Hungary could be compensated through just transition fund

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CEE member states including Hungary could be compensated for upcoming cuts in the EU's cohesion funds by the Just Transition Fund, the EU's financial fund for helping countries with coal-based economies through the climate and energy transition, Bruxinfo reported from Brussels. The EC plans to put about EUR 35 bn in the fund over seven years in its next budget.
The only thing Hungarians like about the EU is its money
Speakers at the Budapest Economic Forum will discuss the economic outlook of Hungary and the CEE region.

The European Commission estimates that the financial and humanitarian burden of transition for fossil fuel-dependent regions could require EUR 35 bn over the seven-year budget cycle..

The so-called Just Transition Fund (JTF) will focus on the "regions and industries most affected by the challenges," according to an EC document. Grants will be tied to decarbonising, such as closing down coal-fired power plants or retraining labour.

Partly in reaction to social pressure, the EU is accelerating its carbon dioxide emission cut programme and intends to achieve a climate-neutral economy by 2050. However, 240,00 people in 41 regions of 12 member states are still working in coal-related jobs, while 8 million employees across Europe are working in carbon-intensive industries.

The EUR 35 bn funding could come from two sources. For a start, there's the EUR 5 bn the EP approved to add to the multiannual financial framework (MFF) in May 2018 for fossil fuel-dependent regions. This could be doubled by regrouping funds from the two main structural funds, with a further EUR 5 bn added through national co-financing. Meanwhile, the InvestEU investment programme set up by the Juncker plan would create a separate financial product for the just transition, mobilising EUR 20 bn from the capital markets using a EUR 1.5 bn guarantee. As a result, the total amount earmarked for the transition of affected regions between 2021 and 2027 could reach EUR 35 bn.

This article is part of the work programme titled "The impacts of EU cohesion policy in Hungary - Present and Future" which is carried out by Net Média Zrt., the publisher of Portfolio.hu, between 1st April 2019 and 31st March 2020 with European Union financing. The views in this article solely reflect the opinions of the author. The European Commission as the funding entity does not take any responsibility for the use of information presented in this article.

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