“Recovery plans and structural funds: how to strengthen the link?”, Marco Lopriore (EIPA, Maastricht)

The recovery plan for the European economy in response to the COVID-19 crisis (also known as the ‘Next Generation EU’ whose main instrument is the Recovery and Resilience Facility, better known by the acronym ‘RRF’) and cohesion policy have different objectives: the former must help the recovery and resilience of our economies in the face of the impact of COVID-19, while the latter must promote economic, social and territorial cohesion between Member States and regions.

Following the agreement on available resources at the December 2020 European Council, the EU swiftly approved the RRF regulation in February 2021. The finalisation of the legal texts, the “Common Provisions Regulation” (DPRK or CPR for the English abbreviation) as well as the specific regulations, had to wait until the end of June 2021. This advance has enabled most (now 26 out of 27) Member States to draft and submit their national recovery plans, but has thus inevitably delayed the new programming of the Structural Funds.

The resources made available by the NGEU to the RRF are considerable (€672 billion) and are in addition to those provided for in the Multiannual Financial Framework for Cohesion Policy (€330 billion). Therefore, the question arises of the use of these resources for the digital and environmental transition, their complementarity, and finally, the real absorption capacities of public and private beneficiaries.

Why is complementarity so important? Because it is essential that the RRF plans, as well as the Structural Funds programmes, can be implemented and deliver the expected results on time. On the one hand, wasting resources is not a good idea in times of fiscal consolidation, but on the other hand, the financing needs are enormous. For this, it is necessary to ensure both the right complementarity and, as far as possible, the synergies between the two project pipelines. Only in this way will we be able to dispel initial fears about an RRF drawing on the ‘project pipeline’ of cohesion, effectively emptying it of its content.

This note questions the principle of complementarity between national recovery plans and cohesion policy programmes: Are they competitors or allies? Are they engaged on parallel tracks? What demarcations and synergies can be drawn between these two instruments? What strategies can be adopted to ensure the eligibility of project expenditure? Here we analyse the practical methods of implementation of this principle and discuss the concrete alternatives in order to combine (or not) the support of the two funds in the projects themselves.

Read more here.