Special feature on Next Generation EU: legal road map

From the European Commission

The Next Generation Recovery instrument (NGEU or NextGen) will mobilize €750,000 million to be distributed to the member states in the form of non-repayable transfers (52%) and loans (48%) in the period between 2021 and 2026. Of the amounts to be provided as non-repayable transfers, however, 70% must be committed in their laws by the states before the end of 2022.

NextGen, which is added to the structural instruments and funds included in the Multiannual Financial Framework (2021-2027), consists of 7 programs (RescuE, Horizon Europe, Just Transition Fund, InvestEU Programme, among others), although the programs that have received the largest share of the budget are the Recovery and Resilience Facility and REACT-EU (accounting for almost 95% of the total).

  • The main purpose of the Recovery and Resilience Facility, (RRF), established in a Regulation that came into force on February 19, 2021, is to strengthen the support framework for member states, by providing them with effective and significant financial assistance to step up implementation of the sustainable reforms and public investments needed to achieve the EU’s policy objectives.
  • To receive NextGen funds, member states have to prepare their own national recovery and resilience plans, setting out their own reform and investment programs for the 2021-2023 period.

The preparation of these plans must be guided by the following aims:

Address the country specific recommendations mentioned for each country in the European Semester.
Propose measures aligned with the six main pillars or areas of action that are priorities for the EU: green transition; digital transformation; smart, sustainable and inclusive growth; social and territorial cohesion; health and economic, social and institutional resilience; and policies for the next generation, children and the youth, such as education.
Contribute to the seven flagship areas in the Annual Sustainable Growth Strategy: Power up; Renovate; Recharge and Refuel; Connect; Modernize; Scale-up; Reskill and upskill.
At least 37% of the funds must be used for measures contributing to the green transition, and 20%, to the digital transformation.
  • From when the respective national plans are submitted, the Commission has two months to assess them and the Council, four weeks to approve them. Then a pre-payment may be received, equal to 13% of the aggregate amount of support allocated (€10,000 million for Spain). The rest of the funding will be delivered in six month periods by reference to how far the member states have achieved the milestones and objectives set in their plans for each period.
  • For the arrival of financing from NextGen funds, every member state must, in accordance with their respective constitutional requirements, approve the EU own resources decision, a necessary step for the EU to be able to secure funds on the international debt markets and obtain funding for the recovery facility.