Laura Perez-Cejuela
Brussels, 25 Feb. Two years after its deployment, the European Union’s post-pandemic recovery fund has not quite taken off: sixteen of the twenty-seven partners have still not received a formal payment to undertake the planned reforms and investments and nine of them didn’t even ask that. .
Of the €144 billion in grants and loans the European Commission has disbursed so far, including €56.5 billion in advances, more than two thirds have gone to Spain (22% of the total ) and Italy (46%), the most advanced countries in the implementation of their recovery plans and also those with the most money allocated.
Although Brussels has already approved the investment and reform plans presented by all the partners to use their share of the 724,000 million euros in aid that the EU will disburse until 2026, more than half of them they only obtained, at best, the advancement of their allowance to which they were automatically entitled as soon as they obtained the green light for their plan.
“The priority must be the rapid implementation of the recovery and resilience plans. Member States must continue to do their utmost to submit payment requests on time and ensure the progress of reforms and investments, allowing a delivery funds in due time”, insisted the Economic Vice-President of the European Commission, Valdis Dombrovskis, during 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 yet to request a formal disbursement from the fund, which governments can do two once a year when they believe they have achieved the milestones and objectives related 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 approval from the European Commission.
On the other side are Spain, Italy, Greece, Portugal and Croatia, which are leading 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 – received a first formal payment.
To date, only 8% of the nearly 6,000 milestones and objectives agreed by the 27 have been achieved, even though half of them should have been reached by the end of 2023, and nearly 30% of allocated funds have been disbursed.
In this situation, the Commission has in recent months called on governments to speed up the implementation of recovery plans and reminded them that the doors are open to see how the process can be improved, in particular through the relaxation of rules for enable the fund to finance the Repower EU strategy to reduce Russian energy dependence.
The community executive acknowledges that global instability, problems in supply chains, the energy crisis and inflation “overload national authorities, sometimes making it difficult to implement” plans, but defends that this context is even more “crucial” to execute them successfully. .
In a report on the two years of the fund’s life, he calls for continuing to strengthen the capacity of public administrations to implement the plans, as well as to take advantage of the fact that they will have to be updated to detect “bottlenecks bottlenecks” in reforms and investments and foster the expansion of those already underway, in order to “avoid delays in implementation” and ensure consistency between payments and operations to attract financing from the funds in the markets.
With many falling short of first disbursement targets, states must now update their plans to include new measures to reduce energy dependency on Moscow and accelerate the green transition, and must notify Brussels by 31 March if they wish. This will require some of the 225,000 million loans still available from the recovery fund.
Yet the Commission argues that the fund is “on solid ground”, that the advances given when the plans were approved were “quick” and “direct” support that helped kick-start the recovery; and that there are already “visible” results in terms of reforms and investments.
This year 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 by the end of the year, investments in the EU will have increased by four tenths compared to 2019, up to 3.4% of GDP, and that half of the increase will be due to the fund . EFE
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