Recovery plans and structural funds: how to strengthen the link?

Summary:

The plan to relaunch the European economy in response to the COVID-19 crisis (also called Next Generation EU (NGEU), whose main instrument is the Recovery and Resilience Facility (RRF)) and EU cohesion policy have different objectives. The first aims to help the recovery and resilience of our economies, while the second promotes economic, social and territorial cohesion among the Member States and regions of the EU.

After the agreement on available resources at the December 2020 European Council, the EU swiftly approved the RRF-related regulation in February 2021. However, finalization of the new Common Provisions Regulation (CPR) governing cohesion policy, as well as the specific regulations, had to wait until the end of June 2021. This allowed most Member States (now 26 out of 27) to draft and submit their national recovery plans, but has inevitably delayed the new programming of structural funds. The resources made available by the NGEU to the RRF are considerable (€672 billion) and are additional to those provided by the Multiannual Financial Framework for cohesion policy (€330 billion).

The question therefore arises of the use of the two resources for the digital and environmental transitions, 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 carried out and deliver the expected results on time. Wasting resources is not a good idea in times of fiscal consolidation, while the financing needs are enormous. It is necessary to ensure both good complementarity and, as far as possible, synergies between the two ‘project pipelines’. Only in this way can we put aside the initial fears about an RRF tapping into the ‘project pipeline’ of cohesion, de facto emptying it of its content.

This Briefing addresses the principle of complementarity between national recovery plans and cohesion policy programmes. Are they competitors or allies? Are they on parallel tracks? What demarcations and synergies can be identified between these two instruments? What strategies can be adopted to ensure the eligibility of project expenditure? We analyse here the methods of practical implementation of this principle and discuss the concrete options available to combine (or not) use of the two funds in projects themselves.