The Recovery and Resilience Facility: A Springboard for a Renaissance of Public Investments in Europe?
The funds provided by the Recovery and Resilience Facility under the National Recovery Resilience Plans are supposed to finance new projects to supplement, not to supplant national efforts. This is also called additionality which has long been a key principle of the EU cohesion policy. According to this principle EU financial intervention should not substitute for national funding that would have been used in the absence of EU intervention. The purpose of this short contribution is to shed light on the additionality of public investments under the Recovery and Resilience Facility. To this end, the authors propose to look at additionality both from a macro and micro perspective. They apply the micro approach to four national recovery and resilience plans: Italy, Germany, Belgium and Austria.
Key messages:
- The Policy Brief analyzes to what extent the funds provided by the Recovery and Resilience Facility (RRF) are used by member states to finance new projects (additionality of public investments).
- The analysis shows that in the EU-27 there is no significant relationship between the amount of RRF grants (in % of GDP) and the acceleration in public investment. This suggests that RRF funds are mainly used to finance existing investment projects.
- An in-depth analysis of the National Recovery Resilience Plans of Austria, Belgium, Germany, Spain, Italy and Portugal reveals substantial heterogeneity across countries. The share of new investments projects is smallest in Austria (19%) and Germany (20%) and highest in Belgium (77%). The shares amount to 40% in Spain and to 64% in Italy and Portugal.
Francesco Corti, Daniel Gros, Tomas Ruiz, Alessandro Liscai, Tamas Kiss-Galfalvi, David Gstrein, Elena Herold and Mathias Dolls: “The Recovery and Resilience Facility: A Springboard for a Renaissance of Public Investments in Europe?”, EconPol Policy Brief 40, November 2021.