Economic and Financial Affairs

In the two decades since, the euro has contributed to the stability, competitiveness, and prosperity of European economies. Most importantly, it has improved the lives of citizens and made it easier to do business across Europe and beyond. With the euro in your pocket, saving, investing, traveling, and doing business became much easier. The euro is a symbol of EU integration and identity. Today, more than 340 million people use it across 19 EU countries, with 27.6 billion euro banknotes in circulation for a value of about €1.5 trillion. The euro is currently the second most widely used currency in the world behind the US dollar. The latest episode of Euronews’ Real Economy reflects on what the euro currency has meant for European economies and businesses two decades after its introduction. The episode focuses on Ireland’s experience and features an interview with President of the Eurogroup and Ireland’s finance minister, Paschal Donohoe.

Spain's payments under the RRF are performance-based and dependent on its implementation of the investments and reforms outlined in its recovery and resilience plan. On November 11, 2021, Spain presented the Commission with a first request for payment of 10 billion euros under the RRF for 52 actions covering reforms in the fields of sustainable mobility, energy efficiency, decarbonization, connectivity, public administration, skills, education and social policy, labour, and fiscal policy. On December 3, 2021, the Commission adopted a positive preliminary assessment of Spain's payment request. The favourable opinion of the Economic and Financial Committee of the Council on the payment request paved the way for the adoption by the Commission of a final decision on the disbursement of funds. The comprehensive plan for Spain's recovery and resilience will be funded by €69.5 billion in grants. Payment amounts to Member States are published on the Recovery and Resilience Scoreboard, which shows progress in implementing the RRF as a whole and individual plans for recovery and resilience.

This follows the €1.8 billion paid to Romania in grants on December 2, 2021. In total, Romania has now received 13% of the total envelope under the Recovery and Resilience Facility. (RRF). The country is expected to receive a total of €29.2 billion, including €14.2 billion in subsidies and €14.9 billion in loans, over the course of its plan. The loan and grant agreements were signed separately for procedural reasons related to the changes in the Romanian government in autumn 2021. The loan and grant components of the Romanian RRP are mutually reinforcing in many areas. This allows Romania to invest in sustainable transport, forests and the protection of biodiversity, energy, digital transformation or education. For example, rail sector modernisation projects are supported by the grant component of the Romanian RRP, while the loan component will finance the development, modernisation and decarbonisation of road transport. Reforms and investments in areas such as water management, waste management and building renovation will also be mainly supported through the loan component. The RRF is at the heart of NextGenerationEU, which will make €800 billion (current prices) available to support investment and reform across the EU. Romania's plan is part of the EU's unprecedented response to emerge stronger from the COVID-19 crisis, encourage ecological and digital transitions and strengthen resilience and cohesion in our societies.

Greece submitted a request to the Commission on 29 December for a disbursement of €3.6 billion in financial support (net of pre-financing). Italy presented its request for a disbursement of €21 billion on 30. Greece's overall recovery and resilience plan will be financed by €17.77 billion in grants and €12.73 billion in loans, while Italy’s plan will be financed by €68.9 billion in grants and €122.6 billion in loans. Each country’s payments under the RRF are performance-based and contingent on them implementing the investments and reforms outlined in their respective recovery and resilience plans.

Greece's first payment request relates to 15 milestones covering several reforms and investments in the areas of energy efficiency, sustainable mobility, waste management and civil protection, active labour market policies, healthcare, tax administration, justice, business extroversion, and the audit and control system linked to the Recovery and Resilience Facility. Italy's first payment request relates to 51 milestones covering several reforms in the areas of areas of justice, public administration, audit and control, education, active labour market policies, digital and tourist sectors as well as simplification of legislation in sectors like waste, water, and rail transport.

Of this total, up to €30 million would be provided in grants and up to €120 million in medium-term loans at favourable financing conditions. The new MFA would build on the two previous MFA operations through which the EU has disbursed a total of €160 million to Moldova since 2017. Moldova continues to face many challenges, notably the need to tackle corruption and governance problems that have contributed to a weakening of the country’s fiscal and balance of payments positions over the past several years, prompting support from international partners. The past year has been equally challenging for the country. Moldova has recently faced a significant energy crisis, which coupled with the post-pandemic recovery has further implications for the economic stability and outlook in Moldova going forward. The proposed EU MFA, which requires adoption by the European Parliament and the Council before it can enter into force and disbursements can be made, would accompany the country's new IMF programme, approved on 20 December 2021.

Looking at the main components of euro area inflation, energy is expected to have the highest annual rate in December (26.0%, compared with 27.5% in November), followed by food, alcohol & tobacco (3.2%, compared with 2.2% in November), non-energy industrial goods (2.9%, compared with 2.4% in November) and services (2.4%, compared with 2.7% in November).