The EU €672.5 billion Recovery and Resilience Facility is now approved by the European Parliament   


On 10 February 2021, the European Commission issued a statement embracing the European Parliament’s confirmation of the political agreement reached on the Recovery and Resilience Facility (‘ RRF’) Regulation. This announcement comes to demonstrate the outcome of the EU’s efforts to support reforms and investments amid the COVID-19 pandemic making €672.5 billion available for loans and grants to EU Member States.


The RRF was initially introduced with the 2021 Annual Sustainable Growth Strategy and it is one of the most important elements of the NextGerenationEU scheme - the recovery instrument that was created as a solution to the economic and social damage brought by the COVID-19 pandemic. Its roots, however, could be traced back to EU’s Treaties. Pursuant to Article 174 of the TFEU, in order to promote its overall harmonious development, the European Union develops and pursues actions that lead to the strengthening of its economic, social and territorial cohesion. The provision of Article 174 further provides that the Union shall aim to reduce disparities between the levels of development of the various regions and the averseness of the least favoured regions.

Areas of support:

In a larger perspective, the RRF is an aspect of EU’s plan for emerging from the pandemic. It is structured in six pillars:

(i) green transition;

(ii) digital transformation;

(iii) economic cohesion, productivity and competitiveness;

(iv) social and territorial cohesion;

(v) health, economic, social and institutional resilience; and

(vi) policies for the next generation.

Timeframe and breakdown:

The confirmation it received by the European Parliament, makes it possible for the RRF to enter into force in the second half of February. Member States are required to present national recovery and resilience plans that provide for specific reforms and public investment projects by 30 April. To benefit from the support of the RRF, member states must implement these reforms and investments by 2026.

An upfront payment of up to 13% of the total requested funding will be available once the Council approves the respective national plan. To receive subsequent payments Member States will have to reach concrete milestones and targets, set out in their plans. It is important to underline that a scoreboard providing stats and information on the progress of the RRF implementation by countries in accordance with the respective national plan will be established and made publicly available.

The RRF funding will be extended in the form of grants and loans, where up to €312.5 billion will be made available in grants and up to €360 billion in loans.

The primary tool for the allocation of 70% of the total amount of the grants will be the assessment of the data in relation to a Member State’s population, its GDP per capita, and its average unemployment rate for the period 2015-2019. The remaining 30% will be subject to the observed loss in real GDP over 2020 and the observed cumulative loss in real GDP over the period 2020-2021.

Regarding the loans, the amount of the funds extended should not exceed 6.8% of the Gross National Income for each Member State with the exception that an increase will be possible in case of exceptional circumstances and subject to available resources.

It is certain that the national plans should allocate at least 37% of total expenditure to investments and reforms that support climate objectives , and these reforms should follow the principle “do no significant harm”, ensuring that they do not significantly impair the environment. Other 20% of expenditures should support the digital transition.

Next steps

All necessary formal steps for the RRF to enter into force must be completed by March 2021. As a first step, the Council of the EU needs to approve the agreement reached on the RRF, before the Presidents of the Economic and Financial Affairs Council and the European Parliament can sign it. Subsequently, Member States will be able to submit their national recovery and resilience plans, which will be adopted by the Council after having received assessment by the Commission.