The EU Commission would like to enable faster disbursement of its billion-dollar reconstruction fund. The financial injection for the post-pandemic period will expire in less than two years.
The €650 billion Recovery and Resilience Facility (RRF), agreed at the height of the COVID-19 pandemic in December 2020, is intended to support the economic recovery of member states. Critical green and digital investments are financed by the EU in exchange for targeted reforms.
Although the program is scheduled to expire in August 2026, only 41 percent of the reconstruction fund has been paid out so far. The fund is financed by debt that is jointly subscribed by EU states and distributed in the form of grants and loans.
In its report published on Thursday (October 10), the EU Commission said it was aiming for faster payouts. The aim is to simplify the process for revising Member States’ recovery and resilience plans, which must be submitted and verified by Brussels before disbursement.
Furthermore, the Commission stated that its newly updated guidelines for the revision of recovery and resilience plans (RRPs) will give Member States more flexibility to revise their plans if they have “a better alternative to implementing a measure in a way that is consistent with the Administrative costs reduced.
The Commission also announced that it would seek to “streamline” future payments by making greater use of “suspension procedures”. The Member State that has completed most – but not all – of the necessary reforms can still receive a corresponding share of the payment originally requested.
As the 2026 deadline approaches, “all Member States and institutions should focus on the full and timely implementation of the Facility,” the Commission said. “Potential bottlenecks in implementation need to be addressed and RRPs should be adjusted as appropriate to respond to new and evolving challenges.”
The Commission’s push to allocate the funds before the facility expires follows a sharp acceleration in payment rates last year.
The Commission stated that a total of 112 billion euros were disbursed from the Reconstruction Fund (RRF) in the period from September 2023 to August 2024. In the period of the previous year (September 2022 to August 2023) it was 40.6 billion euros.
At the same time as the report is published, the European Court of Auditors (ECA) warns before thatthat there is a “significant risk” that the expiry of the RRF could trigger a flood of payments within the next two years that Member States do not have the necessary administrative capacity to process.
The European Court of Auditors has previously criticized the facility. The reason for this is the inadequate control and audit framework and the lack of clarity about the term “final recipient” or the body to which the payments are ultimately distributed.
However, following the Commission’s analysis, the Court has also argued that delays in Facility payments have significantly hampered Member States’ post-pandemic recovery.
In its report on Thursday (October 10), the Commission said it had provided “guidance” to Member States on the concept of final recipient and emphasized “its importance in improving transparency”.
It also stated that it “revised and further strengthened its audit and control system based on audits carried out by the European Court of Auditors, the Council, the Parliament and the Commission itself”.
[Bearbeitet von Anna Brunetti/Owen Morgan/Kjeld Neubert]
