To complement our recent blog “Culture as a First Necessity Investment” aimed at justifying public investment in culture, this article intends to give practical information on the EU’s NextGenerationEU Recovery Plan and ways for the Cultural and Creative Sectors (CCS) to access such EU funds.
The CCS are among the sectors most affected by the ongoing pandemic. While countless creative initiatives bring us solace in these challenging times, a large section of the CSS are still gravely afflicted. Public authorities at European level are considering ways to remedy the situation. The European Commission is playing its part by implementing a variety of measures, most notably the ambitious NextGenerationEU. It is supported by the European Parliament which on 17 September voted overwhelmingly in favour of a Motion urging Member States to include the CCS in the EU-funded national Recovery Plan. Remarkably in her State of the Union address on 16 September 2020, EC president Ursula von der Leyen acknowledged the role of art and culture in NextGenerationEU stating:
“is not just an environmental or economic project: it needs to be a new cultural project for Europe. Every movement has its own look and feel. And we need to give our systemic change its own distinct aesthetic – to match style with sustainability. This is why we will set up a new European Bauhaus – a co-creation space where architects, artists, students, engineers, designers work together to make that happen. This is NextGenerationEU. This is shaping the world we want to live in.” (State of the Union Address 2020)
NextGenerationEU: investment as policy response
NextGenerationEU aims to respond effectively to the COVID-19 crisis by helping the sectors most in need. The Recovery Plan mobilizes several support instruments for the period 2021-2024. The European Commission affirmed in their communication “Europe’s moment: Repair and Prepare for the Next Generation” that the CCS are among the 14 sectors most affected by the ongoing pandemic. This recognition makes the CCS eligible for support through NextGenerationEU. Stakeholders in the CSS should watch out for four support instruments in particular: the Recovery and Resilience Facility; REACT-EU; InvestEU; and the Solvency Support Instrument.
Recovery and Resilience Facility
The Recovery and Resilience Facility offers financial support for investments and reforms with a lasting impact on the productivity and resilience of Member States’ economies. This includes investments in the fields of green and digital transitions as well as other reforms that foster sustainable growth. The Facility has an overall budget of €672.5 billion: €312.5 billion in grants and €360 billion in loans. To access funding through the Recovery and Resilience Facility, Member States are required to submit national Recovery and Resilience plans as part of their National Reform Programmes. These plans will contain their investment and reform agenda for the years ahead, as well as the investment and reform packages to be financed under the Facility. On September 17, the European Commission issued a press release on the next steps for the Recovery and Resilience Facility. Herein, the Commission encourages Member States to “engage as soon as possible in a broad policy dialogue including all relevant stakeholders,” and to submit preliminary draft plans from October 15 this year. The Commission will ultimately assess these plans and decide on the distribution of funding. The CCS are in a position to benefit from grants or loans only if their respective Member States incorporate CCS as a sector entitled to the Recovery and Resilience plans and actively connect the CCS to the aims of the instrument.
The REACT-EU initiative adds €55 billion to the ongoing 2014-2020 cohesion policy programmes to support workers and SMEs; health systems; and society’s green and digital transition. The budget is purposely not broken down per region or economic sector to allow for targeting the areas where support is most needed. Considering that the European Commission explicitly listed the CCS among the sectors most in need of support, funding for the CCS is in theory available through REACT-EU. The European Parliament supports this interpretation in a Resolution. However as for the Recovery and Resilience Facility, Member States have to include the CCS as beneficiaries for the sector to benefit from such support.
InvestEU Programme, including a Strategic Investment Facility
InvestEU can provide crucial support to companies in the recovery phase. It ensures investors stay focussed on the EU’s long-term priorities such as the European Green Deal and the digitization challenge. The InvestEU budget guarantee lists four existing policy windows, of which at least three can be connected to the CCS: research, innovation and digitization (+€10 bn); SMEs (+€10 bn); and social investment and skills (+€3.6 bn). A new fifth window is the Strategic Investment Facility, which supports the creation and development of strong resilient value chains across the EU. This might also offer opportunities for the CCS if they can demonstrate their connections to these value chains. The European Investment Bank (EIB) Group remains a privileged implementing partner for InvestEU, implementing 75% of the EU guarantee. The EIB Group makes money available through different instruments, and provides lists of local banks with access to these funds. Relevant instruments for the CCS include the InnovFin and COSME initiatives, both to be integrated in InvestEU 2021-2027. CCS stakeholders can reach out to participating banks and inquire whether they can benefit from the increased InvestEU budget. However, InvestEU is still under negotiation. It is expected to come into force in 2021. CCS enterprises are advised to approach financial institutions implementing the EU Guarantee Facility for the CCS in their respective countries. The full list is available from KEA.
Solvency Support Instrument
The Solvency Support Instrument channels guarantees from the EU budget to support viable European companies that suffer from solvency issues due to the COVID-19 crisis. The instrument operates alongside InvestEU, and will be implemented in collaboration with the EIB Group within the framework of the European Fund for Strategic Investments. As the European Commission has included the CCS amongst the list of sectors most affected, the latter are in a position to benefit from the Solvency Support Instrument. As for InvestEU, the budget is managed by theEIB Group. Interested parties can reach out through financial intermediaries and inquire whether they can benefit from the budget provision provided by the Solvency Support Instrument. CCS enterprises should in particular approach financial institutions implementing the EU Guarantee Facility for the CCS in their respective countries. The full list is available from KEA.
The European Commission and the European Parliament have taken important steps to ensuring that the CCS are a funding priority eligible for support through different Next Generation EU instruments. Yet while the CCS qualify for funding, they are still required to lobby their national governments which will be responsible for implementation.
What concrete steps can CCS collectives, organisations, and individuals take?
- Collect data on evidence of economic and social damage in your country;
- Develop a collective voice involving all CCS sub-sectors to build scale and promote more effectively CCS’ interests;
- Lobby your Ministry of Culture to alert it on the opportunities of the Recovery Fund. Individuals can also reach out to their national professional associations;
- Urge the Ministry of Culture to coordinate with the other appropriate ministries (Ministry of Finance; Economic Affairs) to ensure the CCS are included in any recovery plans submitted to the EU. The deadline for submitting these plans is currently set at 30 April 2021. Thus advocacy work starts right now!
Reach out to financial intermediaries working with the EIB/EIF to explore fruitful collaborations and funding possibilities opened up by InvestEU and the Solvency Support Instrument. At present, several financial intermediaries already support the CCS through the CCS Guarantee Facility managed by the European Investment Fund.
- KEA’s blog “Culture as a first necessity investment”
- KEA’s report “The impact of the COVID-19 pandemic on the Cultural and Creative Sector”
- KEA’s blog “Manifesto for a Modern Cultural Policy”