The Diplomat
The European Parliament yesterday gave the green light to the Recovery and Resilience Facility, endowed with €672.5 billion in grants and loans to curb the effects of the pandemic and the most important pillar of the Next Generation EU stimulus package.
As reported by the European Parliament, the Regulation on the objectives, financing and rules for accessing the Facility was approved by 582 votes in favor, 40 votes against and 69 abstentions. As a next step, the Facility will have to be formally approved by the Council, after which the Regulation will enter into force one day after its publication in the Official Journal of the EU.
The Facility will have 672.5 billion in grants and loans to finance national measures to mitigate the economic and social consequences of the pandemic and is the most important pillar of the 750 billion euro Next Generation EU recovery instrument.
The approval of the Facility represents a fundamental step for the economic expectations of Pedro Sánchez’s government in the aftermath of the COVID-19 crisis. The Executive’s Recovery Plan depends on the 71,604 million euros that Spain should receive through transfers, between 2021 and 2023, from the Next Generation EU program. Most of these funds, up to 59,168 million euros, will come from the Recovery and Resilience Facility, while the rest, up to 12,436 million, corresponds to the other major investment instrument of the European program, the React-EU. Apart from this, the recently approved General State Budget depends on Spain being able to obtain 24,198 million euros from the Facility and another 2,436 million euros from the React-EU fund, to reach the 26,634 million euros that were incorporated into the Budget while awaiting approval by the Community institutions.
According to the regulation approved yesterday, projects initiated as of February 1, 2020 will be eligible to receive funds from the Recovery and Resilience Facility. The grants will be available for three years and EU governments will be able to apply for up to 13% pre-financing for their recovery and resilience plans.
To be eligible for funding, national recovery and resilience plans must focus on key EU policy areas, such as ecological transition, including biodiversity; digital transformation; economic cohesion and competitiveness; and social and territorial cohesion. Plans addressing the resilience of institutions and ways to better prepare them for crises, as well as policies in favor of children and youth, including education and skills development, will also be eligible for these funds.
The plans must also allocate at least 37% of their budget to climate and 20% to digital actions. In addition, they must have a lasting impact in both social and economic terms and include comprehensive reforms as well as a strong investment package. Moreover, the Regulation also stipulates that only Member States that are committed to respecting the rule of law and the fundamental values of the European Union will be eligible for funding from the Recovery and Resilience Facility.
The European Commission will be responsible for monitoring the implementation of the Recovery and Resilience Facility. The Parliament may ask it to appear every two months before its relevant committees to discuss the state of recovery in the EU and how Member States are implementing the goals and objectives. The Commission will also make available to Member States an integrated reporting and monitoring system to provide comparable information on how the funds are being used.
