The EU’s Recovery and Resilience Facility better equips the continent to meet the new challenges brought about by the Russian invasion of Ukraine, according to Dragos Pislaru, a Romanian MEP, who acts as a rapporteur of the European Parliament draft report on the implementation of the same facility.
Addressing a press seminar hosted by the European Parliament, the Renew MEP highlighted how a number of key pillars underpinning the Facility – which is the EU’s major post-pandemic economic and recovery tool – specifically addresses issues which have been accentuated by the current crisis in Ukraine.
Pislaru explained that these pillars refer to the need of diversify energy sources – which is now on top of the agenda, particularly with EU countries wanting to move away from Russian gas; the digital transformation – even more pertinent with hybrid and cyberwarfare being waged by Russia; and economic development and competitiveness which covers strategic autonomy for a number of raw materials, semiconductors and other similar materials, an issue which was highlighted as never before over the past couple of weeks.
To tap into the €723.8 billion in grants and loans available under the RRF, member states must develop national recovery and resilience plans. Dr. Nils Redeker Policy a fellow at the Jacques Delors Centre explained that NRRPs must set out in detail milestones and targets on specific investments that will be financed by RRF money. On the other hand, the plans must outline economic reform plans that “effectively address all or a significant subset of challenges identified in the relevant country-specific recommendations” (CSRs) of the European Semester.
Redeker explained that the invasion of Ukraine has changed the scenario, with the RRF operating in a very different context, particularly shifting EU goals, including the accelleration towards energy independence. He noted that National RRPs can be adjusted, with Member States being able to propose changes to the European Commission.
Eider Gardiazabal Rubial a Spanish Socialist MEP, a co-rapporteur, highlighted how the Covid-19 crisis allowed, within the context of RRF discussions, to break many political taboos including common European debt, the establishment of new own-resource – which were off the table but now will become an inevitable element of recovery.
Questioned about the Maastricht criteria, Gardiazabal argued that a return to the golden thresholds of a deficit not exceeding 3% and debt levels below 60% is “not realistic” in the current situation. Se noted that even though the RRF is large and flexible, the Russian invasion creates new challenges which are not covered through RRF, such as food independence or migration challenges.
Siegfried Muresan, an EPP Romanian MEP, also a third co-rapporteur, said that this Facility allocates a disproportionate amount of resources to the countries which are most in need. He added that the institutions are taking the necessary steps to ensure that entities and individuals associated with the Russian Federation will not access any of the funds. “This is why we have insisted on transparency elements. We have to make sure no money gets to Russia”.
The draft report is being debated in a joint session of the Economic and Monetary Affairs Committee and Committee on Budgets of the European Parliament today.
The Facility and Malta
Malta’s plan consists of 17 investments and 30 reforms 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 Commission had said, on approving Malta’s plans, that 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.
According to plans submitted by the Government, the RRP will lift Malta’s gross domestic product by 0.7% to 1.1% by 2026.