Mobilising investment

To mobilise the necessary investments, the Commission is putting forward a two-fold response:

  • money support
    Next Generation EU a new recovery instrument of €750 billion which will boost the EU budget with new financing raised on the financial markets for 2021-2024
  • Euro coins
    A reinforced long-term budget of the EU for 2021-2027 (€ 1 100 billion)

The EU budget powering recovery and resilience

To ensure an effective EU response to the coronavirus crisis, which reaches out to everybody in the EU and to its global partners, the European Commission is mobilising a number of instruments. Next Generation EU will be rolled out across three pillars:

EU stars Supporting Member States to recover
  • Supporting investments and reforms
  • Supporting a just transition

(Within European Semester framework)

hand and building Kick-starting the economy and helping private investment
  • Supporting key sectors and technologies
  • Investing in key value chains
  • Solvency support for viable companies
paper with a list Learning the lessons from the crisis
  • Supporting key programmes for future crises
  • Supporting global partners

Read more on the pillars of Next Generation EU

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Key instruments supporting the recovery plan for Europe

The funds will go to areas where they can make the greatest difference, complementing and amplifying the essential work under way in the Member States. The investments will be channelled via a variety of instruments under three pillars, such as:

Supporting Member States to recover, repair and emerge stronger from the crisis

1. European Recovery and Resilience Facility, embedded in the European Semester

In its 2021 Annual Sustainable Growth Strategy, the Commission set out guidance for the implementation of the Recovery and Resilience Facility. The publication of the Annual Sustainable Growth Strategy launches this year’s European Semester cycle and confirms the EU's aim to pursue a new growth strategy based on the European Green Deal and competitive sustainability. The Commission strongly encourages Member States to include investments and reforms in green and digital to create sustainable jobs and growth.

  • Mechanism: Grants and loans by implementing Member States’ national recovery and resilience plans defined in line with the objectives of the European Semester, including in relation to the green and digital transitions and the resilience of national economies. Member States should submit draft recovery and resilience plans as of 15 October.
  • Budget: €560 billion of which €310 billion for grants and €250 billion in loans
  • Steer: The Facility is steered by the Recovery and Resilience Task Force that will work in close cooperation with Directorate-General for Economic and Financial Affairs.
2. REACT-EU – Recovery assistance for cohesion and the territories of Europe
  • Mechanism: Flexible cohesion policy grants for municipalities, hospitals, companies via Member States’ managing authorities. No national co-financing required
  • Budget: €55 billion of additional cohesion policy funding between 2020 and 2022
3. Supporting the green transition to a climate-neutral economy via funds from Next Generation EU
  • A proposal to strengthen the Just Transition Fund up to €40 billion, to assist Member States in accelerating the transition towards climate neutrality
  • A €15 billion reinforcement for the European Agricultural Fund for Rural Development to support rural areas in making the structural changes necessary in line with the European Green Deal and achieving the ambitious targets in line with the new Biodiversity and Farm to Fork strategies

Kick-starting the economy and helping private investment

1. Enhanced InvestEU Programme, including a Strategic Investment Facility
  • Mechanism: Provisioning of an EU budget guarantee for financing of investment projects via the EIB group and national promotional banks
  • Budget: €15.3 billion for InvestEU. Additionally, a new Strategic Investment Facility to be equipped with €15 billion provisioning from Next Generation EU
2. New Solvency Support Instrument to support equity of viable companies
  • Mechanism: Provisioning of an EU budget guarantee to the European Investment Bank Group in order to mobilise private capital
  • Budget: €31 billion

Learning the lessons of the crisis and addressing Europe’s strategic challenges

  1. New health programme to help equip Europe against future health threats
  • A new Health Programme, EU4Health, to strengthen health security and prepare for future health crises with a budget of €9.4 billion.
2. Reinforcing rescEU, the EU’s Civil Protection Mechanism, to respond to large-scale emergencies
  • Mechanism: Grants and procurements managed by the European Commission
  • Budget: A total of €3.1 billion

The Commission is also proposing to reinforce other programmes to allow them to play their full role in making the Union more resilient and addressing challenges brought along by the pandemic and its consequences. These are, among others, Horizon Europe, the Neighbourhood, Development and International Cooperation Instrument (NDICI), Humanitarian Aid Instrument, Digital Europe Programme, Connecting Europe Facility, Common Agricultural Policy, Instrument for Pre-Accession Assistance (IPA), etc.

More flexible emergency tools

Beyond  the  individual  programmes,  the  crisis  has  underlined  how  important  it  is  that  the Union is able to react fast and flexibly to put in place a coordinated European response. This in turn requires a more flexible EU budget. Therefore, the Commission proposes to reinforce the flexibility of the EU budget and emergency tools for the period 2021-2027.

medical equipment Solidarity and emergency aid reserve
  • Enables swift reinforcements via budgetary transfers to EU instruments where needs arise
  • Increase to a maximum annual amount of €3 billion
Euro coins Solidarity fund
  • Supports Member States in the response and immediate recovery following natural disasters such as floods, forest fires, earthquakes, storms and droughts
  • Extension to encompass major health crises and increase to a maximum annual amount of €1 billion
money support European globalisation adjustment fund
  • Provides support for the reintegration in the labour market of persons losing their jobs as a result of unexpected major restructuring events such as a financial or economic crisis
  • Threshold for the activation of the fund lowered to 250 redundancies and increase to a maximum annual amount of € 0.386 billion.
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Financing the Recovery plan for Europe

To finance the necessary investments, the Commission will issue bonds on the financial markets on behalf of the EU.

To make borrowing possible, the Commission will amend the Own Resources Decision and increase the headroom – the difference between the Own Resources ceiling of the long-term budget (the maximum amount of funds that the Union can request from Member States to finance its expenditure) and the actual spending.

With the headroom as a guarantee, the Commission will raise funds on the markets and channel them via Next Generation EU to programmes destined to repair the economic and social damage and prepare for a better future.

Commission issues bonds on the markets on behalf of the EU
Maturity varies from 3 to 30 years
Proceeds go to new EU budget instruments or top-ups for (revamped) EU programmes in the form of grants or budgetary guarantees. Commission lends proceeds to EU countries under the Recovery and Resilience Facility to finance their reform and resilience plans in line with the objectives identified in the European Semester, including the Green and Digital transformation, the Member States’ national energy and climate plans, as well as with the Just Transition plans.
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Adjusted Commission Work Programme for 2020

As part of the EU Recovery Plan, the European Commission also adjusted its Work Programme for 2020 in response to the unprecedented coronavirus reality. The adjusted Work Programme fast-tracks initiatives that support Europe’s recovery, save lives and protect livelihoods.

The Commission remains fully committed to delivering on its flagship initiatives, the twin green and digital transitions, which are key to relaunching the European economy.

All of the money raised through Next Generation EU and the new EU budget will be channelled through EU programmes into:

European green deal image

The European Green Deal is our growth strategy

  • A massive Renovation Wave to modernise Europe’s buildings and critical infrastructure, including building one million charging points for electric vehicles.
  • 1 million new green jobs. A more circular economy also has the potential to bring production home, eliminate foreign dependencies and create hundreds of thousands of new jobs.
  • The Farm to Fork Strategy supports farmers in providing Europeans with affordable, nutritious, safe and sustainable food. Given the vital role of rural areas in the green transition, the Commission is proposing to reinforce the budget for the European Agricultural Fund for Rural Development.
  • To support our natural ecosystems, the European Commission recently adopted a Biodiversity Strategy for 2030 and a Forest Strategy is upcoming.
  • The Just Transition Fund will support re-skilling of workers and create economic opportunities for small and medium-sized enterprises.

A deeper and more digital Single Market

  • Europe needs to invest more in better connectivity, and its industrial and technological presence. Technologies such as artificial intelligence, cybersecurity, data and cloud infrastructure, 5G and 6G networks, super- and quantum computers, as well as blockchain technologies will have spill-over effects and increase Europe’s strategic autonomy. 
  • A real data and digital economy as a motor for innovation and job creation. The Commission will present legislative action on data sharing and governance to be followed by a Data Act. As e-commerce is set to accelerate in the coming years, the Digital Services Act will improve the legal framework for digital services, with clear rules for online platforms.
  • A new Cybersecurity Strategy will boost EU-level cooperation, knowledge and capacity to keep our digital infrastructure safe.
Image of a family

A fair and inclusive recovery

  • SURE - Support mitigating Unemployment Risks in Emergency - will provide €100 billion to help workers and business. The Commission intends to make use of similar instruments in the future.
  • Reinforced youth employment support and fair minimum wages help vulnerable workers, including youth, to build up a financial buffer and get jobs, training and education. Given that women are overrepresented and underpaid in many front-line jobs, there is a need to close the gender pay gap, including through pay transparency measures.
  • To help Member States generate tax revenue, the Commission will step up the fight against tax evasion. A common consolidated corporate tax base would provide business with a single rulebook. Tax simplification can improve the business environment and contribute to economic growth.
  • As Europe sets off on its recovery path towards a greener and digital economy, the need to improve and adapt skills, knowledge and know-how becomes all the more important. The Commission will come forward with a Skills Agenda for Europe and a Digital Education Action Plan.
Delivery of emergency equipment

Constructing a more resilient Union

  • A new pharmaceutical strategy will address risks exposed during the crisis, such as pharmaceutical production capacities in Europe, thereby securing Europe’s strategic autonomy.
  • A new Action Plan on Critical Raw Materials will strengthen crucial markets for e-mobility, batteries, renewable energies, pharmaceuticals, aerospace, defence and digital applications.
  • The EU will undertake a Trade Policy Review to ensure the continuous flow of goods and services worldwide and to reform the World Trade Organization. The EU will reinforce its Foreign Direct Investment screening and present a White Paper on an instrument on foreign subsidies.
  • The Commission will reinforce its rescEU stockpile to build a permanent capacity to handle all types of crises, including by establishing emergency response infrastructure, transport capacity and emergency support teams.
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Next steps

  • May 2020

    Commission proposal for the Revised Multiannual Financial Framework 2014-2020 and 2021-2027 and Own Resources Decision, and sectoral legislation

  • by July 2020

    European Council: Political agreement on Multiannual Financial Framework 2014-2020 and 2021-2027 and Own Resources Decision

  • by summer 2020

    European Parliament’s consultation on Own Resources Decision

  • early autumn 2020

    Adoption of the revised Multiannual Financial Framework 2014-2020 and corresponding sectoral legislation

  • October 2020

    European Council

  • December 2020

    Adoption of the revised Multiannual Financial Framework 2021-2027 (European Parliament’s consent); Adoption of the Own Resources Decision (Ratification by all Member States in line with their constitutional requirements)

  • January 2021

    Multiannual Financial Framework 2021-2027 implementation starts