Negotiators from the European Parliament and the Council of the European Union reached an interinstitutional agreement in the early hours of Friday 18 December on the Recovery and Resilience Facility (RRF ), the budgetary instrument at the heart of the €750 billion Next Generation EU Recovery Plan, which will complement the 2021-2027 Multiannual Financial Framework (MFF).
Generated by joint borrowings by the European Commission on behalf of the EU, the RRF will be endowed with €672.5 billion, comprising €312.5 billion in grants and €360 billion in loans, in line with the July European Council agreement on the MFF. As the EU Council wanted, it will last for 3 years, meaning the appropriations can be committed between 2021 and 2023, although payments can be spread out until the end of 2026.
The national allocations were predetermined and were not addressed in the interinstitutional negotiations (see EUROPE 12562/12). As a sign of European solidarity, financial aid will be concentrated on the countries most affected by the first wave of Covid-19, with Italy and Spain at the forefront with a package worth €44.7 and €43.5 billion, respectively. At mid-term, the remaining part of the national envelopes will be reviewed in light of the evolution of the economic crisis.
After a series of trilogues in November and December, Parliament and EU Council negotiators stepped up their discussions on the modalities of the RFF’s functioning after the MFF was unblocked by the European Council on Thursday 10 December (see EUROPE 12620/1), to finally negotiate almost continuously since Tuesday 15 December. Technical discussions took place again to groom the legal text on Friday.
National plans. Member States will have to draw up a national recovery plan and submit it at European level by the end of April 2021, so that the first financial support arrives before the summer.
Based on the country-specific recommendations addressed annually to EU countries, each national plan should detail the projects, measures and reforms envisaged in six policy areas of European importance: (1) green transition, including biodiversity, (2) digital transformation, (3) economic cohesion and competitiveness, (4) social and territorial cohesion, (5) crisis preparedness and response, (6) policies for the next generation, children and young people, including education and vocational skills.
It was already agreed that each national plan should devote at least 37% of its financial allocation to the green transition and 20% to digital transformation. But “the European Parliament wanted minimum shares for the six priorities”, Damian Boeselager (Greens/EFA, Germany), one of the Parliament negotiators, told EUROPE. “That was not possible because the Council does not want to report things”, he added.
Actions started as of February 2020 and that meet the thematic criteria are eligible.
In addition, MEPs secured an increase in the Facility’s pre-financing from 10% to 13% in order to quickly get the momentum going. “It means more money quicker after national plan accepted and without any condition”, Siegfried Mureşan (EPP, Romania), told EUROPE.
Macroeconomic governance. The Romanian Christian Democrat also stressed the link between the use of the Facility and the respect of the European framework for macroeconomic governance, once the crisis is overcome and the European fiscal rules are applicable again.
“The RRF cannot be used to fill holes in national budgets. [...] Once the economic situation improves, countries shall respect EU deficit rules, while benefitting from the RRF”, he said.
Macroeconomic conditionality will apply and could ultimately lead to payment suspensions in the event of a breach of the rules. On this point, the provisions of the Regulation on common provisions in the cohesion policy will apply (see EUROPE 12614/11).
Mr Mureşan also highlighted Parliament’s fight to set in stone the obligation, via the European Recovery Plan, to respect the principle of the Rule of law. “We ensure that money does not go to those who breach our common values”, he said.
Governance. MEPs wanted to be placed on an equal footing with the Council of the EU in analysing and approving national recovery plans (see EUROPE 12599/4, 12596/3). They did not secure this.
It will therefore be up to the Member States, on a proposal from the Commission submitted within 2 months of the presentation of a national plan, to approve the plans within 4 weeks by means of implementing acts.
To date, the Commission is in contact with all Member States in the preparation of their national plans. It has already received projects from seven Member States (Portugal, Greece, Cyprus, Slovenia, Hungary, Bulgaria and Spain).
On the other hand, faced with the categorical refusal of the EU Council and the Commission to grant it a decision-making role at national level, Parliament has negotiated hard to establish a regular monitoring procedure for the implementation of the Facility through a specific dialogue.
Every 2 months, the competent committees will question the Commission on all aspects of the European Recovery Plan. If necessary, Parliament could adopt a specific resolution which the Commission will have to take into account. However, Member States will not be able to be summoned to justify the measures contained in their national plans.
Mr Mureşan assured that Parliament would give its opinion, by means of a resolution, even before the national plans were adopted.
Transparency. Another controversial issue put forward by the European Parliament is access to information on the implementation of national plans and the monitoring of compliance with the priorities set.
The Commission will have to work on the creation of an on-line database to compile in a standardised way all information on the implementation of the Facility in the field and, if possible, on the final beneficiaries of financial assistance. “This database will be interoperable so that it will be easy to compare information”, said Mr Mureşan, expressing strong resistance from the Council on this “very controversial” issue, while the Commission is in favour of it.
But reporting this information will “ not be mandatory for Member States”, Mr Boeselager noted. He added that tracking will be done only for expenditures related to the climate and digital transition. And a delegated act will have to be drawn up to adopt a methodology to assess the impact of the Facility on the social sector, youth and gender equality issues.
The Commission will also be required to publish a ‘scoreboard’ every 6 months and an annual report on the implementation of the Facility. In addition, it will have to submit “a comprehensive interim report on the implementation of the program, prepared by the Commission in July 2022. It will include recommendations to Member States to update and where necessary correct plans that fall behind their targets”, Mr Boeselager said.
The interim agreement still has to be examined by the European Parliament and the EU Council before being formally adopted. (Original version in French by Mathieu Bion)