01 Sep How Can You Take Advantage of The Recovery and Resilience Facility?
Author: Timothée Perruchoud
What is The Recovery and Resilience Facility?
Since March 2020, Europe has been under the effect of the global health crisis, and in addition to many affected individuals, industries and countries also took a big toll. To help its Member States, the European Commission created NextGenerationEU, a temporary recovery instrument that allows the European Commission to raise funds to help repair the immediate economic and social damage brought about by the coronavirus pandemic. The Recovery and Resilience Facility (RRF) is the centrepiece of this initiative. The aim of the Facility is to mitigate the economic and social impact of the health crisis and make European economies and societies more sustainable, resilient, and better prepared for the challenges and opportunities of the green and digital transitions.
The RRF distributes up to € €338 billion in grants and up to € 390 billion in loans (€ 728 billion in total) to support reforms and investments undertaken by the Member States. The RRF entered into force on 19 February 2021 through Regulation (EU) 2021/241. It will finance reforms and investments in the Member States until 31 December 2026.
National Recovery and Resilience Plans
Under the RRF, each Member State is required to submit their National Recovery and Resilience plan to the European Commission. Initially, Member States could do so until April 2021, but those who have not can now submit their plans until mid-2022.
The Application Process of the Member States
1) Each Member State submits their national recovery and resilience plan to the European Commission.
2) Upon receiving the plan, the Commission has two months to assess it. Afterwards, the proposal is sent to the European Council.
3) The European Council has four weeks to adopt the plan. The adoption of the plan by the Council allows the disbursement of a 13% pre-financing.
4) Member states will be allowed to request further loans and grants as different milestones and objectives are met. The entirety of the loans and grants allocated for each Member State will be distributed over time between 2021 and December 2026 with each milestone achieved.
So far, 25 of 27 Member States have submitted their plan and 18 have been approved by the Commission. The links below will guide you to each Member State Recovery plan section. There you can access the draft or final plans and, where available, the Commission assessment and accompanying press material.
A Facility in Line with The EU Policies
What Should the Plan Include?
The RRF is closely aligned with the Commission’s priorities ensuring a sustainable and inclusive recovery. Each plan must effectively address challenges identified in the European Semester, particularly the country-specific recommendations of 2019 and 2020 adopted by the Council. Each plan should also advance the green and digital transitions and make Member States’ economies more resilient. In fact, each national recovery and resilience plan must include a minimum of 37% expenditure for climate-related investments and reforms and a minimum of 20% expenditure to foster the digital transition.
Relevant Policy Areas
Article 3 of the RRF regulation establishes its scope under six pillars, each being a policy area of European relevance:
- Green transition;
- Digital transformation;
- Smart, sustainable and inclusive growth, including economic cohesion, jobs, productivity, competitiveness, research, development and innovation, and a well-functioning internal market with strong SMEs;
- Social and territorial cohesion;
- Health, and economic, social and institutional resilience, with the aim of, inter alia, increasing crisis preparedness and crisis response capacity;
- Policies for the next generation, children and the youth, such as education and skills.
Assessment Criteria of The Commission
The Commission assesses the relevance, effectiveness, efficiency and coherence of the Recovery and Resilience plans by relying on eleven criteria. The plan should, therefore:
1) Be comprehensive and balanced;
2) Strengthen growth, jobs, economic, social and institutional resilience;
3) Respect country-specific recommendations;
4) Pose no significant harm to the environment;
5) Support the green transition;
6) Support the digital transition;
7) Have a lasting impact;
8) Ensure effective monitoring and implementation of the reforms and investments envisaged;
9) Have a justified and reasonable cost;
10) Prevent, detect and correct corruption and conflicts of interest;
11) Delineate coherent actions.
These criteria allow the Commission to make sure that each plan meets the policy objectives of the EU. This will also be ensured in the years to come with the resources being distributed to each Member State over time as the specific milestones of their plans are reached.
Flagship Areas for Investments and Reforms
The Commission wants to use the RRF as an opportunity to create European flagship areas for investments and reforms with tangible benefits for the economy and citizens across the EU. These should address issues that need significant investment to create jobs and growth, and which are needed for the green and digital transitions. The Commission has strongly encouraged Member States to put forward investment and reform plans in the following areas:
- Clean technologies and renewables;
- The energy efficiency of buildings;
- Sustainable transport and charging stations;
- Roll-out of rapid broadband services;
- The digitalisation of public administration;
- Data cloud capacities and sustainable processors;
- Education and training to support digital skills.
What does The RRF Mean for Your Company?
Each Member State will apply a different and unique Recovery and Resilience plan. These plans will include a set of reforms and new policies which may have an impact on your business and activities. These policies will push for a green transition, with increased use of renewable energy sources and an incentive to innovate in green technologies, and more. Efforts will be made to recover from the health crisis and prevent such a crisis from having a significant impact on our lives in the future. The Europe that will emerge from the RRF will be more connected and digital, with the great majority of adults trained and equipped for the digital transition. Reforms for a green and digital transition may lead to new financial, structural, and social imperatives for your company.
But most of all, the RRF also brings about new opportunities! Member States will undertake new investments to foster their reforms and accompany the sectors which have most suffered from the pandemic.
A thorough analysis of the plans of the countries which affect your activities will enable you to anticipate and influence the planned reforms and be first in line when new opportunities appear.
How Can We Help?
CLERENS is a Brussels-based consultancy specialised in European affairs. We have a deep understanding of the functioning of the EU and national institutions. We have extensive experience in analysing, shaping, and influencing the European policy landscape.
We can help you identify how the RRF will affect your activities and what new opportunities you can grasp. Analysing the impact of the national recovery and resilience plans relevant to your company will allow you to create your own plan for a post-Covid era. Our consultants are able to accompany you with your lobbying, communications and project management needs as well as guide you through the process of applying for public funding.