Regulation (EU) 2021/241 of the European Parliament and of the Council of 12 February 2021 establishing the Recovery and Resilience Facility

CHAPTER I

GENERAL PROVISIONS AND FINANCING

Article 1

Subject matter

This Regulation establishes the Recovery and Resilience Facility (the ‘Facility’).

It lays down the objectives of the Facility, its financing, the forms of Union funding under it and the rules for providing such funding.

Article 2

Definitions

For the purposes of this Regulation, the following definitions apply:

(1) ‘Union funds’ means funds covered by a Regulation of the European Parliament and of the Council laying down common provisions on the European Regional Development Fund, the European Social Fund Plus, the Cohesion Fund, the Just Transition Fund and the European Maritime, Fisheries and Aquaculture Fund and financial rules for those and for the Asylum, Migration and Integration Fund, the Internal Security Fund and the Border Management and Visa Instrument (the ‘Common Provisions Regulation for 2021-2027’);

(2) ‘financial contribution’ means non-repayable financial support under the Facility that is available for allocation or that has been allocated to a Member State;

(3) ‘European Semester’ means the process set out in Article 2-a of Council Regulation (EC) No 1466/97 (¹);

(4) ‘milestones and targets’ means measures of progress towards the achievement of a reform or an investment, with milestones being qualitative achievements and targets being quantitative achievements;

(5) ‘resilience’ means the ability to face economic, social and environmental shocks or persistent structural changes in a fair, sustainable and inclusive way; and

(6) ‘do no significant harm’ means not supporting or carrying out economic activities that do significant harm to any environmental objective, where relevant, within the meaning of Article 17 of Regulation (EU) 2020/852.

Article 3

Scope

The scope of application of the Facility shall refer to policy areas of European relevance structured in six pillars:

(a) green transition;

(b) digital transformation;

(c) smart, sustainable and inclusive growth, including economic cohesion, jobs, productivity, competitiveness, research, development and innovation, and a well-functioning internal market with strong SMEs;

(d) social and territorial cohesion;

(e) health, and economic, social and institutional resilience, with the aim of, inter alia, increasing crisis preparedness and crisis response capacity; and

(f) policies for the next generation, children and the youth, such as education and skills.

Article 4

General and specific objectives

Article 5

Horizontal principles

Article 6

Resources from the European Union Recovery Instrument

Measures referred to in Article 1 of Regulation (EU) 2020/2094 shall be implemented under the Facility:

(a) through an amount of up to EUR 312 500 000 000 as referred to in point (ii) of Article 2(2)(a) of Regulation (EU) 2020/2094 in 2018 prices, available for non-repayable financial support, subject to Article 3(4) and (7) of Regulation (EU) 2020/2094. As provided for in Article 3(1) of Regulation (EU) 2020/2094, those amounts shall constitute external assigned revenue for the purpose of Article 21(5) of the Financial Regulation;

(b) through an amount of up to EUR 360 000 000 000 as referred to in point (b) of Article 2(2) of Regulation (EU) 2020/2094 in 2018 prices, available for loan support to Member States pursuant to Articles 14 and 15 of this Regulation, subject to Article 3(5) of Regulation(EU) 2020/2094.

Article 7

Resources from shared management programmes and use of resources

Article 8

Implementation

The Facility shall be implemented by the Commission in direct management in accordance with the relevant rules adopted pursuant to Article 322 TFEU, in particular the Financial Regulation and the Regulation (EU, Euratom) 2020/2092 of the European Parliament and of the Council (⁴).

Article 9

Additionality and complementary funding

Support under the Facility shall be additional to the support provided under other Union programmes and instruments. Reforms and investment projects may receive support from other Union programmes and instruments provided that such support does not cover the same cost.

Article 10

Measures linking the Facility to sound economic governance

The Commission may make a proposal to the Council to suspend all or part of the commitments or payments in relation to any of the following cases:

(a) where the Council adopts two successive recommendations in the same excessive imbalance procedure in accordance with Article 8(3) of Regulation (EU) No 1176/2011 on the grounds that a Member State has submitted an insufficient corrective action plan;

(b) where the Council adopts two successive decisions in the same excessive imbalance procedure in accordance with Article 10(4) of Regulation (EU) No 1176/2011 establishing non-compliance by a Member State on the grounds that it has not taken the recommended corrective action;

(c) where the Commission concludes that a Member State has not taken measures as referred to in Regulation (EC) No 332/2002 and as a consequence decides not to authorise the disbursement of the financial assistance granted to that Member State;

(d) where the Council decides that a Member State does not comply with the macroeconomic adjustment programme referred to in Article 7 of Regulation (EU) No 472/2013, or with the measures requested by a Council decision adopted in accordance with Article 136(1) TFEU.

Priority shall be given to the suspension of commitments; payments shall be suspended only when immediate action is sought and in the case of significant non-compliance.

The decision to suspend payments shall apply to requests for payments submitted after the date of the decision to suspend.

The suspension of commitments shall apply to the commitments from 1 January of the year following the adoption of the decision to suspend.

The Council shall adopt a decision, by means of an implementing act, on a proposal by the Commission referred to in paragraphs 1 and 2 in relation to the suspension of payments.

The suspension of commitments shall be subject to a maximum of 25 % of the commitments or 0,25 % of nominal GDP, whichever is lower, in any of the following cases:

(a) in the first case of non-compliance with an excessive deficit procedure as referred to in paragraph 1;

(b) in the first case of non-compliance relating to a corrective action plan under an excessive imbalance procedure as referred to in point (a) of paragraph 2;

(c) in the case of non-compliance with the recommended corrective action pursuant to an excessive imbalance procedure as referred to in point (b) of paragraph 2;

(d) in the first case of non-compliance as referred to in points (c) and (d) of paragraph 2.

In the case of persistent non-compliance, the suspension of commitments may exceed the maximum percentages set out in the first subparagraph.

The Council shall lift the suspension of commitments on a proposal from the Commission, in accordance with the procedure set out in the first subparagraph of paragraph 3 of this Article, in the following cases:

(a) where the excessive deficit procedure is held in abeyance in accordance with Article 9 of Regulation (EC) No 1467/97 or the Council has decided in accordance with Article 126(12) TFEU to abrogate the decision on the existence of an excessive deficit;

(b) where the Council has endorsed the corrective action plan submitted by the Member State concerned in accordance with Article 8(2) of Regulation (EU) No 1176/2011 or the excessive imbalance procedure is placed in a position of abeyance in accordance with Article 10(5) of that Regulation or the Council has closed the excessive imbalance procedure in accordance with Article 11 of that Regulation;

(c) where the Commission has concluded that a Member State has taken appropriate measures as referred to in Regulation (EC) No 332/2002;

(d) where the Commission has concluded that the Member State concerned has taken appropriate measures to implement the macroeconomic adjustment programme referred to in Article 7 of Regulation (EU) No 472/2013 or the measures requested by a Council decision adopted in accordance with Article 136(1) TFEU.

After the Council has lifted the suspension of commitments, the Commission may again enter into the commitments previously suspended without prejudice to Article 3(4), (7) and (9) of Regulation (EU) 2020/2094.

A decision concerning the lifting of the suspension of payments shall be taken by the Council on a proposal by the Commission in accordance with the procedure set out in the third subparagraph of paragraph 3, where the applicable conditions set out in the first subparagraph of this paragraph are fulfilled.

The competent committee of the European Parliament may invite the Commission to discuss the application of this Article in the context of a structured dialogue in order to allow the European Parliament to express its views. The Commission shall give due consideration to the views expressed by the European Parliament.

The Commission shall transmit the proposal for suspension or the proposal to lift such a suspension, to the European Parliament and to the Council without delay after its adoption. The European Parliament may invite the Commission to explain the reasons for its proposal.

CHAPTER II

FINANCIAL CONTRIBUTION, ALLOCATION PROCESS, LOANS AND REVIEW

Article 11

Maximum financial contribution

The maximum financial contribution shall be calculated for each Member State as follows:

(a) for 70 % of the amount referred to in point (a) of Article 6(1), converted into current prices, on the basis of the population, the inverse of the GDP per capita and the relative unemployment rate of each Member State as set out in the methodology in Annex II;

(b) for 30 % of the amount referred to in point (a) of Article 6(1), converted into current prices, on the basis of the population, the inverse of the GDP per capita and, in equal proportion, the change in real GDP in 2020 and the aggregated change in real GDP for the period 2020-2021 as set out in the methodology in Annex III. The change in real GDP for 2020 and the aggregated change in real GDP for the period 2020-2021 shall be based on the Commission Autumn 2020 forecasts.

Article 12

Allocation of financial contribution

Article 13

Pre-financing

Article 14

Loans

The request for loan support by a Member State shall set out:

(a) the reasons for the loan support, justified by the higher financial needs linked to additional reforms and investments;

(b) the additional reforms and investments in line with Article 18;

(c) the higher cost of the recovery and resilience plan concerned compared to the amount of the financial contributions allocated to the recovery and resilience plan respectively pursuant to point (a) or (b) of Article 20(4);

(d) where applicable, the reforms and investments in line with Article 21c.

Article 15

Loan agreement

Before entering into a loan agreement with the Member State concerned, the Commission shall assess whether:

(a) the justification for requesting the loan support and its amount is considered reasonable and plausible in relation to the additional reforms and investments; and

(b) the additional reforms and investments comply with the criteria set out in Article 19(3).

Where the Commission considers that the request for loan support fulfils the criteria of paragraph 1, and upon adoption of the Council implementing decision referred to in Article 20(1), the Commission shall enter into a loan agreement with the Member State concerned. The loan agreement, in addition to the elements laid down in Article 220(5) of the Financial Regulation, shall contain the following elements:

(a) the amount of the loan in euro including, where applicable, the amount of the pre-financed loan in accordance with Article 13;

(b) the average maturity; Article 220(2) of the Financial Regulation shall not apply with regard to this maturity;

(c) the pricing formula and the availability period of the loan;

(d) the maximum number of instalments and the repayment schedule;

(e) the other elements needed for the implementation of the loan in relation to the reforms and the investment projects concerned in line with the decision referred to in Article 20(3).

Article 16

Review report

The review report shall set out the following elements:

(a) an assessment of the extent to which the implementation of the recovery and resilience plans is in line with the scope and contributes to the general objective of this Regulation in line with the six pillars referred to in Article 3, including how the recovery and resilience plans tackle the inequalities between women and men;

(b) a quantitative assessment of the contribution of the recovery and resilience plans to: (i) the climate target of at least 37 %, (ii) the digital target of at least 20 %, (iii) each of the six pillars referred to in Article 3;

(c) the state of the implementation of the recovery and resilience plans and observations and guidance to the Member States before the update of their recovery and resilience plans referred to in Article 18(2).

CHAPTER III

RECOVERY AND RESILIENCE PLANS

Article 17

Eligibility

However, the new reforms and investments referred to in Article 21c(1) shall only be eligible where they start from 1 February 2022 onwards.

Article 18

Recovery and resilience plan

The recovery and resilience plan shall be duly reasoned and substantiated. It shall in particular set out the following elements:

(a) an explanation of how the recovery and resilience plan, taking into account the measures included therein, represents a comprehensive and adequately balanced response to the economic and social situation of the Member State, thereby contributing appropriately to all pillars referred to in Article 3, taking into account the specific challenges of the Member State concerned;

(b) an explanation of how the recovery and resilience plan contributes to effectively address all or a significant subset of challenges identified in the relevant country-specific recommendations, including fiscal aspects thereof and recommendations made pursuant to Article 6 of Regulation (EU) No 1176/2011 where appropriate, addressed to the Member State concerned, or challenges identified in other relevant documents officially adopted by the Commission in the context of the European Semester;

(c) a detailed explanation of how the recovery and resilience plan strengthens the growth potential, job creation and economic, social and institutional resilience of the Member State concerned, including through the promotion of policies for children and the youth, and mitigates the economic and social impact of the COVID-19 crisis, contributing to the implementation of the European Pillar of Social Rights, and thereby enhancing the economic, social and territorial cohesion and convergence within the Union;

(ca) an explanation of how the REPowerEU chapter contributes to addressing energy poverty, including, where relevant, giving adequate priority to the needs of those affected by energy poverty, as well as to the reduction of vulnerabilities during the coming winter seasons;

(d) an explanation of how the recovery and resilience plan ensures that no measure for the implementation of reforms and investments included in the recovery and resilience plan does significant harm to environmental objectives within the meaning of Article 17 of Regulation (EU) 2020/852 (the principle of ‘do no significant harm’);

(e) a qualitative explanation of how the measures in the recovery and resilience plan are expected to contribute to the green transition, including biodiversity, or to addressing the challenges resulting therefrom, whether they account for an amount that represents at least 37 % of the recovery and resilience plan’s total allocation and whether measures of that type in the REPowerEU chapter account for an amount that represents at least 37 % of the total estimated costs of measures included in that chapter, based on the methodology for climate tracking set out in Annex VI; that methodology shall be used accordingly for measures that cannot be directly assigned to an intervention field listed in Annex VI; the coefficients for support for the climate objectives may be increased up to a total amount of 3 % of the allocation of the recovery and resilience plan for individual investments to take account of accompanying reform measures that credibly increase their impact on the climate objectives as explained in the recovery and resilience plan;

(f) an explanation of how the measures in the recovery and resilience plan are expected to contribute to the digital transition or to the challenges resulting therefrom, and whether they account for an amount which represents at least 20 % of the recovery and resilience plan’s total allocation, based on the methodology for digital tagging set out in Annex VII; that methodology shall be used accordingly for measures that cannot be directly assigned to an intervention field listed in Annex VII; the coefficients for support for the digital objectives may be increased for individual investments to take account of accompanying reform measures that increase their impact on the digital objectives;

(g) where appropriate, for investments in digital capacities and connectivity, a security self-assessment based on common objective criteria identifying any security issues, and detailing how those issues will be addressed in order to comply with relevant Union and national law;

(h) an indication of whether the measures included in the recovery and resilience plan comprise cross-border or multi-country projects, an explanation as to how the relevant measures in the REPowerEU chapter, including the measures addressing challenges identified in the Commission’s most recent needs assessment, have a cross-border or multi-country dimension or effect, and an indication of whether the total costs of those measures account for an amount that represents at least 30 % of the estimated costs of the REPowerEU chapter;

(i) envisaged milestones, targets and an indicative timetable for the implementation of the reforms, and investments to be completed by 31 August 2026;

(j) the envisaged investment projects and the related investment period;

(k) the estimated total costs of the reforms and investments covered by the recovery and resilience plan submitted (also referred to as ‘estimated total costs of the recovery and resilience plan’) backed up by appropriate justification and by explanations of how it is in line with the principle of cost efficiency and commensurate to the expected national economic and social impact;

(l) where relevant, information on existing or planned Union financing;

(m) the accompanying measures that may be needed;

(n) a justification of the coherence of the recovery and resilience plan; and an explanation of its consistency with the principles, plans and programmes referred to in Article 17;