(Finance) – The first three years of the Recovery and Resilience Facility (RRF), established by the EU with a budget of €724 billion, have seen delays in the disbursement of funds and the implementation of projects. This puts at risk the achievement of the objectives aimed at helping EU countries recover from the COVID-19 pandemic and increasing their resilience. This is what emerges from a European Court of Auditors report.
Despite the increasing rate of payments made by the European Commission, Member States – the Court notes – may not be able to draw on or absorb the funds in time, complete the planned measures before the RRF expires in August 2026 and, therefore, enjoy the expected economic and social benefits.
Established in February 2021, The RRF finances reforms and investments in EU Member States, from the outbreak of the pandemic in February 2020 until the end of August 2026. It focuses on six priority areas, including the green transition and digital transformation. Countries can receive funds based on their progress.
“Timely uptake of the RRF is essential: it helps avoid bottlenecks in the execution of measures towards the end of the device’s life cycle and reduces the risk of inefficient and irregular expenditure – he stated Ivana Maletic, the Court member responsible for the audit –. We are sounding the alarm, because at the halfway point, EU countries had drawn on less than a third of the planned funding and had advanced less than 30% towards the set goals and objectives”.
On the positive side, thanks to a maximum pre-financing of 13% of the amount payable to Member States, more funds could be disbursed quickly at the start, in line with the aims of the crisis response. However, the auditors criticise the pace at which the bulk of the funds have been used since then. By the end of 2023, only €213 billion had been transferred from the Commission to national coffers. And it is not certain that this money has reached the final recipients, including private companies, public energy companies and schools. In fact, almost half of the RRF funds disbursed to the 15 Member States that provided the necessary information on them had not yet reached the final recipients.
Almost all countries – the Court reports – have submitted their applications late Payment requests to the Commissionoften due to inflation or supply shortages, uncertainties about environmental regulations and insufficient administrative capacity. At the end of 2023, the 70 percent of expected requests and approximately 16 percent lower than expected; seven countries had not received any funding for various reasons due to the satisfactory achievement of targets and objectives. The Commission and Member States have taken action to facilitate absorption, especially in 2023, but it is too early to assess their impact, if any.
“There is a risk – the report states – that not all the planned measures will be completed on time. At the end of 2023, payment requests had concerned less than 30 percent of the more than 6,000 goals and objectives (i.e. the total progress indicators); it follows that there are many (perhaps the most difficult) still to be achieved. Many countries have first implemented reforms before proceeding with investments. It is likely, however, that the concentration of the latter towards the end of the useful period further aggravates the delays and slows down absorption”.
Finally, the Court concludes, disbursements do not necessarily reflect the quantity and importance of the milestones and objectives, so that large amounts of money may be paid without the corresponding measures being completed by the Member States. The Court stresses that the legislation does not provide for the recovery of funds if the milestones and objectives are achieved but the measures are ultimately not completed.
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