Source: Council of the European Union, 2021-02-12
In Brussels on 12 February, the Portuguese Prime Minister, António Costa, signed the formal approval of the Recovery and Resilience Facility (RRF) on behalf of the Council of the European Union (EU). The RRF will be used to fund the national recovery plans of the Member States.
Through this approval, the RRF has now officially come into force and the Member States can formally submit their recovery plans to the European Commission for approval. “We are fighting for health and jobs at the present, looking to the future. (…) This is the most innovative plan we have ever had, to manage the most challenging crisis we have ever faced,” said António Costa, Portuguese Prime Minister.
The Recovery and Resilience Facility (RRF) is the main pillar of the European recovery plan, Next Generation EU, designed to provide financial aid to Member States in order to combat the economic and social effects of the COVID-19 pandemic and make the European economy more resistant to future shocks.“ Today in Europe, we have concluded a phase making the resources, capacity and goals for recovery available to our countries, our citizens and our companies. This recovery must be European and it must include everybody,” said David Sassoli, President of the European Parliament.
The RRF will have a financial provision of €672.5bn, of which €312.5bn will be in the form of grants, with the remaining €360bn in loans.
The RRF funds will be released to the Member States after approval of their national plans by the European Commission and by the Council of the EU. The funds are to be used to finance the reforms and investments included in these plans. “This is, indeed, a very historic moment. The vaccines are our ally and our hope, but we must never forget the second enormous crisis, the economic crisis. And there, our ally and our hope is Next Generation EU,” said Ursula von der Leyen, President of the European Commission.
The national recovery plans will be required to respect certain rules: they must be in line with the strategic priorities of the EU and with the specific recommendations for each Member State regarding how their economic policy is conducted. They should also support the green and digital transitions, allocating 37% and 20%, respectively, of the total value of the plans to these areas.