Update: After months of negotiation, the European institutions reached an agreement on the 2021-2027 EU budget at the end of 2020. With the different NextGenerationEU initiatives about to roll out, our updated article intends to provide the latest information about the EU’s largest stimulus package ever – and the opportunities it offers for those working in the Cultural and Creative Sectors (CCS).
A recovery plan to address the socio-economic damage of the pandemic
To complement our recent blog post “Culture as a First Necessity Investment” aimed at justifying public investment in culture, this article intends to give practical information on the NextGenerationEU and ways for the cultural and creative sectors 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.
A major recovery plan, branded NextGenerationEU, was proposed by the European Commission to immediately address the socio-economic damage created by the pandemic and to start building a more resilient, sustainable and healthier society capable of better facing future global health and economic threats. On 17 September 2020, the European Parliament voted overwhelmingly in favour of a Motion urging Member States to include the CCS in their National Recovery Plans – a prerequisite to unlock various funding streams from NextGnerationEU. 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, particularly for the period 2021-2023. 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 EAFRD.
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. The Regulation officially establishing the Recovery and Resilience Facility came into force on 18 February. The European Commission is currently providing feedback on the preliminary draft plans submitted by Member States. The final versions will be assessed by the European Commission within two months of receipt and are due 30 April at the latest. The CCS are in a position to benefit from grants or loans only if their respective Member States incorporate the CCS as a sector entitled to the Recovery and Resilience plans and actively connect the CCS to the aims of the instrument.
REACT-EU (Recovery Assistance for Cohesion and the Territories of Europe) is a €47.5 billion top-up to Cohesion Policy 2014-2020 and 2021-2027 funding programmes that aims 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 supported this interpretation in a Resolution. However as for the Recovery and Resilience Facility, Member States, and in particular regions, have to include the CCS as beneficiaries for the sector to benefit from such support.
InvestEU can provide crucial support to companies in the recovery phase. It ensures investors stay focused on the EU’s long-term priorities such as the European Green Deal and the digitization challenge. The InvestEU budget guarantee will be deployed across four policy windows, of which at least three can be connected to the CCS: research, innovation and digitization; SMEs; and social investment and skills. 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. Moreover, Member States will be able to implement part of their National Recovery and Resilience Plans via the InvestEU programme.
Relevant instruments for the CCS include the InnovFin and COSME initiatives, both to be integrated in InvestEU 2021-2027. 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 Cultural and Creative Sectors Guarantee Facility in their respective countries. The EIF and the European Commission have launched new measures under the Guarantee Facility to enhance access to finance for SMEs in the CCS. The full list of financial intermediaries implementing the Guarantee Facility is available here.
European Agricultural Fund for Rural Development (EAFRD)
The EARDF is the funding instrument of the second pillar of the EU’s Common Agricultural Policy (CAP). It aims at strengthening the EU’s agriculture, agro-food and forestry sectors, as well as rural areas in general. Under NextGenerationEU, the Commission reinforced the EAFRD budget by €7.5 billion to support rural areas and farmers in making the structural changes necessary to implement the European Green Deal. This additional budget under NextGenerationEU will be made available to Member States for a transitional period (2021-2022). The CCS might be able to contribute to the EARDF’s objectives, for example with regard to the regeneration of spaces (including brownfield lands) for the green and digital development of rural areas. Member States have to submit revised Rural Development Plans (RDPs) to the Commission for approval to illustrate how they plan to invest these resources and to disburse these funds to beneficiaries. The CCS could benefit from the reinforced EAFRD budget only if support for CCS is included in the revised RDPs.
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 NextGenerationEU instruments. Yet while the CCS qualify for funding, they are still required to lobby their national governments which are responsible for the development and implementation of their recovery plans.
What concrete steps can CCS collectives, organisations, and individuals take?
- Collect data on evidence of economic and social impact the pandemic has had on the CCS 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 set at 30 April 2021. Thus, the time for advocacy work is right now!
- Reach out to financial intermediaries working with the EIB/EIF to explore fruitful collaborations and funding possibilities opened up by InvestEU. 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” (September 2020)
- KEA’s report “The impact of the COVID-19 pandemic on the Cultural and Creative Sector” (November 2020)
- KEA’s interactive map on the public and private COVID-19 emergency measures taken in the EU Member States (2020)