On implementation report on the Recovery and Resilience Facility

MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION

on the implementation report on the Recovery and Resilience Facility

(2024/2085(INI))

The European Parliament,

– having regard to Article 175 of the Treaty on the Functioning of the European Union,

– having regard to Regulation (EU) 2021/241 of the European Parliament and of the Council of 12 February 2021 establishing the Recovery and Resilience Facility (RRF Regulation),

– having regard to Regulation (EU, Euratom) 2023/435 of the European Parliament and of the Council of 27 February 2023 amending Regulation (EU) 2021/241 as regards REPowerEU chapters in recovery and resilience plans and amending Regulations (EU) No 1303/2013, (EU) 2021/1060 and (EU) 2021/1755, and Directive 2003/87/EC (REPowerEU Regulation),

– having regard to Regulation (EU, Euratom) 2020/2092 of the European Parliament and of the Council of 16 December 2020 on a general regime of conditionality for the protection of the Union budget (Rule of Law Conditionality Regulation),

– having regard to Council Regulation (EU, Euratom) 2024/765 of 29 February 2024 amending Regulation (EU, Euratom) 2020/2093 laying down the multiannual financial framework for the years 2021 to 2027 (MFF Regulation),

– having regard to Regulation (EU, Euratom) 2024/2509 of the European Parliament and of the Council of 23 September 2024 on the financial rules applicable to the general budget of the Union (Financial Regulation),

– having regard to Regulation (EU) 2024/795 of the European Parliament and of the Council of 29 February 2024 establishing the Strategic Technologies for Europe Platform (STEP), and amending Directive 2003/87/EC and Regulations (EU) 2021/1058, (EU) 2021/1056, (EU) 2021/1057, (EU) No 1303/2013, (EU) No 223/2014, (EU) 2021/1060, (EU) 2021/523, (EU) 2021/695, (EU) 2021/697 and (EU) 2021/241,

– having regard to Regulation (EU) 2024/1263 of the European Parliament and of the Council of 29 April 2024 on the effective coordination of economic policies and on multilateral budgetary surveillance and repealing Council Regulation (EC) No 1466/97,

– having regard to its resolution of 23 June 2022 on the implementation of the Recovery and Resilience Facility,

– having regard to the Commission notice of 22 July 2024 entitled ‘Guidance on recovery and resilience plans’,

– having regard to the Commission communication of 21 February 2024 on strengthening the EU through ambitious reforms and investments (COM(2024)0082),

– having regard to the Commission’s third annual report of 10 October 2024 on the implementation of the Recovery and Resilience Facility (COM(2024)0474),

– having regard to special report 13/2024 of the European Court of Auditors (ECA) of 2 September 2024 entitled ‘Absorption of funds from the Recovery and Resilience Facility – Progressing with delays and risks remain regarding the completion of measures and therefore the achievement of RRF objectives’, special report 14/2024 of the ECA of 11 September 2024 entitled ‘Green transition – Unclear contribution from the Recovery and Resilience Facility’, and special report 14/2024 of the ECA of 21 October 2024 entitled ‘Double funding from the EU budget – Control systems lack essential elements to mitigate the increased risk resulting from the RRF model of financing not linked to costs’,

– having regard to the study of December 2023 supporting the mid-term Evaluation of the Recovery and Resilience Facility,

– having regard to the opinion of the Committee of the Regions of 4 December 2024 entitled ‘Mid-term review of the post-COVID European recovery plan (Recovery and Resilience Facility)’,

– having regard to the information published on the Recovery and Resilience Scoreboard,

– having regard to Rule 55 of its Rules of Procedure, as well as Article 1(1)(e) of, and Annex 3 to, the decision of the Conference of Presidents of 12 December 2002 on the procedure for granting authorisation to draw up own-initiative reports,

– having regard to the opinions of the Committee on Budgetary Control, the Committee on Employment and Social Affairs, the Committee on the Environment, Climate and Food Safety and the Committee on Transport and Tourism,

– having regard to the report of the Committee on Budgets and the Committee on Economic and Monetary Affairs (A10-0000/2025),

A. whereas reforms and investments under the Recovery and Resilience Facility (RRF) help to make the EU more resilient and less dependent by diversifying key supply chains and thereby strengthening the strategic autonomy of the EU; whereas reforms and investments under the RRF also generate European added value;

B. whereas RRF expenditure falls outside the ceilings of the multiannual financial framework (MFF) and borrowing proceeds constitute external assigned revenue; whereas Parliament regrets that they do not form part of the budgetary procedure;

C. whereas the borrowing costs for NextGenerationEU (NGEU) have to be borne by the EU budget and the actual costs exceed the 2020 projections by far as a result of the high interest rates; whereas Parliament has insisted that the refinancing costs be placed over and above the MFF ceilings; whereas a three-step ‘cascade mechanism’ including a new special EURI instrument was introduced in the context of the 2024 MFF revision to cover cost overruns resulting from NGEU borrowing; whereas an agreement was reached during the 2025 budgetary procedure to follow an annual 50/50 benchmark, namely to finance the overrun costs in equal shares by the special EURI instrument de-commitment compartment and the Flexibility Instrument;

D. whereas by 31 December 2024, Member States had submitted 95 payment requests and the level of RRF disbursements including pre-financing stood at EUR 197.46 billion in grants (55 % of the total grants envelope) and EUR 108.68 billion in loans (37 % of the total loans envelope); whereas three Member States have already received their fifth payment, while one Member State has not received any RRF funding; whereas all Member States have revised their national recovery and resilience plans (NRRP) at least once; whereas 28 % of milestones and targets have been satisfactorily fulfilled and the Commission has made use of the possibility to partially suspend payments where some milestones and targets linked to a payment request were not found to be satisfactorily fulfilled;

E. whereas robust audit and control systems are crucial to protect the financial interests of the EU throughout the life cycle of the RRF; whereas the milestones commonly known as ‘super milestones’, in particular related to the rule of law, had to be fulfilled prior to any RRF disbursements;

F. whereas effective democratic control and parliamentary scrutiny over the implementation of the RRF require the full involvement of Parliament and the consideration of all its recommendations at all stages;

G. whereas the Commission has to provide an independent ex post evaluation report on the implementation of the RRF by 31 December 2028, consisting of a global assessment of the RRF and containing information on its impact in the long term;

Strengthening Europe’s social and economic resilience

1. Highlights the fact that the RRF is an unprecedented instrument of solidarity in the light of two unprecedented crises and a cornerstone of the NGEU instrument, ending in 2026; highlights the stabilising effect of the RRF for Member States at a time of great economic uncertainty, as it mitigates negative economic and social consequences and supports governments by contributing to the implementation of the European Pillar of Social Rights;

2. Welcomes the fact that the RRF has provided temporary additional fiscal space since the pandemic and contributed to the prevention of divergences between Member States with diverse fiscal space; notes the Commission finding that the RRF has led to a sustained increase in investments across the EU and that the Commission expects the RRF to have a lasting impact across the EU beyond 2026 given its synergies with other EU funds;

3. Takes note of the Commission’s projection in 2024 concerning the potential of NGEU’s impact on the EU’s real gross domestic product (GDP) by 2026, which is significantly lower than its simulation in 2020 (1.4 % compared with 2.3 %) and of the estimation that NGEU could lead to a sizeable, short-run increase in EU employment by up to 0.8 %; notes with satisfaction that long-term benefits of the RRF on GDP could be three to six times bigger than the NGEU budget disbursed, depending on the productivity effects of RRF investment; highlights, however, the difficulty of quantifying the precise social and economic impact of the RRF, as the impact of reforms only becomes clear following a delay; notes the Commission’s finding that approximately half of the expected increase in public investment between 2019 and 2025 is related to investment financed by the EU budget, particularly by the RRF;

4. Notes that the RRF has incentivised the implementation of some reforms included in the country-specific recommendations made in the context of the European Semester and that the RRF Scoreboard is used to monitor the progress made towards achieving milestones and targets, as well as compliance with horizontal principles, and in particular the six pillars, namely the green transition, the digital transformation, smart, sustainable and inclusive growth, social and territorial cohesion, health, economic, social and institutional resilience, and policies for the next generation, children and young people, including education;

5. Highlights that in the context of the new economic governance framework, the set of reforms and investments underpinning an extension of the adjustment period should be consistent with the commitments included in the approved NRRPs during the period of operation of the RRF and the Partnership Agreement under the Common Provisions Regulation; observes that the five Member States that requested an extension of the adjustment period by 31 December 2024 relied on the reforms and investments already approved under the RRF to justify the extension; takes note of the fact that most Member States have included information on whether the reforms and investments listed in the medium-term fiscal-structural plans are linked to the RRF;

6. Welcomes the fact that the RRF provides support for both reforms and investments in the Member States, but notes that a lot still remains to be done; is concerned that the short period for the remaining RRF implementation will not allow for the implementation of several planned important reforms and large investments;

7. Highlights that prioritising RRF implementation, the lack of administrative capacity in many Member States and challenges posed by global supply chains have contributed to the delayed implementation of cohesion policy; recalls the need to respect the additionality principle and appeals against the crowding out or replacement of cohesion policy by the RRF or other temporary instruments;

8. Recalls that, in reaction to Russia’s war of aggression against Ukraine, the REPowerEU revision contributes to Europe’s energy security by reducing its dependence on fossil fuels, diversifying its energy supplies, tackling energy poverty and investing in energy savings; emphasises that through REPowerEU, an additional EUR 20 billion in grants was made available in 2023, including EUR 8 billion generated from the front-loading of Emissions Trading System allowances and EUR 12 billion from the Innovation Fund; highlights Parliament’s successes in negotiations, in particular on the provisions on replenishing the Innovation Fund, the 30 % funding target for cross-border projects, the focus of investments on tackling energy poverty for vulnerable households, small and medium-sized enterprises (SMEs) and micro-enterprises, and the flexible use of unspent cohesion funds from the 2014-2020 MFF and of up to 7.5 % of national allocations under the 2021-2027 MFF;

9. Recalls its call to focus RRF interventions on measures with European added value and therefore regrets the shortage of viable cross-border projects and the related risk of re-nationalising funding;

10. Welcomes the possibility of using RRF funding to contribute to the objectives of the Strategic Technologies for Europe Platform (STEP) by supporting investments in critical technologies in the EU in order to boost its industrial competitiveness;

11. Recalls the application of the ‘do no significant harm’ (DNSH) principle for all reforms and investments supported by the RRF, with a targeted derogation under REPowerEU for energy infrastructure and facilities needed to meet immediate security of supply needs; encourages the Commission to assess the feasibility of a more uniform interpretation of the DNSH principle between the RRF and the EU taxonomy for sustainable activities, while taking into account the specificities of the RRF as a public expenditure programme;

Financial aspects of the RRF

12. Stresses that the RRF is the first major performance-based instrument at EU level which is exclusively based on financing not linked to costs (FNLC); regrets that the Council did not agree to insert specific rules in the Financial Regulation to address the risks of this delivery model, such as double funding;

13. Notes that only 13 Member States have requested loans and that EUR 92 billion of the EUR 385.8 billion available will remain unused since this amount was not committed by the deadline of 31 December 2023; takes note of the fact that loans were attractive for Member States that faced higher borrowing costs on the financial markets or that sought to compensate for a reduction in RRF grants; recalls that Parliament had advocated for a higher share of grants than loans and considers that a political discussion is needed on the use of unspent funds in the light of tight public budgets;

14. Recalls the legal obligation to ensure full repayment of NGEU expenditure by 31 December 2058 at the latest; reminds the Council and the Commission of their legal commitment under the interinstitutional agreement concluded in 2020 to ensure a viable path to refinancing NGEU debt, including through sufficient proceeds from new own resources introduced after 2021 without any undue reduction in programme expenditure or investment instruments under the MFF; deplores the lack of progress made in this regard and urges the Council to adopt new own resources without delay;

15. Notes the Commission’s estimation that between 2024 and 2027, NGEU borrowing costs will exceed expectations by EUR 17 billion to EUR 27 billion; recalls that recourse to special instruments had to be made in the last three budgetary procedures to cover EURI instrument costs;

16. Takes note of the Commission’s target to fund up to 30 % of NGEU costs by issuing greens bonds; notes that by 31 December 2024 the Commission had issued European green bonds amounting to EUR 68.2 billion;

Design and implementation of NRRPs

17. Notes that 47 % of the available RRF funds had been disbursed by 31 December 2024, with grants reaching 55 % and loans 37 %; is concerned, however, about the ECA’s finding that only 50 % of disbursed funds had reached final beneficiaries in 15 out of 22 Member States by October 2023;

18. Welcomes the fact that all Member States have surpassed the targets for the green (37 %) and the digital transitions (20 %), with average expenditure towards climate and digital objectives of the RRF as a whole standing at 42 % and 26 % respectively; notes that the ECA has cast doubt on how the implementation of RRF measures has contributed to the green transition and has recommended improvements to the methodologies used to estimate the climate impact; highlights the fact that the same methodological deficiencies exist across all pillars of the RRF;

19. Notes the tangible impact that the RRF could have on social objectives, with Member States planning to spend around EUR 163 billion; stresses the need to accelerate investments in the development of rural and remote areas, social protection and the integration of vulnerable groups, and youth employment, where expenditure is lagging behind; calls for an in-depth evaluation by the Commission, under the Recovery and Resilience Scoreboard, of the projects and reforms related to education and young people implemented by Member States under the RRF;

20. Welcomes the contributions made under the smart, sustainable and inclusive growth pillar, in particular to competitiveness and support for SMEs; notes the need for an acceleration of investments in transnational cooperation, support for enterprises, and regulatory changes for smart, sustainable and inclusive growth, which are lagging behind;

21. Notes that the achievement of milestones and targets lags behind the indicative timetable provided in the NRRPs, and that the pace of progress is uneven across Member States; welcomes the fact that, following a slow start, RRF implementation has picked up since the second half of 2023 but delays still persist and have been attributed to various factors, including the revisions linked to the inclusion of REPowerEU, mounting inflation, the insufficient administrative capacity of Member States, uncertainties regarding specific RRF implementation rules, high energy costs, supply shortages and an underestimation of the time needed to implement measures;

22. Recalls the modification of the RRF Regulation through the inclusion of the REPowerEU chapter; stresses the importance of the REPowerEU chapters in NRRPs and calls on the Member States to prioritise mature projects and implement their NRRPs more quickly, both in terms of reforms and investments, in order to respond to challenges stemming from geopolitical events and to tackle current realities on the ground, without undermining the overall balance and level of ambition of the NRRPs and in line with the RRF’s objectives;

23. Highlights the role of ‘super milestones’ in protecting the EU’s financial interests against rule of law deficiencies; welcomes the fact that all but one Member State have satisfactorily fulfilled their ‘super milestones’; recalls that the Commission must recover any pre-financing that has not been netted against regular payment requests by the end of the RRF;

24. Notes the high administrative burden and complexity brought by the RRF; stresses the considerable efforts required at national level to implement the RRF in parallel with structural funds; notes that between 2021 and 2024 the Technical Support Instrument supported more than 500 RRF-related reforms in the Member States, directly or indirectly related to the preparation, amendment, revision and implementation of the NRRPs; takes note of the Commission guidance of July 2024 with simplifications and clarifications to streamline RRF implementation but expects the Commission to act swiftly on its promise to cut the administrative burden by 25 %;

25. Believes that implementation delays underscore the risk that measures for which RRF funding has been paid will not be completed by the 2026 payment deadline; recalls the Commission’s statement at the Recovery and Resilience Dialogue (RRD) of 16 September 2024 that it will not reimburse non-implemented projects but considers it a shortcoming that RRF funds paid for milestones and targets assessed as fulfilled cannot be recovered if related measures are not eventually completed;

26. Notes that some milestones and targets may be no longer achievable because of objective circumstances; stresses that any NRRP revisions should be made in accordance with the RRF Regulation, including of the applicable deadlines, and should not entail backtracking on commitments or lower quality projects;

27. Highlights that the duration of the Commission’s assessment of payment requests by Member States differs considerably among the Member States and stresses the need for more transparency from the Commission; urges the Commission to accelerate its assessments and to ensure the equal treatment of the Member States;

28. Urges the Member States to increase their efforts to address administrative bottlenecks and provide sufficient administrative capacity to accelerate RRF implementation in view of the 2026 deadline and to avoid concentrating RRF projects in more developed regions and capitals by enabling RRF funds to flow into projects in the most vulnerable regions, thereby serving the RRF’s objective to enhance the EU’s social, territorial and economic cohesion; calls for the automatic 12-month extension of projects that have an implementation rate of at least 20 % before the 2026 deadline; welcomes the possibility to establish a prioritisation and transfer system after the 2026 deadline in order to allow for the finalisation of ongoing projects through other funding schemes, including the European Investment Fund and a possible new European competitiveness fund;

Transparency, monitoring and control

29. Takes note of the fact that the Commission had planned to conduct 112 RRF audits in all Member States in 2024; reminds the Commission of its obligation to recover funding in case of incorrect disbursements or reversals of measures;

30. Notes that the Commission relies on its own methodologies when calculating partial payments and suspensions of funds;

31. Welcomes the extensive work of the ECA in relation to the RRF and deems it important to thoroughly assess its findings, in particular its findings that milestones and targets are often rather vague and output-oriented and are therefore not fit to measure results and impacts, and its findings regarding the risks of double funding resulting from overlaps with other policies; notes that the Commission has accepted many but not all of the ECA’s recommendations;

32. Regrets the lack of a proper RRF audit trail and the persistent lack of transparency despite the bi-annual reporting requirement for Member States on the 100 largest final recipients, which was introduced into REPowerEU upon Parliament’s request; regrets the delays in reporting by some Member States and the limited informative value of the information provided, which ultimately prevents compliance checks by the Commission or the ECA; reiterates its call for the lists of the largest final recipients for each Member State to include information on the economic operators involved and their beneficial owners;

33. Is concerned about persistent weaknesses in national reporting and control mechanisms, due in part to absorption pressure affecting the capacity to detect ineligible expenditure; regrets the reliance on manual cross-checks and self-declarations in the absence of interoperable IT tools and harmonised standards, which entail the risk that expenditure is declared twice;

34. Shares the view of the ECA that the FNLC model does not preclude reporting on actual costs;

35. Highlights the important role of the European Public Prosecutor’s Office (EPPO) and OLAF in protecting the EU’s financial interests; welcomes the fact that EPPO investigations into RRF-related fraud and corruption cases have led to several arrests, indictments and seizures of RRF funds and expects the number of investigations (233 cases in 2024) to grow as RRF implementation advances;

Role of the European Parliament

36. Reiterates the importance of Parliament’s role in scrutinising and monitoring the implementation of the RRF and in holding the Commission accountable; highlights Parliament’s input provided through various channels, in particular through various plenary debates, parliamentary resolutions, bi-monthly RRD meetings with the responsible Commissioners, over 30 meetings of the standing working group on the scrutiny of the RRF, numerous parliamentary questions, and the regular flow of information and ad hoc requests for information from the Commission;

37. Reiterates that information on the implementation of the RRF transmitted by the Commission to the Council should simultaneously be made available to Parliament; encourages the sharing of relevant outcomes of discussions held in Council preparatory bodies with the competent parliamentary committees;

38. Regrets the fact that Parliament has no role in the design of NRRPs and is not consulted on payment requests; expects to be informed about the context of NRRP revisions in order to make its own assessment of the revisions;

Stakeholders’ involvement

39. Regrets the insufficient involvement of local and regional authorities (LRAs), civil society organisations, social partners, national parliaments and other relevant stakeholders in the design, revision or implementation of NRRPs; recalls that the participation of LRAs, national authorities and those responsible for developing these policies is crucial for the success of the RRF, as stated in Article 28 of the RRF Regulation; recalls that Parliament supported a binding provision in the RRF to establish a multilevel dialogue to engage relevant stakeholders and discuss the preparation and implementation of NRRPs with them, with a clear consultation period; calls, therefore, for the maximum possible stakeholder involvement in the implementation of NRRPs, in accordance with the national legal framework and based on clear and transparent principles;

40. Stresses that decisions should be made at the level that is most appropriate; is convinced that the application of the partnership principle and a stronger involvement of LRAs could make project implementation more efficient, reduce disparities within Member States and bring about more viable cross-border projects;

Lessons for the future

41. Believes that the combination of reforms and investments has proved successful but that a clearer link is needed between the two; insists that the level of ambition of NRRPs should be commensurate with the RRF timeline in order to ensure their successful implementation; urges the Commission to apply the lessons learned and the ECA’s observations, and to ensure that future performance-based instruments are designed also to measure results and impacts and not only outputs;

42. Highlights that meaningful social and territorial dialogues with a high level of involvement of LRAs, social partners, civil society organisations and national parliaments within the national legal framework are essential for national ownership, successful implementation and democratic accountability; believes that such dialogues should be strengthened and more diligently employed as they could inspire future initiatives and mechanisms in the EU and its Member States;

43. Considers that better training and capacity-building across all regions and authorities involved, in particular at national level, could have accelerated the RRF’s implementation; considers that the Commission could have assisted Member States more at the planning stage and provided earlier implementation guidance, in particular with a view to strengthening their audit and control systems and the cross-border dimension of the RRF;

44. Highlights the importance of mitigating the risk of double funding; suggests the deployment of an integrated and interoperable IT and data mining system and the development of clear standards for datasets to be applied across Member States, with a view to allowing comprehensive and automated expenditure tracking; calls for greater coordination of the different bodies involved in the implementation of the various EU and national programmes;

45. Considers that its role in the monitoring of the RRF should be further enhanced;

46. Reiterates its call for an open platform which contains data on all projects, final recipients and the regional distribution of funding, thereby facilitating auditing and democratic oversight;

47. Stresses that any possible future decisions on EU borrowing should respect the unity of the budget and Parliament’s role as part of the budgetary authority; highlights the risks of cost overruns for the repayment of debt, resulting inter alia from volatile interest rates; deems it important to ensure from the outset that sufficient funding is available to cover these costs without presenting a detriment to other programmes or political priorities;

48. Notes the declared intention of the Commission to draw on the RRF experience when designing its proposals for the post-2027 EU funding programmes, due later this year; acknowledges that the independent ex post evaluation will come too late to feed into the process leading up to the next programming period, but expects the Commission and the co-legislators to take due account of the lessons learned from the RRF and of the recommendations of relevant stakeholders, in particular LRA, civil society organisations and social partners;

49. Instructs its President to forward this resolution to the Council, the Commission, and to the governments and parliaments of the Member States.

EXPLANATORY STATEMENT

Background

The Recovery and Resilience Facility (RRF), which was set up in 2021 as part of the EU’s unprecedented recovery programme NextGenerationEU and is set to end in 2026, provides significant financial support to the Member States in exchange for pre-agreed public investments and reforms in line with European objectives, in particular the digital and green transitions. Since the start of RRF implementation, the European Parliament has been paying particular attention to the democratic oversight and monitoring of the RRF, with the aims of verifying that the RRF delivers results and ensuring greater transparency and accountability on the side of the Member States and the Commission.

Aim and timing of the report

Since the RRF has entered the second half of its implementation period and over 40 % of the funds have been disbursed, it is an opportune moment for Parliament to assess the performance and the impact of the Facility, to propose improvements for the remainder of its implementation, and to draw lessons for the future, in particular in view of the forthcoming discussions on the post-2027 Multiannual Financial framework.

ANNEX: ENTITIES OR PERSONS FROM WHOM THE RAPPORTEURS HAVE RECEIVED INPUT

Pursuant to Article 8 of Annex I to the Rules of Procedure, the rapporteurs declare that they received input from the following entities or persons in the preparation of the draft report:

The list above is drawn up under the exclusive responsibility of the rapporteurs.

Where natural persons are identified in the list by their name, by their function or by both, the rapporteurs declare that they have submitted to the natural persons concerned the European Parliament’s Data Protection Notice No 484 (https://www.europarl.europa.eu/data-protect/index.do), which sets out the conditions applicable to the processing of their personal data and the rights linked to that processing.