EU Recovery and Resilience Facility

 

SUMMARY OF:

Regulation (EU) 2021/241 establishing the Recovery and Resilience Facility

WHAT IS THE AIM OF THE REGULATION?

It establishes a Recovery and Resilience Facility (RRF) for the European Union (EU) and sets out the facility’s aims and the criteria for receiving funding.

KEY POINTS

The RRF aims to promote the EU’s economic, social and territorial cohesion by:

• improving EU Member States’ resilience, crisis preparedness, adjustment capacity and growth potential;
• mitigating the social and economic impact of the COVID-19 crisis, particularly on women;
• contributing to the implementation of the European Pillar of Social Rights;
• supporting the green transition (see summary) and helping to achieve the EU’s 2030 climate targets and 2050 climate neutrality objective;
• encouraging the digital transition.

RRF funding is available for measures which ‘do no significant harm’, i.e. that do not harm the environment, and do not involve recurrent expenditure, in the following six pillars:

• the green transition;
• the digital transformation;
• smart, sustainable and inclusive growth;
• social and territorial cohesion;
• health, economic, social and institutional resilience;
• policies for the next generation, such as education and skills.

The €723.8 billion (in current prices) budget:

• consists of:
  • €338 billion in grants, of which the European Commission may allocate 70% up to 31 December 2022 and 30% during 2023,
  • €385.8 billion in loans, which Member States may request until 31 August 2023 (a loan may not exceed 6.8% of the Member State’s 2019 gross national income);
• does not replace recurring national budgetary expenditure, except in justified cases;
• supplements financial support under other EU programmes;
• respects the additionality principle* of EU funding.

The economic governance rules state that:

• the Commission may propose suspending all or part of the funding to a Member State if the Council of the European Union decides it has not done enough to correct its excessive deficit;
• a proposal to suspend commitments* is adopted unless the Council rejects it by a qualified majority within 1 month;
• a proposal to suspend payments* requires the Council’s approval;
• suspension of funding must be proportionate and take account of a Member State’s economic and social circumstances;
• the Council may lift a suspension following a Commission proposal.

Member States draw up national recovery and resilience plans, setting out their reform and investment agenda in a comprehensive and coherent package. These:

• may include measures from 1 February 2020;
• have to be consistent with:
  • national challenges and priorities identified in the European semester,
  • national reform programmes,
  • national energy and climate plans,
  • territorial ‘Just Transition’ plans,
  • ‘Youth Guarantee’ implementation plans;
• must allocate at least 37% of the budget to climate measures, and 20% to digital measures.

The Commission:

• assesses the plans according to their relevance, effectiveness, efficiency and coherence;
• if it proposes that the Council approves a national plan, sets out the milestones and targets that a country must meet in its reforms and investment projects, and the RRF’s financial contribution;
• may reject or accept amendments to the plans;
• transmits the national plans to the European Parliament and the Council without delay;
• monitors the facility’s implementation and measures the achievements made;
• establishes a recovery and resilience scoreboard;
• submits annual reports to the European Parliament and the Council.

Member States:

• must prevent, detect and correct any fraud, corruption or conflict of interest when using EU funds;
• report twice a year on the progress of their plans in the context of the European semester.

The relevant European Parliament committee may invite the Commission every 2 months to discuss progress under the facility.

The Commission submits reports to the European Parliament and the Council:

• a review report by 31 July 2022;
• on the RRF’s overall implementation by 20 February 2024 (also goes to the European Economic and Social Committee and the Committee of the Regions).

Recovery and resilience scoreboard

In December 2021, the Commission launched the recovery and resilience scoreboard, a public online platform which is designed to show progress made in the implementation of the RRF as a whole, and of the individual national recovery and resilience plans.

Delegated act

In defining a methodology for reporting social expenditure, Commission Delegated Regulation (EU) 2021/2105 supplements Regulation (EU) 2021/241. The methodology for reporting social expenditure, including on children and the youth, and on gender equality under the facility is based on the estimated expenditure provided in the approved recovery and resilience plans.

FROM WHEN DOES THE REGULATION APPLY?

It has applied since 19 February 2021.

BACKGROUND

• The RRF is the centrepiece of the EU’s €750 billion NextGenerationEU stimulus package. This allows the Commission to raise funds to help repair the immediate economic and social damage brought by the coronavirus pandemic.
• It is closely aligned with the Commission’s priorities to ensure a sustainable and inclusive recovery that promotes the green and digital transition.
• For further information, see:
  • The Recovery and Resilience Facility (European Commission).

KEY TERMS

MAIN DOCUMENT

Regulation (EU) 2021/241 of the European Parliament and of the Council of 12 February 2021 establishing the Recovery and Resilience Facility (OJ L 57, 18.2.2021, pp. 17–75).

Successive amendments to Regulation (EU) 2021/241 have been incorporated in the original text. This consolidated version is of documentary value only.

RELATED DOCUMENTS

Commission Delegated Regulation (EU) 2021/2105 of 28 September 2021 supplementing Regulation (EU) 2021/241 of the European Parliament and of the Council establishing the Recovery and Resilience Facility by defining a methodology for reporting social expenditure (OJ L 429, 1.12.2021, pp. 79–82).

Council Regulation (EU) 2020/2094 of 14 December 2020 establishing a European Union Recovery Instrument to support the recovery in the aftermath of the COVID-19 crisis (OJ L 433I, 22.12.2020, pp. 23–27).

Regulation (EU, Euratom) 2020/2092 of the European Parliament and of the Council of 16 December 2020 on a general regime of conditionality for the protection of the Union budget (OJ L 433I, 22.12.2020, pp. 1–10).

See consolidated version.

Communication from the Commission to the European Parliament, the European Council, the Council, the European Economic and Social Committee and the Committee of the Regions – Building a European Health Union: Reinforcing the EU’s resilience for cross-border health threats (COM(2020) 724 final, 11.11.2020).

Communication from the Commission to the European Parliament, the European Council, the Council, the European Central Bank, the European Economic and Social Committee, the Committee of the Regions and the European Investment Bank – Annual Sustainable Growth Strategy 2021 (COM(2020) 575 final, 17.9.2020).

European Semester: integrated country-specific recommendations, Council of the European Union, 24.6.2020.

Communication from the Commission to the European Parliament, the European Council, the Council, the European Central Bank, the European Economic and Social Committee, the Committee of the Regions and the European Investment Bank – 2020 European Semester: country-specific recommendations (COM(2020) 500 final, 20.5.2020).

Communication from the Commission to the European Parliament, the European Council, the Council, the European Economic and Social Committee and the Committee of the Regions – The European Green Deal (COM(2019) 640 final, 11.12.2019).

Regulation (EU) 2018/1999 of the European Parliament and of the Council of 11 December 2018 on the Governance of the Energy Union and Climate Action, amending Regulations (EC) No 663/2009 and (EC) No 715/2009 of the European Parliament and of the Council, Directives 94/22/EC, 98/70/EC, 2009/31/EC, 2009/73/EC, 2010/31/EU, 2012/27/EU and 2013/30/EU of the European Parliament and of the Council, Council Directives 2009/119/EC and (EU) 2015/652 and repealing Regulation (EU) No 525/2013 of the European Parliament and of the Council (OJ L 328, 21.12.2018, pp. 1–77).

See consolidated version.

Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on the financial rules applicable to the general budget of the Union, amending Regulations (EU) No 1296/2013, (EU) No 1301/2013, (EU) No 1303/2013, (EU) No 1304/2013, (EU) No 1309/2013, (EU) No 1316/2013, (EU) No 223/2014, (EU) No 283/2014, and Decision No 541/2014/EU and repealing Regulation (EU, Euratom) No 966/2012 (OJ L 193, 30.7.2018, pp. 1–222).

last update 04.02.2022