EU members struggle to meet aid package deadline

Belgium, (Brussels Morning Newspaper) EU countries are struggling to meet the deadline for spending the aid allocated to them as part of the Recovery and Resilience Facility (RRF).

Officials from four bloc members reminded that the aid package was agreed almost two years ago and expressed concern that national governments will not be able to absorb the money on time, according to Reuters reporting on Monday.

Manuel Hidalgo, a senior fellow at the Esade Centre for Economic Policy think tank, warned “if all the money isn’t spent this will have a reputational cost for the EU.”

“If it doesn’t turn out well they will have to justify many things, such as the very existence of these kinds of plans,” he concluded.

In order to extend disbursement beyond 2026, EU member states would have to reach a unanimous agreement and each country’s parliament would have to approve the extension.

Marek Zemman, the spokesman of the Czech Ministry of European Affairs, pointed out that any extensions face “a major problem – the decision on own resources would have to be reopened, which requires unanimity, which is almost unthinkable.”

Slow implementation

According to EU data, bloc members are already behind schedule as they committed approximately 20% of loans and grants thus far, but should have reached 70% by the end of last year.

Some officials have pointed out that rising prices of raw materials and supply chain disruptions are delaying implementation of RRF projects.

A Portuguese official announced the start of talks with the European Commission to “review the execution period” for later this month, noting that Lisbon disbursed roughly 1.4 billion euro or about 8.5% of the funds allocated to it by the end of last year.

The official added that Portugal is analysing the effects of “the current macroeconomic context” on each project.

According to a source familiar with the matter, Portugal and Romania are pushing the hardest to extend the deadline and enjoy the support of other Eastern European countries.A source from the European Commission noted that the body could delay its approval of extensions to force bloc members to stick to the schedule as much as possible, predicting that negotiations will start next year and end in 2025.