EU Council will approve 12 national recovery plans

Brussels, 09/07/2021 (Agence Europe)

EU finance ministers will adopt 12 national recovery plans under the Next Generation EU recovery plan on Tuesday, 13 July, during the first ‘Ecofin’ Council meeting under the Slovenian Presidency.

The 12 plans are those that were submitted before the end of April and that received a favourable opinion from the European Commission before the June European Council.

On Friday, 9 July, an EU source indicated that Member States’ permanent representatives had a “rather positive” discussion on these recovery plans.

On Tuesday, another diplomat had predicted, “we don’t expect an in-depth discussion on the plans”, since discussions had already taken place at the Economic and Financial Committee level. The 12 plans will be approved by consensus, although—formally—a qualified majority of Member States is required.

At the technical level, the national plans were discussed twice. In the vast majority of cases, Member States agree with the European Commission’s detailed assessments. Some stress the importance of including the socio-economic policy recommendations that are considered to be the most important, such as pension system reforms or the establishment of robust anti-corruption systems, in the recovery plans. Only minor changes were made to the first 12 recovery plans.

As anticipated (see EUROPE 12754/15), an extraordinary ‘Ecofin’ Council meeting will be held via videoconference on Monday, 26 July, in order to approve the national plans of at least another four countries, namely Cyprus, Croatia, Lithuania, and Slovenia.

Once adopted, the national plans will receive prefinancing of up to 13% of the amount of the grants awarded. Next week, the European Commission is expected to undertake a third issuance of securities on the financial markets in order to be able to pay the necessary amounts to the 16 countries concerned (see EUROPE 12751/6).

That being so, 11 national plans are still missing, but these plans are not expected to be formally adopted before September. The Irish, Polish, and Czech national plans could, nevertheless, receive a positive assessment from the European Commission between 16 and 19 July.

“The elephant in the room”, as a third source described it, is the Hungarian recovery plan. The European Commission affirms that it has not suspended its analysis of this plan so as to put pressure on Budapest regarding the respect of the rule of law in the country (see EUROPE 12757/16). In its view, the analysis of the plan and its response to the Hungarian law stigmatising LGBTI people are two separate processes. The results of its assessment are expected by 12 July, but it is possible that they will be presented a few days later. The sources consulted were not able to affirm, on Friday, that the assessment of the Hungarian plan would be presented after the summer.

When a recovery plan approved by the European Commission remains controversial in the EU Council and when the European Commission opposes changes, unanimity of the 27 Member States—including the target country—is needed to require the changes be made to a national plan.

Finally, only Malta, Bulgaria, and the Netherlands have not officially delivered their national recovery plans at the EU level.

Sustainable Finance. The European Commission will also present ministers with its latest proposals on sustainable finance, which were published on 6 July. This will be an opportunity for Member States to express their initial responses.

According to an EU source, the discussion is expected to mainly focus on the revised sustainable finance strategy (see EUROPE 12756/15) and, to a lesser extent, on the proposed voluntary European green bond standard (see EUROPE 12756/14).

While it is difficult to anticipate reactions, as a number of elements of the strategy are linked to the EU taxonomy on sustainable finance (see EUROPE 12703/2), it is not out of the question that the usual divergences between Member States regarding the inclusion of nuclear and gas in the taxonomy will resurface during this discussion, in this same source’s opinion.

G20 ‘Finance’ Meeting. Ministers will be informed of the results of the G20 ‘finance’ meeting, which is taking place on 9 and 10 July under the Italian Presidency. The European countries present in Venice are earnestly hoping to reach an agreement on international tax reform (see EUROPE 12757/17).

EU2021SI. As the current president of the ‘Ecofin’ Council, Andrej Šircelj will present the Slovenian Presidency’s economic and financial priorities.

In addition to implementing the European [Economic] Recovery Plan, Ljubljana notably wants to make progress in the EU Council with regard to proposals on sustainable finance, the fight against money laundering, and taxation of the digital and energy sectors.

See: https://bit.ly/3AhhkXI

European Semester. Finally, as part of the budgetary process for the ‘European Semester’, the ‘Ecofin’ Council will adopt conclusions on the macroeconomic imbalances observed in 12 countries (see EUROPE 12732/1). A draft text indicates that the pandemic has not fundamentally altered these imbalances but has delayed their reduction.

Read the draft conclusions: https://bit.ly/3xuAxn2 (Original version in French by Mathieu Bion)

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