EU Parliament Approves €672.5 Billion Recovery and Resilience Facility
Posted on 02/12/2021
On February 10, 2021, European Parliament approved the Recovery and Resilience Facility. The massive facility is designed to help EU countries tackle the effects of the COVID-19 pandemic. The regulation on the objectives, financing and rules for accessing the Recovery and Resilience Facility (RRF) was adopted with 582 votes in favor, 40 against, and 69 abstentions. The RRF is the biggest building block of the €750 billion Next Generation EU recovery package.
€672.5 (US$ 814 billion) billion in grants and loans will be available to finance national measures designed to alleviate the economic and social consequences of the pandemic. Related projects that began on or after 1 February 2020 can be financed by the RRF, too. The funding will be available for three years and EU governments can request up to 13% pre-financing for their recovery and resilience plans. The EU wants to become climate neutral by 2050. The EU has a binding 2030 target to cut its emissions by at least 40% from 1990 levels.
According to the press release, “To be eligible for financing, national recovery and resilience plans must focus on key EU policy areas – the green transition including biodiversity, digital transformation, economic cohesion and competitiveness, and social and territorial cohesion. Those that focus on how institutions react to crisis and supporting them to prepare for it, as well as policies for children and youth, including education and skills, are also eligible for financing.
Each plan has to dedicate at least 37% of its budget to climate and at least 20% to digital actions. They should have a lasting impact in both social and economic terms, include comprehensive reforms and a robust investment package, and must not significantly harm environmental objectives.
The regulation also stipulates that only member states committed to respecting the rule of law and the European Union’s fundamental values can receive money from the RRF.”