EU Member States made progress on Wednesday 8 July in discussions on the governance of the Recovery and Resilience Facility proposed as part of the European Economic Recovery Plan for the post-Covid-19 economy.
Their ambassadors to the EU (Coreper) discussed on Wednesday a compromise proposal by the German EU Council Presidency to “strengthen” the EU Council’s role in the governance of the Facility “without compromising the rapid implementation” of European financial assistance.
This subject of governance is expected to be included in the new negotiating box for the 2021-2027 EU budget to be unveiled by the President of the European Council, Charles Michel, in advance of the extraordinary European summit on 17 and 18 July (see EUROPE 12521/12, 12519/1).
The German proposal is twofold: - the approval and modification of national recovery plans; and - the approval and cancellation of payments.
For the first component, it provides that the EU Council shall act by a qualified majority of the Member States on a proposal from the Commission. At the end of May, the Commission suggested the use of reverse qualified majority voting, whereby a qualified majority of countries is required to reject a proposal.
The German Presidency’s proposal was reportedly widely welcomed by delegations as a good basis for further discussions.
Taking a more restrictive position than other countries, the Netherlands advocates strict control over both the approval of national plans and the related financial support. In their view, the EU Council should decide unanimously whether or not to pay out grants and loans from the Recovery Fund.
The other so-called ‘frugal’ countries have reportedly indicated that the German proposal on procedures for approving recovery plans is the minimum acceptable.
On the second part, concerning the approval of payments, the German proposal provides that the ‘Economic and Financial Committee’ within the EU Council shall examine the Commission’s opinion. This Committee could adopt an opinion by a majority of its members on the Commission’s assessment.
Austria reportedly called for a stronger role for the EU Council.
The countries that will be the main beneficiaries of the Facility, such as Italy, reportedly insisted on the need to find the right balance in the procedure to avoid ‘politicisation’ of the process and delays in the implementation of national recovery plans.
Italy, Spain, Portugal and Greece reportedly argued for a comitology procedure for the approval of the plans, or a reverse qualified majority vote in the EU Council, if the EU Council were to decide on these plans.
See the German proposal on the governance of the Facility: https://bit.ly/2VYZuX2
Own resources. The German EU Council Presidency also presented an amended proposal on the EU’s own resources.
On 28 May, the Commission adopted an amended proposal for an EU Council Decision on the system of Own Resources (see EUROPE 12494/1).
The decision about this system plays a central role in activating the Recovery Plan. It provides for extraordinary and limited empowerment of the Commission to borrow funds on the capital markets and guarantees the Union’s ability to repay, due to a dedicated temporary increase of the own resources ceilings.
According to the German Presidency of the EU Council, national delegations have expressed their concerns at previous meetings, in particular with regard to the “lack of clarity” regarding the responsibility of Member States and situations in which some Member States may be required to pay more than their relative share. They also asked for clarification on the procedure to be followed for provisional calls for funds and for ensuring that Member States will be reimbursed for any additional payments made provisionally.
In order to respond to the concerns raised by delegations, the German Presidency has worked with the EU Council Legal Service to formulate the following amended proposal, which: - clarifies the proportional nature of provisional cash resource payments; - strictly circumscribes the cases in which the Commission may provisionally request more resources from Member States than their respective relative shares; - specifies that under no circumstances may the Commission call on cash resources on an annual basis for an amount that would lead to exceeding the own resources ceilings set in the Own Resources Decision “as temporarily increased for the sole purpose of covering all the Union’s obligations resulting from borrowings under the ‘Next generation EU’ recovery plan”.
This subject is important to frugal countries, which are asking for clarity for their national parliaments. (Original version in French by Lionel Changeur)