The European COVID-19 Recovery Plan

19.05.2021

NextGenerationEU and Multiannual Financial Framework: 1,824.3 Billion € at a Glance

Today, 19 May 2021, the Austrian Parliament votes on the EU's own resources decision. A recent article of the WIFO-Monatsberichte (monthly reports) Julia Bachtrögler-Unger, Margit Schratzenstaller and Franz Sinabell describe the changes compared to the previous Multiannual Financial Framework (MFF), the instruments to cope with the COVID-19 crisis and the transformation towards climate neutrality.

With a total volume of 1,824.3 billion €, the COVID-19 European Recovery Plan includes the 750 billion € NextGenerationEU (NGEU) temporary recovery package – the most important instrument of which is the 672.5 billion € Recovery and Resilience Facility (RRF) – and the 1,074.3 billion € Multiannual Financial Framework (MFF) 2021-2027.

While the spending structure of the MFF has only been moderately modernised, the NGEU and especially the RRF are explicitly future-oriented: 37 percent of RRF funds are to be used for climate protection, 20 percent for digital transformation.

New own resources are to support important European policies in the future: a plastic-based own resource is added to the existing own resources used to finance the MFF as of 2021. A digital tax, an own resource based on the EU Emissions Trading Scheme and a carbon border adjustment mechanism, among others, whose implementation is envisaged for 2023, are to contribute to the repayment of the debt taken on for NGEU.

"NextGenerationEU holds great potential to strengthen cohesion in the EU as well as to strengthen the European added value in crisis management. The implementation in terms of future-oriented use of funds and the implementation of new own resources could become an important challenge for the Union",  said Julia Bachtrögler-Unger, Margit Schratzenstaller and Franz Sinabell.

 

Publications

WIFO-Monatsberichte, 2021, 94(4), pp.321-334
Online since: 06.05.2021 0:00
 
Der COVID-19-Aufbauplan der EU umfasst das temporäre Aufbaupaket NextGenerationEU (NGEU) im Umfang von 750 Mrd. € – dessen wichtigstes Instrument die Aufbau- und Resilienzfazilität (RRF) mit 672,5 Mrd. € ist – sowie den Mehrjährigen Finanzrahmen (MFR) 2021-2027 im Umfang von 1.074,3 Mrd. €. Während die Ausgabenstruktur des MFR nur mäßig modernisiert wurde, sind NGEU und vor allem die RRF explizit zukunftsorientiert: 37% der RRF-Mittel sollen in den Klimaschutz fließen, 20% in den digitalen Wandel. Neue Eigenmittel sollen künftig wichtige europäische Vorhaben unterstützen: Die bestehenden Eigenmittel zur Finanzierung des MFR werden um ein plastikbasiertes Eigenmittel ergänzt. Zur Tilgung der für NGEU aufgenommenen Schulden sollen u. a. eine Digitalsteuer, ein auf dem EU-Emissionshandelssystem basierendes Eigenmittel und ein CO2-Grenzausgleichsmechanismus beitragen.
Please contact

Julia Bachtrögler-Unger, MSc

Research groups: Structural Change and Regional Development

Margit Schratzenstaller-Altzinger

Research groups: Macroeconomics and European Economic Policy

Franz Sinabell

Research groups: Environment, Agriculture and Energy
© Mika Baumeister/Unsplash
© Mika Baumeister/Unsplash