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After five days of negotiations, the meeting of European leaders reached a deal on 21 July for both a €750 billion coronavirus recovery plan and a 2021-2027 budget of €1.07 trillion.

The European Council stated on Tuesday 21 July that EU leaders had agreed a comprehensive budget of €1,824.3 billion. This includes a 2021-2027 financial framework (MFF) of €1,074 billion, which will be accompanied by a further €750 billion coronavirus recovery fund. Under the recovery fund, European countries will jointly borrow on the financial markets for the first time.

Most of the recovery fund - €312.5 billion in grants and €360 billion in loans - will be allocated through a new Recovery and Resilience Facility, where the grant portion is linked to policy reform plans that national governments should submit to the European Commission. There is also a €47.5 billion top-up under a new REACT-EU programme, which is also part of the recovery fund, in the form of cohesion policy grants for municipalities, hospitals and companies through national EU budget managing authorities until 2022.

Relevance for social services

The Recovery and Resilience Facility and REACT-EU are the most relevant instruments for public social services who represent the main constituency of members at the European Social Network (ESN). Public social services should liaise with their regional or national governments or their managing authorities to ensure that social services can access this funding.

Throughout our work on the European Semester, we will provide the European Commission with information regarding the funding needs of local public social services. By doing so, we will aim to ensure that the Commission’s country specific recommendations with requests for reform to national authorities are in line with the views of social services authorities and providers.  

Challenge from the European Parliament

The European Parliament, which needs to approve the deal before it comes into force, passed a motion criticising the reduction of the grant component in the final agreement of the recovery fund and requesting a role in implementation.

In this context, ESN together with other European networks wrote to Members of the European Parliament requesting an amendment to the regulations on additional resources under REACT-EU. In our communication, we requested that these additional resources are also used to support investment in operations and staff, as well as health and safety measures in social services through programmes funded by the European Regional Development Fund and the European Social Fund.

In its statement, the European Parliament did not accept the political agreement on the 2021-2027 financial framework as it stands and criticised cuts to health, research, education, innovation and the green deal. The Parliament also recalled its mandate to consent to the agreement before it can be implemented.

The future budget

The budget for the period 2021-2027 will include the heading “Cohesion, Resilience and Values” with a sub-heading for economic, social, and territorial cohesion. The European Social Fund (ESF+) will provide support for youth employment, up-skilling and re-skilling of workers, social inclusion and poverty reduction (including child poverty) by merging existing programmes: the European Social Fund, the Youth Employment Initiative, the Fund for European Aid to the Most Deprived and the Employment and Social Innovation Programme. The total financial envelope for the ESF+ for the period 2021-2027 will be €87,995 million.

It is expected that under the ESF+ each Member State shall allocate at least:

  • 25% to social inclusion, including integration of migrants;
  • 2% to address material deprivation;
  • 10% to targeted actions for young people not in employment, education, or training (NEET) where there is a NEET rate above EU average.

Looking ahead

The European Parliament will have a final say through a vote by absolute majority before the EU recovery plan and the 2021-2027 budget can enter into force.

ESN is following the negotiations and has contacted the European Parliament to ensure that social services are included in investments under the recovery fund, and will work with the European Commission so that its recommendations highlight the essential role of social services for the recovery of the EU.

This should include specific investments for social services support for children and youth in difficult socio-economic circumstances, and for integrated health and social services for people with disabilities and older adults.