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National recovery and resilience plans (RRPs) are and will be implemented with the sufficient EU’s financial support through the European Recovery and Resilience Facility. The latter is a key instrument in the “NextGenerationEU” program, which is the European plan towards states’ stronger socio-economic recovery in the post-pandemic period. National RRPs should be duly reasoned and substantiated: i.e. they should detail the expected measures representing a comprehensive and balanced response to urgent national socio-economic development while implementing six main EU recovery directions.
The EU-wide Recovery and Resilience Facility (RRF) is going to provide about €672.5 billion to support investments in the member states’ recovery reforms; the sum breaks down into grants worth about €312.5 billion and €360 billion in loans. The RRF will play a crucial role in helping European states emerge stronger from the crisis, and securing the green and digital transitions among other EU’s priorities.
The Commission established a submission term for national RRPs – as a rule– by the end of April 2021 in a single document together with their National Reform Programs. To ensure fast RRF’s implementation, the EU states were able to submit drafts of their national RRPs starting already from October 2020.
The Commission has to assess the recovery and resilience plans proposed (with possible updates) within two months of the official national RRPs submission.
The EII has already published a couple of articles on the issues under present concern, see e.g. the following links: https://www.integrin.dk/2021/04/12/recovery-assistance-to-the-eu-states-first-beneficiaries/, and https://www.integrin.dk/2021/03/08/reminder-for-the-baltic-states-recovery-plans/
Allocations for the states
Maximum national grant allocations for the member states under the RRF are available at the Commission’s website (see below). The highest grants are allocated to Italy and Spain (€68,9 billion and €69,5 billion, correspondingly); allocations for Germany and Poland are between €25,6 and €23,9 billion. However, some modest allocations –but still quite significant- are for the 3 Baltic States: for Estonia €1, for Latvia €2 and Lithuania €2,2 billion; the smallest amount is allocated to Malta with €300 million.
Bottom line: the member states shall take sufficient efforts to acquire these grants and loans… More in: https://ec.europa.eu/info/sites/info/files/about_the_european_commission/eu_budget/recovery_and_resilience_facility_.pdf
Note: Current maximum financial allocation is only indicative and based on the Commission‘s Autumn 2020 Economic Forecast for the GDP growth in 2020 and 2021. The 30% allocations will be revised by June 2022, based on data from Eurostat. The amount available for grants is €312.5 billion in 2018 prices, which corresponds to €337.96 billion in current prices. The difference is due to the standard conversion from 2018 to current prices, calculated by applying a fixed 2% deflator to the annual amount of commitments. The Recovery and Resilience Facility, RRF will make €360 billion available in loans, on top of the €312.5 billion it makes available in grants. The EU member states can request a loan worth up to 6.8% of their 2019 Gross National Income as part of the submission of their recovery and resilience plans, RRPs.
In order to ensure a meaningful financial contribution commensurate to the actual needs of the states to complete reforms and investments for the RRPs, the EU established a maximum financial contribution available to them under the RRF as non-repayable financial support. Thus, 70 % of that maximum financial contribution should be calculated on the basis of the population, the inverse of the GDP per capita and the relative unemployment rate of each state. Another 30 % of that maximum financial contribution should be calculated on the basis of the population, the inverse of the GDP per capita, and, in equal proportion, the change in real GDP in 2020 and the aggregated change in real GDP during the period 2020-2021 based on the Commission Autumn 2020 forecasts.
In order to foster synergies between the RRF and RRP, the InvestEU Program (established by a Regulation of the European Parliament and of the Council) includes the Technical Support Instruments established by the Regulation 2021/ 240 of the European Parliament and of the Council in February 2021.
The Commission will assess the national RRPs within two months based on the eleven criteria set out in the Regulation*) and translate its content into legally binding acts; the assessment will include a review of whether the plan contributes to effectively addressing all significant challenges identified in the relevant country-specific recommendations issued in the context of the European Semester.
The Commission will also assess whether the national RRPs dedicate at least 37% of expenditure to investments and reforms to support climate objectives, and 20% to the digital transition. Based on a proposal by the Commission, the Council will have -as a rule- four weeks to finally adopt the Commission proposal.
*) Regulation (EU) 2021/241 of the European Parliament and of the Council of 12 February 2021 establishing the Recovery and Resilience Facility (in all EU official languages); see: OJ L 57, 18.2.2021, p. 17–75. In: https://eur-lex.europa.eu/eli/reg/2021/241/oj
RRPs requirements
For example, the recovery issues in the national RRPs should be achieved, and the resilience of the member states enhanced, through the support for measures that refer to the policy areas of European relevance structured in six pillars (the ‘six pillars’), namely:
= green transition;
= digital transformation;
= smart, sustainable and inclusive growth, including economic cohesion, jobs, productivity, competitiveness, research, development and innovation, and a well-functioning internal market with strong small and medium enterprises (SMEs);
= social and territorial cohesion;
= health, and economic, social and institutional resilience with the aim of, inter alia, increasing crisis preparedness and crisis response capacity; and
= policies for the next generation, children and the youth, such as education and skills.
The above-mentioned regulation also particularly specifies all six “pillars” of enhanced recovery plans. Besides, for the first payments to be made, all member states have to approve their “own resource” decisions.
A dedicated scoreboard will be established by the Commission to display the progress of the implementation of the states’ RRPs in each of the mentioned six pillars and the progress made as regards the RRPs implementation in respect of the EU’s common indicators.
The scoreboard should be operational by December 2021 and should be updated by the Commission twice a year.
The implementation of the national RRP reforms and investments shall be completed by 31 August 2026.
First example
The recovery and resilience plan of Portugal is the first plan officially submitted to the Commission on 22 April, 2021, almost a week ahead of the schedule. The Portuguese plan, which focuses on resilience, climate and digital transitions, includes projects in almost all of the European flagship’s “six pillars”.
The Portuguese plan is structured around the three pillars of resilience, green and digital transformation including measures in social housing, energy-efficiency in buildings and digital schooling. Projects in the plan cover the entire lifetime of the RRF until 2026.
The Council’s approval would pave the way for the disbursement of a 13% pre-financing to Portugal of the requested € 13.9bn of grants and € 2.7bn of loans under the RRF, subject to the entry into force of the Own Resources Decision, which must be also approved by Portugal.
Source: https://ec.europa.eu/commission/presscorner/detail/en/IP_21_1869