Economic and Financial Affairs

The European Council endorsed the Commission’s proposal that Croatia adopt the euro on 1 January 2023 and invited the Council to adopt the relevant Commission proposals without delay. Leaders also endorsed the country-specific recommendations, thus allowing the 2022 European Semester to be concluded. Referring to the Versailles Declaration and recent European Council conclusions, EU leaders asked the Commission to urgently pursue efforts to secure energy supply and to explore with international partners ways in which to curb rising energy prices, including the feasibility of introducing temporary price caps where appropriate. Lastly, EU leaders took note of the proposals outlined in the final report of the Conference on the Future of Europe, which was presented to the three co-Presidents during the closing ceremony on 9 May 2022. The Conference provided a unique opportunity to engage with European citizens, and the EU institutions now must ensure that there is an effective follow-up to the final report, within each institutions’ own sphere of competence and in accordance with the Treaties. On 24 June, EU leaders also met in Brussels for a Euro Summit in inclusive format. They discussed the current economic situation and efforts for further strengthening the banking union and the capital markets union.

She announced the disbursement of the first payment of €700 million in grants (net of pre-financing) to Croatia under the Recovery and Resilience Facility (RRF), the key instrument at the heart of NextGenerationEU. This payment to Croatia brings the total amount of funds disbursed under the RRF since its entry into force in February 2021 to over €100 billion, both in grants and loans. On 15 March 2022, Croatia submitted to the Commission the first request for payment of €700 million under the RRF covering 33 milestones and one target. These include several reforms and investments in the areas of health, social policy, adult education, public administration, anti-corruption, fiscal, anti-money-laundering, energy, transport, water and waste management, and energy efficiency, as well as Croatia's audit and control system for the implementation of the RRF. On 10 May 2022, the Commission adopted a positive preliminary assessment of Croatia's request for payment. The favourable opinion of the Economic and Financial Committee of the Council on the payment request paved the way for the Commission to adopt a final decision on the disbursement of the funds.

On 29 April 2022, Slovakia submitted a payment request to the Commission for the first instalment, based on the achievement of the 14 milestones selected in the Council Implementing Decision. They cover reforms of the judicial system and in the areas of higher education, the fiscal framework, the energy system, sustainable mobility, anti-corruption, the digitalisation of the public sector, as well as Slovakia's audit and control system for the implementation of the RRF. With their request, the Slovak authorities provided detailed and comprehensive evidence demonstrating the fulfilment of the 14 milestones. The Commission has now sent its positive preliminary assessment of Slovakia's fulfilment of the milestones required for this payment to the Economic and Financial Committee (EFC), asking for its opinion. Following the EFC's opinion, the Commission will adopt the final decision on the disbursement of the financial contribution, after which the disbursement to Slovakia would take place.

The Commission has approved a positive preliminary assessment of Spain's request for payment of a second €12 billion grant under the Recovery and Resilience Facility (RRF), the key instrument at the heart of NextGenerationEU. On 30 April 2022, Spain submitted a payment request to the Commission based on the achievement of the 40 milestones and targets defined in the Council's implementing decision for this second tranche. These cover investments and reforms in the areas of green and just transition; the labour market; pensions; regulated professions; digital connectivity and research; as well as health care; education; support for vulnerable groups; entrepreneurship and micro-enterprises; green taxation and the prevention of tax evasion; and efficient and sustainable public expenditure. The Commission has forwarded its preliminary assessment to the Economic and Financial Committee (EFC) for an opinion. The opinion of the EFC, which must be delivered within four weeks, must be taken into account in the Commission's assessment. Following the EFC's opinion, the Commission will adopt the final decision on the disbursement of the financial contribution, after which the disbursement to Spain would take place.

Italy's overall recovery and resilience plan is financed by €68.9 billion in grants and €122.6 billion in loans. Payments under the RRF are performance-based and contingent on Italy implementing the investments and reforms outlined in its recovery and resilience plan. This second payment request relates to 45 milestones and targets covering several reforms including in the areas of public administration, public procurement, tax administration, education and territorial healthcare, as well as investments in ultra-broadband and 5G, tourism and culture, hydrogen, urban regeneration and digitalization of schools. The Commission will now assess the request, and will then send its preliminary assessment of Italy's fulfilment of the milestones and targets required for this payment to the Council's Economic and Financial Committee.

The funds will be used to support Member States' economic recovery, following the COVID-19 pandemic, under the Recovery and Resilience Facility. Alongside the financing of NextGenerationEU, the Commission may also be called upon to issue up to €9 billion for loans to support Ukraine under a new exceptional macro-financial assistance (MFA) program and up to €6.6 billion for loans under the SURE programme, subject to requests from Member States and the completion of the relevant procedures. Since June 2021, when the Commission made its market debut with NextGenerationEU, issuance under the program has amounted to €118.5 billion through long-term EU bonds, of which €28 billion through the issuance of NextGenerationEU green bonds. The Commission will announce its issuance plans for the first half of 2023 at the end of the year.

The 25-year bonds maturing on February 4, 2048, were more than six times oversubscribed, a very positive result especially given the market turbulence of recent weeks. Including this transaction, the Commission has issued bonds for a total amount of €47.5 billion in the first half of 2022, bringing it even closer to its target of €50 billion for the funding under NextGenerationEU in the first six months of the year. The Commission has so far raised €118.5 billion through the issuance of long-term EU bonds under the NextGenerationEU program since its launch in June 2021, of which €28 billion euros in NextGenerationEU green bonds. The funds are used to finance Europe's long-term economic recovery and resilience through the Recovery and Resilience Facility and other EU budget programmes. By the end of June 2022, the Commission will announce its funding targets for the second half of the year.

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