Why it Matters

The global COVID-19 pandemic has severely hit economies all over the world, plunging many people into unemployment, insecurity and poverty. In Europe, national governments and the European Union are deploying large recovery packages to bring their economies back on track. This includes a ground-breaking €750bn recovery package for the entire EU (“Next Generation EU”), with the €672.5bn Recovery and Resilience Facility (RRF) as its central element. The RRF will enable recovery measures in all EU member states, based on Recovery and Resilience Plans (RRPs) prepared by national governments.

These recovery programmes can be powerful tools for simultaneously addressing two of the most pressing issues of our time: the socio-economic consequences of the pandemic and the climate crisis.

There is broad consensus that recovery measures should be aligned with long-term targets such as  a climate neutral economy by 2050. Furthermore, there is considerable evidence showing recovery packages that emphasize investments into clean technologies will provide a better long term growth outlook than traditional recovery packages that focus solely on stimulating demand.

In the EU, green recovery plans can therefore enable member states to reap the benefits of the green transition, such as significant job creation, resilient economic growth and cleaner air, while avoiding the risks of failing to align national economic development with the European Green Deal.

Our analytical work focuses on the recovery measures of EU member states. The Recovery and Resilience Facility provides an important source of funding for these.

In July 2020, European leaders agreed in the European Council that the EU’s recovery must be aligned with the green and digital transition, and the RRF regulation demands that at least 37% of the spending in NationalRecovery Plans support the green transition, with the remainder of the funding doing no harm to the transition. Currently, governments are finalizing their National Recovery Plans, which have to be submitted to the European Commission for its approval by 30 April 2021. Our analysis tracks the development of these plans and answers the question of whether national recovery efforts live up to the announced green ambitions.