2024-09-02 17:22:03
The implementation of the European recovery funds has not yet reached cruising speed. Member States had used only a third of the money granted and had made less than 30% of the progress towards meeting their milestones and objectives by the end of 2023, three years after the massive relaunch plan have been launched after the recession of covid-19 and half way to wear them. In addition: of that money, only half of the transfers from Brussels had reached the final recipients there, according to a report published by the EU Court of Auditors last Monday, in which it warns that the delay this is a question of community capacity. partners to carry out the promised reforms and investments. Spain, which is also piling up delays, is not doing so badly: it has achieved 29% of the milestones agreed with Brussels compared to an average of 19%, with 121 objectives achieved out of a total of 416 and 46% of the funding disbursed. (the European average is 37%).
“We conclude that the absorption of MRR funds [el Mecanismo de Recuperación y Resiliencia, el principal instrumento del fondo de recuperación] proceeding with some delay and that there are risks in the absorption and completion of measures in the second half of the application,” the document says. Absorption of funds from the Recovery and Resilience Mechanismwhich was published last Monday.
MMR is a transatlantic endowment of 724,000 million euros – with Spain leading the beneficiaries – achieved through an unprecedented scheme to mutualize community debt. Of that amount, 338,000 million are non-refundable subsidies and the rest are loans. Its disbursement is dependent on achieving a series of milestones and objectives, agreed between each capital and Brussels, through reforms and investments, so that national economies are more resilient for the future. disturbances. Requests for payment are submitted according to an indicative calendar and the deadline for the execution of the plan is mid-2026, a deadline that some States consider challenging due to its brevity given the huge administrative burden and difficulties involved to be executed.
These obstacles have been reflected in the fact that the speed of absorption of funds has decreased over time. In the first stages, the disbursement was carried out quickly thanks to the pre-financing of 56.5 billion that the European Commission decided to grant, which represented 13% of the allocation identified for each country that was deducted from subsequent payments. Then came the delay. “In December 2023, the number of payment requests submitted to the Commission was significantly lower than the number provided for in the operational provisions,” the report emphasizes.
The main causes of delay are found in external factors that have changed the existing panorama. In particular, the report highlights the shortage of supplies and the rise in prices exacerbated by the conflict in Ukraine, which in many cases led to the renovation or abandonment of projects that appeared in the national recovery plans . Other factors delaying implementation include the underestimation of the time required to carry out the proposed measures and the associated uncertainty, such as public procurement issues, as it is a new instrument which has not been used so far. The high administrative burden is also slowing progress.
At the end of 2023, Brussels had 213 billion euros in disbursements – 139,000 in grants and 74,000 in loans – including pre-financing. On the same date, States had requested 228 billion, but there were large differences between countries. As many as seven of them had not received any interest in reaching the milestones (Belgium, Finland, Hungary, the Netherlands, Sweden, Poland and Ireland) for various reasons, due to the lack of technical agreements with Brussels regarding the execution of the due plan. in relation to failure to submit an application for payment.
Each country can request two payments over a period of years, which the Commission evaluates within two months and, if it considers that the milestones related to them have been met, it will release the money. Spain had requested, until the end of 2023 – the period covered by the report – four payments and received three, all of which related to subsidies. However, all but the first were delayed. Italy is the most advanced in this regard, having requested and received five requests for subsidies and requested and received four loan payments. Portugal, Greece and Romania follow each other closely.
If the proportion of payment requests submitted against the expected deadlines is taken into account, Spain is at 80% compared to an average of 70%. 100% are Croatia, Czech Republic, Denmark, Germany, Italy, Latvia, Malta, Portugal and Slovakia. However, the auditors remember that these data do not necessarily reflect the good performance of one country compared to another, as they may have signed their operational provisions later. That is to say that they are not delayed, it does not mean that they are more advanced in the implementation of the plan.
“There are some risks, not only from the point of view of financial management, because many measures, due to this accumulation of delays, will be implemented in the last two years, 2025 and 2026,” warned Ivana Maletić, member of the Court responsible for the Council. audit, which presented the report via video conference next Monday. “If the measures are not completed, tools will be needed to recover the funds.”
The institute also expresses the difficulties of identifying the final beneficiaries of the funds, despite the fact that from March 2023 member states are obliged to publish lists of the 100 largest recipients. In fact, the audit body asked the 22 Member States that benefited from the aid to obtain information on the location of the aid: almost half of the funds disbursed to the 15 Member States that provided the corresponding information have not yet reached the real economy . ; the others provided no information or did not do so at all.
Deferral of investments
The auditors have also analyzed the risks that exist for the second phase of the implementation of the plan, and their conclusions are not the most optimistic, also because investments are concentrated in that phase, which is more complicated to make in relation to it the reforms. There were 2,530 measures in the countries’ initial recovery plans, of which 1,541 were investments and 989 were amendments. Most States decided to implement the reforms first.
Therefore, the capitals of Europe have planned the milestones and objectives of 39% of investments – especially related to infrastructure – and 14% of renovations during the last eight months of the plan’s implementation period to bring to an end. “The postponement of investments is likely to increase the risk of delays and a slowdown in absorption,” the document emphasizes, citing the Spanish Building Energy Recovery Program as an example. The Commission also recognized that the second half of the implementation of the RRF will be more difficult than the first, as the investments reach a critical stage of their implementation. Therefore, among the proposed recommendations, the court recommends the Commission to provide additional guidance when necessary and to expand its supervision.
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