The EU risks not arriving in time to invest the 723.8 billion euros that Brussels has made available to the Member States in the midst of the pandemic to emerge from the crisis caused by the coronavirus and which have become a kind of lifeline in an increasingly difficult context. hostile economic and commercial environment in which Europe, as a power, is being left behind. The European Court of Auditors warns that the delays that have accumulated in the middle of the application threaten that the European funds can be implemented within the set deadline, which expires on 31 August 2026.
“We consider that there are risks related to the timely absorption and completion of measures in the second half of the implementation period of the Recovery and Resilience Mechanism (RRM),” EU auditors said in a report published on Monday.
In their analysis, they note that, by the end of 2023, the European Commission had disbursed 37% of the total envelope of the plan (213 billion euros) and that this corresponded to the achievement of only 19% of the established milestones and objectives. One of the concerns is that this means difficulties for the money to reach the final recipients and the real economy.
The report was prepared with information available at the end of 2023, so some disbursements do not appear, such as the fourth payment received by Spain at the end of July, which was delayed by several months compared to the initial plan due to the inability to approve the allocation. Sources from the institution indicate that until June 2024, disbursement requests have increased, but maintain that the risks of not arriving on time persist.
In Brussels, there is awareness of the complications that Member States face in implementing recovery plans, which involve a massive mobilisation of resources. The European Commission has proposed to relax the conditions, for example by clarifying the cases in which a Member State can modify its recovery plan or by simplifying the information requirements of Member States.
Delays in applications are a common problem across all Member States. The most common reasons, according to the report, are “changes in external circumstances (such as inflation or supply shortages), underestimation of the time needed to implement measures, uncertainty about the specific rules for applying the MRR and challenges in implementing measures.” administrative capacity of Member States.
“In Spain, the interim target of renovating 231,000 homes by the end of 2023 was delayed because demand for renovation work was lower than expected due to inflation and, in particular, the sharp rise in the price of raw materials. Thus, in the process of amending its recovery and resilience plan, Spain proposed to postpone the deadline for the interim target by one year and also to reduce the total number of renovation works that were to be carried out under the measure from 510,000 to 410,000,” the report gives as an example.
In any case, Spain is by no means one of the worst-performing countries according to the audit. “After almost three years of application of the MRR and almost half of its implementation period, seven Member States had not received any funding for the satisfactory achievement of milestones and targets,” the report states, recalling that Hungary and the Netherlands have not received any funding. had even signed operational agreements and were therefore not in a position to submit payment requests or receive funding from the MRR; Sweden has also not requested any payments and four countries (Belgium, Finland, Ireland and Poland) have not yet received disbursements because they were under assessment at the time of writing.
The EU Court of Auditors also warns that the accumulation of delays, added to the high percentage of reforms that some countries have left until 2026, makes it even more difficult to meet the deadline that ends in August of the same year and that, at first, Brussels rules out an expansion. “Member States planned to complete the milestones and objectives related to 39% of investments and 14% of reforms planned in 2026, in the last eight months of the implementation period of the RRF,” the document states. The percentages vary between 30% in Spain and 70% in Poland, which is the highest, followed by Italy (62%).
“Investments, particularly in infrastructure, can be quite complex and are generally more sensitive to delays caused by external circumstances beyond the control of Member States. As a result, postponing investments risks further increasing the risk of delays and slowing down absorption. In its presentation of the mid-term evaluation, the Commission acknowledged that the second half of the implementation of the RRF will be more challenging than the first, as investments reach a critical phase of their implementation,” the report summarises.
