Programme in a nutshell
Concrete examples of achievements
Member States shall submit applications for a financial contribution from the Brexit Adjustment Reserve (BAR) by 30 September 2024. The Member States provide information on their expenditure stemming from measures carried out with BAR support, among other areas. Against this background, the achievements stemming from the BAR’s implementation can only be examined after 2024.
Discussions with Member States suggest that measures in the following categories were set up: fisheries and coastal communities; private and public businesses, in particular small and medium-sized enterprises (including advisory support), export and trade promotion (some also considered tourism); customs and border controls/ports (installations and construction/rental of buildings to accommodate additional inspection services (customs/veterinary/phytosanitary); job creation and protection, reskilling and training.
Budget for 2021-2027
[notranslate]BARWeb:budg_01:pie[/notranslate]
(**) Only Article 15(3) of the financial regulation.
Rationale and design of the programme
The withdrawal of a Member State from the EU was unprecedented. The overarching logic behind the BAR was to provide support to the economies of Member States to master the transition from the United Kingdom being an EU Member State to it being a non-EU country.
In that regard the reserve supports regions, areas and local communities most adversely affected by the United Kingdom’s withdrawal (due to decreased market share, employment, trade volumes, turnover, etc.), and thus mitigate the negative impact on economic, social, and territorial cohesion.
Since 1 February 2020, the United Kingdom is no longer a member of the EU. The withdrawal of a Member State from the EU is unprecedented. The challenge is to identify and counter the most adverse consequences of Brexit for Member States and specific regions.
Challenges encountered throughout the reference period:
- Delays during the notification phase
Only two Member States (IT, IE) provided a timely notification whereas the last Member State (FI) did so two years later, i.e. end December 2023, which coincided with the closing of the reference period for this instrument.
It was not only constitutional set ups, which hindered a timely notification but also the need for the Member State to implement the crisis and recovery measures under 2014-2020 programmes, as well as the Recovery and Resilience Facility. The BAR regulation does not provide for any form of penalty in case of delayed notifications.
The notification delay directly impacted the adoption of the respective Implementing Acts and led to an uneven disbursement of pre-financing tranches for 2021, 2022 and 2023.
- Hard vs soft Brexit and call for extension
Apart from the fishery sector where the impact was felt imminently, it has become clear over the last months that the impact of Brexit has been rather incremental than of a cliff-edge nature.
Reasons included (1) the repeated postponement of announced measures by the UK; (2) the COVID-19 pandemic; (3) negotiations of RRPs and cohesion programmes; and (4) challenges relating to complying with the State-aid framework.
As a consequence, several Member States have been struggling with delays in implementation and were pushing for an extension of the deadline. The Russian war of aggression against Ukraine and the intertwined energy crisis have further aggravated the situation. Therefore, the possibility of transfers from the BAR to the REPowerEU plan was introduced in the amended Recovery and Resilience Facility regulation. Member States were to notify the Commission by 1 March 2023 of any intention to transfer BAR funds (part or all) to the Recovery and Resilience Facility (even retroactively). This possibility enabled Member States with implementation delays to make use of the funds in a related instrument. 23 out of 27 Member States submitted a reasoned request for transfer from the BAR to REPowerEU (10 out of which called for a full transfer).
In July 2020, the European Council agreed to establish a new special instrument with an allocation of EUR 5.5 billion (in current prices). The regulation establishing the BAR was adopted in October 2021. The BAR is a temporary, targeted instrument, aiming to provide swift support to Member States to address their specific Brexit-related challenges. Support from the reserve can be used for national measures specifically taken between January 2020 and December 2023.
The BAR should support those regions, areas and local communities most adversely affected by the United Kingdom’s withdrawal, and thus mitigate the related negative impact on economic, social and territorial cohesion.
It aimed to provide swift support to Member States, allowing them to address their specific Brexit-related challenges while minimising administrative burden. For this reason, it did not ask for advance programming or planning of measures and offered flexibility in the implementation in line with the subsidiarity principle.
The regulation leaves it to Member States to decide which sectors, regions or communities are worst affected and require support. It provides a list of indicative measures to counter the adverse consequences of the United Kingdom’s withdrawal. This list is non-exhaustive to allow for the flexible use of funds according to the specific situation of the sectors, regions and local communities in Member States.
To be eligible, each Member State needs to demonstrate several aspects: (1) the adverse consequences of Brexit; (2) the direct link between the measures carried out and the negative consequences of Brexit; (3) fulfilment of the eligibility criteria set out by the regulation.
The BAR is implemented through shared management. In order to minimise the administrative burden, there are neither programming nor national co-financing requirements.
80% of the total BAR allocation will be paid in three tranches of pre-financing in 2021, 2022 and 2023, subject to having received complete notification by the Commission of the designated body or bodies to which the pre-financing will be paid and confirmation that the descriptions of the management and control systems have been drawn up. The remaining amount will be paid in 2025 against the assessment of eligible expenditure.
The EU’s contribution takes the form of reimbursement of eligible costs actually incurred and paid by public authorities in Member States, including payments to public or private entities, for measures carried out and for the benefit of the Member State concerned.
Each Member State must submit an application to the Commission for a financial contribution from the reserve by 30 September 2024. In this application, the Member States will provide information on their expenditure stemming from measures carried out with BAR support, among other areas. Against this background, the Commission will assess and determine eligibility for BAR funds, and will also assess whether additional payments need to be made or whether funds need to be recovered.
The Directorate-General for Regional and Urban Policy is the lead DG for the implementation of the BAR.
The notification phase is spread out over time as a pre-condition for the first, second and third instalments of pre-financing.
(*) Decision adoption – the Commission pays the 2021 instalment of pre-financing within 30 days following the adoption of the implementing act. For the second and third instalments, the implementing act is adopted to disburse funds to Member States by April 2022 and April 2023 respectively.
(**) Pre-financing is subject to a complete notification provided by the Member State; the first instalment of the pre-financing upon complete notification, the second by April 2022 and third by April 2023 (second and third payments only when complete notification is confirmed).
(***) The implementation phase runs from January 2020 (with retroactivity) to December 2023.
(****) The application phase covers the submission of Member States’ application reports by 30 September 2024 and the Commission’s assessment, including determining residual payments or recoveries in 2025 and 2026.
(*****) The evaluation phase encompasses three parts: (1) information provided by the Commission to the European Parliament and the Council of the European Union by June 2024; (2) an evaluation by the Commission by 30 June 2027; (3) a report on implementation by the Commission by 30 June 2028.
The BAR is a programme under special instruments set up outside the annual ceilings of the multiannual financial framework (Chapter 16). It addresses challenges created by Brexit.
Programme website:
Impact assessment:
- no impact assessment was carried out for the BAR.
Relevant regulation:
- Regulation (EC) No 2021/1755 of the European Parliament and of the Council (OJ L 357, 8.10.2021, p. 1);
- Commission Implementing Decision (EU) 2021/1803 (OJ L 362, 12.10.2021, p. 3)
setting out the provisional amounts allocated to each Member State from the resources of the Brexit Adjustment Reserve and the minimum amount of support to local and regional coastal communities [notified under document (2021) 7330] (OJ L 362, 12.10.2021, p. 3).
- Commission Implementing Decision (EU) 2023/837 of 17 April 2023 amending Implementing Decision (EU) 2021/1803 setting out the provisional amounts allocated to each Member State from the resources of the Brexit Adjustment Reserve and the minimum amount of support to local and regional coastal communities [notified under document C(2023) 2459] (OJ L 105, 20.4.2023, p. 55
- Regulation (EU) 2021/241 of the European Parliament and of the Council of 12 of February 2021 establishing the Recovery and Resilience Facility (OL L 57, 18.2.2021, p. 17)
- Commission Implementing Decision C(2023)2451
- Commission Implementing Decision (EU) 2023/837
Evaluations:
- not available.
Budget
Budget programming (million EUR):
[notranslate]BARWeb:budg_02:table[/notranslate]
Two-stage process:
- pre-financing phase 2021, 2022, 2023 (80%);
- 2025, for the final payment (20%) against the assessment of sufficient eligible expenditure.
Note on zeros in 2024: Member States submit their application for the final contribution. The final payments will take place in 2025; 2026 is zero due to unused commitment and payment appropriations that will be automatically carried over and may be used until 2026; 2027 is zero for possible delays in payments / financial corrections.
Based on the provisions of the Recovery and Resilience Facility regulation as amended by the REPowerEU regulation, which entered into force in March 2023, Member States had the possibility to request transfers from the BAR to the Recovery and Resilience Facility (largely take up by 23 Member States) According to the European Council Conclusions of 1 February 2024 concerning the midterm revision of the multiannual financial framework and in line with the revised multiannual financial framework regulation (1), the remaining 2025 funds of the BAR envelope will be redeployed for other purposes.
(1)Council Regulation (EU, Euratom) 2024/765 of 29 February 2024.
Budget performance – implementation
Cumulative implementation rate at the end of 2023(*) (million EUR):
[notranslate]BARWeb:budg_03:table[/notranslate]
(*) excluding amounts transferred/to be transferred to the RRF (REPowerEU) and redeployment
Voted budget implementation (million EUR) (*):
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(*) Voted and carried-over appropriations (C1 and C2), excluding amounts transferred/to be transferred to the RRF (REPowerEU) and redeployment
Member States receive their first pre-financing instalment as soon as they submitted the complete notification to the Commission. As of December 2022, 25 Member States had notified the Commission and received their 2021 and 2022 pre-financing instalments. This represents 98.9%, with the remaining 1.5% of the total allocation for the first and second instalments that has not yet been paid out relating to Czechia (1%) and Slovenia (0.1%). Member States currently design and implement their measures under their own responsibility and will report to the Commission by September2024. The Commission assisted Member States in helping them identify eligible measures in informal dialogues. In line with shared management rules, the Commission does not provide written confirmation in advance on the eligibility of measures considered by Member States for support under the BAR.
Following the transfer to REPowerEU, the Commission timely disbursed the 2023 tranche to seven Member States. Since Finland only notified the Commission at the end of 2023, it received its remaining 2023 amount in the course of Q1 2024.
The regulation does not provide for any form of penalty in the case of delayed notifications.
In the context of the recovery from the COVID-19 pandemic, the Russian war of aggression against Ukraine, the ensuing migratory and energy crises and other recent geopolitical turbulences, the implementation of the BAR proved challenging. Several Member States experienced delays in implementation and called for an extension of the deadline. Therefore, the possibility of transfers from the BAR to the REPowerEU plan was introduced in the amended Recovery and Resilience Facility regulation. Member States were to notify the Commission by 1 March 2023 of any intention to transfer BAR funds to the Recovery and Resilience Facility (even retroactively). As a result, 23 Member States took the opportunity to transfer to the Recovery and Resilience Facility all or part of the amounts of the provisional allocation set out in the implementing acts (10 called for full transfer and 13 for a partial transfer). The total requests for transfer amount to over EUR 2.1 billion and represent 38% of the total BAR allocation.
Contribution to horizontal priorities
Green budgeting
Contribution to green budgeting priorities (million EUR):
[notranslate]BARWeb:budg_05:table[/notranslate]
- Given the very specific and targeted purpose of the BAR, there is no pre-established requirement for Member States regarding the level of contributions to achieve climate objectives.
Gender
Contribution to gender equality (million EUR) (*):
[notranslate]BARWeb:budg_06:table[/notranslate]
| Gender disaggregated information: |
|---|
| Due to its specific nature, the BAR does not contribute to gender equality. However, the objectives of the reserve should be pursued in line with the principles set out in the European Pillar of Social Rights, including the inherent contribution to the elimination of inequalities and to the promotion of gender equality and gender mainstreaming, while ensuring respect for fundamental rights. |
Digital
Contribution to digital transition (million EUR):
[notranslate]BARWeb:budg_07:table[/notranslate]
- Due to its specific nature, the BAR does not contribute to the digital transition.
Budget performance – outcomes
The BAR was established in October 2021. Support from the reserve can be used for national measures specifically taken between January 2020 and December 2023. The Commission will only assess and determine eligibility for BAR funds once Member States have applied for a financial contribution from the reserve, by 30 September 2024. In this application, the Member States will provide information on their expenditure stemming from measures carried out with BAR support, among other areas. Against this background, the achievements stemming from the BAR’s implementation can only be examined after 2024.
Indicators to measure performance will become available as output indicators through the reports.
The Commission has provided and continues to provide support to Member State authorities through bilateral meetings, written replies, a website and seminars on the clarification of practicalities behind the BAR regulation and the preparation of their potential measures.
Performance assessment in a nutshell. The BAR was conceived and designed at a moment of uncertainty about the scale and speed of Brexit, and its gravity for on Member States. With the benefit of hindsight, several findings should be noted, such as the following. (1) Even though Brexit formally took effect 4 years ago, the economic and political consequences are still unfolding beyond the reference period of the BAR. (2) Evidence suggests that despite its high level of flexibility (neither programming nor national co-financing requirements; large pre-financing), numerous Member States have been struggling with setting up national measures with a clear direct link to Brexit endangering the full use of available funds – the innovative and simplified set-up with its own legal basis seems to have complicated implementation. (3) New challenges stemming from multiple crises, geopolitical turbulences and uncertainty called for immediate action by Member States and further hampered the smooth implementation of the BAR. This included the programming and implementation of much bigger funding sources (such as the Recovery and Resilience Facility, recovery assistance for cohesion and the territories of Europe, etc.) crowding out the implementation of the rather small contribution by the BAR. As a result, large transfers by Member States from the BAR to REPowerEU were requested. The remaining BAR allocation stands at EUR 3.4 billion, of which EUR 584 million was envisaged to be paid in 2025 upon receipt of documentation attesting to sufficient eligible expenditure.
According to the European Council conclusions of 1 February 2024 concerning the midterm revision of the multiannual financial framework, and in line with the revised multiannual financial framework regulation (100), the remaining 2025 funds of the BAR envelope will be redeployed for other purposes. This decision will directly impact 12 Member States, most of which have already set up measures to counter the impact of Brexit and have incurred and paid the 2025 tranche. The Commission will carry out an evaluation of the reserve in 2027 and will submit a report to the Parliament and the Council in 2028.
(2)Council Regulation (EU, Euratom) 2024/765 of 29 February 2024
Sustainable development goals
Contribution to the sustainable development goals
The objectives of the reserve will be pursued in line with the objective of promoting sustainable development as set out in article 11 TFEU, considering the United Nations sustainable development goals, the Paris Agreement and the ‘do no significant harm’ principle.
As there is no programming involved for this temporary instrument, it is up to Member States to carry out specific measures and report on these by 30 September 2024. No intermediate reporting from Member States is expected before this date.
Therefore, the Commission will assess the contribution of the measures to the sustainable development goals based on the information made available by Member States in the final report on the implementation of the reserve.
| SDG | Does the programme contribute to the goal? | Example |
|---|---|---|
| NA |