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ECFIN E-news 241

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NextGenerationEU: European Commission endorses recovery and resilience plans of four more Member States
Presentation of key parts of CY RRP: Ursula von der Leyen ©European Union

Over the past several days, the European Commission has adopted positive assessments of the recovery and resilience plans of four Member States, in addition to the fourteen already approved.

Specifically, the Commission has assessed the plans of Cyprus, Croatia, Ireland and Czechia. This is an important step towards disbursing funds under the Recovery and Resilience Facility (RRF) to these Member States. This financing will support the implementation of the crucial investment and reform measures outlined in each Member State's recovery and resilience plan. The RRF will play an important role in enabling them to emerge stronger from the COVID-19 pandemic. The Commission assessed the plans based on the criteria set forth in the RRF Regulation. The Council will now have, as a rule, four weeks to adopt the Commission's proposals. The RRF – at the heart of NextGenerationEU – will provide up to €672.5 billion (in current prices) to support investments and reforms across the EU.

See also NextGenerationEU: European Commission en...
Ursula von der Leyen, President of the European Commission
Ursula von der Leyen, President of the European Commission

“NextGenerationEU is reshaping our continent for future generations. With the investment of NextGenerationEU, we make the European Green Deal a reality; we are also building our digital leadership in Europe; and we are equipping our societies to be stronger, to be more resilient and, in particular, to deal with the future health challenges we might be seeing.”

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Council gives green light to first recovery disbursements
Valdis DOMBROVSKIS (Executive Vice-President of the European Commission for an Economy that Works for People) and Andrej SIRCELJ (Slovenian Minister for Finance, Slovenia) at the Press Conference of Economic and Financial Affairs Council on 13 July 2021 ©European Union

On 13 July, EU economic and finance ministers adopted the first batch of Council implementing decisions on the approval of national recovery and resilience plans.

Austria, Belgium, Denmark, France, Germany, Greece, Italy, Latvia, Luxembourg, Portugal, Slovakia and Spain got the green light for the use of EU recovery and resilience funds to boost their economies and recover from the COVID-19 fallout. The adoption of Council implementing decisions on the approval of the plans permits the Member States to sign grant and loan agreements that will allow for up to 13% pre-financing. The Council received a positive assessment for the 12 Member States’ plans from the Commission in June, accompanied by the proposals for the Council decisions on their approval. The EU financial assistance from the €672.5 billion Recovery and Resilience Facility aims to power the European economic recovery by supporting Member States’ reforms and investment projects. The measures approved in the national plans are centred around six policy areas (‘pillars’) that include the green and digital transition, smart, sustainable and inclusive growth, and social and territorial cohesion.

See also Council gives green light to first recov...
Eurogroup exchanges views with US Treasury Secretary Janet Yellen on economic recovery, and banking and financial stability
Paschal Donohoe, President of the Eurogroup, meets Janet Yellen, United States Secretary of the Treasury at Eurogroup, 12 July 2021 ©European Union

During a meeting of the Eurogroup in inclusive format on 12 July, EU finance ministers exchanged views on the international dimension of euro area economic and financial policies with Janet Yellen, the United States Secretary of the Treasury.

The discussion focused on the economic recovery as well as on banking and financial stability issues. Paschal Donohoe, the President of the Eurogroup, also briefed ministers on the June Euro summit, focusing in particular on the banking union discussions in order to prepare the work ahead. In addition, ministers discussed the budgetary situation and prospects in the euro area as a whole, focusing on prospects for 2022. The chairman of the European Fiscal Board (EFB), Niels Thygesen, was invited to the meeting and presented the EFB's recently published report. The assessment is based on a Commission analysis of the 2021 stability programmes. The discussion fed into the preparation of the draft budgetary plans and the recommendations for the euro area for 2022. Lastly, finance ministers discussed the potential implications of a digital euro for citizens, businesses and the Economic and Monetary Union as a whole. They focused on its political dimension, fully respecting the roles and mandates of all institutions involved.

See also Eurogroup, 12 July 2021
Brussels Economic Forum 2021

The Brussels Economic Forum 2021 took place on 29 June, and it featured keynote addresses by Ursula von der Leyen, Angela Merkel, Jacinda Ardern and Christine Lagarde, among many others.

If you missed the Forum live, you can replay the full event or catch up with the individual panels, debates and keynotes.

Did you watch the event? Give us your feedbak in the evaluation survey!

See also Brussels Economic Forum 2021
EU disburses €250 million in Macro-Financial Assistance to Jordan
Jordan flag and European Union flag ©European Union

On 20 July, the European Commission, on behalf of the EU, disbursed €250 million in macro-financial assistance (MFA) to Jordan.

The disbursement is partly from the €3 billion emergency MFA package for ten enlargement and neighbourhood partners, which aims to help them limit the economic fallout of the COVID-19 pandemic (COVID-19 MFA programme), and partly from Jordan's €500 million third MFA programme (MFA-III programme), which was approved in January 2020. The first €250 million disbursement to Jordan under these two MFA programmes took place in November 2020. Jordan has fulfilled the policy conditions agreed with the EU for the release of the €250 million disbursement under the COVID-19 MFA programme and the MFA-III programme. These included important measures to improve public finance management, accountability in the water sector, measures to increase labour market participation and measures to strengthen good governance. In addition, Jordan continues to satisfy the pre-conditions for the granting of MFA as regards the respect of human rights and effective democratic mechanisms. With this disbursement, the EU has successfully completed four out of the 10 MFA programmes in the €3 billion COVID-19 MFA package. The third and final tranche of the MFA-III programme to Jordan, amounting to €200 million, will follow once Jordan fulfils the agreed commitments.

See also EU disburses €250 million in Macro-Fin...
European Green Deal: Commission proposes transformation of EU economy and society to meet climate ambitions
The Berlaymont building lit in green to mark European Green Deal ©European Union

The European Commission adopted a package of proposals on 14 July designed to make the EU's climate, energy, land use, transport and taxation policies fit for reducing net greenhouse gas emissions by at least 55% by 2030, compared to 1990 levels.

Achieving these emission reductions in the next decade is crucial to Europe becoming the world's first climate-neutral continent by 2050 and making the European Green Deal a reality. With these proposals, the Commission is presenting the legislative tools to deliver on the targets agreed in the European Climate Law and to fundamentally transform the EU’s economy and society for a fair, green and prosperous future. The proposals combine: application of emissions trading to new sectors and a tightening of the existing EU Emissions Trading System; increased use of renewable energy; greater energy efficiency; a faster roll-out of low emission transport modes and the infrastructure and fuels to support them; an alignment of taxation policies with the European Green Deal objectives; measures to prevent carbon leakage; and tools to preserve and grow our natural carbon sinks. To ensure social equity, the policies in the package spread the costs of tackling and adapting to climate change, and a new Social Climate Fund would provide dedicated funding to Member States to help citizens finance investments in energy efficiency, new heating and cooling systems, and cleaner mobility.

See also Economic Sentiment hitting a 21-year hig...
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Quantifying Spillovers of Next Generation EU Investment
Quantifying Spillovers of Next Generation EU Investment © European Union

This study quantifies macroeconomic spillover effects of Next Generation EU investment.

Trend Capital when Goods and Capital Market Frictions Exist
This paper estimates trend capital based on supply side factors and good and capital market frictions.
The 2021 Stability & Convergence Programmes: an Overview, with an Assessment of the Euro Area Fiscal Stance
This paper presents an overview of Member States’ 2021 Stability and Convergence Programmes and an assessment of the recent and prospective fiscal stance.
Digitalisation and Beyond: The COVID-19 Pandemic and Productivity Growth in G20 Countries
This Economic Brief discusses productivity developments in G20 countries and policies to unlock productivity growth.
2021 Economic Reform Programmes of Albania, Montenegro, North Macedonia, Serbia, Turkey, Bosnia and Herzegovina and Kosovo: The Commission's Overview and Country Assessments
This report contains the Commission's assessments of the 2021 Economic Reform Programmes (ERP) of countries that are candidates or potential candidates for EU membership.
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