Article - Covid-19 recovery: how the main EU instrument will work
Published By Europa [English], Thu, Feb 4, 2021 4:48 AM
During the February plenary session, MEPs will vote on the rules establishing the Recovery and Resilience Facility, the flagship EU programme in the €750 billion Covid-19 recovery plan. Parliament and Council reached a provisional agreement on the instrument in December 2020.
It will offer large-scale support to EU countries for the investments and reforms needed to mitigate the economic and social consequences of the pandemic and to prepare the EU economies for a sustainable, digital future.
The money will be available as grants and loans. The grants will amount to €312.5 billion in 2018 prices (the actual amount will be adjusted upwards to take account of inflation).
The allocation of the grants among countries will be based on several criteria: in the initial phase - until the end of 2022 - these will include population, gros domestic product per capita and unemployment in 2015-2019. Later the performance of the economy in 2020 and 2021 will be taken into account instead of unemployment. The European Commission will have to make commitments by the end of 2023 for the full amount of the grants to EU countries and the money will have to be paid by the end of 2026.
Loans will be provided at the request of member states by the end of 2023 up to a total of €360 billion in 2018 prices. The level of loans for each country will be capped at 6.8% of the country’s gross domestic product.
In the negotiations with the Council, MEPs insisted that the countries use the money in line with EU priorities. “EU recovery money will go to EU priorities. The EU recovery won’t be a cash machine for national policies and domestic agendas,” said Dragoş Pîslaru (Renew Europe, Romania), one of the lead MEPs on this, after the announcement of the provisional deal with the Council.
Another lead MEP Eider Gardiazabal (S&D, Spain), emphasised that while the funds should alleviate the immediate social impact of the crisis, they should also support long-term EU goals such as the green transition and digitalisation. “We must bear in mind that it is the most important investment programme in the coming years, and we have to seize the opportunity [for reform],” she said.
The rules list six areas that the Recovery and Resilience Facility will support:
Press release distributed by Media Pigeon on behalf of Europa, on Feb 4, 2021. For more information subscribe and follow