The European Court of Auditors recently painted a sobering picture of the progress of the European Union’s Corona recovery fund. Although the proportion of funds already paid out by the European Commission is growing, there are considerable doubts as to whether the EU member states will be able to use the funds allocated to them in a timely manner. Delays could mean that the ambitious economic and social goals will not be achieved before the end of the funding period in 2026.
The funding pot, officially called the Recovery and Resilience Facility (ARF), consists of a mixture of grants and loans and was launched in 2021 with a volume of 724 billion euros. These funds are intended to help mitigate the massive economic and social damage caused by the corona pandemic. The ARF is unprecedented in its structure, as the debt for this was taken on jointly at European level.
To receive financial support, EU countries must submit detailed investment and reform plans and achieve certain milestones before the next tranche is paid out. In Germany, for example, some of the funds will be used to speed up planning and approval procedures in the transport sector and to digitalize administration. In total, the Federal Republic is to receive 30.3 billion euros in non-repayable grants.
To make matters worse, less than a third of the funds had been paid out by the end of 2023. The Court of Auditors cites uncertainty about environmental regulations and a lack of administrative capacity in the member states as reasons for the delays. These logistical and bureaucratic hurdles mean that many countries have been late in submitting their payment requests and have only been able to meet a fraction of the targets.
Ivana Maletic of the Court of Auditors warns of the risks that these delays entail. Halfway through the funding period, only a fraction of the more than 6,000 milestones set have been achieved. Most of the most difficult goals in particular are still outstanding.
However, the EU Commission is responding proactively to these challenges. It is taking measures to help Member States implement reforms in a timely and effective manner. Additional advice and support are intended to help address remaining uncertainties and accelerate the absorption of funds.
