Next Generation EU: next steps in the Recovery and Resilience Mechanism

The European Commission has set out strategic guidelines for the implementation of the Recovery and Resilience Facility in its 2021 Annual Sustainable Growth Strategy (ASGS). As the main recovery instrument and the core of the Next Generation EU (NGEU), the Facility will help the EU emerge from the current crisis stronger and more resilient. The Facility will provide an unprecedented €672.5 billion in loans and grants as early financial support for the crucial first years of recovery.

The Annual Sustainable Growth Strategy (ASGS)

The publication of the ASGS launches this year’s European Semester cycle. In last year’s ASGS the Commission launched a new growth strategy based on the European Green Deal and the concept of competitive sustainability. This year’s ASGS is in full continuity with the previous one. The four dimensions of environmental sustainability, productivity, fairness and macroeconomic stability identified in last year’s ASGS remain the guiding principles underpinning Member States’ recovery and resilience plans and their national reforms and investments. These dimensions lie at the heart of the European Semester and ensure that the new growth agenda helps to build foundations for a green, digital and sustainable recovery.

The plans should reflect national investment and reform programmes

In order to benefit from the Recovery and Resilience Facility, Member States should submit their draft recovery and resilience plans outlining national investment and reform agendas in line with the aforementioned EU policy criteria. Member States’ recovery and resilience plans should address the economic policy challenges set out in the country-specific recommendations of recent years and in particular in the 2019 and 2020 cycles. The plans should also enable Member States to enhance their economic growth potential, job creation and economic and social resilience, and to meet the green and digital transitions.

Recovery and resilience plans: how will projects be presented?

The Commission also presented today additional guidance for Member States on how to best present their recovery and resilience plans together with a standard template.

The deadline for the Recovery and Resilience plans submission is 30 April 2021. However, Member States are encouraged to submit their preliminary draft plans as soon as 15 October 2020. Member States should engage as soon as possible in a broad policy dialogue, including all relevant stakeholders, to prepare their recovery and resilience plans and are invited to interact with the Recovery Task Force and DG ECFIN to discuss their draft plans.

Flagship projects

Based on their relevance across Member States, the very large investments required, and their potential to create jobs and growth and reap the benefits from the green and digital transitions, the Commission strongly encourages Member States to include the following flagship areas in their investment and reform plans:

1. Power up – The frontloading of future-proof clean technologies and acceleration of the development and use of renewables.
2. Renovate – The improvement of energy efficiency of public and private buildings.
3. Recharge and Refuel – The promotion of future-proof clean technologies to accelerate the use of sustainable, accessible and smart transport, charging and refuelling stations and extension of public transport.
4. Connect – The fast rollout of rapid broadband services to all regions and households, including fiber and 5G networks.
5. Modernise – The digitalisation of public administration and services, including judicial and healthcare systems.
6. Scale-up – The increase in European industrial data cloud capacities and the development of the most powerful, cutting edge, and sustainable processors.
7. Reskill and upskill – The adaptation of education systems to support digital skills and educational and vocational training for all ages.

The Commission calls on the European Parliament and the Council to agree as quickly as possible on the legislative proposal so that the Facility becomes operational as of 1 January 2021.

Ursula von der Leyen at the head of the NGEU

President Ursula von der Leyen commented: “The Recovery and Resilience Facility is at the very heart of NextGenerationEU. It is our key tool to turn the immediate challenges presented by the coronavirus pandemic into a long-term opportunity. Member States need clear guidance to ensure the Facility’s €672 billion is invested both for Europe’s immediate economic recovery, but also for long-term sustainable and inclusive growth. Today, we are presenting this guidance and stand ready to support Member States in developing their national strategies.”