Article from Ministry of Finance

EU Recovery and Resilience Facility (RRF)

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In July 2020, EU heads of state and government agreed on a recovery package to mitigate the effects of the crisis. The package, called NextGenerationEU, comprises EUR 750 billion in loans and grants to the Member States. The bulk of this will be channelled via the Recovery and Resilience Facility (RRF).

In order to access the RRF, Member States must submit national recovery plans, outlining the reforms and public investments for which they are applying for financial support. In addition to grants, Member States can also apply for loans.

What should the national recovery plans contain?

The measures that the Member States present in their plans should:

  • address the challenges set out in the country-specific recommendations received by each Member State in recent years within the framework of the European Semester (i.e. the annual cycle of EU economic and fiscal policy coordination);
  • contribute to strengthening growth potential;
  • contribute to creating jobs;
  • contribute to increased economic, social and institutional resilience, i.e. strengthen the capability to manage future shocks;
  • mitigate the social and economic impact of the crisis;
  • contribute to increased economic, social and territorial cohesion and convergence;
  • contribute to the green and digital transitions; and
  • have no significant negative environmental impacts.

The European Commission also calls on Member States to take the Commission’s ‘flagship initiatives’ into account in their plans in order to address the common challenges facing the Member States. These are to:

  • Power up – future-proof clean technologies, with use of renewables
  • Renovate – more energy and resource-efficient private and public buildings
  • Recharge – sustainable, accessible and smart transport and charging stations
  • Connect – faster broadband and 5G networks
  • Modernise – digitalisation of the public sector, including the judicial and healthcare systems
  • Scale-up – increase cloud capacity for industrial data
  • Reskill and upskill – education systems for better digital skills

In the national recovery plans, at least 37 per cent of the total allocation must contribute to climate transition and at least a further 20 per cent to digital transition or challenges connected to it. 

Member States may apply retroactively for support for measures from February 2020.

The disbursement of funds from the RRF is linked to the actual implementation of reforms and investments based on pre-defined milestones and targets, which must have been completed before the end of August 2026.

How much funding can Sweden receive?

According to the agreement reached between Sweden and the other Member States, EUR 312.5 billion (in 2018 prices) will be distributed between the Member States during the period 2021–2023. Due to inflation, the actual amount paid out will be slightly higher. The grant for 2023 will be determined on the basis of an allocation key that takes into account the impact of the crisis on the economic development of the Member States. The final amount for 2023 will therefore be set in June 2022. The maximum grant amount for Sweden from the RRF is preliminarily estimated to amount to between SEK 30 billion and SEK 40 billion in fixed prices. Sweden does not intend to apply for any loans from the RRF, but only the grant part.

Which measures will be included in the Swedish plan?

To mitigate the economic impact of the pandemic on companies and households, the Government presented 12 additional amending budgets to the Riksdag in 2020 in addition to the usual spring and autumn amending budgets. These budgets contained a large number of measures to protect people’s health, lives and livelihoods. In total, the budgetary effect of the measures taken and proposed is estimated to amount to more than SEK 200 billion in 2020. In the Budget Bill for 2021, the Government proposes a powerful green restart package for the Swedish economy, but also long-term reforms to solve societal problems so that Sweden can emerge from the crisis stronger. In total, the investments in the Budget Bill for 2021 amount to just over SEK 105 billion in 2021 and just over SEK 85 billion in 2022. The calculations have assumed that RRF funds will be paid out during 2021–2023.

The Government intends to seek financial support from the RRF for measures presented in these additional amending budgets, the usual spring and autumn amending budgets and in the Budget Bill for 2021. The funds are paid to the Swedish treasury and it is not possible for individual companies to apply for direct grants from the RRF.

What is happening right now in the work of developing the plan?

At the Government Offices, the Ministry of Finance is preparing the Swedish recovery plan. In the first stage, this means selecting appropriate measures from the budgets presented in 2020 for inclusion in the plan. This work is taking place in close dialogue with the European Commission. Which measures are finally included in the plan will not affect how the budget for 2021 will be allocated, however.

When will the Swedish recovery plan be submitted and what happens next?

The recovery plan must be submitted to the European Commission no later than 30 April 2021, in connection with the submission of the National Reform Programme.

The European Commission will then make an assessment of the plan within two months. If the assessment is positive, the Commission will submit a proposal for implementation decision to the Council, which will adopt the plan within four weeks. Thereafter, 13 per cent of the total amount can be paid out (in Sweden’s case, just over SEK 3 billion). This is followed by bi-annual follow-ups until 2026, and at each of these it is decided whether payments of the financial contribution are to be paid out.

The regulation that governs the Recovery and Resilience Facility