Economic and Financial Affairs

The package launched on 22 November draws upon the Autumn 2022 Economic Forecast which showed that after a strong first half of the year, the EU economy has now entered a much more challenging phase. While swift and well-coordinated policy action during the COVID-19 pandemic is paying off, the fallout from Russia's invasion of Ukraine confronts the EU with multiple and complex challenges. Historically high energy prices, high inflation rates, supply shortages, increased debt levels and rising borrowing costs are affecting business activity and eroding households’ purchasing power. These challenges call for coordinated action to secure adequate and affordable energy supply, safeguard economic and financial stability, and protect vulnerable households and companies while preserving the sustainability of public finances. At the same time, rapid action is needed to boost potential growth and quality job creation and to deliver on the green and digital transitions. Economic policy coordination through the European Semester will help Member States achieve these objectives by setting priorities and providing clear and well-coordinated policy guidance for the year to come.

This is Spain’s third payment request and relates to 24 milestones and 5 targets covering several reforms and investments in the areas of the green and digital transitions, pensions, research, development and innovation, education and vocational training. Other areas covered include healthcare, support to vulnerable groups, insolvency procedures, public expenditure quality and the prevention of tax evasion and fraud. Spain’s recovery and resilience plan is financed by €69.5 billion in grants, with €7.7 billion in additional grants still available for request. As with all Member States, payments under the RRF are performance-based and contingent upon Spain implementing the investments and reforms outlined in its recovery and resilience plan. The Commission will now assess the request and will then send its preliminary assessment to the Council’s Economic and Financial Committee.

This is part of an MFA package, announced by the Commission in its 18 May Communication and endorsed by the European Council of 23-24 June 2022. With this payment, total MFA support disbursed to Ukraine since the start of Russia's war has reached €6.7 billion. The funds have been made available to Ukraine in the form of highly concessional loans, with longer-term maturities than under regular MFAs. In a further expression of solidarity, the EU budget will cover the interest costs on these exceptional MFA loans, at least for the current multiannual financial framework. The third and last instalment of €0.5 billion under this exceptional MFA operation is expected to be disbursed in December of this year. This disbursement comes after a favourable assessment by the Commission of the progress made by Ukraine towards the implementation of the seven structural policy measures agreed in a Memorandum of Understanding that was signed on 3 October. These measures aim at strengthening the resilience and economic stability of the country, improving the business climate, reinforcing the rule of law and governance and ensuring the energy security of Ukraine. Ukraine has also complied successfully with the enhanced reporting requirements linked to this exceptional MFA. The Commission disbursed the first €600 million already in March and another €600 million in May this year, followed by €1 billion in August and €2 billion in October. In order to continue supporting Ukraine, on 9 November 2022, the Commission proposed the MFA+ support package for Ukraine of up to €18 billion, with stable, regular and predictable financial assistance – averaging €1.5 billion per month – which would help cover a significant part of Ukraine's short-term funding needs for 2023.

The agreement reached on 14 November is for commitments of €186.6 billion and payments of €168.7 billion. Once adopted, the budget would allow the EU to mobilise significant funds to help mitigate the severe consequences of Russia’s war of aggression against Ukraine not only in Ukraine itself, but also in the southern neighbourhood and Member States. The budget would also support the ongoing sustainable recovery from the coronavirus pandemic, as well as protect and create jobs. It would trigger further investments in a greener, more digital and more resilient Europe, while protecting the most vulnerable in the European neighbourhood and around the world.

Global concerns such as climate change, resource depletion, inequality, poverty, and health are pressing decision-makers to move away from a narrow focus on Gross Domestic Product (GDP) as a single metric to measure economic success and citizens’ wellbeing. However, there is a lack of consensus on how to achieve this. Would you like to take up the challenge? Join this Youth Policy Dialogue and make your voice heard!

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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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