Economic and Financial Affairs

The Commission has fully supported Croatia in the process of joining the euro area. With Croatia, 20 EU Member States and 347 million EU citizens will share the EU's common currency. The euro will deliver practical benefits to Croatian citizens and businesses. It will make travelling and living abroad easier, boost the transparency and competitiveness of markets, and facilitate trade. Euro notes and coins will also become a tangible symbol for all Croatians of the freedom, convenience and opportunity that the EU makes possible. Public support for the euro in the euro area remains very strong, with broad majorities of EU citizens believing the euro is a good thing for the EU as a whole and for their own country.

With this ninth and final payment, SURE has provided total financial assistance of €98.4 billion to 19 Member States. As part of the operations, Bulgaria received €460 million, Cyprus €29 million, Czechia €2.5 billion, Greece €900 million, Croatia €550 million, Lithuania €142 million, Latvia €167 million, Poland €1.5 billion and Portugal €300 million. All nine Member States had already received financial support under SURE, which successfully helped Member States mitigate the effects of the pandemic in 2020 and supported their rapid economic recovery in 2021. The latest Commission report on SURE shows that the instrument supported around 31.5 million people and 2.5 million businesses in 2020, and nine million people and over 800,000 businesses in 2021. For Bulgaria, Cyprus, Czechia, Greece, Croatia, Lithuania, Latvia and Portugal, the loans granted on 14 December are top-ups to the initial financial assistance granted under SURE in 2020. These top-ups were granted by the Council between September and November 2022. For Poland, the payment of the last part of the financial assistance granted in 2020 was made after an issue related to the absorption of funds was resolved in November.

Italy's overall recovery and resilience plan (RRP) is financed by €69 billion in grants and €122.6 billion in loans. Payments under the Recovery and Resilience Facility are performance-based and contingent on Italy 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 of Italy's fulfilment of the milestones and targets required for this payment to the Council's Economic and Financial Committee.

The agreement will unlock additional CDC finance of up to €700 million for investments across France. More specifically, part of the EU guarantee will back CDC equity investments, which in turn will mobilise private investments for the rehabilitation and restoration of industrial wasteland, the development of data centres, and investment in industrial infrastructure to support innovative companies in France. The other part of the guarantee targeted at loans will support a broad type of financing to help the poorest urban areas in France and the tourism sector to recover from the COVID-19 crisis. EU guarantees of €140 million under this agreement are also expected to contribute to climate and environmental objectives, making CDC an important contributor to the EU's sustainability goals.

The Draft Budgetary Plan presented by the Italian authorities updated the no-policy-change plan submitted by the outgoing government in October 2022. The Opinion finds that, overall, Italy's updated DBP is in line with the Council Recommendations of July 2022: Italy has limited the growth of nationally financed primary current expenditure and it plans to finance public investment for the green and digital transitions, and for energy security. While Italy rapidly deployed measures in response to the increase in energy prices, it is important – as recommended to all Member States – that Italy increasingly focuses such measures on the most vulnerable households and exposed firms, to preserve incentives to reduce energy demand, and withdraws these measures as energy price pressures diminish. The Commission is also of the opinion that Italy has not yet made progress regarding the structural part of the fiscal recommendations contained in the Council Recommendations of July 2022. The structural recommendations required Italy to adopt and appropriately implement the enabling law on the tax reform to further reduce taxes on labour and increase the efficiency of the tax system. Moreover, Italy's updated DBP includes measures that are not consistent with the structural part of previous fiscal recommendations regarding pensions and tax evasion, including on the compulsory use of e-payments and the legal thresholds for cash payments.

This payment made on 14 December is part of a package of MFA measures, announced by the Commission in its communication of 18 May and approved by the European Council of 23 and 24 June 2022. With this payment, the total amount of macro-financial assistance disbursed to Ukraine since the start of the war in Russia has reached €7.2 billion. The funds were made available to Ukraine in the form of highly concessional loans, with longer maturities than under a regular MFA. In a further show of solidarity, the EU budget will cover the interest on these exceptional MFA loans, at least for the current multiannual financial framework. The disbursement follows a favourable assessment by the Commission of Ukraine's achievement of the seven structural policy measures agreed in a Memorandum of Understanding signed on 3 October. These measures aim to strengthen the country's resilience and economic stability, improve the business climate, strengthen the rule of law and governance and guarantee Ukraine's energy security. Ukraine has also successfully complied with the enhanced reporting requirements associated with this exceptional MFA.

On 30 September 2022, Portugal submitted a payment request to the Commission based on the achievement of the 20 milestones and targets indicated in the Council Implementing Decision for the second tranche. They cover reforms in the areas of public hospital management and digital transition in the private and public sectors. Several milestones and targets also relate to significant investments in the areas of health, forestry, water management, social protection, innovation, sustainable mobility, digital skills, culture, public finance and public administration. In their request, the Portuguese authorities provided detailed and comprehensive evidence demonstrating that the 20 milestones and targets had been achieved. The Commission has now sent the Economic and Financial Committee (EFC) its positive preliminary assessment of Portugal's compliance with the milestones and targets required for this payment, asking for its opinion. Following the opinion of the EFC, the Commission will adopt the final decision on the payment of the financial contribution, after which the payment to Portugal will take place.

The agreement builds on the Recovery and Resilience Facility (RRF) to further respond to the economic hardship and global energy market disruption caused by Russia's invasion of Ukraine. Thanks to this agreement, Member States will be able to get their reforms and investments rolling, thereby phasing out imports of Russian fossil fuels and providing clean, affordable and secure energy to households and businesses across Europe.

The payment of €1.37 billion in grants (excluding pre-financing) to Bulgaria was made possible thanks to Bulgaria's fulfilment of the 22 milestones and targets linked to the first instalment. They cover important first steps in reforms and investments towards decarbonising the energy sector, promoting large-scale deployment of digital infrastructure, reforming the judicial system, strengthening the anti-money laundering framework, digitalising the public sector, and strengthening the adequacy and coverage of the minimum income scheme. Measures to ensure that the audit and control system for the implementation of the RRF is up to standard are also included. The implementation of these measures was required before the disbursement of the first payment. The payment of €700 million in grants (excluding pre-financing) to Croatia was made possible by Croatia's fulfilment of the 25 milestones and targets linked to the second instalment. They cover several reforms and investments in the areas of public administration, the judiciary, social policy, employment, education, skills, energy and energy efficiency, water management and connectivity.

The agreement signed on 12 December will unlock NIB financing of up to €480 million for investments in sustainable infrastructure, research, innovation and digitalisation across the Nordic and Baltic countries, as well as in Poland. This is expected to, in turn, mobilise public and private investments of around €2 billion in total. With this agreement, NIB becomes an InvestEU implementing partner. NIB will use this guarantee agreement to mobilise investments in clean energy, the modernisation and decarbonisation of industry, critical raw materials supply, sustainable transport, environmental protection, bioeconomy, digital connectivity and sustainable data infrastructure. It will also support investments in projects relating to the sustainable blue economy, space, critical infrastructure, health and the development of innovative technologies across a range of sectors. These investments will help the EU to achieve its broader strategic objectives of securing the green and digital transitions.

The exchange between Executive Vice-President Dombrovskis and youth representatives on how we can best support EU citizens to deal with the immediate effects of the energy crisis and inflation and build a fair, more inclusive and sustainable future for the next generation is now available to replay online.

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