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Key aspects and main pillars of the recovery plan

ECONOMÍA Y FINANZAS I April 22, 2021

The COVID-19 pandemic recovery plan has set out key objectives and other essential pillars to aid the eurozone's economic recovery.

En el plan de recuperación por la pandemia del covid-19 se han establecido objetivos claves y otros pilares fundamentales para ayudar a la recuperación económica de la zona euro.

The recovery plan for Europe aims to rebuild the European economy after the COVID-19 pandemic and make it more sustainable, digital and resilient in the face of future crises. To this end, key objectives and six essential pillars for recovery have been established.

On sustainability, the European Green Deal is the EU's roadmap, which aims to achieve climate neutrality by 2050, decoupling economic growth from resource use, boosting the circular economy, restoring biodiversity and reducing pollution.

When it comes to digitalisation, the Digital Europe programme is leading the way. With this, the EU wants to accelerate the digital transformation of Europe's economy and society by passing on its benefits to citizens and businesses.

Objectives of the recovery plan for Europe

Funds allocated through the recovery plan for Europe will have three key objectives:

Supporting countries in their recovery. The recovery and resilience plans presented by the countries that voluntarily apply for this support will have to be adapted, among other issues, to the priorities defined by the EU, such as digitalisation and a green transition.
Relaunching the economy and supporting private investment. National plans should grow the economy through support for key sectors and technologies and mobilise capital for the solvency of viable companies.
Learning from the experience of the crisis. The recovery plan for Europe includes measures to strengthen health and essential supplies stockpiling programmes at EU level (through rescEU), as well as to encourage innovation and research in the healthcare sector.

The six pillars of recovery

To achieve these objectives, actions funded by the European Recovery and Resilience Facility (RRF), the main instrument of NextGenerationEU, should be organised around six main pillars:

Green transition to achieve climate neutrality in the European Union by 2050 through a strategy to move towards a sustainable economy.
Digital transformation to create the right framework for the use of digital technologies to benefit citizens and businesses.
Smart, sustainable and inclusive growth, incorporating elements such as economic cohesion, employment, productivity, competitiveness, research, innovation, a well-functioning internal market and strong SMEs.
Social and territorial cohesion of all the population and territories of Europe.
Health, economic, social and institutional resilience, which will increase preparedness and the capacity the respond in the face of future crises.
Policies for the next generation. It establishes the need to pay special attention to policies related to children and young people and in particular to education and training.

Therefore, in order to receive support from the Recovery and Resilience Facility, EU countries must put in place a coherent package of projects, reforms and investments linked to these six policy areas. Each Member State should design a National Recovery and Resilience Plan that includes the reforms and investment projects needed to achieve these objectives, with the four aspects identified in the European Commission's Annual Sustainable Growth Strategy as guiding principles: environmental sustainability, productivity, equity and macroeconomic stability.

The Commission has encouraged Member States to submit investment and reform plans in the following areas:

Clean and renewable technologies.
Energy efficiency of buildings.
Sustainable transport and charging stations.
Deployment of broadband services.
Digitalisation of the administration.
Increasing cloud capabilities.
Education and training to support digital skills.

In addition, National Recovery and Resilience Plans should include detailed strategies to address the specific challenges of each Member State and have to meet the following conditions:

They should devote at least 37% of total spending to investments and reforms that support climate action goals.
They should devote a minimum of 20% of spending to support the digital transition.
All investments and reforms must respect the principle of not causing significant damage to the environment.
They should propose strong measures to protect the EU's financial interests, especially to prevent fraud, corruption and conflicts of interest.

Spain presented its national plan on 30 April, within the limit set for this purpose and they are expected to be evaluated and approved by the European Commission in June 2021. The European Regulation on the Recovery and Resilience Facility, adopted last February, describes the objectives of this financial instrument and the conditions for its implementation.

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