The Economic and Monetary Affairs and Budgets committees of the European Parliament have called for recovery funding to be tied to respect for the rule of law, and for ensuring maximum return on investment.
The report, adopted by MEPs with 73 votes to 10 against and 13 abstentions, is intended to influence the Commission’s upcoming review of the implementation of the Recovery and Resilience Facility (RRF) expected by 31 July 2022.
MEPs want the Commission to ensure a strong auditing and monitoring mechanism for RRF expenditure, implementation and data management. This would, MEPs say, prevent misuse, double funding or the overlapping of objectives with other EU funding programmes.
The report underlines the importance of compliance with the rule of law and with Article 2 TFEU as prerequisites for accessing RRF funding, and that the EU’s rule of law conditionality mechanism is fully applicable to the RRF. MEPs expect the Commission to refrain from approving the draft national plans of Poland and Hungary as long as concerns about the observance of the rule of law, judicial independence, and the anti-fraud measures, conflicts of interest, and corruption persist.
The rule of law and the sound financial management of EU funds need continuous evaluation throughout the lifecycle of the RRF and it should be possible to halt or recover already-disbursed funds in case of non-compliance.
MEPs reiterated the importance of the Recovery and Resilience Scoreboard in providing basic information for citizens on the overall progress in the implementation of national plans. They expect continuous monitoring of the implementation of the RRF’s six pillars, as well as the 37% target for green spending and 20% for digital issues. They recall that member states should collect and ensure access of data on beneficial owner(s) of the recipient of the funds and beneficiaries of the programme.
Strategic autonomy, war in the Ukraine and social investment
The RRF investments in the green transition and digital transformation should contribute to increase EU strategic autonomy and independence, in particular to reduce its dependency on imported fossil fuels. However, MEPs call for more cross-border projects, such as the improvement of the interconnection of European gas and electricity energy networks and the full synchronisation of power grids. They stress the role of the RRF in the rollout of REPowerEU and say the loans available under the RRF could be used to supplement these projects and advance investment in the EU’s energy transition, contributing significantly to EU energy sovereignty.
They also encourage member states to use the full potential of the RRF, including loans, to counter the effects of current and future challenges – in areas like SMEs, health care, measures to support Ukrainian refugees, and aiding local and regional administration in using funding effectively.
Malta’s plan consists of 17 investments and 30 reforms. They will be supported by € 316.4 million in grants. 53.8% of the plan will support climate objectives and 25.5% of the plan will foster the digital transition.
The reforms address bottlenecks to lasting and sustainable growth through a strengthening of the rule of law and the fight against corruption, while investments are targeted to support the green and digital transition and to tackle challenges related to health and skills. All reforms and investments have to be implemented within a tight time frame, as the Regulation on the Recovery and Resilience Facility foresees they have to be completed by August 2026.