European Parliament approves €672.5 billion Recovery and Resilience Facility Regulation
The European Parliament’s confirmed the political agreement reached on the Recovery and Resilience Facility (RRF) Regulation in December 2020. This marks an important step towards making €672.5 billion in loans and grants available to Member States to support reforms and investments. The aim is to mitigate the economic and social impact of the coronavirus pandemic and make European economies and societies more sustainable, resilient and better prepared for the challenges and opportunities of the green and digital transitions.
Recovery and resilience plans
The approval of the European Parliament paves the way for the RRF to come into force in the second half of February. Member States will then be able to officially submit their national recovery and resilience plans, which will be assessed by the Commission and adopted by the Council. The recovery and resilience plans set out the reforms and public investment projects that will be supported by the RRF. The Commission is already engaged in intensive dialogue with all Member States on the preparation of these plans.
Pre-financing of 13% of the total amount allocated to Member States will be made available once recovery and resilience plans are approved, to ensure that RRF financing arrives where it is needed as quickly as possible.
Eligibility to receive funding
To be eligible for financing, national recovery and resilience plans must focus on key EU policy areas:
- green transition;
- digital transformation;
- economic cohesion, productivity and competitiveness;
- social and territorial cohesion;
- health, economic, social and institutional resilience;
- policies for the next generation.
Each plan has to dedicate at least 37% of its budget to climate and at least 20% to digital actions. They should have a lasting impact in both social and economic terms, include comprehensive reforms and a robust investment package, and must not significantly harm environmental objectives.
The regulation also stipulates that only member states committed to respecting the rule of law and the European Union’s fundamental values can receive money from the RRF.
The Council now also needs to formally approve the agreement reached, before the Presidents of the ECOFIN Council and the European Parliament can sign it. The Regulation will then be published in the Official Journal, allowing it to enter into force on the day after publication. The Commission expects all the necessary formal steps to be concluded in time for the RRF to enter into force in the second half of February.
Sources: European Parliament, European Commission
In: CLEPA News, Growth & Competitiveness