On Thursday 17 September, the European Commission clarified the functioning and the timetable for the launch of the Recovery and Resilience Facility as well as the breakdown of financial support by Member State.
A budgetary instrument at the heart of the European Recovery Plan, the Facility will be endowed over 4 years with €672.5 billion, of which €312.5 billion will be in the form of grants and €360 billion in loans, as agreed by the European Council on 21 July (see EUROPE 12532/2).
The proposal for a regulation establishing it is currently under discussion in the EU Council (see EUROPE 12559/16) and the European Parliament (see EUROPE 12551/11), which may adopt its position in November. The aim is to have it adopted under the co-decision procedure by the end of the year, so that the Facility will be operational from January 2021.
European Semester. On Thursday, the Commission anticipated the presentation of its Annual Sustainable Growth Strategy document, which marks the start of the 2021 edition of the 'European Semester' budgetary process by setting the economic priorities at European level. Still facing the Covid-19 pandemic, the EU will have to boost its economy by implementing the European Green Deal with the aim of being both competitive and sustainable from a social and environmental point of view.
This guidance document, accompanied by standard templates, will help Member States to prepare their National Recovery Plans containing the measures, investments and reforms they intend to undertake to stimulate the green and digital transition of their economies.
Seven flagship areas, visible to the public, are envisaged: - clean technologies and renewable energies; - the energy efficiency of public and private buildings; - innovative mobility; - connectivity (5G, fibre optic); - modernisation of public administration; - the development of a European cloud for industrial data and powerful microprocessors; - the digitisation of education systems and the development of digital skills.
The Facility will thus have to devote 37% of its financial allocation to green transition and 20% to digital transition (see EUROPE 12561/7).
The national recovery plans should also be based on the country-specific recommendations that Europe addresses to the Member States each year in the framework of the 'European Semester'. According to an EU source, if a recommendation is made to reduce labour taxation, a Member State may include such a measure in its plan.
Some 20 countries are already in close contact with the European institution in order to be able to present a first draft of their plan by mid-October.
The Commission will assess the plans in the light of the country-specific recommendations, the targets set for green and digital transition, and the European added value they provide, in particular through the achievement of sustainable infrastructure. Its methodology will be the same regardless of the type of financial assistance (grants, loans) requested.
If the Facility is operational in early 2021, the national plans can be validated next spring and, if the decision amending the own resources of the EU budget is approved and ratified by the Member States within that period, the first financial payments could take place in the first half of 2021, bearing in mind that a pre-financing of 10% of the Facility has also been planned for. Other disbursements, which would occur twice a year, would depend on the achievement of the milestones set out in the national plans.
To finance the aid, the European Commission has set itself the objective of borrowing on behalf of the EU27 on the markets through the issue of 30% 'green' bonds (see EUROPE 12561/6). While it is organising itself internally to monitor the implementation of the Facility (see EUROPE 12535/10), it is not clear at this stage whether its own services are carrying out these market operations.
Parliament, the European Court of Auditors (see EUROPE 12556/5) and OLAF will be empowered to exercise their powers of control in order to protect the EU's financial interests.
Helping the most affected countries. As an expression of European solidarity, the Facility will further support the countries most affected by the pandemic, with Member States contributing based on their national contributions to the EU budget.
The European Council agreement of 21 July provides for 70% of the budgetary allocation of the Recovery and Resilience Facility to be allocated in 2021 and 2022 according to criteria such as population, national GDP and unemployment trends over the period 2015-2019 (see EUROPE 12532/2). At the request of the Central and Eastern European countries in particular, who felt that the allocation of resources did not fully reflect the economic impact of the pandemic, the criterion based on unemployment will be replaced by the fall in national GDP in 2020 and the cumulative decrease in GDP for 2020-2021 when the allocations for the remaining 30% to be committed in 2023 are calculated.
The lion's share is divided between Italy and Spain, as shown by the following breakdown of the Facility: - Austria: €2.1 billion + €913 million; - Belgium: €3.4 billion + €1.7 billion; - Bulgaria: €4.3 billion + €1.7 billion; - Croatia: €4.3 billion + €1.6 billion; - Cyprus: €764 million + €204 million; - Czech Republic: €3.3 billion + €3.4 billion; - Denmark: €1.2 billion + €338 million; - Estonia: €709 million + €308 million; - Finland: €1.6 billion + €782 million; - France: €22.7 billion + €14.7 billion; - Germany: €15.2 billion + €7.5 billion; - Greece: €12.6 billion + €3.6 billion; - Hungary: €4.3 billion + €1.9 billion; - Ireland: €853 million + €420 million; - Italy: €44.7 billion + €20.7 billion; - Latvia: €1.5 billion + €342 million; - Lithuania: €1.95 billion + €480 million; - Luxembourg: €72 million + €21 million; - Malta: €160 million + €44 million; - Netherlands: €3.7 billion + €1.9 billion; - Poland: €18.9 billion + €4.1 billion ; - Portugal: €9.1 billion + €4.1 billion; - Romania: €9.5 billion + €4.3 billion; - Slovenia: €1.2 billion + €363 million; - Slovakia: €4.3 billion + €1.5 billion; - Spain: €43.5 billion + €15.7 billion; - Sweden: €2.8 billion + €985 million.
See documents published by the Commission: https://bit.ly/3hFnqXk (Original version in French by Mathieu Bion)