Thursday, October 21, 2021

With payouts in sight, EU shifts to making ‘green’ recovery plan work

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imageCommodities7 minutes ago (Jun 25, 2021 11:06AM ET)

(C) Reuters. FILE PHOTO: European Union flags flutter outside the EU Commission headquarters in Brussels, Belgium May 5, 2021. REUTERS/Yves Herman

By Jan Strupczewski

BRUSSELS (Reuters) – European Union leaders called on Friday for rapid implementation of national post-pandemic recovery plans intended to make economies greener and more digitalised, with the first batch of 12 such schemes set to get EU funding next month.

All the bloc’s 27 nations are to get money from an EU recovery scheme worth 800 billion euros ($960 billion) in grants and loans.

To qualify, each government has to set out how it wants to spend its share, with the caveat that at least 37% must go towards green goals such as cutting CO2 emissions, and at least 20% to making the economy fit for the digital age.

The plans are assessed by the European Commission to make sure they meet all criteria, and then by the council of finance ministers, before money is paid out.

The Commission has already approved 12 such plans — from Belgium, Denmark, Greece, Spain, France, Germany, Italy, Latvia, Luxembourg, Austria, Portugal and Slovakia — which will now be reviewed by EU finance ministers in July.

The plans took months of intensive work to prepare, but their approval now shifts the focus to the many challenges of implementing them.

“The European Council … underlines the importance of full and timely implementation of the plans,” the EU leaders said in the conclusions of their two-day summit said.

Governments will get only 13% of their share of the money up front, with further tranches roughly twice a year, on completion of agreed investment targets and reforms.

“For the next few years, the EU has quite a significant amount of leverage to make sure that commitments are met,” one EU official said.

Reforms are also front-loaded in the next 6-12 months, officials said – making them more immune to government changes later in the scheme.

Some members of the European Parliament and non-governmental organisations have said that, instead of introducing new investments and reforms, some governments have simply repackaged what they had already planned to do.

Some also detect “green-washing” – creating an impression that projects are environmentally friendly and fight climate change when in fact they are nothing of the sort.

A second EU official conceded that there would be challenges, but said the plan was still preferable to allocating no money to green or digital investments at all. ($1 = 0.8359 euros)

With payouts in sight, EU shifts to making ‘green’ recovery plan work

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