Lawmakers give green light to Recovery and Resilience Facility of €672.5bn

Each national plan has to dedicate at least 37% of the budget to climate and at least 20% to digital actions

Photo: EP European Parliament in session.

MEPs approved on Wednesday the Recovery and Resilience Facility (RRF), designed to infuse €672.5bn in loans and grants helping EU countries to overcome the sequels of the Covid-19 crisis. The RRF holds the lion's share of the €750bn NextGenerationEU.

Lawmakers confirmed the political agreement reached on the RRF regulation with 582 votes in favour, 40 against and 69 abstentions.

EU states can use €672.5bn in grants and loans to finance national measures designed to mitigate the economic and social consequences of the pandemic. By this tool can be funded as well related projects that began on or after 1 February last year.

The RRF funding will be available for three years and EU governments can request up to 13% pre-financing for their recovery and resilience plans.

The green transition including biodiversity, digital transformation, economic cohesion and competitiveness, and social and territorial cohesion are the areas on which national recovery and resilience plans must focus as to receive money from the RRF.

Specifically these plans should zoom in on how institutions react to crisis and on policies for children and youth, including education and skills, as to be qualified for financing.

Siegfried Mureșan (EPP, RO), one of the lead MEPs involved in the negotiations said during the debate that the RRF “will help to modernise our economies and to make them cleaner and greener”.

We have set the rules on how to spend the money but left them flexible enough to meet the different needs of member states, he commented adding that this money must not be used for ordinary budgetary expenditures but for investment and reforms.

Saying that the RRF in the short-term aims to recover by supporting gross national income (GNI), investments and households, Eider Gardiazabal Rubial (S&D, ES), one of the lead negotiators specified that in the long-term, “this money is going to bring about change and progress to meet our digital and climate goals.

We will ensure that the measures will alleviate poverty and unemployment, and will take into account the gender dimension of this crisis and our health systems will also become more resilient, she also said.

Europe’s destiny is in our hands and we have a duty to deliver recovery and resilience to our youth and children, who will be at the centre of the recovery, Dragoș Pîslaru (Renew, RO), one of the lead MEPs involved, underlined.

According to the regulation, each plan has to dedicate at least 37% of its budget to climate and at least 20% to digital actions.

These actions should have a lasting impact in both social and economic terms, include comprehensive reforms and a robust investment package, and must not significantly harm environmental objectives.

Only EU countries committed to respecting the rule of law and the European Union’s fundamental values can receive money from the RRF.

The Commission, which is responsible for monitoring the implementation of the RRF, may be asked to appear before Parliament’s relevant committees every two months to discuss the state of the recovery and how the targets are implemented by Member States.

The EU executive will also make an integrated information and monitoring system available to the member states to provide comparable information on how funds are being used.

Welcoming the adoption of RRF by the Parliament, Valdis Dombrovskis, Executive Vice-President for an Economy that Works for People, stressed that his facility provides EU countries with a unique chance to rebuild and revamp their economies for the post-Covid world.

“It is an opportunity build resilience and to embrace a more digital and greener future. That requires both the right investments and the right reforms. To recover from the crisis and meet the challenges of the 21st century, Member States should seize the opportunity of the RRF funding to free their economies of bottlenecks and refresh outdated policies and practices. We call on Member States to continue working closely with the Commission on compiling robust and credible recovery and resilience plans so we can start disbursing the funding as soon as possible. I thank the European Parliament for its support and the speed with which it has approved the RRF,” EVP Dombrovskis stated.

 

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