EUROPEAN COMMISSION

Brussels, 21.2.2024

SWD(2024) 70 final

COMMISSION STAFF WORKING DOCUMENT

Mid-term evaluation of the Recovery and Resilience Facility

Accompanying the document

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS

Mid-Term Evaluation of the Recovery and Resilience Facility: Strengthening the EU through ambitious reforms and investments

{COM(2024) 82 final}

Table of contents

1.Introduction

2.What was the expected outcome of the intervention?

2.1.    Description of the intervention and its objectives    

2.2.    Point(s) of comparison    

3.How has the situation evolved over the evaluation period?

3.1. Economic developments since the start of the RRF    

3.2. State of play of the RRF implementation    

3.3. Improvements in RRF implementation over the evaluation period    

3.4. Inter-institutional scrutiny    

4.Evaluation findings (analytical part)

To what extent was the intervention successful and why?    

4.1. Effectiveness    

4.2. Efficiency    

4.3. Coherence    61

How did the EU intervention make a difference and to whom?    

4.4. EU added value    

Is the intervention still relevant?    72

4.5. Relevance    72

5.What are the conclusions and lessons learned?

5.1. Conclusions    

5.2. Lessons learned    

Annex I: Procedural Information85

Annex II. Methodology and Analytical models used88

Annex III. Evaluation matrix and Details on answers to the evaluation questions142

Annex IV. Overview of benefits and costs200

Annex V. Stakeholders consultation - Synopsis report202

Annex VI. Additional Data and Analysis217

Glossary

The Recovery and Resilience Facility (‘RRF’) was established in February 2021 by Regulation (EU) 2021/241 1  (hereafter referred to as ‘RRF Regulation’) to help the Union recover from the COVID-19 crisis and is time-bound until 2026. The Facility was set up as a new, innovative, demand-driven performance-based instrument, providing direct financial support to Member States against the implementation of a combination of reforms and investments. Unlike other EU instruments (such as CRII 2 , REACT-EU 3  or SURE 4 ) that were set up for crisis-management purposes, the RRF was created to address the unprecedent impact of the COVID-19 crisis and make the Union more resilient and better prepared for the future. With an envelope of EUR 724 billion 5  (in current prices), the scale of financial support is unprecedented in the Union’s history.

As required by the RRF Regulation, the purpose of this evaluation is to provide, at the half-way point, a mid-term assessment of how the RRF is delivering on its objectives, in particular to which extent the Facility has been providing financial support to Member States against the implementation of pre-agreed reforms and investments (specific objective) that promote the Union’s economic, social and territorial cohesion (general objective). In line with the RRF Regulation (Article 32), it will assess in particular “to which extent the objectives have been achieved, the efficiency of the use of the resources and the European added value”, as well as “the continued relevance of all objectives and actions” and “the implementation of the REPowerEU chapters and their contributions to the REPowerEU objectives”.

This mid-term evaluation covers the evaluation requirements set out in the RRF Regulation (Article 32(2)) and the five evaluation criteria set out in the European Commission’s Better Regulation Guidelines and the Inter-institutional Agreement on Better Law-Making 6 . In particular, it seeks to assess: (i) to which extent the objectives of the RRF have been achieved or progress has been made since the start of the implementation period (i.e. effectiveness); (ii) how do the costs and benefits of the Facility compare, including an assessment of potential unnecessary administrative burden and complexity (i.e. efficiency); (iii) to what extent the RRF is and continues to be relevant in view of its objectives, needs and new emerging challenges (i.e. relevance); (iv) the interplay between the RRF and other Union’s policies and instruments (i.e. coherence); and (v) whether the RRF yield results that go beyond what could be expected by individual actions of Member States (i.e. EU-added value).

The scope of this mid-term evaluation covers the design of the recovery and resilience plans (‘RRPs’) and the ongoing implementation of the Facility in all Member States until 1 February 2024 7 . It covers the full scope of the Facility specified in the RRF Regulation, i.e. the following six pillars structuring the policy areas of European relevance: (i) green transition, (ii) digital transformation, (iii) smart, sustainable and inclusive growth, (iv) social and territorial cohesion, (v) health, economic, social, and institutional resilience, (vi) policies for the next generation. The adopted REPowerEU chapters and their contributions to the REPowerEU objectives are also in the scope of this mid-term evaluation. The funding strategy to finance the RRF, and NextGenerationEU (‘NGEU’) more generally, is outside the scope of this evaluation. 

It is important to acknowledge that the nature and timing of this report comes too early for the report to be able to deliver a fully-fledged impact evaluation. The mid-term evaluation can only report and assess the implementation of the RRF until 1 February 2024. Given that most measures, particularly investments, have not yet reached the level of full implementation, it is not feasible at this point to provide a systematic assessment of results and impacts of the Facility. This impact analysis will be included in the 2028 ‘ex-post evaluation’, when the measures supported by the RRF will have been fully implemented. The ex-post evaluation will provide a “global assessment of the Facility and its impact in the long term”, as specified by the RRF Regulation (Article 32(4)).

This report therefore takes stock of the progress in the implementation of the Facility halfway through its implementation and evaluates its impact where possible. It presents the progress made to date in reaching the RRF’s specific objective (i.e. to provide Member States with financial support in order to achieve specific milestones and targets that represent steps in the implementation of reforms and investments). It also illustrates how the achievement of milestones and targets has, in some cases, already translated into the implementation of reforms and investments by Member States. This in turn contributes to achieving the RRF’s general objective, i.e. to promote the Union’s economic, social and territorial cohesion.

Two innovative features of the RRF are of particular interest in the context of this mid-term evaluation. First, the RRF combines financial support for both investments and reforms. It provides financial incentives for the delivery of key reforms, as identified in the context of the European Semester. A second innovation concerns the fact that disbursements to Member States are related to the achievement of ‘milestones and targets’ 8 . This evaluation pays particular attention to assessing this so-called ‘performance-based’ approach, which is defined in the literature as “aiming to improve the efficiency and effectiveness of public expenditure by linking the funding of public sector organisations to the results they deliver, making systematic use of performance information” 9 . The ‘performance-based’ approach of the RRF differs from the ‘cost-based’ approach generally applied for the European Structural and Investment Funds. As a performance-based instrument, the RRF disburses funds against the achievement of milestones and targets, which measure the progress towards the achievement of concrete results, which are the delivery of the agreed reforms and investments in each national RRP.

As is the case with a mid-term evaluation of any instrument, more information is available at this stage on outputs than on results and impacts. This is particularly relevant for the RRF since measures are usually covered in the RRPs by more than one milestone and/or target, and the final deadline for milestones and targets to be completed is 31 August 2026. Particularly for investments, the milestones and targets that have been achieved at the mid-term point often cover initial steps, such as a launch of calls for tender, or signing of procurement contracts; whilst the final milestones and targets due in the second half of the Facility’s lifetime will increasingly cover final investment outputs.

The results of the evaluation will serve two aims. First, they can help identify possible improvements in implementing the RRF over the remaining period (until end 2026) 10 . Second, the early assessment of the novel performance-based nature of the Facility will be a pertinent reference point to inform discussions on EU funding instruments in view of the next EU Multi-annual Financial Framework starting in 2028.

This Staff Working Document (‘SWD’) presents the Commission staff’s views on the mid-term evaluation of the RRF, building on multiple sources. The assessment is primarily based on an independent external evaluation report (hereinafter referred to as ‘supporting study’) contracted by the Commission and prepared by a consortium comprising CEPS, ECORYS, NIESR, CSIL and Wavestone (for further information see the Annex to this SWD). The supporting study was concluded in November 2023 and is published together with this SWD. Given the unprecedented scale and scope of the RRF, the study takes a comprehensive approach and is complemented by eight case studies 11 that provide an in-depth assessment of selected policy areas. Moreover, the Commission organised a call for evidence and an open public consultation, with a limited response rate 12 . The reports of the European Economic and Social Committee 13  and of the European Committee of the Regions 14  feed into this evaluation as well.

Overall, the evaluation process went as planned, and the data gathered are considered reliable. No significant difficulties were encountered in reaching key stakeholders involved in the design and implementation of the RRF. An appropriate and diverse range of tools was used, with different sources of evidence enabling triangulation of findings and converging sufficiently to support the assessments made. Therefore, even with the limitations linked to the early state in the RRF’s implementation, the conclusions and lessons learned can be considered sufficiently robust for a mid-term evaluation.

To ensure the quality of the evaluation, a Commission inter-service steering group (‘ISG’) oversaw the evaluation process. The ISG provided information, expertise and quality assurance in line with evaluation standards and provided a useful steer to both the external study and this SWD. The members of the ISG came from a broad range of Commission services 15 that are responsible for EU-policies relevant to the RRF.

This SWD is organised as follows: Section 2 summarises the objectives and expected outcomes of the RRF, whilst Section 3 describes how the situation has evolved since the inception of the RRF in 2021. Section 4 presents the main findings of the evaluation by criteria and the final Section 5 provides conclusions and lessons learned. The annexes provide additional information about the methodology and analytical models used, about the stakeholder consultation conducted, and about the procedure followed for this mid-term evaluation.

2.1. Description of the intervention and its objectives

2.1.1. Context of the intervention

The RRF is at the core of the EU’s answer to the unprecedented crisis resulting from the COVID-19 outbreak in early 2020. The pandemic fundamentally transformed the European and global economic, social and budgetary situation. Economic activity in Europe and around the world suffered a series of severe shocks in 2020 as lockdowns and public health measures were introduced to limit the spread of the COVID-19 virus and manage the severe health emergency. The EU was pushed into recession, with output falling by 5.6% in real terms in 2020 as a whole 16 . This drop was even larger than the one recorded in 2009 during the Great Financial Crisis (-4.3%). The economic recovery hinged upon the successful implementation of vaccination campaigns allowing for the gradual lifting of restrictions, and the ability to structurally recover while avoiding long‑term scars.

The EU considered that a rapid, coordinated and large public intervention was needed to maintain confidence and ensure a balanced economic recovery 17 . Member States needed significant fiscal space to mitigate the social and economic impact of the crisis, and to foster the resilience of their economies and social structures. Coordinated action at EU level was necessary to prevent a lasting loss in productive capacity and employment (“hysteresis” effects), financial fragmentation within the Union, as well as a distortion of the level playing field of the Single Market. Previous crisis experiences had shown that a lack of resilience can lead to negative spill-over effects across Member States, and that investments are drastically cut. It was clear that such reductions in public spending would drag on the economic and social recovery, and that investment efforts should be accompanied by complementary reforms responding to pre-existing and emerging challenges in the Member States. At the same time, the recovery strategies put in place by the Member States needed to be consistent with the Union’s common priorities, including as regards the green and digital transitions, by fostering ambitious investments and reforms in these areas.

2.1.2. Objectives of the intervention

The RRF, established by Regulation (EU) 2021/241 of 12 February 2021, is the centrepiece of NGEU, the EU response to mitigate the economic and social impact of the pandemic and to emerge stronger from the crisis. The Facility was set up to offer large-scale financial support for a combination of public investments and of reforms that would make Member States economies more resilient and better prepared for the future. It was designed to help Member States address existing economic and social challenges that had been exacerbated by the crisis in various areas, such as social, employment, skills, education, research and innovation, health issues, but also issues related to the business environment, including public administration and the financial sector. The combination of reforms and investments is a key innovative feature of the RRF. Importantly, the Facility was also designed to ensure that these investments and reforms address the challenges identified in the relevant country-specific recommendations (‘CSRs’) issued in the context of the European Semester, as well as the challenges and investment needs related to common EU priorities, including the green and digital transitions, thereby ensuring a sustainable recovery and helping to make the Union more resilient, including by diversifying key supply chains and strengthening the strategic autonomy of the Union.

The general objective 18  of the RRF is to promote the Union’s economic, social and territorial cohesion, by: “[…] improving the resilience, crisis preparedness, adjustment capacity and growth potential of the Member States, by mitigating the social and economic impact of that crisis, in particular on women, by contributing to the implementation of the European Pillar of Social Rights, by supporting the green transition, by contributing to the achievement of the Union’s 2030 climate targets [...], by complying with the objective of EU climate neutrality by 2050 and of the digital transition, and by increasing the resilience, security and sustainability of the Union’s energy system through the necessary reduction in dependence on fossil fuels and diversification of energy supplies at Union level, including by means of an increase in the uptake of renewables, in energy efficiency and in energy storage capacity, thereby contributing to the upward economic and social convergence, restoring and promoting sustainable growth and the integration of the economies of the Union, fostering high quality employment creation, and contributing to the strategic autonomy of the Union alongside an open economy and generating European added value.”

To achieve this general objective, the specific objective 19 of the Facility is “to provide Member States with financial support with a view to achieving the milestones and targets of reforms and investments as set out in their recovery and resilience plans […] in close and transparent cooperation with the Member States concerned”. 

The RRF Regulation also establishes six pillars that define the scope of the Facility, namely: (i) green transition; (ii) digital transformation; (iii) smart, sustainable and inclusive growth, including economic cohesion, jobs, productivity, competitiveness, research, development and innovation, and a well-functioning internal market with strong small and medium enterprises (‘SMEs’); (iv) social and territorial cohesion; (v) health, and economic, social and institutional resilience with the aim of, inter alia, increasing crisis preparedness and crisis response capacity; and (vi) policies for the next generation, children and the youth, such as education and skills.

Green and digital policy efforts are mainstreamed in the RRF. This reflects the importance of tackling climate change, in line with the EU’s commitments to implement the Paris Agreement and the UN Sustainable Development Goals. Beyond the mandatory compliance with the “do no significant harm” principle (except for a targeted derogation under REPowerEU), the Regulation established that measures accounting for at least 37 % of the total allocation of Member States’ RRPs should contribute to the green transition, including biodiversity or addressing the resulting challenges, based on an agreed methodology for climate tracking. Similarly, the Regulation establishes that measures contributing to the digital objectives of the Regulation should account for an amount that represents at least 20% of the RRPs total allocation.

The RRF Regulation defines a specific allocation key for the Facility 20 , in order to ensure a meaningful financial contribution for each Member State commensurate to the actual needs. The allocation key was a tailored solution to consider the specific crisis circumstances and the uncertainty related to the effects of the pandemic. It was first applied to 70% of the EUR 338 billion in non-repayable support, based on the population, the inverse of GDP per capita of 2019 and the relative average unemployment rate of each Member State. An adjusted allocation key was later applied to 30% of the non-repayable support, also taking into account the change in real GDP in 2020 and 2021. This was to ensure the allocation of resources was well aligned with the objective of the Facility. Non-repayable support would be particularly beneficial to Member States with a lower per capita income and with a high unemployment rate, reflecting the high economic and social challenges that the pandemic aggravated. The RRF Regulation, also provided for an update of the maximum financial contribution available to each Member State in June 2022, to reflect the actual depth of the economic crisis across the Member States and the aggregated impact on real GDP during the period 2020-2021.

The RRF also provides loans that complement non-repayable support and cover additional financing needs linked to reforms and investments. RRF loans of maximum EUR 386 billion are characterised by long maturities and favourable interest rates. They are of particular interest and benefit to Member States that faced higher borrowing costs. The total amount of loans on offer to each Member State is determined by the assessment of its loan request and should ordinarily not exceed 6.8% of its 2019 gross national income 21 . 

With its wide scope and anchor in the European Semester, the RRF is expected to contribute to all Sustainable Development Goals (‘SDGs’). The SDGs are an integral part of the analysis conducted under the European Semester for the Country Reports and the identification of key challenges. On a country-specific basis, this analysis feeds in the CSRs. Since all or a significant subset of the CSRs need to be tackled in the RRPs, RRPs are expected to contribute to achieving the SDGs.

2.1.3. Functioning of the Facility

National Recovery and Resilience Plans (‘RRPs’)

To access financial support under the Facility, Member States had to prepare RRPs setting out a national agenda of reforms and investments to be implemented gradually until 31 August 2026. The Commission assessed each plan with a view to 11 criteria set out in Article 19(3) of the RRF Regulation. Notably, the Commission assessed whether the plans contributed appropriately to the six pillars defining the scope of the Facility, whether they met the minimum green and digital targets (respectively 37% and 20% of the total’s allocation contributing to the green and digital transitions), whether they contributed to addressing all or a significant subset of challenges identified in the relevant CSRs issued in the context of the European Semester, whether they ensure that no measure does significant harm to environmental objectives, and whether they provide for an effective and efficient control system for the protection of the financial interests of the Union. Once a RRP is approved by the Council upon proposal by the Commission, the plan’s content becomes a legally binding act 22  that includes the milestones and targets against the fulfilment of which payments should be made. 

Payment requests and disbursement process

The RRF is a performance-based instrument where disbursements are made against the satisfactory fulfilment of milestones and targets. Once a Member State has fulfilled the milestones and targets of the relevant instalment, as detailed in the respective Council Implementing Decision (‘CID’), it submits a duly justified payment request to the Commission. The Commission then has two months to assess the satisfactory fulfilment of the relevant milestones and targets. The Commission’s preliminary assessment is then subject to a committee consultation 23  followed by a Commission Implementing Decision to disburse. 

Reporting framework on the implementation of the RRPs

With its comprehensive set of milestones and targets, the RRF provides a solid tool to monitor outputs and results. The Facility’s monitoring framework corresponds to its approach, which links disbursements to the satisfactory fulfilment of concrete milestones and targets, as set out in the CIDs. In the context of the European Semester, Member States report twice a year on the implementation of milestones and targets to measure the progress towards the achievement of reforms and investments.

The monitoring framework of the RRF also includes 14 common indicators to be reported upon by Member States to track the progress of the Facility 24 . The common indicators were agreed in a delegated act to help monitoring the progress made with the implementation of the RRF. While bearing in mind the additional data collection and reporting obligations for Member States, the common indicators were chosen to offer a condensed picture of the different national RRPs across the six pillars of the Facility. According to the RRF Regulation, the common indicators (described in Box 1) are meant to monitor and evaluate the Facility towards the achievement of the general and specific objectives. They measure outputs and results (but not impacts) to the extent possible. Unlike key performance indicators that are usually linked to specific and measurable targets, the RRF common indicators are used for reporting on the progress of the Facility as a whole, and most of them are relevant for more than one pillar.

The Commission publishes a wide array of data on the implementation of the RRPs on the Recovery and Resilience Scoreboard 25 . The Scoreboard provides up-to-date information on the disbursements and progress made by Member States, including on the fulfilment of milestones and targets disaggregated by Member State and by RRF pillar. It also includes thematic analyses on the status of the implementation of the RRF and information on the 100 final recipients receiving the highest amount of RRF funds in each of the 27 Member States 26 . 

2.1.4. Intervention Logic

The RRF intervention logic frames the purpose, actions, and expected outcomes of the Facility. It is presented below in Figure 1 and captures the consecutive steps of the RRF from the initial needs to be addressed to the ultimate goals to be achieved. Individual Member States’ RRPs comprise measures with a varying thematic focus, in a wide range of policy areas, designed to cater for Member States’ specific needs within the common overall frame of the Facility’s six pillars. Given its broad scope and large financial envelope, the RRF’s general and specific objectives are defined in broad terms. They do not provide the kind of specific and measurable objectives that are typically assigned to smaller and more targeted programmes within the EU’s budget. Moreover, they do not fulfil the S.M.A.R.T. criteria 27 .

The intervention logic of the RRF corresponds to its design: the delivery of financial support against the implementation of reforms and investments. The RRF is designed to support reforms and investments in the Member States. Progress made on reforms and investments is demonstrated by the achievement of milestones and targets of the plans. To assess the progress achieved to date in concrete and measurable terms, it is possible to precisely assess the financial support disbursed, the number and type of milestones and targets fulfilled (which track the implementation progress of the reforms and investments supported by the RRF), and the common indicators (that monitor progress towards the achievement of the RRF’s general and specific objectives).

Figure 1: Intervention logic for the RRF mid-term evaluation

Source: European Commission

The intervention logic, as outlined in Figure 1, comprises the following elements:

1)Needs as described in the RRF Regulation (e.g. recital 6). The extent to which the RRF is addressing the needs is assessed under the relevance criterion.

2)Objectives as stated in Article 4 of the RRF Regulation. The extent of the RRF’s contribution to these objectives is assessed under the effectiveness criterion, while the relation of the RRF objectives/measures to other instruments (e.g. Cohesion Policy financing and national instruments) is reviewed under the coherence criterion.

3)Inputs refer to the financial inputs (non-repayable financial support and loans) as well as the human resources and administrative processed needed to manage and implement the RRF. Issues related to the disbursements are included in the effectiveness analysis, while cost and administrative issues are covered in the efficiency analysis.

4)Outputs are defined as the disbursements performed and the achievements of milestones and targets. These are the first elements that are assessed under effectiveness.

5)Results are emanating from the reforms and investments implemented by Member States, in accordance with the plans and the objectives of the RRF. They are discussed in the analysis of effectiveness and coherence (e.g. on the reinforcement of investments and reforms).

6)Impacts of the RRF are expected to be as wide as the identified objectives and needs. Given that this mid-term evaluation is performed early in the implementation of the RRF, impacts cannot be expected to have significantly materialised yet. The analysis on effectiveness includes considerations on the contribution of the RRF to the expected impacts.

7)External factors have also affected the implementation of the RRF and are captured in this mid-term evaluation.

2.2.Point(s) of comparison 

Without decisive and coordinated policy action, the EU economy was facing serious risks of a long-lasting severe contraction after the COVID-19 outbreak, risks of investment being drastically cut, risks of a lasting loss in productive capacity and employment, risks of financial fragmentation, as well as risks of a distortion of the level playing field of the Single Market, which could have led to increasing economic divergences in the Union and aggravated Europe’s long-term growth challenges. The financial support needs identified at the time, stemming from investment gaps and equity losses, were very large 28 .

The RRF aimed at addressing these risks and needs through a strategic and coordinated policy response that provided large-scale financial support for public investments and reforms. The fact that this response came swiftly and was designed as a common EU initiative was significantly different from the more gradual and fragmented response to the euro area crisis of 2010. This time, a clear political agreement was reached to react in a decisive and coordinated manner, to avoid a severe contraction of the EU economy and mitigate the associated risks. 

As a first possible point of comparison, EU Cohesion Policy is being considered. Cohesion Policy is the EU investment tool that is the most comparable in terms of the size of its financial support (EUR 543 billion over 2021-2027 period). In addition, Cohesion Policy also finances investments that support the EU’s economic, social and territorial cohesion and links support of investment to an agenda of enabling reforms (previous ‘ex ante conditionalities’ or ‘enabling conditions’). At the same time, the Cohesion Policy Instruments are not comparable to the design and management of the RRF. Key novelties of the RRF are the performance-based approach, where payments are made upon the fulfilment of milestones and targets, and the strong incentives to implement long-standing CSRs in the context of the European Semester.

Hence, the main point of comparison to assess the implementation and expected impact of the RRF relates to the counterfactual situation of what would have happened in its absence. The milestones and targets as well as the related disbursements embedded in the RRF’s design provide one point of comparison against which to assess its implementation.

The macro-economic simulations conducted as part of this evaluation aim to illustrate ex-ante the expected impact of the RRF compared to a baseline or counterfactual characterised by the absence of the RRF or NGEU. The models consider the impact on EU GDP that can be attributed to the investments financed by the RRF, as well as the consequences of reduced interest rate spreads on sovereign bonds.

Integrating up-to-date information on loan requests, inflation, and expected spending profiles, the simulations with the Commission’s QUEST 29 model suggest sizable macroeconomic effects of NGEU investment 30 . The model’s results show that NGEU 31 has the potential to increase EU real GDP by up to 1.4% in 2026 above a no-NGEU scenario (Figure 2a) 32 According to the simulations, the peak GDP effect for the EU would materialise in 2026. The model simulations also suggest a sizeable, short-run increase in EU employment (by up to 0.8%). Moreover, the results yield persistently higher real wages in the medium term, reflecting potential productivity gains of productive investment 33 .

The estimated results of the NiGEM 34 model used in the evaluation study broadly confirm these findings, albeit with some differences due to a different model design. Overall, both modelling approaches find a substantially positive economic impact of NGEU/RRF. The NiGEM analysis additionally assesses the effects of a reduction spreads and government borrowing costs, which is a further benefit of the RRF. At the same time, the productivity gains of public investment appear to be lower in the NiGEM model (partly due to the model’s assumptions) and below those reported by Ramey (2021) 35 .

Quantitatively, the results of the NiGEM model suggest that, as a result of the RRF disbursements, EU GDP was 0.4 per cent higher in 2022 than it would have been in the absence of RRF spending. RRF disbursements had stronger effects in the Southern and Eastern Member States than in the Northern and Western ones with relatively higher levels of GDP. The initial disbursements lowered unemployment in the European Union by around 0.2 percentage points relative to what it would have been in the absence of the RRF.

The importance of positive cross-country spillovers and reductions in interest rate spreads are central to these overall findings. The simultaneous implementation of investment by all Member States generates an added value for the EU that amounts to between one-fourth and one-third of the total impact of the RRF (hereafter referred to as spillovers). These positive spillover effects have shown in the QUEST assessments and are also relevant in the NiGEM simulations. Moreover, the NiGEM estimations yield that reducing spreads has been an important positive side effect, which helped mitigate risks of financial fragmentation at the time of the COVID shock (for details, see section 4.4.3. regarding the impact on spreads).

Figure 2: GDP effects (in % of a no-NGEU scenario), QUEST model scenarios

Notes: All results are expressed in per cent deviation from a no-NGEU scenario. In the left panel (a), the blue line reports real EU GDP effects in the benchmark scenario, while the red line depicts the low-productivity scenario. The right panel (b) depicts the respective peak GDP effects for each country. Blue (red) bars report GDP effects in the benchmark (low-productivity) scenario.

Source: European Commission

With its allocation key, the RRF was designed to support lower-income and more vulnerable Member States, which had also been hit the hardest by the pandemic. The RRF’s allocation of funding thus helps counteract economic divergence, fostering economic stability and growth where it is most needed. Given the allocation key, the QUEST simulations indicate that Member States with below-average GDP per capita are expected to experience the largest boost to GDP levels because of the significant RRF investments (see Figure 2b). For the benchmark (high productivity) model calibration, the increase in output reaches almost 4.5% in Greece, more than 4% in Croatia, and around 3.5% in Spain and Bulgaria compared to the EU average impact of 1.4%. The model-based analysis does not explicitly cover reforms, which are expected to have a long-term positive impact and can further lay the groundwork for long-term economic convergence within the EU 36 .

The ex-ante macroeconomic simulations also predict that the simultaneous implementation of the RRF by all Member States generates sizeable positive spillover effects, leads to economic convergence and is helping to reduce unemployment. In line with the estimates based on QUEST 37 , the absence of joint and coordinated action (counterfactual) would have substantially reduced the average GDP impact (see Figure 3). While all Member States are estimated to benefit from sizable cross-border spillover effects because of rising demand across the integrated EU economy, the joint investment impulse from the RRF is also supporting the upward economic convergence in the EU. The results predict that Member States with below-average GDP specifically gain from these spillover effects, as they spur enhanced economic activity and cross-border trade. This analysis is reinforced by the simulations undertaken using the NiGEM model. It shows that the collective effect on EU GDP is greater than the sum of the direct effects of RRF spending if each Member State (counterfactually) implemented the investments on its own. The NiGEM simulations also suggest that the initial disbursements lowered unemployment in the European Union by around 0.2 percentage points relative to what it would have been in the absence of the RRF.

Figure 3: GDP effects (in % from a no-NGEU scenario), spillover effects

Notes: All results are expressed in per cent deviation from a no-NGEU scenario. Blue bars show simulation results from unilateral plans (counterfactually assuming that only one Member State implements the investment plan at a time). Spillover (red) is defined as the difference of the coordinated simultaneous NGEU stimulus in all Member States and the standalone simulations of the national plans. The left (a) and right (b) panels depict the benchmark and low-productivity scenarios, respectively.

Source: European Commission

RRF loans, if used to finance additional projects, are estimated to contribute to the positive real GDP impact. These gains are largest for Member States with significant amendments to loan requests (as of 2023), while all Member States can benefit from other Member States’ investment through spillover effects.

The RRF’s cumulated long-run impact on GDP can be expected to exceed the total disbursed RRF funds. According to DG ECFIN’s model-based macroeconomic simulations 38 , the (undiscounted) cumulative impact on EU GDP of NGEU budget 39 can be about three to six times as large in the long run, depending on the productivity effects of RRF investment. The long-run benefits of the RRF are confirmed by the supporting study, whose NiGEM analysis suggests that the cumulative impact on EU GDP by 2041 of the RRF funds disbursed up to end July 2023 is almost twice as large as the value of these disbursed funds. The study further suggests that the cumulative impact on EU GDP by 2041 of the entire RRF package of non-repayable support and loans is expected to exceed twice the total RRF funds 40 .

It is important to note that the overall macroeconomic impact calculated by the simulations depends on the assumptions on the productivity effects and additionality of the financed investment projects. Notably, the macroeconomic impact could be considerably smaller if investment projects yielded lower productivity gains. In the low-productivity scenario of the QUEST model, the simulated EU-wide GDP gains are smaller (see Figure 3b). While sizeable growth effects remain, the changes across assumptions are noteworthy (as reflected in the estimated multipliers shown in Annex II). For the purposes of modelling and as a stylised simplification, the simulations assume that Member States utilise all non-repayable support (100%) and half of loans (50%) for additional public investment. The assumption of reduced loan additionality reflects a conservative approach taken in the analysis (for details, please see Annex II). Similarly, the GDP effects could also be smaller in case of lower additionality of non-repayable support since, in this case, not all resources would be used for additional public investment 41 .

While the RRF was established during the COVID-19 pandemic to help Member States recover faster and become more resilient, its implementation is taking place in a constantly evolving context. Nearly a year after the entry into force of the RRF, the international context experienced another radical change following Russia’s illegal war of aggression against Ukraine. This caused renewed pressures on supply chains as well as on global energy and food markets, which to a large extent resulted in high levels of inflation, with the European Union being particularly affected. These external factors have had an impact on the implementation of the RRF, both as concerns implementation speed and the need to use the Facility to tackle emerging challenges. The REPowerEU Plan, presented by the Commission in May 2022 as the EU’s response to the energy crisis, paved the way for an amendment of the RRF Regulation less than two years after its entry into force. The RRF became a key financial tool to deliver on the REPowerEU objectives. It increased the amount of EU funds made available to the Member States through the RRF, and enabled Member States to adjust their RRPs by putting forward additional reforms and investments to rapidly phase-out the EU’s dependence on Russian fossil fuels, accelerate the clean energy transition, support the reskilling of the workforce, and address energy poverty.

This section describes how the European economy and the RRF implementation have evolved over the evaluation period and presents the state of play to date.

3.1. Economic developments since the start of the RRF

As the RRF’s general objective is to promote the Union’s economic, social and territorial cohesion, the way in which the EU economy developed since the COVID-19 pandemic crisis provides an important context for the evaluation.

Following a steep fall in economic activity in the first half of 2020 due to pandemic-related restrictions, a vigorous and synchronised economic rebound started in the second half of 2020. The robust rebound in economic activity brought the EU economy back to its pre-pandemic output level (fourth quarter of 2019) in the third quarter of 2021. By the end of 2022, the volume of EU output was 3.2% higher compared to pre-pandemic levels, while the EU’s aggregate public investment-to-GDP ratio is expected to increase from 3.0% in 2019 to 3.3% in 2023 42 . In contrast with previous macroeconomic shocks, public investment hence remained robust during the COVID-19 pandemic and the energy crisis.

The resilience of the EU economy was tested again following Russia’s unprovoked aggression against Ukraine. Russia’s aggression against Ukraine exacerbated the supply-side disruptions that had started to push up global commodity prices in 2021. Due to its geographical proximity to the war and heavy reliance on gas imports from Russia, the EU economy was expected to fall into a recession in winter 2022-2023. While this recession was avoided by a margin, the economic momentum slowed down significantly since the end of 2022. Based on the Commission's Winter 2024 interim Forecast, the conditions for a gradual pick-up in economic activity are still in place 43 .

3.2. State of play of the RRF implementation

3.2.1. Adoption of RRPs and operational documentation

At the half-way point, the implementation of the Facility is under way in all Member States. The RRF Regulation entered into force on 12 February 2021. In 2021 and 2022, the Commission supported Member States to put forward ambitious plans with clear and realistic milestones and targets to monitor their progress during the implementation and was in close contact with them to conduct a comprehensive assessment of each plan. The Commission assessed each plan in a consistent and transparent manner, following the 11 criteria set out in Article 19(3) of the RRF Regulation. With this assessment, the Commission has ensured that the measures included in Member States’ RRPs contribute to meeting the objectives of the Facility 44 . 

By December 2022, the positive assessment of all 27 Member States’ initial RRPs had been proposed by the Commission and adopted by the Council. The adoption timeline varied across Member States, with the first CID adopted in July 2021 and the last in December 2022. The median duration between the submission of original RRPs by Member States and the adoption of CIDs by the Council was 70 calendar days, although the assessment for the plans submitted by Bulgaria, Hungary, Poland, and Sweden took significantly longer. Information on the dates of submission of RRPs and adoption of CIDs of each Member State is provided in Annex VI.

Financing agreements, (where relevant) loan agreements, and operational arrangements also needed to be concluded with each Member State. The financing and loan agreements define the rights and obligations of the parties. This includes the protection of the financial interests of the Union, requirements for Member States’ control systems and a commitment of the financial contribution and of the loan support. The Commission also concluded operational arrangements with most Member States, which further specify the modalities for monitoring and cooperation, as well as the verification mechanism for each milestone and target (discussions are still ongoing with two Member States 45 ). The signing of operational arrangements is a pre-requisite for submitting a first payment request.

3.2.2. REPowerEU and amendment of the RRF Regulation

The amended RRF Regulation, integrating revisions related to REPowerEU, entered into force in March 2023. The amendments provide additional financial support for new or scaled-up reforms and investments dedicated to diversifying energy supplies (in particular gas imports), increasing energy savings, accelerating the clean energy transition and ultimately increasing the resilience, security and sustainability of the Union’s energy system. Corresponding REPowerEU objectives were also introduced 46 .

The amendments to the RRF Regulation also strengthened transparency by requiring Member States to publish data on the 100 final recipients 47 receiving the highest amount of funding for the implementation of measures under the RRF. Further information is provided in Section 3.3.1. below.

3.2.3. Revisions of RRPs and submission of REPowerEU chapters

The external factors related to the war in Ukraine, energy crisis, high inflation and supply chain disruptions impacted the implementation of the RRPs. Faced with cost increases, supply chain shortages, uncertainty and the need to divert administrative resources to tackle external emergencies, Member States found that they could not implement some of the measures as initially planned in their RRPs. This impacted the speed of implementation of the Facility and generated a need to introduce targeted revisions to the RRPs (under Article 21 of the RRF Regulation). These revisions came on top of the revisions related to the updated maximum contribution (see Section 2).

By 1 February 2024, all Member States had submitted a request to modify their RRPs and 23 had also submitted a REPowerEU chapter (Table 1). 31 modified RRPs, 23 of which including REPowerEU chapters, were assessed by the Commission and then adopted by the Council (Table 1).

Table 1: State of play on the submission of modified RRPs and REPowerEU chapters by 1 February 2024

Source: European Commission

3.2.4. Submission and assessment of payment requests

By 1 February 2024, the Commission received 54 payment requests from 24 Member States and disbursed close to EUR 225 billion. This figure includes EUR 157.2 billion disbursed upon the submission of payment requests and satisfactory fulfilment of milestones and targets, EUR 56.6 billion in RRF pre-financing granted to 21 Member States until 31 December 2021, and EUR 10.4 billion of REPowerEU pre-financing disbursed to 21 Member States between December 2023 and 1 February 2024 (see next paragraphs). EUR 144.0 billion of the total amount disbursed to Member States concern non-repayable support and EUR 80.2 billion concern loans. Table 2 provides an overview of the submission of payment requests by the Member States and the corresponding total disbursements by the Commission, covering both non-repayable support and loans 48 , following a positive assessment of the milestones and targets covered by the respective payment request.

Pre-financing for the initial RRPs was disbursed to all requesting Member States whose plans were adopted by the legal deadline of 31 December 2021. To ensure that the financial support provided by the RRF was frontloaded in the aftermath of the COVID-19 crisis, Member States could request up to 13% of their total financial allocation as up-front payment in the form of so-called ‘pre-financing’. This was however only possible where the relevant RRP was adopted by the Council before the deadline of 31 December 2021, as set in the RRF Regulation 49 . The disbursement of this pre-financing was not directly linked to the fulfilment of milestones and targets, unlike subsequent disbursements that are conditional upon the fulfilment of the relevant milestones and targets. The amounts disbursed under pre-financing are deducted over time from regular payments to Member States. Any potentially remaining amount can be recovered by the Commission at the end of the Facility’s lifetime, including if the Member State does not fulfil the requirements established in the CID. All Member States whose initial plans were adopted by end-2021, except Ireland, requested and received pre-financing, which amounted to EUR 56.6 billion (see Table 2 below). Pre-financing payments were executed within six business days after the signing of the Financing (and/or Loan) Agreements (where relevant), and well ahead of the 2-month period mentioned in the RRF Regulation 50 . Two Member States for which no payment request has been processed yet (Belgium and Finland) have nonetheless received RRF funding, in the form of pre-financing. As the RRPs submitted by Bulgaria, Hungary, the Netherlands, Poland and Sweden were adopted after the legal deadline, those five Member States were unable to request pre-financing for their initial plans.

By 1 February 2024, EUR 10.4 billion was disbursed as REPowerEU pre-financing to the 21 Member States that requested it (see Table 2 below). In the same spirit as the 2021 round of pre-financing and to ensure that financial support is frontloaded to better respond to the energy crisis, Member States that modified their RRPs to include a REPowerEU chapter had the possibility to request up to 20% of the additional funding requested to finance their REPowerEU measures until the end of 2023 51 . 21 Member States requested and received REPowerEU pre-financing. Bulgaria, Germany, Ireland and Luxembourg are not eligible for REPowerEU pre-financing since their REPowerEU chapters were not adopted by the Council by end-2023 – as they were still under preparation. The Netherlands and Sweden did not request any REPowerEU pre-financing.

Progress in RRF implementation is underway in all Member States, but with differences. While some Member States are progressing fast with the roll-out of their payment requests, others are facing diverse challenges. Hungary, the Netherlands, and Sweden have not yet submitted a payment request to the Commission. For Hungary and Poland, the authorities need to take necessary steps to implement the milestones related to the protection of the financial interests of the Union – no regular payment under the RRF is possible without the fulfilment of these milestones. In contrast, eight 52 Member States have submitted three or more payment requests.

Table 2: State of play on implementation of RRF payment requests, by 1 February 2024

Note: * No pre-financing was requested by Ireland. ▲ As prerequisite for pre-financing, the CID had to be adopted by 31 December 2021. ● Bulgaria, Germany, Ireland, and Luxembourg have not submitted a REPowerEU chapter and are thus not eligible for REPowerEU pre-financing. ■ The Netherlands and Sweden did not request any REPowerEU pre-financing.

Source: European Commission

By 1 February 2024, 1,153 milestones and targets out of a total of 6,266 to be achieved by 2026 had been assessed as satisfactorily fulfilled and an additional 1,238 had been reported by Member States as completed. This represents a progress rate of approximately 38% of the total number of milestones and targets under the RRF (with 18% of all milestones and targets assessed as satisfactorily fulfilled). Around 75% of the milestones and targets planned to be achieved by end 2023 were either assessed by the Commission as satisfactorily fulfilled or reported as completed by the Member States. Furthermore, on 1 February 2024, the Commission is in the process of assessing 18 payment requests that, if positively assessed, will significantly increase the amount of milestones and targets satisfactorily fulfilled by Member States in the near future. Of the 1,153 milestones and targets satisfactorily fulfilled, 632 contribute to reform-related RRF measures and 521 to investment-related measures. Italy, Spain, and Croatia have fulfilled the highest amounts of milestones and targets, with 178 (out of a total of 527), 121 (out of 416), and 104 (out of 372) fulfilled milestones and targets, respectively (Figure 4). As the Commission’s assessment is still ongoing for the first payment requests submitted by Belgium, Ireland, Poland, and Finland, no information is available on fulfilled milestones and targets for these Member States yet. The number of milestones and targets fulfilled by Bulgaria, Czechia, Denmark, Estonia, Spain, France, Croatia, Italy, Cyprus, Latvia, Lithuania, Malta, Romania and Slovakia does not yet reflect the milestones and targets under assessment on 1 February 2024, following the payment requests submitted by these Member States. No milestone or target initially assessed as satisfactorily fulfilled by the Commission has subsequently been reversed by a Member State so far. Further details on Member States’ progress in fulfilling milestones and targets for reforms and investments is provided in Figure 4, and a breakdown across all six policy areas is included in Annex VI.

Figure 4: Number of fulfilled milestones and targets for reforms and investments, per Member State 53  

Source: Recovery and Resilience Scoreboard

Member States report good progress in implementing their RRPs across all six pillars (Figure 5). Self-reported progress by Member States, which takes place twice a year, indicates that the vast majority of milestones and targets due by October 2023 are either fulfilled or reported as completed (Figure 5). The progress of upcoming milestones and targets is also encouraging, with a significant number of milestones and targets reported as on track or already completed (Figure 5). When providing explanations in the bi-annual reporting for non-completion or delays, Member States reported difficulties in meeting deadlines for signatures of contracts and/or unexpected time lags in construction works. In general, Member States did not consistently provide detailed explanations for non-completion or delays and did not generally consider these delays as substantial 54 .

Figure 5: Progress of milestones and targets, per RRF pillar

Note: Milestones and targets which have already been assessed as satisfactorily fulfilled by the Commission in the context of a payment request have the status ‘fulfilled’. The progress status of each backward-looking milestone and target (i.e. those planned to be achieved up to the quarter before the reporting date) can be either ‘completed’ or ‘not completed’. The status of forward-looking milestones and targets (i.e. those planned to be achieved in the quarter of the reporting date and the three following quarters) milestones and targets can be ‘completed’, ‘on track’, or ‘delayed’.

Source: European Commission.

A detailed analysis on the speed of disbursements and on the progress in implementing milestones and targets by policy area is included in Section 4.1.

3.3. Improvements in RRF implementation over the evaluation period

Since the adoption of the RRF Regulation, the Commission has been in close contact with Member States and also with other EU institutions, notably the European Parliament and European Court of Auditors (described in Section 3.4.), to discuss implementation challenges as they emerged. Against the background of constant dialogue and feedback, the Commission has taken various steps, as described below, to improve the implementation of the Facility within the mandate of the Regulation.

3.3.1. Increasing transparency on the RRF implementation

Since the establishment of the RRF, the Commission has provided a range of guidance documents to help Member States prepare their RRPs 55 and has further clarified how it implements the RRF Regulation and which frameworks it uses to do so. In February 2023 56 , the Commission published its framework to assess the fulfilment of milestones and targets as well as the methodology to be used to calculate the suspended amounts in case of non-fulfilment of a milestone or target. Stakeholders, notably Member States authorities, the European Parliament and the European Court of Auditors, broadly welcomed this step that increased transparency and clarified the Commission’s methodology 57 . In September 2023 58 , the Commission also published its framework for dealing with potential situations where milestones and targets initially assessed as satisfactorily fulfilled by the Commission would subsequently be reversed by a Member State.

Information on the state of implementation of the RRF and on final recipients is continuously being made available. The Commission has set up a website dedicated to the RRF – which includes the individual RRPs in dedicated country pages – as well as the Recovery and Resilience Scoreboard 59 that provides real-time information on the disbursements and progress made by Member States, as well as additional data, indicators and thematic analyses. To further increase the visibility and transparency of the RRF, the Commission has launched an interactive map 60 of projects supported by the RRF in each Member State. Furthermore, following the entry into force of the amended RRF Regulation, the Commission has been publishing the data provided by the Member States on the 100 final recipients receiving the highest amount of funding on the Scoreboard. By 1 February 2024, all Member States have provided corresponding data.

A series of joint communication activities on the RRF and 25 Annual RRF Events organised by 22 different Member States have taken place. In collaboration with Member States, the Commission has organised communication and Annual Events to bring together key institutions, stakeholders (including social partners and civil society representatives) and recipients of RRF support, among others, to discuss the progress in implementing the various projects proposed by Member States in their national RRPs. The European Parliament Liaison Offices in the Member States, the European Economic and Social Committee national representatives and the Committee of the Regions are also invited to participate in these events.

3.3.2. Strengthened robustness of the RRF control framework (audit and control)

Since the inception of the RRF, the Commission has further strengthened the robustness of the RRF control framework, including its ex-post audit work. The Commission has notably increased the pace and scope of system audits related to the protection of the financial interests of the Union. It now also verifies that Member States regularly check compliance of RRF funded expenditure within the framework of Public Procurement and State Aid rules.

The RRF control framework 61 is tailored to the unique nature of the RRF as an EU spending programme and is built upon two main pillars: on the one hand, the legality and regularity of transactions, which is the main responsibility of the Commission, and on the other hand the protection of the financial interests of the Union, which responsibility lies mainly with the Member States but on which the Commission also carries out specific checks.

Since the inception of the RRF, the Commission carried out both ex-ante controls before payments were made and ex-post audits thereafter. By 1 February 2024, the Commission assessed 36 payment requests including over 1,150 milestones and targets and concluded that all but seven 62  milestones and targets had been satisfactorily fulfilled. In 2022-2023, the Commission also carried out 17 63 risk-based ex-post audits on milestones and targets to obtain additional assurance that the information provided by the Member State was correct. Based on final audit reports issued, the Commission’s audits confirmed the previous positive assessments that the relevant milestones and targets had been satisfactorily fulfilled.

The Commission also conducted system audits that draw upon information available within the Commission as well as in audit summaries, management declarations and payment requests submitted by the Member States. In the context of the system audits, the Commission checks the procedures in place in Member States to prevent, detect and correct fraud, corruption, and conflict of interest, as well as ‘double-funding’ arising from the possible simultaneous funding of project-related costs by different EU programmes. In the period 2022-2023, the Commission audited all Member States at least once, issuing where relevant recommendations with strict implementation deadlines.

3.4. Inter-institutional scrutiny

European Parliament Working Groups

Since the beginning of the RRF implementation, the Commission has closely engaged with the European Parliament and the Council. The Commission shares all RRPs and modified plans, as well as all preliminary assessments of payment requests, with both the European Parliament and the Council in full respect of its inter-institutional obligations. This ensures a transparent flow of information with a high level of engagement between the institutions throughout the implementation phase.

The Commission holds regular exchanges to discuss horizontal topics concerning the RRF with the European Parliament. Since the setting-up of the RRF, the Executive Vice President responsible for an Economy that Works for People and the Commissioner for Economy participated by 5 February 2024 in 14 high-level Recovery and Resilience Dialogues. Moreover, the Commission engages regularly with the standing Working Group of the joint ECON-BUDG Committees and participated overall in 33 meetings. In addition, the Commission is invited on a regular basis to various other committees to exchange views on matters related to the RRF, including the REGI, CONT and ENVI committees.

Council

The Council is involved at all stages of the Facility’s implementation. The Council approves the ‘Council Implementing Decisions’ setting out the reforms and investment projects to be implemented by the Member State, including the milestones and targets to be fulfilled for each payment requests, and the financial contributions – based on a Commission proposal reflecting the RRP of each Member State. In the context of each payment request, once the Commission has adopted its preliminary assessment regarding the satisfactory fulfilment of milestones and targets, the Economic and Financial Committee (‘EFC’), which is composed of senior officials from national administrations and central banks, subsequently provides its opinion 64 . The Commission also provides regular updates on the Facility’s implementation to the ECOFIN Council.

Informal expert group on the implementation of the RRF

The Commission has also set up an informal expert group to exchange views and good practice with Member States on the implementation of the RRF. By 1 February 2024, 24 meetings of the expert group had taken place. This group provides an important forum to discuss cross-cutting aspects on the RRF, among the experts from the Member States as well as the Commission. The Council and the European Parliament are invited to observe all these meetings. The topics discussed in this format show a great variety and range from financial matters to governance and audit and control, as well as issues related to specific policy areas. All relevant information from the meetings is published online 65 .

Audits undertaken by the European Court of Auditors

In addition to the audits carried out by the Commission itself, the RRF is scrutinised by the European Court of Auditors (‘ECA’), notably through Statement of Assurance (‘SoA’) audits, and Performance audits on a number of thematic areas. By 1 February 2024, the ECA has finalised two SoA audits on the RRF, which aim to assess annually the legality and regularity of payments disbursed by the Commission to Member States upon satisfactory fulfilment of milestones and targets. The main findings are presented in the ECA annual reports of 2021 66 and 2022 67 . In addition, three performance audits specifically dedicated to the RRF have been finalised as of 1 February 2024, namely on the Commission’s assessment of RRPs, the design of the Commission’s control system for the RRF, and on the framework put in place by the Commission to monitor the performance of the RRF. Another eight 68 ECA audits focusing on the RRF are ongoing and are expected to be finalised by end 2024, and while RRF-related matters are also considered in other reports. The ECA has also issued a comparative analysis on Cohesion Policy funds and the RRF.

To what extent was the intervention successful and why? 

4.1. Effectiveness

This section presents an assessment of how successful the RRF has been, mid-way through its lifetime, in progressing towards its specific objective, which is “to provide Member States with financial support with a view to achieving the milestones and targets of reforms and investments as set out in their recovery and resilience plans”. The section then also illustrates, with the results of specific case studies, how the achievement of milestones and targets feeds into the elements of the RRF high-level general objective.

The achievement of milestones and targets in and of itself represents progress towards achieving both the RRF specific as well as general objective, respectively. Milestones and targets represent concrete progress made towards the achievement of the reforms and investments committed to by Member States in their RRPs. This in turn corresponds to progress towards the achievement of the RRF specific objective which has been construed, by design of the instrument, to deliver on the RRF high-level general objective “to promote the Union’s economic, social and territorial cohesion”. Milestones and targets follow the different implementation steps of a measure. Each measure (reform or investment) included in Member States’ RRPs has been selected on the basis that it fulfils all assessment criteria of the RRPs and is in line with the relevant EU priorities and the RRF general objective, while being tailored to Member States’ specific needs.

Since this is a mid-term evaluation, it is too early to systematically assess the impact of the RRF. At the mid-term point of the Facility, and as per the set-up of the RRF, the milestones and targets that have been achieved so far often cover initial steps, such as a launch of calls for tender or signing of procurement contracts in particular for investments. Most measures have not yet reached the last milestone or target (i.e. their completion) which would enable a first evaluation of the results, as defined in the intervention logic (i.e. the full implementation of the measures included in the RRP). The milestones and targets due in the second half of the Facility’s lifetime will increasingly cover final steps in reform implementation and investment outputs. It is the implementation of these reforms and investments, included in the RRPs, that will allow for an assessment of the full impact of the intervention.

Accordingly, it is too early to conclude on the extent to which progress towards milestones and targets has translated into reaching the general RRF objective. This section therefore presents the progress made to date in implementation rather than a fully-fledged impact evaluation. The latter will be possible only ex-post, once the measures are fully implemented by the end of 2026. However, some telling examples of completed reforms or investments are already available and have been analysed in specific case studies. It is therefore possible to illustrate how the achievement of milestones and targets translates into the implementation of reforms and investments by Member States (results in the intervention logic) that are delivering on the RRF general objective.

The most complete available information at this point in time relates to the financial support provided (i.e. amounts disbursed by the Commission) and to the achievement of milestones and targets (assessed as satisfactorily fulfilled by the Commission when assessing payment requests). The indicative timeline for achieving the milestones and targets and the resulting planned disbursements were determined, together with the Member States, in the annex to the Council Implementing Decision approving each plan and in the “operational arrangements”. This information is publicly available and referenced on the Recovery and Resilience Scoreboard 69 .

4.1.1. Progress towards the RRF specific objective

The specific objective of the Facility is to provide Member States with financial support for the achievement of milestones and targets of reforms and investments, as set out in their RRPs. Both the achievement of milestones and targets as well as the disbursement of funds represent outputs in the intervention logic (Figure 1) used for the evaluation.

A. Providing financial support to Member States

I.RRF disbursements to Member States

This section presents the progress in disbursing RRF funds in the first three years of the Facility’s lifetime (2021-2023). Overall, the RRF has been effective in disbursing funds quickly post-crisis, notably thanks to pre-financing. By 1 February 2024, close to EUR 225 billion has been disbursed under the RRF, including EUR 157.2 billion disbursed upon the submission of payment requests and satisfactory fulfilment of milestones and targets, EUR 56.5 billion in RRF pre-financing granted to 21 Member States until 31 December 2021, and EUR 10.4 billion of REPowerEU pre-financing granted to 21 Member States between December 2023 and 1 February 2024. EUR 144.0 billion of the total amount disbursed to Member States concerns non-repayable support and EUR 80.2 billion concerns loans. Pre-financing provided fast direct support to Member States, playing a stabilising role in the aftermath of the unprecedented economic and social shock caused by the COVID-19 pandemic, thereby also helping to kick-start the recovery 70 . Compared to the baseline scenario of no-RRF, the RRF provided immediate additional fiscal space. The additional pre-financing agreed by co-legislators in the context of REPowerEU seeks to achieve the same goals. Many stakeholders, notably Member States authorities, interviewed consider that pre-financing has been an effective feature of the RRF: it supports public finances and boosts the progress of the instrument 71 . 

The speed of disbursement is considered as one of the most effective features of the RRF 72 , also in comparison with disbursements made under Structural Funds 73 . The validity of comparing disbursement speed under Structural Funds with that under the RRF is however limited. This is because of, first, the larger amount of pre-financing over the total allocation under the RRF to date, second, the different disbursement mechanisms and, third, given that a larger share of reforms compared to investments has been implemented during the first years of the RRF implementation, which is therefore not comparable to cohesion funding 74 . However, overall, the RRF features, with substantial pre-financing and payments also linked to preparatory and intermediate steps of measures implemented on the ground, have enabled quicker disbursement to Member States than instruments where payments have been linked to expenditure already incurred, including Structural Funds, and thus have been effective in creating fiscal space in Member States in the aftermath of the COVID-19 crisis.

The speed of disbursement in the first two years of operation of the RRF has followed the indicative yearly timetable for disbursements shown in the operational arrangements 75 . Approximately 27% of the RRF budget was paid out via pre-financing and regular payments in the period 2021-2022, which is almost aligned with what was foreseen at the time of adoption of the plans (28% of budget was planned for the same period) 76 . Similarly, Member States have largely adhered to the planning of the first payments in 2021 and 2022, requesting their payments at the time initially foreseen, reinforcing close alignment between planned and disbursed financing in the first two years of the RRF.

The revisions of the RRPs and the addition of REPowerEU chapters, in response to the war in Ukraine, have impacted the disbursement schedule of RRF funds in 2023, creating delays between actual disbursements and initially planned disbursements for 2023. The first half of the year 2023 has seen a slowdown in the submission of payment requests, with Member States focusing their efforts on the revision of plans and the addition of REPowerEU chapters. As a result, many Member States with a payment request indicatively planned for the first part of 2023 have pushed back the indicative timing by one to three quarters. As detailed in Section 3, the revisions of the RRPs (not only to factor in the updated maximum contribution, but also the impact of inflation and supply chain disruptions) and the addition of REPowerEU chapters (as a response to the war in Ukraine and energy crisis) are the direct consequences of external factors, which have affected the implementation of the Facility.

As the revisions of the RRPs advanced, the submission of payment requests significantly picked up pace in the second half of 2023. Between May and December 2023, 26 payment requests were submitted and EUR 60.9 billion disbursed following the satisfactory fulfilment of milestones and targets. With most revised RRPs having been adopted, this catching-up effect is expected to continue as Member States have continued to implement the measures of their RRP. For example, 18 payment requests have been submitted very swiftly after the plans’ revisions and were being assessed by the Commission in January 2024. It is therefore a challenging, but still an achievable task to catch up on the delays experienced in the first half of 2023 in the time available until the end-2026 deadline.

Progress has been made towards achieving the RRF specific objective despite heterogeneous implementation of the RRF across Member States. Within the overall progress in the disbursement of RRF funds explained above, the situation varies across Member States. Notably, to date, three Member States have not yet submitted a payment request (Hungary, the Netherlands and Sweden). No pre-financing requests were received in 2021 from any of these three Member States, as a result of the late adoption of these Member States’ CIDs in 2022, after the legal deadline for pre-financing of 31 December 2021. Hungary has however received REPowerEU pre-financing in December 2023. In contrast, eight Member States have already submitted three or more payment requests. In line with the performance-based nature of the RRF, payments can only be made where concrete progress towards the achievement of reforms and investments, and thereby towards the RRF’s specific objective, has been made.

II.Comparison of RRF disbursements and RRF-related Member States’ expenditure

As expected, in the first years of the RRF, disbursements do not translate immediately into actual RRF-related Member States’ expenditure. Figure 6 shows that the Member States’ expenditure for the implementation of RRF measures is slightly lower than the amount disbursed to them under the RRF. The term ‘RRF-related expenditure’ refers to the occurrence of all types of costs for the general government, for the financing of measures supported by RRF non-repayable support. The data is included in the Commission’s Autumn 2023 Forecast 77 , building on Member States’ reporting in national accounts, which is recorded on an accrual basis, i.e. when the actual expenditure (or other costs) takes place and impacts on economic activity 78 . 

Figure 6: RRF disbursements, remaining RRF allocation and RRF-related Member States’ expenditure in EU-27, in EUR billion

Source: European Economic Forecast – Autumn 2023, available at: https://economy-finance.ec.europa.eu/economic-forecast-and-surveys/economic-forecasts/autumn-2023-economic-forecast-modest-recovery-ahead-after-challenging-year_en .

The first RRF disbursements included pre-financing payments that created fiscal space for Member States. Until 31 December 2021, Member States had the possibility to request pre-financing of up to 13% of their initial allocation, which was disbursed without any links to the fulfilment of milestones and targets, in order to kick-start the economy. Moreover, the performance-based nature of the RRF implies that the amounts linked to instalments do not reflect the underlying costs of the implemented measures. This holds in particular for reforms (with lower or no budgetary cost) and the preparatory or intermediary steps for both reforms and investments, such as feasibility studies and contracting/procurement steps, that tend to be concentrated in the earlier instalments of the RRPs. This implies that the RRF provided Member States with important fiscal space early on 79  after the COVID-19 crisis. The expenditure of RRF support is expected to increase and catch up with disbursements over the forecast horizon. For the EU as a whole, expenditure of RRF non-repayable support is set to reach 0.4% of GDP in 2023 (from 0.2% in 2021 and 0.3% in 2022), and to stabilise at that level in 2024-25 80 .

B. Achievement of milestones and targets

To assess the progress achieved in the implementation of reforms and investments supported by the RRF, the analysis first considers milestones and targets.

Data related to the progress with milestones and targets builds on (i) self-reported data by the Member States providing an indication of implementation progress, as well as on (ii) data on the number of milestones and targets assessed as satisfactorily fulfilled by the Commission 81 . Member States report twice per year on the progress with milestones and targets. The Commission assesses the fulfilment of milestones and targets in the context of the relevant payment requests, whilst the implementation of milestones and targets covered in subsequent payment requests is progressing simultaneously. To assess the progress made by Member States in fulfilling milestones and targets, the analysis therefore considers both datasets.

Table 4 below provides an overview of the state of implementation of the milestones and targets, presenting, for each of the elements of the RRF’s general objective and their related pillars, the ‘progress rate’ of the milestones and targets – calculated by aggregating the milestones and targets assessed as “satisfactorily fulfilled” by the Commission or reported as “completed” by Member States. It shows that the implementation of the Facility has progressed steadily across the six pillars, with around a third of the milestones and targets contributing to each objective and pillar being ‘fulfilled’ or ‘completed’. More information per pillar is provided in the next section.

Midway through implementation, it is too early to fully 82  assess how far the progress with milestones and targets (i.e. output in the intervention logic) has translated into the actual implementation of reforms and investments (i.e. results in the intervention logic). As per the RRF’s design, implemented measures, in particular investments, are still in the early stages with milestones capturing first steps in the implementation. Investments included in the RRPs are spread over the RRF timeline, but most are planned to be completed in 2025/2026. It is therefore too early to fully assess the RRF’s effectiveness towards reaching the Facility’s general objective. Examples of investments or reforms already implemented (outlined in section 4.1.2.B) are however available. They represent concrete results that have already been achieved and help illustrate the RRF’s intervention logic, from the achievement of milestones and targets to the impact on the ground, in line with the elements of the RRF’s high level objective laid down in Article 4 of the RRF Regulation.

4.1.2. Progress towards the elements of the RRF general objective

The general objective of the Facility, as defined under Article 4 of the RRF Regulation, is “to promote the Union’s economic, social and territorial cohesion”,

- by (i) “improving the resilience, crisis preparedness, adjustment capacity and growth potential of the Member States”,

- by (ii) “mitigating the social and economic impact of that crisis, in particular on women, by contributing to the implementation of the European Pillar of Social Rights”,

- by (iii) “supporting the green transition” and (iv) “the digital transition”,

“thereby contributing to the upward economic and social convergence, restoring and promoting sustainable growth and the integration of the economies of the Union, fostering high quality employment creation, and contributing to the strategic autonomy of the Union alongside an open economy and generating European added value”.

This section first presents the results available to date on the common indicators, which were agreed by co-legislators to report on the progress of the Facility towards the achievement of its objectives. It then presents, for each of the four elements of the RRF general objective laid down in Article 4 and described above, the progress achieved and the evidence available to date on the results that the measures supported by the RRF are having on the ground.

A. Common indicators

A first analysis of the data reported by Member States on the common indicators 83 sheds light on the overall progress made under the Facility. To date, the data of four reporting rounds have been reviewed to ensure comparability 84 and published on the Recovery and Resilience Scoreboard 85 , covering the progress achieved in the period from February 2020 to June 2023 86 . At this early point in time, the common indicators data cannot be complete. The picture will become clearer once the implementation of RRPs progresses further and in particular investments become operational, allowing Member States to report more advanced and mature data.

Table 3: Common indicators – progress as of 06/2023, EU level

Source: Recovery and Resilience Scoreboard

Methodological caveats apply to the common indicators. While their purpose is to report on the overall performance and progress of the Facility towards its objectives, they do not comprehensively cover all investments included in the RRPs and do not fully capture the contribution of reforms, which is difficult to measure using quantitative indicators. The collection methodology of the common indicators’ underlying data makes it at times impossible to disentangle their specific origin and contribution to RRF objectives 89 , particularly as there is no comparison point (counterfactual in the absence of the RFF). Furthermore, the common indicators do not include final target values, which limits their use in the context of an evaluation and in determining RRF effectiveness 90 . This point has been echoed by feedback received from Member States, who argue that the purpose and design of such type of common indicators should be discussed 91 . Because of these limitations, common indicators’ data is only used in this mid-term evaluation to complement the information gathered on the fulfilment of milestones and targets presented above.

B. Progress in the implementation of reforms and investments supporting the RRF’s general objective

The following section presents, for each element of the RRF general objective, evidence of the progress achieved to date and first available results providing indications of the impact on the ground of some reforms and investments supported by the RRF. The examples used stem from the dedicated case studies carried out in the context of the external support study. The purpose is to illustrate how the progress with achieving milestones and targets (output) has translated into the implementation of reforms and investments (results) that contribute to the RRF general objectives (impact).

Table 4: Progress rate of milestones and targets per RRF objective and pillars 92

Source: European Commission

I.Improving the resilience, crisis preparedness, adjustment capacity and growth potential of the Member States

The RRF has contributed to preserving public investment in the EU, in sharp contrast with other crisis episodes. It is expected to boost investment going forward, thereby providing support to Member States’ growth potential. The EU’s aggregate public investment ratio is expected to rise to 3.5% of GDP in 2025, having increased from 3.0% in 2019 to an expected 3.3% in 2023, according to the Commission’s 2023 Autumn Forecast 94 . In contrast with previous macroeconomic shocks, public investment remained robust during the COVID-19 pandemic and the energy crisis. The 2023 Autumn Forecast also finds that approximately half of the increase in public investment between 2019 and 2025 is related to investment financed by the EU budget, particularly by the RRF. By the end of the forecast horizon, national budgets in most EU Member States are projected to devote more resources to investment than they did prior to the pandemic, with Slovenia, Portugal and Italy expected to record the largest increases. In contrast, Hungary, and to a lesser extent the Netherlands, are set to reduce their nationally financed investments compared to 2019.

The RRF supports a wide range of measures contributing to the objective “to improve the resilience, crisis preparedness, adjustment capacity and growth potential of Member States”. The measures are diverse and cover various policy areas, from health- and long-term care to the effectiveness of judicial systems and anti-money laundering supervision 95 . The RRF also supports measures that directly contribute to fostering the growth potential of Member States, ranging from reforms to support the business environment or competitiveness, to research and development and innovation, or to the cultural sector. This view is supported by the academic literature, with some authors 96 considering that the contribution of the RRF in support of institutional resilience mostly come from investments and reforms aimed at modernising public administrations and improve the effectiveness and integrity of public governance institutions. They show that 39% of the reforms supported by the RRF in euro area countries relate to the public sector, notably reforms in health care, in the judiciary and tax administration – and note that, before the introduction of the RRF, progress in these areas was particularly slow 97 . A majority of respondents in the public consultation 98  also agreed that the RRF fosters the growth potential of the EU to some or a large extent. 

The balance between reforms and investments varies across policy areas. There are more investments aimed at strengthening the Member States’ strategic autonomy (33 investments versus four reforms) 99 , improving their crisis preparedness (39 investments versus 11 reforms) or modernising and strengthening health care (196 investments versus 94 reforms). In contrast, there are more reforms than investments in areas related to fiscal policy (65 reforms versus seven investments), taxation (70 reforms versus 11 investments), rule of law (39 reforms versus two investments) and fraud prevention (54 reforms versus 14 investments) or interventions to improve the effectiveness of public administrations (290 reforms versus 208 investments). 

There has been significant progress in implementing measures related to resilience and growth potential, with over 40% milestones and targets contributing to these RRF objectives reported as completed by Member States or assessed as satisfactorily fulfilled by the Commission (see Table 4). 962 of 2,317 milestones and targets contributing to resilience and 1,152 of 2,780 milestones and targets contributing to growth are reported as completed by Member States or assessed as fulfilled by the Commission (680 milestones and targets for reforms and 282 for investments contributing to resilience; 591 milestones and targets for reforms and 561 for investments contributing to growth), which yields a progress rate of 41% (over 20% assessed in payment requests) for both pillars combined. As aforementioned, it is too early to assess in how far this progress (an output) has translated into the actual implementation of reforms and investments. However, some evidence points to the results achieved so far.

Business organisations had an overall positive view of the EU’s efforts in addressing the post-COVID economic challenges 100 . RRP measures designed to bolster economic recovery and resilience, while overall relevant, have however not always addressed the needs of SMEs. Progress in implementing SME-related measures varies across Member States, with some SME stakeholders raising issues related to the slow speed of RRF funds in reaching the ultimate recipients and pointing to the complexity of RRF supported programmes, designed at national level, which negatively affects SMEs participation 101 . The issues conveyed by SMEs primarily need to be addressed at Member States level. In its proposal for a Strategic Technologies for Europe Platform (‘STEP’) from June 2023, the Commission proposed a single ‘Sovereignty portal’ where SMEs, as well as other businesses, would be able to find all information about existing funding opportunities for STEP-related investments, including under the RRF, and relevant contact details of national authorities 102 .

Data on the common indicators 103  point to positive results in the areas of improving the effectiveness of public administrations and increasing healthcare capacity. 21 Member States have reported approximately 309 million users of new or upgraded public digital services supported by RRF measures, although the data cannot exclude that the same person has used the service multiple times. As regards the increase in healthcare capacity (in terms of the maximum number of patients per year), nine Member States have reported a total of 45.8 million additional capacity of new or modernised healthcare facilities supported by the RRF. The common indicators also show that over 17,500 researchers have been supported by the RRF across 17 Member States.

Numerous resilience-enhancing measures in the health sector have already been implemented and led to tangible results 104 . For example, in line with its RRP, Spain has made progress in purchasing and installing new medical equipment. In Estonia, a regulation expanding the list of healthcare services and pharmaceutical products reimbursed by the Estonian Health Insurance Fund entered into force on 1 April 2023. The digitalisation of healthcare is also included in many RRPs, and the use of e-consultations and digital tools has improved patient care and access to specialists in some Member States 105 , thereby positively impacting the national healthcare systems. For example, Croatia has already procured and deployed medical and computer equipment to 40 primary healthcare locations in remote and rural areas, via the Telecordis project. The equipment installation has resulted in 356 telemedicine services provided, allowing for the reading and interpretation of diagnostic results. The project has also resulted in improved access to diagnostic services, quicker diagnosis, and enhanced healthcare quality in rural areas.

More generally, some resilience-enhancing reforms implemented to date are already showing positive results, although it is too early to evaluate their full impact on resilience, crisis preparedness, adjustment capacity and growth potential of the Member States. For example, in line with their RRP, Croatia has implemented 106  various legislative measures that aim to establish a legal, organisational, and technological framework to reduce backlogs, shorten proceedings in civil and commercial courts 107  and strengthen the transparent and efficient administration of cases. Despite the short time since the adoption of the measures (in 2022 and 2023), there are already some results in terms of reduction of the duration of litigation in civil and commercial cases: the time taken to resolve a civil case has been reduced by almost 100 days at the end of 2022, compared to 2020 figures. The time needed to resolve a commercial case has also been reduced by more than 50 days, which illustrates 108 In Italy, several measures related to a series of structural public administration reforms 109  have already been implemented to date, in particular the activation of the ‘Recruitment Portal’. This is a single platform where administrations, employees and those interested in entering the civil service can find all data concerning job opportunities in the public sector, access procedures and their implementation 110 . The effect of this public administration, combined with other upcoming structural reforms 111 included in the Italian RRP, is expected to have a positive impact on GDP, on aggregate investment and consumption, on labour productivity, as well as well as a range of positive social impacts 112 .

The RRF also supports structural reforms aimed at strengthening the rule of law, and in particular judicial independence. These structural reforms outlined in the Semester CSRs are relevant to protect the EU financial interests and strengthen the business environment in the Member States concerned and are expected to have an impact on its growth potential 113 . For example, Hungary, Romania and Poland have included in their RRPs reforms aimed at strengthening judicial independence. Whilst it is too early to assess the results of these reforms, particularly since the content of these reforms has not yet been notified to or assessed by the Commission by February 2024, the mere fact of having included them in their respective RRPs can be considered as a positive step 114 . This view is supported by academic authors 115  who discuss the potential role of the European Semester and the RRF to address rule of law issues and conclude that the RRF has become a powerful tool to make progress to protect the rule of law.

II.Mitigating the social and economic impact of the crisis, in particular on women, by contributing to the implementation of the European Pillar of Social Rights

One of the objectives of the RRF is to mitigate the social and economic impact of the COVID-19 crisis. The Regulation specifically calls for the RRF to improve the social and economic situation, while making a particular reference to the effect on women. In order to analyse the progress achieved in this area, this evaluation first discusses the progress achieved with the implementation of milestones and targets in the areas of social and territorial cohesion as well as policies for the next generation, children and the youth, such as education and skills. Furthermore, it looks at measures contributing to gender equality. 

The RRPs coverage of social and territorial cohesion is more present in some plans than others, with good overall progress. In some Member States (e.g. Spain and Italy) social and territorial cohesion is streamlined across all components of the RRP. 876 of the 2,590 milestones and targets contributing to social and territorial cohesion are already reported as completed by Member States or assessed as fulfilled by the Commission (431 milestones and targets for reforms and 445 for investments), representing a 34% progress rate (15% assessed in payment requests).

Progress is also tangible for the milestones and targets contributing to policies for the next generation, children and the youth, such as education and skills. So far, 222 of 636 milestones and targets are already reported as completed by Member States or assessed as fulfilled by the Commission (105 milestones and targets for reforms and 117 for investments), which yields a progress rate of 35% (17% assessed in payment requests). Positive advancement has also been shown as regards milestones and targets for measures related to the cultural and creative sectors, with 62 of 195 milestones and targets reported as completed by Member States or assessed as fulfilled by the Commission.

Member States are also progressing with the implementation of measures with a focus on gender equality and equal opportunities for all. The 27 plans adopted contain 134 (sub-)measures with a focus on gender equality, and many reforms and investments that are explicitly aimed at contributing to equal opportunities in general 116 . Of the 256 milestones and targets with a focus on gender equality in the 27 RRPs, 83 are already reported as completed or assessed as fulfilled, representing a 32% progress rate (approximately 13% positively assessed).

Data on the common indicators 117 point to positive results in improving social, economic and territorial resilience following the pandemic. With support received through the RRF, 13 Member States have reported that over 1.3 million people have either found employment or engaged in job searching activities and 20 Member States reported that over 8.7 million have participated in education and trainings to improve their skills. In addition, classroom capacities of childcare and education facilities have increased by over 246,000 persons per year across the seven Member States who reported on this.

The RRF has helped in addressing social, economic and territorial challenges, in line with the relevant European Semester CSRs. For example, Spain, France, Italy and Croatia have included ‘Active Labour Market Policies’ (‘ALMP’) that address a number of key labour market challenges in line with their CSRs in 2019 and 2020.

The final labour market impact of measures cannot be evaluated at this stage, given the short time horizon and the time lag in observing impacts on the labour market, but first examples of results are emerging. Therefore, further monitoring and evaluation of the ALMP measures will be needed 118 . Nonetheless early evaluations for the youth subsidy measure in France, which was satisfactorily fulfilled in the context of France’s first payment request, suggests that the measure had a positive effect on the quality, if not quantity, of employment for young people 119 . Research on France’s youth hiring subsidy measure shows that it was associated with a 6% increase in the number of subsidised contracts of long duration – i.e. the contracts eligible for the youth hiring subsidy. Despite this increase, the measure did not have effects on the total employment of young people, as the new contracts substituted for non-salaried and substitute employment. The measure did, however improve the quality of employment, in line with the objective of the measure to reduce labour market segmentation 120 . Another example concerns Spain, which adopted in December 2021 a labour market reform that generalised the use of open-ended contracts and incentivised the internal flexibility of firms, striking a long-awaited balance between workers’ protection and firms’ flexibility. Recent data from the Bank of Spain 121 confirms that the reform was successful in meeting its objectives of increasing the number of open-ended contracts and reducing the number of temporary or fixed-term contracts.

III.Progress on supporting the green transition

The green transition is a key focus of the RRF and has been allocated a significant amount of RRF funding across all Member States. The total number of (sub-)measures contributing to the green transition is 983 (sub-)measures (262 reforms and 721 investments), including over 2,600 milestones and targets (576 for reforms and 2,046 for investments) 122 . The biggest expenditure supporting the in all the RRPs has been allocated to sustainable mobility (31%), followed by energy efficiency (29%) and renewable energy and networks (14%). In addition, all Member States’s RRPs have exceeded the target of 37% of total allocation set in the RRF Regulation, with the total estimated climate expenditure amounting to EUR 275 billion or over 40% of the total plans’ allocations. Several Member States are even dedicating over half of their total allocation to climate objectives, such as Austria, Bulgaria, Denmark, Estonia, Luxembourg, Malta, and Finland. 

Progress in implementing measures related to the green transition has been good overall. Over third of milestones and targets have been reported as completed or assessed as satisfactorily fulfilled by the Commission. Specifically, 908 of 2,625 milestones and targets related to the green transition are already reported as completed by Member States or assessed as fulfilled by the Commission (319 milestones and targets for reforms and 589 for investments), which yields a progress rate of approximately 35% (17% assessed in payment requests). Given that final effects will only materialise in the longer term, it is too early to assess the RRF’s impact on the green transition overall and to gauge the impact of green-transition measures more specifically. Nonetheless, the already fulfilled ‘green’ milestones and targets have helped increase momentum for the green transition 123 , as exemplified below. 

Data on the common indicators 124 point to positive results in the areas of energy savings and deploying renewable energy infrastructure. 15 Member States have reported already achieving about 28 million Megawatt-hours of savings in annual primary energy consumptions, 10 reported over 54,000 Megawatt of additional operational capacity for renewable energy, and 15 reported installing over 530,000 new or upgraded refuelling and recharging points for clean vehicles. Overall, the primary energy savings achieved so far approximately correspond to the installed electricity capacity in Belgium. 

Whilst it is too early to draw conclusions on impacts of measures addressing energy efficiency in buildings, some examples of results are emerging. For example, whilst France and Romania are making good progress towards implementing their milestones and targets for energy efficiency in buildings, Latvia is experiencing some delays, and Bulgaria is lagging behind 125 . France is one of the few Member States that already reports energy savings, with 3.0 Terawatt-hour in savings reached by end of 2022, mostly via schemes concerning heating and domestic hot water. Energy efficiency measures are however long-term construction projects by nature, and it is too early to draw firm conclusions about energy savings impacts for most other Member States, despite their achievement of various outputs laid down in the milestones and targets in the Council Implementing Decisions (such as published calls for tender, applications to energy-efficiency calls for tender, granted projects etc). Other examples illustrate how RRF-supported measures are having an impact on the ground. For instance, with the aim to develop clean mobility solutions to decarbonise the transport sector, Germany adopted a reform on a ten-year tax exemption for purely electric vehicles. Data from the German Federal Motor Transport Authority 126  demonstrates that there has already been a steady growth in pure electric vehicles in Germany, suggesting that the measure is delivering good results in this sector in Germany. Overall, most respondents in the public consultation 127  consider that the RRF has contributed or will contribute to the green transition (62%) and the European Green Deal (64%) to some or to a large extent.

Member States recognise the Do No Significant harm (‘DNSH’) principle as a new feature that has strengthened the ‘green’ dimension of RRF reforms and investments and helps achieve the RRF’s green objectives, according to the results of the public consultation and a survey of key RRF stakeholders 128 . EU and national respondents expressed their satisfaction with the novelty of the principle and its potential to shape investments in line with the European Green Deal objectives, noting that the principle could have positive “spillover effects” into national policy systems and improve the environmental sustainability of Member States’ public investments. 

IV.Progress on the digital transition

The RRF supports various measures contributing to the digital transformation in the Union. RRPs cover a range of measures, including deployment of next generation digital infrastructures and advanced technologies, digital skills development for the population and the workforce, and support to the digitalisation of enterprises as well as of public services 143 . Member States have exceeded the target of 20% of total allocation set in the RRF Regulation, with the total estimated digital expenditure amounting to EUR 130 billion or 26% of the total plans’ allocations.

Member States have made significant progress in implementing measures related to the digital transformation, and nearly a third of related milestones and targets are reported as complete or assessed by the Commission as fulfilled. 721 of 2,297 milestones and targets related to the digital transformation are already reported as completed by Member States or assessed as fulfilled by the Commission (262 milestones and targets for reforms and 459 for investments), which yields a progress rate of 31% (approximately 15% assessed in payment requests).

Data on the common indicators 144 point to positive results related to the digital transformation. Seven Member States reported that an additional 5.6 million dwellings had received internet access via high-capacity networks with support received under the RRF. In addition, 21 Member States reported that the number of users of new or upgraded public digital services had increased to almost 309 million users 145 .

Some of the measures implemented in the digitalisation of health are already showing results on the ground 146 . The digitalisation of health has been a top priority for the EU in recent years and many Member States – Belgium, Croatia, Czechia, Denmark, and Estonia amongst others – have already implemented measures related to the digitalisation of national healthcare systems as part of their RRPs. These measures include eHealth services, telemedicine solutions, and improvements in healthcare data management and they have been effective in achieving their objectives, such as empowering patients, optimising healthcare delivery, and fostering innovation 147 . As aforementioned in Section 4.1.2.B.i., these measures have also positively impacted healthcare systems, including the use of e-consultations and digital tools to improve patient care and access to specialists in Croatia and in other Member States 148 .

While investments in the digital sector are still in the early stages, a number of reforms supporting the digital transformation have been implemented and are starting to have an impact on the ground. For example, Romania adopted a reform to accelerate the national roll-out of 5G networks, in accordance with security regulations, and to provide broadband coverage for white areas (small rural municipalities, isolated localities, disadvantaged inhabited areas), tackling the rural-urban digital divide, reducing the administrative burden and streamlining procedures and fees, creating the prerequisites for equal access to digital services and internet access 149 . Belgium’s 5G reform introduced in 2021, and supported by the RRF, led to a significant increase in 5G traffic in 2022 150 .

Many RRPs contain measures to develop digital skills and some have already been implemented 151 . Over 25,000 people in France have signed up for a training for digital skills thanks to an investment contained in the French RRP to top-up individual learning accounts for digital skills. In turn, the Italian RRP aims for 700,000 individuals at risk of digital exclusion to have benefitted from facilitation and education services for the development and improvement of digital skills by the end of 2025.

4.1.3. Effectiveness in supporting reforms: a key feature of the RRF

Progress on the implementation of country-specific recommendations

The RRF’s ability to support the implementation of reforms can be considered as one of the most effective features of the instrument 152 , and the RRF has proven to be a key tool to deliver on the European Semester’s CSRs 153 . In line with the RRF Regulation, Member States were required to effectively address in their RRPs all or a significant subset of the challenges identified in the relevant CSRs. In addition, milestones related to the protection of the financial interests of the Union in all Member States must be satisfactorily fulfilled before any RRF payment can be disbursed following a payment request. There is unanimous agreement between Member States and the various EU institutions, including the European Parliament 154 and the European Court of Auditors 155 , that the RRF has been effective in supporting CSR-related reforms 156 . Relevant literature 157 confirms this view, recognising that the RRF has contributed effectively to the support of reforms that otherwise would not have been implemented. Most stakeholders interviewed 158 also confirm that the RRF has contributed to putting on the agenda long-awaited reforms linked to the CSRs that would otherwise have had little chance of being implemented.

The RRF has significantly accelerated policy action to implement CSRs which was considered slow in the past 159 . The European Court of Auditors 160 found that, over the 2011-2017 period, only 1.6 % of CSRs were deemed to have been ‘fully implemented’ within one year after issuance, and that only 26 % of the CSRs have been implemented over the full 2011-2018 period. In the two years preceding the RRF, the share of 2016-2017 CSRs reaching at least ‘some progress’ increased by only six percentage points from 53% in 2018 to 59% in 2020. In comparison, the share of 2019-2020 CSRs reaching at least ‘some progress’ increased by 17 percentage points from 52% in 2021 before the RRF to almost 69% in 2023, after two years of RRF implementation (see Figures 7 161 and 8). Since the start of the implementation of their RRPs, Member States have made most progress on access to finance and financial services, followed by labour market functioning, anti-money laundering and business environment. At the same time, in the first years of implementation of the RRF, progress has been less visible in the areas of the single market, competition and State aid, housing, long-term care and pension systems, even if relevant reforms are foreseen in the RRPs and are expected to be implemented in the years ahead. Progress in the implementation of the recommendations adopted in 2022 has also been substantial. Member States have made at least ‘some progress’ in almost 52% of the recommendations addressed to them in July 2022.

Note: The multiannual assessment on the left graph looks at implementation of CSRs adopted 2019-2020 from the time the recommendations were first adopted until May 2023. The CSR assessment takes into account the degree of implementation of the measures included in the RRPs and of those done outside of the RRPs at the time of assessment. Measures envisaged in the Annexes of the adopted Council Implementing Decisions on the approval of the assessment of the RRPs, which have not yet been adopted or implemented but are considered as credibly announced in line with the CSR assessment methodology, warrant ‘limited progress’. Once implemented, these measures can lead to ‘some/substantial progress’ or ‘full implementation’, depending on their relevance.

Source: European Commission

The financial incentives provided by the RRF is one of the main factors in reinforcing the implementation of CSRs 162 . The fact that financial support is conditional upon the implementation of reforms is the most relevant factor explaining the RRF's success in triggering structural reforms that address the European Semester’s CSRs. This is recognised by interviewees, stakeholders and external evaluators. On average, the link between implementation of CSR-related reforms and financial support is stronger for Member States that receive a larger size of the financial support: those that receive a proportionally bigger financial envelope in terms of their GDP are more likely to commit to and implement structural reforms. Moreover, the RRF serves as an incentive for Member States to internally steer the political debate and overcome potential resistance against structural reforms. Furthermore, some observers have emphasised the positive role that the steering and incentives provided by the RRF are having on Member States, by fostering their commitment to the measures and timelines in their RRPs 163 .

Some of the key reforms included in national plans have already been successfully implemented and are delivering results on the ground. A number of reforms supported by the RRF have already been introduced across a wide range of policy areas: labour market, social protection and pensions, education and training, civil and criminal justice, public administration, including digitalisation of the public administration, spending review and public finance governance, anti-money laundering, licensing simplification reforms to boost the investments in renewables, roll-out of renewable energy and sustainable transport, introduction of 5G and broadband, structural reform of the education system, anti-corruption and tax planning 164 . Some have already led to tangible results: For example, Spain adopted in December 2021 a labour market reform that generalised the use of open-ended contracts by restricting the use of temporary contracts and reducing the contract menu and incentivised the internal flexibility of firms with the introduction of the RED mechanism, striking a long-awaited balance between workers’ protection and firms’ flexibility. Recent data from the Bank of Spain 165  confirms that the reform was successful in meeting its objectives of increasing the number of open-ended contracts and reducing the number of temporary or fixed-term contracts (see Section 4.1.2.B.ii). As mentioned above, results also show that, for example, the justice reform implemented in Croatia is already delivering on reducing the time needed to resolve civil and commercial cases 166 , or that the public administration reform in Italy is expected to have a positive impact on labour productivity and labour force upskilling 167 . 

4.1.4. Positive externalities

The RRF had a positive effect on reducing the risks associated with sovereign-bank loops in the context of the COVID-19 crisis. Stylised simulations 168 show that the crisis response policies of the EU strongly mitigated the risks associated with sovereign-bank loops 169 in euro area countries in connection to the COVID-19 crisis. Together with the monetary policy measures taken by the ECB, the creation of the contributed to macro financial stability in the aftermath of the COVID-19 pandemic, providing a structural policy commitment and financial safety net that avoided heightened market pressure on public finances and potential financial risks.

The implementation of the RRF has also triggered positive effects for policy planning at the national level 170 . The RRF has contributed to improving inter-institutional coordination in the design of national reforms and investments 171 . In Slovenia, for example, the tight deadlines for the implementation of the RRP have helped the national government and stakeholders to jointly focus on efficient implementation 172 . In addition, relying on national implementing bodies with experience in EU funds proved useful in dealing with the Commission. In Austria, the performance-based nature of the RRP served as a blueprint and inspired the setting-up of an instrument at national level for the distribution of funds between different levels of government that is linked to pre-defined quantitative and qualitative targets. This may potentially have positive repercussions, including for decentralised States more generally 173 . Stakeholders 174  further conveyed that the performance-based approach brought predictability and accountability, resulting in a “cultural shift” in policy planning and implementation. Overall, in some Member States, the RRF has changed implementation at national level by improving national governance and coordination and by accelerating delivery with a clear medium-term deadline (2026).

The implementation of the RRF has also triggered some positive effects in terms of EU governance. With the RRF, the Commission and Member States have established a regular dialogue, based on the bottom-up nature of the instrument. This engagement has been built on more than ten years of experience with the European Semester, while becoming more comprehensive, detailed and practical in the context of the Commission’s responsibilities for assessing RRPs and the related payment requests. Overall, stakeholders 175 confirmed that the Facility has deepened the dialogues and exchanges between Member States and the Commission on investments and reforms compared to the pre-2021 European Semester.

4.1.5. Limiting factors for the effectiveness of the Facility

Factors limiting the effectiveness of the Facility concern both the design and the implementation of the instrument, as described below.

A. Limiting factors related to the design of the Facility

The comprehensive audit and control framework enshrined in the RRF Regulation appears to have negatively affected the speed of implementation of the RRF, with some stakeholders 176 , notably Member States authorities, calling for simplification 177 . Member States reported on the high workload stemming from different audit and control requirements related to the RRF. At the same time, audit and control procedures are considered complex by stakeholders and there is a perceived overlap between controls and audits by national authorities, the Commission and the ECA. Consultation responses suggest that the resulting resource needs reduce efficiency as those resources could otherwise have been dedicated to the implementation of the plans. Member States see room for simplifying control and audit procedures, ensuring better coordination among the actors involved and avoiding multiple checks. Whilst identifying potential areas of simplification is always relevant, there is also an onus on ensuring a proportionate approach to managing public money, given the scale of the budget and the relative novelty of the approach.

The inclusion of a combination of milestones and targets in each instalment ensures that balanced progress with both reforms and investments is being made, but the fixed composition of each instalment has also been reported to slow down RRF disbursements. The RRF Regulation requires Member States’ RRPs to propose a combination of reforms and investments and link them to instalments. The purpose is to avoid “cherry picking” and ensure a balanced progress of both reforms and investments, including when political challenges emerge ahead of difficult structural reforms. Stakeholders, in particular Member States authorities, however report that Member States avoid submitting payment requests before all milestones and targets envisioned for the specific instalment have been fully completed, which can lead to significant delays in payments if only one or a few of the milestones and targets are pending 178 . During the stakeholder interviews, national authorities accompanied this problem description with a call for more flexibility in (re)grouping milestones and targets for a specific payment request. At the same time, it also has to be noted that in February 2023, the Commission published a methodology for partial suspension of payments, which provides more transparency on the suspended amounts. The suspension procedure thus gives more flexibility to Member States who can (and do) now submit payment requests where not all milestones and targets have been fulfilled (yet).

B. Limiting factors related to the implementation of the Facility

Since the inception of the RRF Regulation in 2021, a range of unforeseeable external factors have markedly changed the economic and geo-political context in the EU and made the implementation of the RRF more challenging. Russia’s war of aggression against Ukraine led to a spike in energy prices in 2022, exposing the vulnerabilities linked to the dependence on Russian fossil fuels. It has also driven inflation to levels unseen in decades, increasing price levels for all Member States and causing ‘cost of living’ difficulties for many households. The RRF has not been unscathed by the current global events, with inflation, issues in global supply-chains and labour shortages affecting the implementation of many RRF measures across the Member States.

In response to these challenges, Member States have used the opportunities offered in the RRF Regulation to amend their RRPs, which has however slowed down implementation. In response to inflation and supply-chain issues, Member States have reacted by (i) using national resources or additional RRF funding to bridge the gap between the actual current cost of their measure and what their initial RRF envelope is able to cover, (ii) adapting the targets to the increased costs, (iii) replacing investment projects that are no longer feasible from their plans, and/or (iv) postponing the initially foreseen timeline for the implementation of milestones and targets. At the same time, applying these changes to the RRPs programming takes some time and the implementation of some measures has been put on hold, resulting in delays and an overall slow-down of the implementation. It is important to note however that delays in the submission of payment request do not necessarily translate into implementation delays. The Member States’ on-the-ground implementation of most investments and reforms has continued, as evidenced 179 by the number of milestones and targets reported as ‘completed’ by Member States even though not yet assessed by the Commission under a formal payment request (as highlighted in Figure 5 in Section 3.2.4. and as discussed throughout Section 4.1.2.), even if the submission of payment request has not followed the indicative timeline.

Limited absorption capacity 180  hampers the effectiveness of the RRF implementation in some Member States. When the RRF was adopted, several observers 181 pointed to the risk of absorption capacity of the significant RRF funding, which would come in addition to the remaining EU Structural Funds from the 2014-2020 period, and the new Structural Funds for the 2021-2027 period. The actual payments of structural funds depend on the ability of beneficiaries to use the funds, which vary significantly across Member States 182 . Under the RRF, as payments are made upon the fulfilment of milestones and targets (related to both investments and reforms – performance-based approach), the absorption capacity is closely linked to the administrative capacity of Member States to implement the pre-agreed agenda of reforms and investments. In this context, the Committee of the Regions stressed that many Member States did not sufficiently strengthen administrative capacity at local and regional levels, which is a precondition to ensure proper implementation of the plans and an adequate take-up of the RRF funds.

The administrative work required at national and sub-national level to implement the RRF is higher than initially expected by Member States 183 . Some Member States have not been able to mitigate the increase in the workload of administrations observed at both national and local levels 184 . Overall, Member States that experience administrative and staff shortages have noted that the administrative burden has resulted in delays affecting RRP implementation. Research 185 illustrates how low administrative capacity, especially at local level, can affect the implementation of RRF-supported investments. The authors analysed the implementation of investments supported by the RRF in ‘Early Childhood Education and Care’ in four Member States (Italy, Spain, Germany and Portugal), which are traditionally run at local level. They found that two key obstacles in implementation relate to (i) the lack of support/technical assistance to local authorities to develop projects’ proposals; and (ii) the lack of personnel especially at local level.

More generally, an adequate administrative capacity within Member States is key to supporting the effectiveness of RRF implementation. To ensure the effective implementation of their plans, some Member States put in place measures to strengthen their administrative capacity, such as reforms and investments aimed at modernising the public administration, including improving the transparency and effectiveness of tendering procedures and their compliance with EU legislation. These reforms were added in the RRPs to address specific regulatory hurdles and investment bottlenecks identified and have often been implemented early in the RRPs. Some Member States also included more specific interventions to directly support the administration to implement the plans. This comprises measures to improve the organisation, capacity and means of national administrations directly involved in the implementation of plans that can rely on the technical assistance from the Commission provided via the Technical Support Instrument (‘TSI’). This capacity building support is aimed at strengthening their institutions and their capacity to implement reforms. 23 Member States have received or are currently receiving general support for the horizontal aspects of RRP implementation, including support for the revision of the plans, while all 27 Member States are benefiting from the thematic support linked to RRF measures’ implementation 186 . In addition to the TSI, another sectoral instrument available to Member States to support them in implementing RRF reforms is the Horizon Policy Support Facility. Member States such as Romania and Croatia have already requested and benefited from this support to help them implement key structural reforms of their national R&I systems foreseen in their plans. 

Local and regional authorities, as well as social partners and civil society organisations, pointed to their insufficient involvement by Member States in the preparation and implementation of the RRPs. When submitting their RRPs, Member States were required (under Article 18 of the Regulation) to include a summary of the consultation process of local and regional authorities, social partners, civil society organisations, youth organisations and other relevant stakeholders, explaining how the input of the stakeholders was reflected in their RRP. The involvement of social partners, local and regional authorities also positively contributes to the effectiveness of the RRPs’ implementation. The involvement of social partners has played a key role in speeding up the adoption process of some key reforms, especially for labour market or social policy reforms. Relevant stakeholders (including local and regional authorities or civil society organisations) have however complained about their insufficient involvement in the national context, both in the preparation and the implementation of the plans. The European Economic and Social Committee, in its report 187 informing the mid-term evaluation of the RRF, specifically called for a greater involvement of organised civil society in the implementation of the RRF, through formal, structured consultation processes. As regards sub-national authorities, according to a survey conducted by the European Committee of the Regions 188 , cities and regions reported a low involvement in the monitoring and implementation of the RRF plans. The overall low involvement of stakeholders by national governments for the preparation of the plans can partly be explained by the exceptionally condensed time available for programming of the RRPs during the COVID-19 crisis and by the various degrees of consultation. 

While recognising the improvements made by the Commission, some Member States 189 consider that the Commission’s guidance on the RRF was not always sufficiently timely and clear. Most Member States interviewed during the evaluation consider that the Commission’s communication for the preparation of the RRPs in September 2020 was timely and clear 190 . However, with regard to the specific guidance on the DNSH principle from February 2021, a number of Member States regretted that it was published too late 191 in the drafting phase of the plans. Some Member States had to modify their plans following the publication of the guidance, which caused additional burden and slowed down the implementation process. Moreover, some Member States are also of the view that the Commission’s Communication in February 2023 on the framework used for assessing milestones and targets and for the payment suspension methodology came rather late – and a majority of Member States consider that the payment suspension methodology remains unclear when it comes to reforms because of the discretion given to the Commission in applying the methodology. To a lesser extent, a number of Member States conveyed that the informal dialogue with the Commission for the preparation and revisions of the plans and ahead of the submission of payment requests add administrative burden, suggesting for example to reduce the rounds of comments by the Commission to Member States on the documentation to be submitted for payment requests. The Commission however sees this informal dialogue as a key element facilitating a smooth and swift processing of payment requests.

4.2. Efficiency

This section assesses how the costs of implementing the Facility compare with its benefits, including an assessment of administrative burden and complexity with potential areas for simplification.

4.2.1. RRF design

There are efficiency gains by supporting reforms and investments under one instrument. With RRPs combining both reforms and investments in one plan, they contribute to a more coherent sequencing between the two and encourage Member States to undertake reforms that will enhance the impact of investments. Accordingly, a majority (59%) of survey respondents 192 consider that combining reforms and investments in one instrument leads to some or significant efficiency gains. Member States also report that coordinating the two is simpler when they are combined in one planning process 193 .

The performance-based approach of the RRF is a key factor in enhancing efficiency. In the implementation of the RRF to date, the performance-based nature of the instrument, with financing not linked to cost, had led to strong commitments by Member States and provided incentives for them to deliver on the agreed measures within a clear timeframe. The results of the public consultation show that a majority of stakeholders supports this view 194 .

Demanding reporting requirements and a lack of flexibility 195  are perceived as affecting the efficiency of the instrument. The various reporting requirements specified in the RRF Regulation (reporting on the achievement of milestones and targets; bi-annual reporting; reporting in the context of audits; reporting on the common indicators) have reportedly affected the efficiency of the instrument, with some Member States calling for simplification 196 . Several national coordination bodies consider that the common indicators, while anchored in the Regulation, have limited added value as they are not directly linked to tracking results of reforms and investments. Member States also conveyed a perception of rigidity in the interpretation of milestones and targets fulfilment by the Commission, even though the Communication of February 2023 197 was acknowledged as an important step to clarify the margins of manoeuvre for Member States, especially when it comes to investments.

4.2.2. RRF governance and implementation

The RRF-related governance in Member States influences the efficiency of the RRP’s implementation, in particular through the degree of centralisation of the decision-making process. Centralisation is reinforced by the performance-based approach of the RRF and the requirement to maintain a single national point of contact for verifying the fulfilment of the relevant milestones and targets in support of scheduled payment requests 198 199 . While the programming of the national RRPs required a certain centralisation in all Member States, differences emerge in the governance of implementing the plans, which affect the efficiency of the RRF. One of the main differences concerns the involvement of the Prime Minister’s office, which tends to be correlated with a smoother implementation of the plans due to increased political ownership and enhanced capacity to steer internal decision-making processes. This is particularly the case for reforms.

The involvement of social partners and local/regional stakeholders also matter for the efficiency of the implementation of RRPs. The different degree of involvement of sub-national authorities in the design and implementation of the plans also affected the efficiency of the plans, in particular investments 200 . For example, some regions conveyed that the RRP measures chosen by their central governments did not always align with the local priorities: in their views, more participation of local/regional authorities during the development of the RRP could have resulted in a more efficient use of the funds to target local priorities 201 . For investment involving local authorities, such as for example the construction of childcare facilities 202 , some challenges have emerged as negatively affecting the implementation of the measures, notably: the lack of resources to cover recurrent costs, the tight timeline and lack of technical capacity of municipalities to present projects in time, and the lack of qualified personnel to run the new infrastructures. 

4.2.3. Cost-benefit assessment

In the absence of a counterfactual, quantifying the ‘benefits’ of the RRF to compare them to the ‘costs’ requires using macroeconomic models to estimate the benefits of the RRF. The results of the macro-economic simulations, both in the evaluation study (NiGEM model) and by the Commission (QUEST model), have been presented in section 2. At this juncture, it is too early to go further. A full cost-benefit analysis will be conducted as part of the ‘ex-post’ evaluation.

As it is a new instrument, the RRF created inevitable entry costs, but with differences across Member States. An overview of the administrative costs incurred by Member States in implementing the RRF was established based on a survey of national coordination bodies 203 . The latter have counted the number of full-time equivalents (‘FTEs’) involved both for one-off and recurrent activities linked to the implementation. While there were significant variations across Member States in FTEs declared by coordination bodies – from a handful of FTEs in some Member States to over 100 FTEs in other – the survey results demonstrate that there have generally been high entry costs for national administrations to become familiar with the functioning of the RRF. According to representatives of most Member States (17 out of 21 for which feedback was provided), the implementation of the RRF required new skills and knowledge as national administrations were not familiar with all formal requirements for implementing RRF projects, especially those related to reporting and verification based on results.

The variations in administrative costs incurred by Member States depend on specific characteristics of the RRPs, such as the financial size of the plan or the number of measures devoted to investments. As many administrative tasks are not related to the size of a plan, smaller plans tend to be relatively more costly than larger plans. For example, in Germany and Poland (which have the two largest RRPs among those for which administrative costs are available), the administrative costs per euro of funding are notably low 204 . The total number of measures supported, in particular the number of investments, and the number of final recipients also matter: more investments and more final recipients is associated with more administrative workload.

Similar to other instruments, the administrative costs linked to the implementation of the RRF have increased over time 205 . Most respondents (72%) in the survey of national authorities convey that the costs linked to the implementation of the RRF have increased over time 206 . However, only 18% of the respondents rated the increase as substantial. The cost increase is attributed to the demanding reporting requirements, as well as audit and control requirements, which turned out to be more extensive than initially anticipated. Meeting them has required more resources, time, and personnel than initially expected. The implementation in the first half of the lifetime of the RRF has been described as a ‘learning-by-doing' experience by many stakeholders, including Member States and local or regional authorities. The administrative costs generated by the RRF vary significantly across Member States, with findings affected by the availability of data and governance choices concerning the implementation of RRPs at national level. In some Member States (e.g. Bulgaria, Estonia, Lithuania), existing structures have been adapted to manage the RRF, while in others (e.g. Belgium, Croatia, Portugal) new structures have been set up to coordinate the implementation of the RRP (e.g. new directorate or task force). Overall, the cost increase over time is however comparable to similar investment programmes, such as the Cohesion Policy. Indeed, for the Cohesion programming period 2014-2020, the administrative workload has built up from the start of the programme preparation to reach a peak in 2017-2018, and then declined towards closure after 2022 207 . Over time, the administrative burden associated with the RRF is expected to decrease as Member States authorities gain more experience.

In particular, Member States have highlighted the need to mobilise more resources than initially planned to revise the RRPs. According to Member States 208 , the efficiency of the performance-based approach is reduced by the ‘excessively complex procedures’ for the plan modifications enshrined in the RRF Regulation, which do not distinguish between major or minor amendments and require Council approval for any modification.

So far, the implementation of the RRF has not brought the administrative simplification that Member States had hoped for 209 . Member States consider that the CIDs are too detailed given that every element must be checked at the relevant payment request – and that not every element should be binding. The legally binding character of each element included in the CID, including in the description of the measure, has been reinforced by the strict interpretation of the European Court of Auditors. Likewise, stakeholders, notably Member States authorities, predicted that the administrative burden would remain higher compared to projects financed under EU Cohesion Policy. This is because, while Member States need to demonstrate the fulfilment of milestones and targets (as disbursements are based on performance) – a process that is perceived as very demanding by Member States – they are also required to collect evidence of the expenditure incurred as well as data on final recipients of RRF funds, for audit and control purposes 210 . This may be exacerbated by the coexistence of the two EU funding instruments (RRF and structural funds) with two different approaches (performance-based and costs-based). Overall, the requirements to protect the financial interests of the Union can lead to an administrative burden similar to that of other EU funds based on costs, such as Cohesion Policy funds 211 . Furthermore, the evidence provided by Member States, for each payment, to prove the delivery of concrete outputs (milestones and targets) is also essential to ensure their actual ‘performance’.

4.3. Coherence

4.3.1. Coherence of the RRF with other EU instruments

The scope of the RRF, as reflected in the six pillars anchored in the RRF Regulation, broadly covers the main policy areas of EU relevance, with a specific focus on the EU’s twin transition via the climate and digital targets. The general coherence of the RRF with key EU policies is therefore ensured by the design of the RRF and reflected in the RRPs in diverse areas, including green, digital, social and rule of law. Moreover, the strong coordination between the different services of the European Commission in designing and implementing the RRPs helped ensure coherence between the RRPs and Union policies.

European Semester

The RRF is in line with the European Semester priorities and has provided a novel and significant incentive to reinforce the implementation of CSRs. First, the European Semester provides a framework for the preparation of RRPs. RRPs are “expected to contribute to effectively addressing all or a significant subset of challenges identified in the relevant country-specific recommendations” 212  adopted in the context of the European Semester. All RRPs were assessed against this criterion and needed to reach the highest (‘A’) rating for their plan to be approved. In this sense, EU priorities – tailored to Member States’ needs – guided the reforms and investments put forward in RRPs. In turn, the RRF offered financial incentives to implement the policy advice given under the Semester and has reinforced the implementation of the CSRs (see above under “effectiveness”). In other words, the RRF contributed to strengthening the link between EU funds and the European Semester, which in turn contributed to bringing long-awaited structural reforms into fruition, across a wide range of policy areas. The positive interactions 213 between the RRF and the Semester are mutually beneficial 214 : the EU Semester supports the preparation of RRPs, while the RRF, in turn, supports the implementation of the policy advice issued under the European Semester. By providing financial incentives in return for a coherent package of public investments and reforms, the RRF gave European governments additional means to overcome domestic institutional resistance in the face of Semester tools and recommendations 215 .

The implementation of the RRF has been integrated in the European Semester, with reporting processes streamlined to limit the administrative burden both at national and Commission level. The European Semester and its national reform programmes offered a platform for the bi-annual reporting under the RRF. At the same time, the European Semester, and in particular the Country Reports, have been the key tool for the European Commission to regularly report on the monitoring of RRP implementation, making the implementation of the RRF a key part in EU economic coordination and surveillance. The 2022 and 2023 European Semester both focused on the implementation of the RRPs, with CSRs focusing on the implementation of each Member States’ RRP 216 . In that sense, the RRF has been implemented in full coherence with the European Semester, limiting to the extent possible the increase in administrative burden that reporting on RRF implementation places on both national administrations and the EU.

Technical Support Instrument (‘TSI’)

Coherence between the RRF and the TSI is due to built-in synergies between the two instruments and the alignment of their assessment criteria 217 . The RRF Regulation actively promotes synergies between the RRF and TSI by enabling Member States to allocate up to 4% of their total allocation to technical support in RRP implementation 218 , an option used by four Member States 219 . The alignment of the assessment criteria of the RRF and of TSIs emphasises that both instruments have the same policy objectives and that their priorities are aligned. For example, the relevance of CSRs is one of the assessment criteria used both for selecting TSI projects and for approving RRPs. The coherence of the two instruments is evident in the fact that over 400 projects approved under the TSI are linked to the preparation or implementation of Member States’ RRPs, highlighting the crucial role of TSIs in the Facility.

Cohesion Policy

With the parallel implementation of the RRF and Cohesion Policy programmes, Member States had to make strategic decisions in coordination with the Commission on the funds to use to finance investments. While double funding is prohibited, also in line with the Financial Regulation, a measure can be financed by both instruments as long as the same cost is covered only once, and as long as the RRF does not cover the mandatory national co-financing under Cohesion. The regulatory framework 220  gives the responsibility to national authorities to ensure that the two instruments complement each other.

To ensure synergies and avoid overlaps between Cohesion Policy and the RRF, demarcations between the two have been included in national plans. Member States have put in place four approaches to demarcation, in a typology proposed by Lopriore 221 and by ECA 222 : (i) a thematic demarcation to reserve certain areas of funding exclusively for the RRF (for example in the health sector); (ii) a territorial demarcation within individual sectors (for example the French RRP focuses on mobility in rural areas while the European Regional Development Fund (‘ERDF’) finances it in urban areas); (iii) a demarcation based on the typologies of beneficiaries (for instance, the German RRP supports the energy efficiency of residential buildings with the RRF, while support for non-residential buildings comes from the ERDF); (iv) a temporal demarcation, with the absorption of funds based first on RRF resources and then on Cohesion Policy funds (with some substitution effects between the two instruments). The thematic demarcation has been the most frequently adopted approach by Member States 223 .