Written by Velina Lilyanova and Alessandro D’Alfonso.
The European Parliamentary Research Service (EPRS) recently held a policy roundtable taking stock of the state of play of implementation of Next Generation EU (NGEU) recovery instrument, the largest ever EU financial tool, and its centrepiece, the Recovery and Resilience Facility (RRF). The panel of distinguished speakers addressed the seemingly simple question ‘Is NGEU delivering?‘, and reflected on three related aspects: the achievements so far, the challenges and risks to be addressed, as well as the lessons to be learnt from this new instrument for the future design of EU finances. With less than two years to complete the implementation of RRF-funded national recovery and resilience plans, NGEU has entered a crucial phase of its lifecycle, as outlined by the latest edition of the EPRS Economic Outlook Quarterly.
This innovative and complex tool has proven to have a positive effect on the EU’s economy, and has already delivered on multiple objectives. However, challenges lie ahead in the final two years of implementation and beyond – and this was the overall conclusion that emerged from the debate. Etienne Bassot, Director of the Members’ Research Service at EPRS, opened the event, welcoming the keynote speakers: Members of the European Parliament Aurore Lalucq (Chair of the Committee on Economic and Monetary Affairs), and Siegfried Mureşan (Co-rapporteur on the Recovery and Resilience Facility and recently appointed co-rapporteur for the post-2027 multiannual financial framework (MFF) of the EU). Both stressed that the creation and launch of the NGEU was one of the main achievements of the last legislature. They agreed that its delivery and implications for the future remain in the spotlight for this new term. The European Parliament is in permanent dialogue with the other institutions, seeking to ensure accountability, transparency and effectiveness of spending, while safeguarding the citizens’ right to know how the RRF money is spent and that it is well spent.
During the discussion, moderated by Alessandro D’Alfonso, Head of the NEXT Generation EU Monitoring Service at EPRS, each panellist took on a slightly different, but complementary perspective on NGEU and the RRF. Céline Gauer, Director-General of the European Commission’s Recovery and Resilience Task Force, highlighted two aspects she felt worked well with the new instrument: the RRF’s fostering of critical, long-due reform in the Member States, and its performance-based nature allowing for speedy progress in implementation and rollout of payments.
Eulalia Rubio, Senior Research Fellow, Jacques Delors Institute, and Associate Senior Research Fellow, Centre for European Policy Studies, drew attention to the complex overarching structure with multiple objectives of the RRF, which seeks both short-term impact and support for long-term goals, including for the green, digital and energy transitions. She reflected on whether these objectives can be reconciled, on the trade-offs needed, on the way Member States put the RRF funds to different use, as well as the importance of assessing the RRF as a potential template for future financing instruments.
Furthermore, NGEU allowed the EU budget to take on a fiscal stabilisation function for the first time – an aspect Sander Tordoir, Chief Economist at the Centre for European Reform assessed. He juxtaposed NGEU as a 2020 crisis response with the 2012‑2013 austerity measures, highlighting the significance of the EU’s novel and large joint fiscal operation.
The RRF runs until the end of 2026 and the coming few years hold many challenges. The panellists highlighted: the possibility (or necessity) to extend the RRF’s lifetime (on which different views emerged); the issue of ownership at the national level; the burden of repayment of the resources borrowed to finance NGEU as of 2028; and the need to strengthen the administrative capacity to implement the RRF, notably in some Member States.
Looking to the future, some elements of the current recovery instrument emerged as worth further reflection. On the one hand, including reforms that deliver on country-specific recommendations, as well as making greater use of the performance-based model were mentioned as positive features that could be embedded in future instruments. On the other, ensuring greater transparency, a greater role for local and regional stakeholders, simplification and stronger support for cross-border projects were among the elements flagged up for further elaboration and better inclusion in future exercises.
The policy roundtable ended with a lively Q&A session, during which a number of other points were raised both in the room and online, including on the RRF model’s interaction with cohesion policy. The keen interest and the many questions show that the debate on the implementation and legacy of NGEU, in the EU at large, is only just beginning.
The central task of the Members Research Service is to ensure that all Members of the European Parliament are provided with analysis of, and research on, policy issues relating to the European Union, in order to assist them in their parliamentary work.