EU approves €5b fund to cushion impact of Brexit

The Council of the European Union (EU) on Tuesday green-lighted a 5-billion-euro fund designed to help member states cushion the negative impact of Brexit, reported Xinhua.

The fund will support the hardest-hit regions, sectors and communities to cover extra costs, compensate for losses or counter other adverse economic and social effects resulting directly from Britain's withdrawal from the EU.

The Council said in a statement that the fund will be used to support public and private businesses facing disruption of trade flows, including new costs for custom checks and administrative procedures.

It said that since the UK's withdrawal from the EU created an unprecedented situation, member states will have the flexibility to decide on the best actions to take so as to counter various negative consequences.

The goal of the fund is "to help the most vulnerable navigate through a difficult period of adjustment in the aftermath of Brexit," Zvonko Cernac, Slovenian Minister for Development and European Cohesion Policy. Slovenia currently holds the European Council's rotating presidency.

The reserve, which is a special one-off emergency instrument, will finance measures introduced from Jan. 1, 2020 until Dec. 31, 2023 to cover expenditure incurred before the expiry of the transition period.

On its allocation, the Council said this will be determined by three main factors: the importance of trade with the UK, the importance of fisheries in the UK's exclusive economic zone and the importance of neighbouring links for the maritime border regions with the UK.