Economic and Financial Affairs

Taking into account concerns regarding the current framework, the orientations aim to strengthen debt sustainability and enhance sustainable and inclusive growth through investment and reforms. They seek to ensure that the framework is simpler, more transparent and effective, with greater national ownership and better enforcement, while allowing for reform and investment and reducing high public debt ratios in a realistic, gradual and sustained manner. In this way, the reformed framework should help build the green, digital and resilient economy of the future, while ensuring the sustainability of public finances in all Member States, in line with President von der Leyen's 2022 State of the Union address. The Communication follows extensive outreach to stakeholders and Member States.

The EU is among the most exposed advanced economies, due to its geographical proximity to the war and heavy reliance on gas imports from Russia. Amid elevated uncertainty, high energy price pressures, erosion of households' purchasing power, a weaker external environment and tighter financing conditions are expected to tip the EU, the euro area and most Member States into recession in the last quarter of the year. Still, the potent momentum from 2021 and strong growth in the first half of the year are set to lift real GDP growth in 2022 as a whole to 3.3% in the EU (3.2% in the euro area) - well above the 2.7% projected in the Summer Interim Forecast.

The support announced on 9 November will come in the form of highly concessional loans, disbursed in regular instalments as of 2023. This stable, regular and predictable financial assistance – averaging €1.5 billion per month – will help cover a significant part of Ukraine's short-term funding needs for 2023, which the Ukrainian authorities and the International Monetary Fund estimate at €3 to €4 billion per month. The support put forward by the EU would need to be matched by similar efforts by other major donors in order to cover all of Ukraine's funding needs for 2023. Thanks to this package, Ukraine will be able to keep on paying wages and pensions and maintain essential public services, such as hospitals, schools, and housing for relocated people. It will also allow Ukraine to ensure macroeconomic stability, and restore critical infrastructure destroyed by Russia in its war of aggression, such as energy infrastructure, water systems, transport networks, roads and bridges. Support under the instrument will be accompanied by reforms, to further enhance the rule of law, good governance, anti-fraud and anti-corruption measures in Ukraine.

They cover key reforms in the areas of public employment, public procurement, teaching, tax administration and healthcare, as well as investments covering key policy areas such as ultra-broadband and 5G networks, research and innovation, tourism and culture, production and consumption of clean hydrogen, urban regeneration and digitalisation of schools. As with all Member States, payments under the Recovery and Resilience Facility (RRF), the key instrument at the heart of NextGenerationEU, are performance-based and contingent on Italy implementing the investments and reforms outlined in its Recovery and Resilience Plan. The overall Recovery and Resilience Plan of Italy will be financed by €191.6 billion (€68.9 billion in grants and €122.6 billion in loans).

The payment was made possible by Romania's fulfillment of the 21 milestones and targets linked to the first instalment. They cover several reforms contributing to the digital transition, as well as in the areas of sustainable mobility, decarbonisation, audit and control, education and health, and preliminary steps in tax and pension reforms. Measures to support businesses and to ensure the country's good governance are also included. As for all Member States, payments under the RRF, the key instrument at the heart of NextGenerationEU, are performance-based and contingent on Romania implementing the investments and reforms outlined in its Recovery and Resilience Plan. The overall Recovery and Resilience Plan of Romania will be financed by €12.1 billion in grants and €14.9 billion in loans. The amounts of payments made to Member States are published on the Recovery and Resilience Scoreboard, which shows the progress made in implementing the RRF as a whole and individual recovery and resilience plans.

Payments under the RRF are performance-based and contingent on Member States implementing the investments and reforms outlined in their respective recovery and resilience plans. Cyprus submitted a payment request to the Commission on 28 July 2022 based on the achievement of the 14 milestones set out in the Council Implementing Decision for the first instalment. They cover reforms and investments in the electricity market, in the areas of energy efficiency and circular economy, and anti-corruption and transparency. Measures in the financial sector and public administration, in the domain of digital skills, as well as Cyprus' audit and control system for the implementation of the RRF are also covered. The Commission thoroughly assessed this information before presenting its positive preliminary assessment of the payment request. The Cypriot recovery and resilience plan includes a wide range of reforms and investments in 13 thematic components. It is worth over €1.1 billion, of which €916 million in grants and €200 million in loans. €157 million was already disbursed to Cyprus in pre-financing on 9 September 2021.

On 31 August 2022, Bulgaria submitted a payment request to the Commission based on the achievement of the 22 milestones and targets selected in the Council Implementing Decision. They cover reforms and investments in the areas of education, smart industry, climate neutrality, digital connectivity, sustainable transport and road safety, justice, anti-money laundering, social inclusion, healthcare, and audit and control. With their request, the Bulgarian authorities provided detailed and comprehensive evidence demonstrating the fulfilment of the 22 milestones and targets. The Commission has now sent its positive preliminary assessment of Bulgaria's fulfilment of the milestones and targets 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 Bulgaria will take place.

This second edition, entitled ‘Building Tomorrow’, gathered policymakers from across the globe, entrepreneurs, investors, financial institutions and civil society representatives. Participants explored new ways to mobilise finance for sustainable investments and discussed EU and international standards on sustainable finance reporting and transparency. President Ursula von der Leyen delivered the summit’s opening remarks. The Executive Vice-President for the European Green Deal, Frans Timmermans; the Executive Vice-President for an Economy that Works for People, Valdis Dombrovskis; the Commissioner for the Economy, Paolo Gentiloni; the Commissioner for Cohesion and Reforms, Elisa Ferreira; and the Commissioner for financial services, financial stability and Capital Markets Union, Mairead McGuinness, also took part in the discussions. The event also featured keynote addresses by Prime Minister of Canada, Justin Trudeau; the Prime Minister of New Zealand, Jacinda Ardern; UN Secretary-General, António Guterres; and the US Secretary of the Treasury, Janet L. Yellen. Recordings of the speakers and panels are now available on the website.

Join experts and policymakers at the #EUatCOP27 side event on 16 November to discuss ‘How to protect people and economies from the consequences of extreme weather events’. The event is organised by the European Commission’s Directorate General for Economic and Financial affairs.

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The European Commission and the European Investment Fund are scaling up support for women. New venture capital funding is accessible across a variety of areas for funds with female representation. An information session and investment masterclass is coming up on 5-6 December in Luxembourg for European venture capital fund managers.

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