The Council today approved a reserve of about 5.4 billion euros at current prices to help member states deal with the negative consequences of Brexit, the council said. The Reserve is intended to help cover additional costs and offset losses as well as mitigate the negative economic and social impacts resulting directly from Great Britain’s withdrawal from the European Union.

“The reserve is an exceptional one-time special tool. It will provide support to public and private institutions facing disruptions in trade flows, including due to new costs of customs control and administrative procedures,” the statement said.

Since the situation after the UK’s withdrawal is unprecedented, it was left up to the member states to decide what actions should be taken to counter the various negative consequences.

When the reserve is established, an open list of eligible actions is expected: from support to small and medium-sized businesses, communities and regional and local organizations, including small coastal fishing that depend on fishing activities in UK waters, to measures to support job creation and reintegration into the employment of nationals European Union leaving the European Union. As reported by Great Britain.

The reserve will be used to fund actions introduced from January 1, 2020 to December 31, 2023. It will cover expenses incurred prior to the end of the transition period.

The Council decided to allocate a full reserve in advance of 5.4 billion euros at current prices, given the negative impact of Britain’s exit from the European Union on each of the member states. The method of calculating the temporary allocation depends on three main factors.

The division of the largest amount – 4.5 billion euros – is determined by the importance of trade with Great Britain; €656 million has been allocated on the basis of the importance of fisheries in the UK’s exclusive economic zone, and €273 million on the basis of the importance of neighborhood relations with coastal areas bordering the UK.

Moreover, to enable member states to act quickly, the vast majority of the funds – €4.3 billion – will be made available as advance payments in three annual installments – in 2021, 2022 and 2023. The remaining funds will be made available in 2025, following an overview of spending on Eligible actions from previous years, taking into account any unused amounts.

Today’s approval by the European Parliament of the European Parliament’s position is the last step in approving the reserve. The regulation on this matter will enter into force the day after its publication in the Official Journal of the European Union in the first half of October.

Source: ISBnews