EU Council Approves First Recovery Disbursements

The first batch of Council implementing decisions on the adoption of national recovery and resilience plans was accepted today by EU economic and financial ministers. Austria, Belgium, Denmark, France, Germany, Greece, Italy, Latvia, Luxembourg, Portugal, Slovakia, and Spain have all been given permission to use EU recovery and resilience funds to help their economies recover from the COVID-19 impact. The adoption of Council implementing decisions on the plans’ approval allows member states to negotiate grant and loan agreements with pre-financing of up to 13 percent. 

In June, the Commission gave the Council a good assessment of the 12 member states’ plans, along with proposals for Council decisions on their ratification. Pre-financing from allotted monies was requested by all 12 member states. The Council’s decisions are the final step before member states can sign grant and loan agreements with the Commission and begin receiving funding to carry out their national programmes. 

The €672.5 billion Recovery and Resilience Facility, which is funded by the EU, intends to boost European economic recovery by supporting member states’ reforms and investment projects. The national plans’ measures are organized around six policy areas (or “pillars”) outlined in the rule creating the Recovery and Resilience Facility. Green and digital transitions, smart, sustainable, and inclusive growth, and social and territorial coherence are among the topics covered. 

Decarbonisation of industry, building rehabilitation, digitization of public administration, and reskilling of the workforce are some of the initiatives taken by individual member states to achieve recovery and strengthen the EU’s resilience. The proposals also address the country-specific recommendations identified during the European Semester debates in 2019 and 2020. 

The Recovery and Resilience Facility is a key component of Next Generation EU, a recovery package aimed at reviving the EU economy following the COVID-19 epidemic while simultaneously tackling today’s most pressing issues, such as climate change and digital transformation. Member states must submit their recovery and resilience plans to the Commission, which then examines them against country-specific recommendations and the facility’s six pillars in order to receive assistance from the facility. 

Once an individual plan is filed, the Commission has two months to review it and propose a Council implementing decision on its approval, unless the member state involved agrees to a deferral. The proposal is usually examined by the Council within four weeks. The member state can negotiate bilateral finance arrangements with the Commission and receive the agreed pre-financing within two months after the proposed decision is adopted. 

Further disbursements from the facility will be contingent on a positive assessment of the recovery and resilience plan’s implementation, taking into account the success of the individual plan’s milestones and targets. 

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