- 4.6
Recovery and resilience device
723.82 billion (from NGEU, including 337.97 in grants and 385.85 in loans)
The ultimate device for post-Coronavirus economic and social revitalization
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DG / Responsible Agencies: RECOVER | Italian Government | Presidency of the Council
Potential beneficiaries
EU member states and, indirectly, EU citizens, public or private organizations and companies.
Description and objectives
The Recovery and Resilience Device has a unique and historic nature in the context of European funds. It was specially created in response to a unique situation, the Covid-19 pandemic, which took a huge toll of lives and triggered the most severe economic recession in the postwar period.
The Recovery and Resilience Device is also called the Recovery and Resilience Facility (RRF). It is by far the largest part of a larger “Recovery Tool,” also called “Recovery Instrument“, “Recovery Package“, NextGenerationEU o “NGEU“.
While NGEU contributes to many other programs covered in this section, the Recovery and Resilience Facility is the core and ad-hoc program for the EU’s response to the Coronavirus crisis and emergency.
The Recovery and Resilience Device has:
- An unprecedented budget allocation;
- Own management (ensured by a special system at the member state level, in close coordination with the European Commission);
- Own sources of financing (involving, among other things, the first issuance of “European bonds” in history);
- A mixed system of support (including both grants for the benefit of member states and loans that can be activated at the request of member states);
- A national plan (prepared at the Italian level as part of the PNRR, the National Recovery and Resilience Plan, and submitted to community institutions for approval);
- A control system that binds member states to the achievement of certain goals and targets (defined in the NRP) and the implementation of reforms (deemed essential to respond to the crisis and trigger a sustainable development process);
- An important time alley (funds must be 70% committed by the end of 2022, the remaining 30% by the end of 2023, and actually spent by the end of 2026).
The Device thus aims to mitigate the economic and social impact of the Coronavirus pandemic and make EU economies and societies more sustainable, resilient, and better prepared for the challenges and opportunities of the green and digital transition. It will promote economic, social and territorial cohesion, job creation and sustainable growth, as well as resilience and preparedness for future challenges of the Union and member states.
Types of actions and projects
Funding is provided in the form of non-repayable financial support (grants) and loans. The funds are allocated to member states, which use them on the basis of what their respective National Recovery and Resilience Plans provide: primarily for public investment and reform, with the goal (inherent in the Device) of ensuring a sustainable and inclusive recovery that promotes green and digital transitions.
The Recovery and Resilience Device will therefore provide large-scale financial support for public investment and reforms in six main areas:
- Green transition (minimum 37% of the budget);
- Digital transformation (minimum 20% of the budget);
- Smart, sustainable and inclusive growth;
- Social and territorial cohesion;
- Health and economic, social and institutional resilience;
- Policies for the next generation and youth.
Indirectly, the RRF will also provide financing for private investment, channeled through public schemes.
There is potential room for planning by private or membership organizations, but channeled by: 1) specific criteria; 2) A focus on the “macro” objectives defined by the Device and the NRP; 3) Important time limits.
Italy’s National Recovery and Resilience Plan (NRP):
- It has a total amount of 191.5 billion euros, plus 30.6 billion in Complementary Plan (CP), financed by the Italian state, for a total of 222.1 billion euros;
- It is divided into 6 Missions (main thematic areas, consistent with the six areas above), broken down into Components (areas of intervention that address specific challenges), each of which has a large number of Investments (specific interventions). The general structure is summarized in the table;
- Provides for 3 Transversal Priorities (the principles guiding NRP investments, reforms and projects), Youth, Gender Equality and Citizenship Gap Reduction (North-South, disabled and elderly);
- It is accompanied by a broad strategy of reforms (63 in all), divided into Transversal Reforms (justice and public administration), Enabling Reforms (competition, environmental regulations, public contracts, quality of regulation, fiscal federalism, tax gap, administrative simplification, economic and capital accounting, spending review and evaluation, PA payment times, Recovery Procurement Platform, anti-corruption, investment and intervention in the Mezzogiorno, construction, urban planning and urban regeneration) and an even larger number of Sectoral Reforms covering specific areas.
Highlights
The RRF is a new, indeed historical, instrument. Therefore, there are no precursors in previous planning periods (see above).