Recovery plans – Countries should use the more than €700 billion available under EU recovery plans to adapt to new social and economic realities, MEPs say.
The EU’s Recovery and Resilience Facility was set up at the height of the Covid-19 crisis to help EU countries support struggling businesses and people. While the EU’s economy rebounded in 2021 after a sharp fall in 2020, new economic and social challenges are emerging with the war in Ukraine and the increase of energy and food prices.
More than a short-term relief instrument, the €723,8 billion Recovery and Resilience Facility is a future-oriented plan that finances reforms and investments proposed by EU countries in areas such as the green transition, digital transformation, health, social and economic resilience and support for young people.
In a report on the implementation of the Recovery and Resilience Facility, adopted by the Parliament on 23 June 2022, MEPs stressed that the money should be used effectively to ensure long-term benefits for the EU’s economy and society. They emphasised the need to increase the EU’s strategic autonomy, to reduce the dependence on imported fossil fuels and diversify energy sources.
Find out more about the Recovery and Resilience Facility
Progress with implementation of recovery plans
Speaking at a plenary debate on 22 June, MEP Eider Gardiazabal, co-author of Parliament’s report, said that the recovery plans are financed through the issuance of joint European debt by the European Commission and will be repaid with new sources of EU budget revenue. “The response to the [Covid-19] crisis was very different from [the financial crisis in] 2008. It was powerful and innovative. Lots of barriers were overcome and some taboos were broken.”
Apart from a pre-financing instalment of up to 13% of the allocated funds, EU countries get the rest of their payments under the Recovery and Resilience Facility upon meeting specific targets and milestones.
Check out the infographic to find more about the progress regarding disbursing funds to EU countries
The decision to approve a country’s recovery plan is taken by the Council on a proposal by the European Commission. While Parliament doesn’t have a formal role to play, it has raised concerns about the rule of law and the protection of EU financial interests in some countries. In June 2022, MEPs expressed their disagreement with the decision to approve Poland’s recovery plan and in November 2022 MEPs said that the EU should resist the pressure to approve Hungary’s plan.
“A plan must never be approved at any cost. Always remember that the EU values are essential, non-negotiable and they must set the foundation for each action, project, reform or investment,” said Dragoș Pîslaru (Renew Europe, Romania), one of the co-authors of Parliament’s report during the debate on 22 June.
Recovery funding goes to EU countries either as grants or as loans. Member states have made plans for almost the full amount of grants available, but in June 2022 they indicated they would like to use €166 billion out of the €385.8 billion available for loans.
MEPs urged countries to make use of the full potential of the Recovery and Resilience Facility, including loans, to counter the effects of the pandemic and emerging challenges.
Parliament’s oversight
The European Parliament is actively involved in scrutinising the implementation of the Recovery and Resilience Facility. MEPs hold debates and adopt resolutions on the topic, Parliament’s budgets and economic committees have quarterly discussions with commissioners and there are frequent meetings at the technical level with Commission officials.
MEPs want to make sure that the funds are used transparently and in compliance with the rules and that the Commission conducts effective monitoring and audit of the member states.
Parliament’s report noted that national public administrations faced difficulties in absorbing all of the funding in a short space of time as all reforms and investments must be carried out by 2026. MEPs insisted that local and regional authorities, social partners and civil society organisations should be involved in carrying out the national plans to ensure successful implementation and democratic accountability.
“We would like to see more cross-border projects, particularly in the area of energy, because this will help us to bring the energy from where we have it to where we need it,” said report co-author Siegfried Mureșan (EPP, Romania) during the plenary debate on 22 June 2022.
The article was originally published in June 2022 and was updated in January 2023
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