funds: 17 regional and national programmes amounting to a budget of 16.4 billion €.
Horizon 2020, Research, Development and Innovation support fund: The United Kingdom is the top beneficiary of this programme with a total budget of over 80 billion €.
Juncker Investment Plan: The United Kingdom is today the top contributor and top beneficiary of these funds. The plan offers guarantees to priority and high potential projects (energy, environment, transport and innovation…) to allow the mobilisation of 315 billion euro of investments before the end of 2018.