Brexit Adjustment Reserve

Key points 

The EESC

• Considers that Brexit is a very complex and difficult exercise. The EU-UK Trade and Cooperation Agreement alleviates some of the economic and social damage of a "no-deal" scenario, but the future economic and financial losses are very difficult to quantify at such an early stage.
• Observes already the negative impacts on cross-border mobility and barriers to trade in goods and services. This could result in job losses and businesses going bankrupt, especially SMEs. 
• Welcomes the creation of the Brexit Adjustment Reserve (the "Reserve") within the special instruments outside of the EU budget ceilings of the Multiannual Financial Framework (MFF). It considers that cohesion and solidarity between Member States are fundamental EU values and appreciates the retroactive application of the Reserve going back to July 2020.
• Believes that Workers' rights have to be protected immediately and the mutual recognition of qualifications must be further negotiated.  Also recommends that all Member States should immediately start organising information campaigns to raise awareness among citizens regarding the new rules in place.  Suggests that the fisheries sector should have a completely separately designed reserve that will support this sector only. Special attention should be paid to other sectors, such as tourism and agriculture, for example.
• Expects prolonged discussions between stakeholders on who gets the biggest slice of the Reserve and considers that additional funds should be immediately provided for. 
• Calls on all Member States to act responsibly and direct the available funds towards the regions, companies, workers and citizens that need them the most. 
• Believes that the eligibility period could be extended by two more years, just to make sure that the Member States have adequate time to make use of their share of the Reserve and absorb the shock waves from the UK's withdrawal.
• Considers that a small part of the Reserve should be earmarked for technical assistance purposes, for when a new management system is created. However,  strongly believes that the largest part of the Reserve should be allocated to supporting employment and economic activities.
• Is asking for specially designed measures to support the SMEs whichare particularly affected by the newly introduced customs procedures, regulatory burdens and rising transport costs.
• Recommends that the simplified costs option be used. Simplified rules and less bureaucracy in the implementation process will contribute to faster distribution of the financial resources.
• Calls for the creation of a monitoring committee in each Member State with the main purpose of eliminating possible risks that could appear in the implementation process, while ensuring the formal involvement of civil society in the process. 
• Proposes that more clarity should be provided in terms of governance by clearly designating a management body for the Reserve. 
• Calls for an intermediary performance framework to be created, based on specific performance-driven indicators to be established by the Member States and evaluated by the European Commission yearly.
• Finally, suggests that the European Commission report on its evaluation of the Reserve's effectiveness to the European Parliament and the Council within three months from the assumed deadline.