In an analysis published on Thursday 19 January, the EU’s Court of Auditors looked at the commonalities in funding between the 2021-2027 Cohesion Policy and the Recovery and Resilience Facility (RRF). While these instruments have similar objectives, the coordination of their implementation is essential, the Court of Auditors insists.
Avoiding duplication
Indeed, both the Cohesion Funds and the RRF should contribute to the digital and green transitions while promoting investments that work towards cohesion and resilience. For some investments, Member States can therefore choose which instrument will be used to finance it.
However, their management methods differ. Cohesion Policy is under shared management, whereas the RRF is more centralised and depends on national systems. In other words, the Court of Auditor’s report points out, “the responsibilities of EU and Member State authorities differ depending on the source of funding”. Their coordination, it says, is therefore “crucial”, with countries needing to ensure that they complement each other and avoid double funding.
More funding available
Moreover, their parallel implementation has brought its share of difficulties, particularly administrative ones, contributing to delays in the preparation of partnership agreements under the 2021-2027 Cohesion Policy. Countries will therefore have to absorb their funding in a shorter period of time, while having more funds available through the RRF.
The €724 billion from the RRF means that EU countries can spend more EU funds between 2021 and 2027 than before on economic, social and territorial cohesion. This would increase the share of EU-funded public expenditure in the Member States from 1% to 3% of the EU’s GDP (at most, if the “loan” component of the RRF is fully mobilised). Furthermore, the Court of Auditors estimates that six Member States will be able to spend twice as much in 2021-2027 as in 2014-2020 and seven of them three times as much. Luxembourg and the Netherlands could spend seven times more.
While there is a risk that the absorption pressures associated with shorter timeframes and larger amounts may favour investments with a lower added value, the Court of Auditors considers that this risk is limited by a number of factors, including the possibility of using both instruments for the same investment and inflation.
The full report of the Court of Auditors also discusses the differences in the allocation of funds, the evaluation process and the composition of the two instruments. Its analysis is based on Spain, Germany, France, Italy, Romania and Slovenia.
To read the full report: https://aeur.eu/f/4zb (Original version in French by Hélène Seynaeve)