Recovery plan for Europe

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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)

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Recovery plan for Europe

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.


Mobilising investment

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
  • Supporting investments and reforms
  • Supporting a just transition

(Within European Semester framework)

Kick-starting the economy and helping private investment
  • Supporting key sectors and technologies
  • Investing in key value chains
  • Solvency support for viable companies
Learning the lessons from the crisis
  • Supporting key programmes for future crises
  • Supporting global partners

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.


  • Mechanism: Grants and loans by implementing Member States’ national recovery and resilience plans defined in line with the objectives of the European Semester, including in relation to the green and digital transitions and the resilience of national economies. Member States should submit draft recovery and resilience plans as of 15 October.
  • Budget: €560 billion of which €310 billion for grants and €250 billion in loans
  • Steer: The Facility is steered by the Recovery and Resilience Task Force that will work in close cooperation with Directorate-General for Economic and Financial Affairs.
2. REACT-EU – Recovery assistance for cohesion and the territories of Europe
  • Mechanism: Flexible cohesion policy grants for municipalities, hospitals, companies via Member States’ managing authorities. No national co-financing required
  • Budget: €55 billion of additional cohesion policy funding between 2020 and 2022
3. Supporting the green transition to a climate-neutral economy via funds from Next Generation EU
  • A proposal to strengthen the Just Transition Fund up to €40 billion, to assist Member States in accelerating the transition towards climate neutrality
  • A €15 billion reinforcement for the European Agricultural Fund for Rural Development to support rural areas in making the structural changes necessary in line with the European Green Deal and achieving the ambitious targets in line with the new Biodiversity and Farm to Fork strategies


Kick-starting the economy and helping private investment

1. Enhanced InvestEU Programme, including a Strategic Investment Facility
  • Mechanism: Provisioning of an EU budget guarantee for financing of investment projects via the EIB group and national promotional banks
  • Budget: €15.3 billion for InvestEU. Additionally, a new Strategic Investment Facility to be equipped with €15 billion provisioning from Next Generation EU
2. New Solvency Support Instrument to support equity of viable companies
  • Mechanism: Provisioning of an EU budget guarantee to the European Investment Bank Group in order to mobilise private capital
  • Budget: €31 billion


Learning the lessons of the crisis and addressing Europe’s strategic challenges

  1. New health programme to help equip Europe against future health threats
  • A new Health Programme, EU4Health, to strengthen health security and prepare for future health crises with a budget of €9.4 billion.
2. Reinforcing rescEU, the EU’s Civil Protection Mechanism, to respond to large-scale emergencies
  • Mechanism: Grants and procurements managed by the European Commission
  • Budget: A total of €3.1 billion


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.


medical equipment

Solidarity and emergency aid reserve

  • Enables swift reinforcements via budgetary transfers to EU instruments where needs arise
  • Increase to a maximum annual amount of €3 billion
Euro coins

Solidarity fund

  • Supports Member States in the response and immediate recovery following natural disasters such as floods, forest fires, earthquakes, storms and droughts
  • Extension to encompass major health crises and increase to a maximum annual amount of €1 billion
money support

European globalisation adjustment fund

  • Provides support for the reintegration in the labour market of persons losing their jobs as a result of unexpected major restructuring events such as a financial or economic crisis
  • Threshold for the activation of the fund lowered to 250 redundancies and increase to a maximum annual amount of € 0.386 billion.
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