Two years after rolling out, the European Union’s post-pandemic recovery fund has not quite taken off: sixteen of the twenty-seven partners have still not received any formal payment for undertaking the planned reforms and investments and nine of them have not even applied for it. .
Of the €144 billion in grants and loans the European Commission has disbursed so far, including €56.5 billion, more than two-thirds have gone to Spain (22% of the total) and Italy (46), the countries most advanced in implementation of their recovery plans and also those with more money allocated.
Although Brussels has already approved the investment and reform plans presented by all partners to use their share of the €724 billion in aid that the EU will disburse up to 2026, more than half of them have only obtained, in the best of cases , the advancement of their allowance to which they were automatically entitled upon receiving the green light for their plan.
“The priority has to be the rapid implementation of the recovery and resilience plans. Member States have to continue to make every effort to submit payment requests on time and ensure the progress of reforms and investments, allowing for a timely delivery of funds”, insisted the economic vice-president of the European Commission, Valdis Dombrovskis, in the last debate with the European Parliament on the execution of the fund.
Germany, Belgium, Ireland, the Netherlands, Estonia, Finland, Sweden, Poland and Hungary have not yet requested any formal disbursement from the fund, something that governments can do twice a year when they consider that they have met the milestones and objectives linked to each aid tranche.
Austria, Lithuania, Luxembourg, Malta, the Czech Republic, Denmark and Slovenia have not yet received funds either, although in their case they have already submitted a first application and are awaiting the approval of the European Commission.
On the opposite side are Spain, Italy, Greece, Portugal and Croatia, which lead the execution of the recovery plans and have already obtained two disbursements -Madrid and Rome have already requested the third-, while the rest -France, Bulgaria , Cyprus, Latvia, Romania and Slovakia – have received a first formal payment.
To date, only 8% of the almost 6,000 milestones and objectives agreed upon by the Twenty-seven have been met, despite the fact that half of them should have been completed by the end of 2023, and close to 30% of the allocated money has been disbursed.
In this situation, the Commission has called on governments in recent months to speed up the implementation of recovery plans and has reminded them that the doors are open to see how the process can be improved, especially as a result of the easing of the rules to allow the fund to finance the Repower EU strategy to reduce dependence on Russian energy.
The Community Executive recognizes that global instability, problems in supply chains, the energy crisis and inflation “are overloading the national authorities, sometimes making it difficult to implement” the plans, but defends that this context does even more ” crucial” to execute them successfully.
In a report on the two years of life of the fund, he calls for continuing to strengthen the capacity of public administrations to implement the plans, as well as taking advantage of the fact that it will be necessary to update them to detect “bottlenecks” in reforms and investments and promote the expansion of those already underway, in order to “avoid delays in implementation” and ensure consistency between payments and operations to attract funding from the fund in the markets.
With many failing to meet targets for a first disbursement, states now have to update their plans to include new measures to reduce energy dependency on Moscow and speed up the green transition, and must notify Brussels by March 31 whether to they will request part of the €225 billion in loans that are still available from the recovery fund.
All in all, the Commission defends that the fund is “on solid footing”, that the advances given when approving the plans were “quick” and “direct” support that helped start the recovery; and that there are already “visible” results in terms of reforms and investments.
This 2023, they say, will be decisive since the highest volume of payments and a peak in the implementation of reforms are expected. Brussels calculates that at the end of the year investment in the EU will have increased four tenths compared to 2019, up to 3.4% of GDP, and that half of the increase will be due to the fund.