1. Fiona Wishlade, EPRC, University of Strathclyde, Glasgow, UK
Brexit and the implications for European Structural and Investment Funds
EStIF Interactive Forum: Management, Control and Audit of ESI Funds, Zagreb, May 2017
Fiona Wishlade, EPRC, University of Strathclyde, Glasgow, UK

2. What are the implications of Brexit for ESIF?
Medium/short-term budgetary issues
Longer-term financing questions
Impact on eligibility
Cooperation
Implications for the UK
EPRC

3. Short/medium-term budgetary issues…
Article 50 triggered March 2017; in principle, implies Brexit by 29 March 2019
Current ESIF programmes run to 2020, but payments lag
By time of Brexit, less than half of Cohesion payments likely to have been made
Payments still due until 2023
Commission forecast of interim payment profile
2018
ESF
28.1%
59.2%
ERDF
59.8% CF
20.3%
52.7%
SWD(2016)299
EPRC

4. …Cohesion policy liabilities part of wider ‘divorce bill’
Bruegel,
Estimates vary widely: €60b, €25-€73b, some gross, some net…
Financial settlement likely a highly contentious element of Article 50 negotiations
Settlement required to avoid shortfall in planned Cohesion spending for
Financial Times,
EPRC

5. Longer-term budgetary issues – MFF post 2020
UK is significant net contributor (OBB €11.5 billion 2015) to EU budget (expenditure €145.2 billion 2015)
Making up the shortfall:
other net contributors pay more?
or net beneficiaries receive less?
DG Budget
EPRC

6. Views divided on severity of impact…
Notre Europe: ‘Shock’ to EU budget: €10b annual shortfall; absolute decrease in spend (1% EU GNI); end of ‘rebate on rebate’; dynamics of negotiations. Threat or opportunity?
EPC: More threat than opportunity; gap of €20-27b – 14-19%; could be reduced to 12-18% with Norway or Swiss style trade deal; or % with no trade deal.
CEPS: Brexit a ‘non-catastrophic event’ for EU budget – loss of €3.4 billion (using 2014 figures) based on Norway model; similar outcome under no trade deal with revenue from tariffs. ‘Manageable.’
Before 1 January 2018, Commission must present proposal for new MFF
EPRC

7. How will the EU budget and Cohesion policy shape up?
EPRC

8. Under policy continuity Brexit implies eligibility change
2015 data suggest regional change (eg.  Yugozapaden, CZ regions, MT, Dolnośląskie; but others  esp. ES, GR, IT, CY [&UK])
Brexit lowers EU GDP per head, altering thresholds for LDR, Transition & MDR
11 regions change status solely due to statistical effect of Brexit (just a snapshot)
Potentially significant impact on funding…
Status
€ per head pa
LDR
€185
Transition
€64
MDR
€23
Own calculations from Eurostat data for 2015
EPRC

9. The future of cooperation programmes
Mainland UK participates in five transnational and four cross-border programmes
Gibraltar in two further transnational programmes
Scope for UK to continue, as Norway, but will it?
The Government will consult closely with stakeholders to review all EU funding schemes in the round, to ensure any ongoing funding commitments best serve the UK’s national interests.
UK Government White paper, 2017
EPRC

10. A vote rooted in issues of economic and social cohesion?
The Guardian, 24 June 2016
Key predictor: vote closely correlated with educational attainment
Age and ethnicity also important
London and Scotland voted overwhelmingly remain, also Northern Ireland, creating significant tensions in UK political and economic geography
EPRC

11. Implications for UK regional policy?
Impact of Brexit likely spatially uneven – with ‘leave’ areas worse affected
Some regions set to lose significant funds – esp. Wales, Cornwall
Short-term, ESIF commitments to be honoured by UK gov
Potentially complex ‘tail end’ compliance issues
Long-term vision for domestic regional policy unclear; no constitutional commitment concerning territorial inequalities (as DE, IT, ES)
How will ‘policy vacuum’ be filled post-ESIF?
Estates Gazette, 2016
c€55b in
Own calculations
EPRC

12. Thank you for your attention!
European Policies Research Centre, University of Strathclyde, Glasgow:
EPRC