Recovery and Resilience Facility - Performance

Programme in a nutshell

Concrete examples of achievements

^{(1) The same person can use the service multiple times, in which case they would be counted multiple times.}

^{(*) The latest information on fulfilled milestones and targets and payments made is available on the Recovery and Resilience Scoreboard.}

Budget for 2021-2027

^{(*)   Loans committed in 2021 and 2022 for adopted plans. The available budget for 2021-2027 for loans is EUR 385 855.2 million.}

Rationale and design of the programme

The Recovery and Resilience Facility is a funding programme with the objective to promote cohesion by mitigating the economic and social impact of the COVID-19 crisis and make EU economies and societies more sustainable, resilient and better prepared for the challenges and opportunities of the green and digital transitions.

In addition, following the Russian aggression against Ukraine and the consecutive energy crisis, on 18 May 2022 the European Commission proposed the repowerEU package which inter alia modifies the Recovery and Resilience Facility regulation and other legislative acts. The legislative change allows Member States to add a repowerEU chapter to their national recovery and resilience plans (RRPs) to finance key investments and reforms to diversify energy supplies and reduce dependence on Russian fossil fuels. A political agreement was reached between the Council and the European Parliament in December 2022, and the legal text entered into force on 1 March 2023. In the course of 2023 Member States are expected to submit revised RRPs which include such repowerEU chapters.

Budget

Budget programming (million EUR):

^{(*)   Loans committed in 2021 and 2022 for adopted plans. The available budget for 2021-2027 for loans is EUR 385 855.2}

^{(**) Only Article 15(3) of the financial regulation.}

^{(***) The total available budget for 2021-2027 includes loans committed in 2021 and 2022 for adopted plans. This total will be updated yearly if loans are committed in subsequent years.}

• The Recovery and Resilience Facility (RRF) is the centrepiece of NextGeneration EU, the EU's recovery plan. It supports the way out of the COVID-19 crisis and aims at making Europe more resilient and better prepared for the challenges and opportunities of the green and digital transitions. The Facility is therefore a temporary recovery instrument to finance reforms and investments to be implemented by 2026. To finance NextGenerationEU and the RRF, the European Commission borrows funds on behalf of the EU on the capital markets.
• As set out in Article 23 of Regulation 2021/241, the Commission commits the financial contribution allocated to each Recovery and Resilience Plan upon its adoption by the Council. Beyond the twenty-two plans adopted in 2021, in 2022, the remaining five plans were adopted, namely of Sweden, Bulgaria, Poland, The Netherlands, and Hungary.

Budget performance – implementation

Multiannual cumulative implementation rate for RRF grants (*) at the end of 2022 (million EUR):

^{(*) RRF loans are not included}

• The Facility is an innovative, performance-based instrument. Member States develop national RRPs which are assessed by the Commission and ultimately Council Implementing Decisions on these Plans adopted by the Council. Payments are made to Member States, as beneficiaries, upon delivering reforms and investments pre-agreed in their plans. The funds are therefore disbursed solely on the basis of the progress in the achievement of the reforms and investments that Member States committed to implement.
• With the endorsement of the RRPs of Hungary, Poland, Romania, Sweden and The Netherlands in 2022, by the end of last year all 27 plans had entered the implementation phase.
• The Commission disbursed 13 payments to Member States in 2022, disbursing EUR 72.1 billion to 11 Member States (Bulgaria, Cyprus, France, Greece, Italy, Latvia, Portugal, Croatia, Slovakia, Romania, Spain), along with EUR 2.2 billion remaining pre-financing for Member States with a Plan still adopted in 2021 (Finland and Romania), for a total of EUR 74.4 billion. In addition to the EUR 64.3 billion disbursed in 2021, this means the RRF disbursed a total of EUR 138.7 billion from its inception to the end of 2022.
• The Commission has continued monitoring the implementation of the Facility through the payment request reporting (data are regularly updated in the Recovery and Resilience Scoreboard), bi-annual reporting by Member States on the progress made in the achievement of their plans and frequent exchanges, including missions to the Member States.
• For each disbursement a specific set of milestones and targets must be fulfilled. In case one or more milestones or targets are not satisfactorily fulfilled, the Commission suspends all or part of the related disbursement. However, in line with the methodology for payment suspensions presented by the Commission in February 2023 ⁽¹⁾, the implementation of the plan can continue and payments are made for all milestones and targets that have been satisfactorily fulfilled. The concerned Member State has six months from the date of suspension to take the necessary actions to fulfil the milestones and targets that have not been satisfactorily fulfilled..
• The Commission has generally encouraged Member States to submit payment requests only when all milestones and targets are fulfilled. Nevertheless, as the Commission stressed in its communication on the RRF in February 2023 (quoted above), Member States should make their best efforts to deliver the investment and reforms within the indicative timelines envisaged in the Council Implementing Decisions and the operational arrangements. This is increasingly important as the RRF enters the second half of its lifetime and it is necessary to ensure the efficient planning of the Commission's funding operations on the capital markets, timely disbursements and a full implementation of the investments and reforms as envisaged in Member States plans.
  Some Member States are facing challenges in administering funds, due in part to limited administrative capacity or investment bottlenecks. The process of revising the RRPs in 2023 represents an opportunity to address these issues and increase the absorption capacity of RRF funds. At the same time, it is expected that the revisions to the plans will also impact the disbursement schedule of RRF funds in 2023 and beyond.

^{(1) https://commission.europa.eu/system/files/2023-02/COM_2023_99_1_EN.pdf}

Contribution to horizontal priorities

Green budgeting

Contribution to green budgeting priorities (million EUR):

• The RRF will help achieve the EU’s targets to reduce net greenhouse gas emissions by at least 55% by 2030 and to reach climate neutrality by 2050. The RRF regulation requires that at least 37% of the total allocation of each RRP shall support climate objectives. However, the reforms and investments proposed by Member States have exceeded the target, with about 40% of the total plans’ allocation contributing to climate objectives (as calculated according to the climate tracking methodology, using Annex VI of the RRF regulation).
• Green measures implemented by Member States in 2022 with the support of the Recovery and Resilience Facility aimed, among other things, at promoting sustainable mobility, increasing energy efficiency and the deployment of renewable energy sources, taking climate change adaptation measures, reducing air pollution, promoting the circular economy and restoring and protecting biodiversity.

Gender

Contribution to gender equality (million EUR) (*):

<sup>(*) Based on the applied gender contribution methodology, the following scores are attributed at the most granular level of intervention possible:
- 2: interventions the principal objective of which is to improve gender equality;
- 1: interventions that have gender equality as an important and deliberate objective but not as the main reason for the intervention;
- 0: non-targeted interventions (interventions that are expected to have no significant bearing on gender equality);
- 0*: score to be assigned to interventions with a likely but not yet clear positive impact on gender equality.</sup>

• Mitigating the social and economic impact of the COVID-19 crisis on women is a clear objective of the Recovery and Resilience Facility, as set out in Article 4 of its founding regulation. The RRF regulation requires Member States to explain how the measures in their RRPs contribute to gender equality and equal opportunities for all and the mainstreaming of these objectives.
• The potential contribution to gender equality reported under score 0* for 2021 included all grants and loans committed in 2021, as all RRF measures may have an impact on gender equality.
• It should be noted that the evaluation of the impact of RRF measures on gender equality is not envisaged by the RRF regulation. However, in order to report on the number of measures with a focus on gender equality and the share of such measures included in each RRP, the Commission, in consultation with Member States, has assigned a tag to measures with a focus on gender equality, based on the methodology set out in the Delegated Act on social expenditure reporting under the RRF (Delegated Regulation 2021/2105). As a result, 115 measures were considered to have a focus on gender equality in 2021. This number increased to 134 in 2022, taking into account the five plans adopted in 2022 (for further information, see the Recovery and Resilience Scoreboard).
• It is worth stressing that this estimate might change if Member States amend their plans.

Digital

Contribution to digital transition (million EUR):

• The Recovery and Resilience Facility makes a significant contribution to the digital transformation in the EU. The RRF regulation requires that at least 20% of the total allocation in each RRP support digital objectives. However, the reforms and investments proposed by Member States have exceeded the target, with around 26% of the total allocation of the plans contributing to the digital transformation (as calculated according to the digital tagging methodology set out in Annex VII of the RRF regulation).
• By the end of 2022, important steps had been taken to implement measures related to the deployment of next-generation digital infrastructures and advanced technologies, digital skills development for the population and the workforce, and support for the digitalisation of enterprises and public services.

Budget performance – outcomes

• The Commission Delegated Regulation (EU) 2021/2106 defines a set of common indicators related to the objectives of the RRF and linked to the six policy pillars. Member States report on the common indicators twice a year and the Commission calculates an aggregate for the RRF on this basis. Data on the common indicators are published and regularly updated on the recovery and resilience scoreboard: https://ec.europa.eu/economy_finance/recovery-and-resilience-scoreboard
• Furthermore, some important reforms already progressed during the first 2 years of implementation of the facility:
  • reforms to digitalise public administration (Slovakia) and ensure cybersecurity (Romania);
  • reforms of civil and criminal justice systems to make them more efficient by reducing the length of proceedings and by improving the organisation of courts (Italy, Spain);
  • labour market reforms and modernisation of active labour market policies (Spain);
  • reforms enhancing employment and social protection (Croatia);
  • reforms to foster scientific excellence and improve the performance of universities and public research organisations (Slovakia) and to enhance the predictability and stability of public research funding (Portugal);
  • reforms tackling corruption and ensuring the protection of whistle-blowers (Cyprus);
  • licensing simplification reforms to boost investments in offshore renewables or reforms to create the conditions for introducing renewable hydrogen (Greece, Portugal, Spain);
  • reforms to support the roll-out of renewable energy and sustainable transport (Croatia, Romania);
  • reforms improving the quality of the legislative process (Bulgaria);
  • reform to improve affordable housing (Latvia).
• In addition, the Recovery and Resilience Facility unlocks the full potential of structural reforms by complementing them with key investments. Some of the major investments with key steps already completed include:
  • investments to support the decarbonisation and energy efficiency of industry (Croatia, for a total estimated cost of EUR 91 million; France, EUR 1.4 billion);
  • purchase of 600 000 new laptops to lend to teachers and pupils, and selection of digital innovation hubs to support companies in their digitisation efforts (Portugal, EUR 600 million);
  • funds to increase the competitiveness of firms operating in the tourism sector, including 4 000 small and medium-sized enterprises (Italy, EUR 1.9 billion);
  • investments to support vulnerable people (Italy, EUR 1 billion);
  • digitisation of public administration towards digital, simple, inclusive and secure public services for citizens and businesses (Portugal, EUR 170 million);
  • broadband infrastructure development (Latvia, EUR 4 million).
• Milestones and targets included in payments disbursed in 2022 contributed to the six policy pillars as follows. ⁽¹⁾
  • Pillar 1: the green transition. A total of 134 milestones and targets were reached. These included investments to support an energy-efficient renovation and major rehabilitation of private and social housing in France, and new legislation to promote biomethane production and consumption in Italy.
  • Pillar 2: the digital transformation. A total of 93 milestones and targets were reached. These included the adoption of a new 2021-2025 plan on digitalisation of small and medium-sized enterprises and a digital competences plan by Spain, development of broadband infrastructure in Latvia and purchase of 600 000 laptops for teachers and pupils in Portugal.
  • Pillar 3: smart, sustainable and inclusive growth. A total of 185 milestones and targets were reached. For instance, Italy provided targeted support to 4 000 small and medium-sized enterprises and set up investments to support firms operating in the tourism sector to increase the competitiveness of tourism enterprises; and Bulgaria introduced a new legal framework to attract industrial investment and develop industrial ecosystems.
  • Pillar 4: social and territorial cohesion. A total of 136 milestones and targets were reached. For example, France deployed investments to support territorial infrastructure and services such as the renovation of local railway lines and approved a reform to transfer powers to local territories; and Croatia adopted the 2021-2027 National Plan against Poverty and Social Exclusion, with the aim to improve the daily lives of people at risk of poverty and those living in severe material deprivation.
  • Pillar 5: health, economic, social and institutional resilience. A total of 156 milestones and targets were reached. For instance, Italy reformed the civil and criminal justice systems and provided investments for the digital update of the digital equipment of hospitals; and Cyprus improved the legal and institutional framework for fighting corruption.
  • Pillar 6: policies for the next generation. A total of 32 milestones and targets were reached. These included a new action plan to tackle youth unemployment in Spain, in the framework of a broader reform to modernise active labour market policies, and a new reform of the compulsory education system to prevent and reduce early school leaving in Romania.
• In general, more detailed Information on the state of play of implementation, disbursements per pillar and key measures achieved by Member States can be found in the Recovery and Resilience Scoreboard, which includes links to the RRF annual reports, thematic analyses and the RRF review report published in July 2022  Information about concrete projects supported under the Recovery and Resilience Facility, including details on their implementation and their geo-location in the Member States’ territory, is available in an interactive map on the RRF website that is regularly updated ⁽²⁾.
  .

^{(1) Each milestone and target is linked to a measure which (generally) contributes towards two of the six policy pillars. Therefore, milestones and targets can contribute to more than one policy pillar according to the methodology used by the Commission to display data in the Scoreboard.}

^{(2) https://commission.europa.eu/business-economy-euro/economic-recovery/recovery-and-resilience-facility_en#national-recovery-and-resilience-plans}

Contribution to the sustainable development goals