On Tuesday, 21 February, the European Commission published its methodology for assessing whether EU Member States are fulfilling the commitments they made with regard to investments and reforms included in their national recovery plans within the framework of the NextGenerationEU Recovery Plan.
Responding to questions from Member States, the European Parliament, and the European Court of Auditors, the European Commission has notably interpreted what it means by a “satisfactory” implementation of a recovery plan.
A European official indicated, “We will be strict on the objectives” and a little more flexible on the means—advocating that “common sense” be used when applying common rules. In accordance with the de minimis principle applicable to competition policy, minimal deviations in relation to the amounts (up to 5% of the amount allocated to a reform or an investment), the internal administrative procedures, the original timing envisaged, or even the substance of an investment or a reform envisaged will be allowed.
The EU institution also unveiled the methodology it will use to temporarily suspend certain payments in the event of non-compliance or partial compliance with the targets set in a recovery plan. The objective is to calculate the amount of European aid that could be suspended while allowing other measures in a national plan to continue to be implemented. The Member State concerned will have the opportunity to submit its own observations in the context of a contradictory procedure.
See the Commission communication: https://aeur.eu/f/5f5
On Tuesday, the Council of the EU definitively adopted the regulation establishing the ‘REPowerEU’ chapters to be inserted into national recovery plans so as to expedite [the EU’s] independence from Russian hydrocarbons and investments in the ‘net-zero emissions’ industry (see EUROPE 13084/15).
See the regulation establishing the ‘REPowerEU’ chapters: https://aeur.eu/f/5f9
In its communication, the European Commission reiterates its guidance from early February on how to modify a national recovery plan to meet the new policy objectives set for NextGenerationEU (see EUROPE 13112/2). The institution stresses that it will be very careful to maintain the initial ambition of the national plans by ensuring that the introduction of the ‘REPowerEU’ chapters will not lead to the backloading of the measures initially planned. In addition, measures scaling up investments and reforms that have already been planned will be favoured. Amendments to national plans are expected to be submitted by the end of April at the latest—with a view to obtaining approval at the EU level by the summer at the latest.
On the financial side of things, the EU institution is requesting that Member States indicate, before the end of March, whether they intend to use all or part of the loans to which they are entitled while the envelope of €225 billion in loans is still available. It will assess the additional needs that certain Member States have expressed so as to finance their ‘REPowerEU’ chapter and, depending on the available loans, will distribute them fairly among the applicant countries.
The same European official indicated that experience with the SURE initiative supporting national short-time work schemes has shown that this is possible.
To date, the European Commission has disbursed €144 billion to 25 Member States (all Member States except Poland and Hungary), including €96 billion and €48 billion respectively in grants and loans.
Unique in its design, the financial assistance from the EU comes from a joint EU loan on capital markets. Through it, the EU has become one of the largest issuers of euro-denominated securities with €119 billion in securities issued in 2022. It is going to become the largest issuer of green bonds in the world. Between October 2021 and December 2022, green bonds worth a total of €36.5 billion were thus issued to finance investments in the green transition, according to the European Commission.
See the European Commission’s report, whose aim is to be transparent about its green bonds: https://aeur.eu/f/5fb (Original version in French by Mathieu Bion)