Recovery plan for Europe
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To help repair the economic and social damage brought by the coronavirus pandemic, kick-start European recovery, and protect and create jobs, the European Commission proposed on 26 May a major recovery plan for Europe based on harnessing the full potential of the EU budget.
On 21 July 2020, the EU leaders agreed on this recovery plan and the multiannual financial framework for 2021-2027, leading the way out of the crisis and laying foundations for a modern and more sustainable Europe. Negotiations with the European Parliament will now follow with a view to urgently finalising the work on all legal acts. The Own Resources Decision, once adopted, should be approved by Member States as soon as possible, in accordance with their respective constitutional requirements.
Until the co-legislators - the European Parliament and the Council - have reached a final agreement, the below information presents the Commission’s proposal from 26 May.
To mobilise the necessary investments, the Commission is putting forward a two-fold response:
- Next Generation EU a new recovery instrument of €750 billion which will boost the EU budget with new financing raised on the financial markets for 2021-2024
- A reinforced long-term budget of the EU for 2021-2027 (€1.100 billion)
The EU budget powering recovery and resilience
To ensure an effective EU response to the coronavirus crisis, which reaches out to everybody in the EU and to its global partners, the European Commission is mobilising a number of instruments. Next Generation EU will be rolled out across three pillars:
|Supporting Member States to recover|
(Within European Semester framework)
|Kick-starting the economy and helping private investment|
|Learning the lessons from the crisis|
Key instruments supporting the recovery plan for Europe
The funds will go to areas where they can make the greatest difference, complementing and amplifying the essential work under way in the Member States. The investments will be channelled via a variety of instruments under three pillars, such as:
Supporting Member States to recover, repair and emerge stronger from the crisis
|1. European Recovery and Resilience Facility, embedded in the European Semester|
In its 2021 Annual Sustainable Growth Strategy, the Commission set out guidance for the implementation of the Recovery and Resilience Facility. The publication of the Annual Sustainable Growth Strategy launches this year’s European Semester cycle and confirms the EU's aim to pursue a new growth strategy based on the European Green Deal and competitive sustainability. The Commission strongly encourages Member States to include investments and reforms in green and digital to create sustainable jobs and growth.
|2. REACT-EU – Recovery assistance for cohesion and the territories of Europe|
|3. Supporting the green transition to a climate-neutral economy via funds from Next Generation EU|
Kick-starting the economy and helping private investment
|1. Enhanced InvestEU Programme, including a Strategic Investment Facility|
|2. New Solvency Support Instrument to support equity of viable companies|
Learning the lessons of the crisis and addressing Europe’s strategic challenges
|2. Reinforcing rescEU, the EU’s Civil Protection Mechanism, to respond to large-scale emergencies|
The Commission is also proposing to reinforce other programmes to allow them to play their full role in making the Union more resilient and addressing challenges brought along by the pandemic and its consequences. These are, among others, Horizon Europe, the Neighbourhood, Development and International Cooperation Instrument (NDICI), Humanitarian Aid Instrument, Digital Europe Programme, Connecting Europe Facility, Common Agricultural Policy, Instrument for Pre-Accession Assistance (IPA), etc.
More flexible emergency tools
Beyond the individual programmes, the crisis has underlined how important it is that the Union is able to react fast and flexibly to put in place a coordinated European response. This in turn requires a more flexible EU budget. Therefore, the Commission proposes to reinforce the flexibility of the EU budget and emergency tools for the period 2021-2027.
Solidarity and emergency aid reserve
European globalisation adjustment fund