Written by Magdalena Sapała with Nina Thomassen.
In December 2020, the adoption of the legislative package on the 2021-2027 multiannual financial framework (MFF) and the Next Generation EU (NGEU) recovery instrument marked the end of an important stage in the process of launching a unique financial stimulus package – the recovery plan for Europe. However, in order to make the plan fully operational, additional conditions need to be met and preparatory steps completed.
First, there is the financing of NGEU, based on borrowing operations carried out by the European Commission on behalf of the European Union. These operations could start only once the Member States had ratified the Own Resources Decision (ORD). This procedure was completed before the end of May 2021. In the meantime, the Commission started preparing for its role as a borrower on an unprecedented scale and published its diversified funding strategy for the financing of NGEU. The Commission has ensured that the preparations are advanced and that it would be ready to begin the borrowing operations as soon as ratification of the ORD was finalised and the act in force.
In parallel, preparations are ongoing for the spending of the biggest part of NGEU (90 %) under the Recovery and Resilience Facility (RRF). This process includes the drawing up of national recovery and resilience plans by the Member States, their evaluation by the European Commission, and approval by the Council of the EU. Only then will the Commission conclude an agreement with each Member State on a legal commitment authorising the financial contribution to be made, and begin pre-financing. An indicative timeline of the whole process shows that the first payments for Member States could be made between July and September 2021.
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Read the complete briefing on ‘Recovery plan for Europe: State of play‘ in the Think Tank pages of the European Parliament.