WHAT IS THE EUROPEAN RECOVERY PLAN?
This is NextGenerationEU. It is more than a recovery plan. This is a unique chance to emerge stronger from the pandemic, to transform our economies, to create opportunities and jobs for the Europe we want to live in. We have everything to achieve this. The long-term EU budget and NextGenerationEU, the temporary tool to boost recovery, are the biggest stimulus package ever funded in Europe. Europe's recovery from COVID-19 is being supported with a total of €2.018 trillion at current prices. It will be a greener, more digital and more sustainable Europe. The funds are used to address the most important challenges facing Europe and to support those in need. After the start of the Russian aggression against Ukraine, the EU budget was mobilized to provide emergency aid in Ukraine and in EU countries and to alleviate the humanitarian consequences of the war.
The package pays special attention to:
modernizing traditional policies such as cohesion policy and the common agricultural policy to maximize their contribution to the Union's priorities the fight against climate change, for which 30% of EU funds are allocated - the largest share of the European budget so far the protection of biological diversity and gender equality
Over 50% of the long-term budget and NextGenerationEU support modernization, for example through: research and innovation — under Horizon Europe just climate and digital transition — through the Just Transition Fund and the Digital Europe program preparedness, recovery and resilience — through the Recovery and Resilience Facility, rescEU and a new health program EU4Health
The European Union (EU) faces a series of unprecedented and unexpected challenges since the adoption in 2020 of the EU's long-term budget for the period 2021-2027 – from Russia's brutal invasion of Ukraine and its aftermath, to the acceleration of post-pandemic migration and the acceleration of inflation and interest rates. The EU budget played an important role in driving the EU response. Dealing with these numerous challenges has pushed his resources to the point of exhaustion, hampering his ability to deal with even the most pressing challenges.
In June 2023, the Commission proposed a targeted strengthening of the EU's long-term budget for the period 2021-2027 to ensure that the EU budget can continue to achieve its most important objectives. The long-term EU budget for the period 2021-2027, together with the NextGenerationEU recovery instrument, amounts to €2.018 trillion in current prices (€1.8 trillion in 2018 prices). This unprecedented response will help repair the economic and social damage caused by the coronavirus pandemic and support the transition to a modern and more resilient Europe.
The package consists of the long-term budget, the multiannual financial framework for the period 2021-2027, made up of €1.211 trillion in current prices (€1.074 trillion in 2018 prices), combined with the temporary recovery instrument, NextGenerationEU, of 806, 9 billion euros (750 billion euros at 2018 prices).
This is a truly modernized budget:
More than 50% of the total of the next long-term budget and NextGenerationEU will support the modernization of the European Union through research and innovation; fair climate and digital transition; preparedness, recovery and resilience
30% of the EU budget will be spent on combating climate change. The package also pays special attention to biodiversity conservation and gender issues
20% of NextGenerationEU will be invested in digital transformation
In 2026 and 2027, 10% of annual long-term budget spending will contribute to halting biodiversity loss.
Multiannual Financial Framework 2021-2027
NextGenerationEU
NextGenerationEU is a temporary recovery instrument with a budget of more than €800 billion, which aims to help address the immediate economic and social damage caused by the coronavirus pandemic. A post-COVID-19 Europe will be greener, more digitalised, more resilient and better suited to today's and future challenges. The main element of NextGenerationEU is the Recovery and Resilience Facility (RESF), a grant and loan tool to support reforms and investment in EU countries with a total value of €723.8 billion. To receive funds under the Recovery and Resilience Facility, Member States must prepare Recovery and Resilience Plans, which specify how the funds will be invested. In addition, they must complete the relevant milestones and other objectives. Before payments can be made under the facility, the Commission assesses whether each of these objectives has been satisfactorily met. The rest of the NextGenerationEU funds are allocated to Member States through several EU programmes: Recovery Aid for Cohesion and Territories of Europe (REACT-EU), Horizon Europe, InvestEU, European Agricultural Fund for Rural Development and Just Transition Fund (JTF). In connection with Russia's aggression against Ukraine, EU countries can use part of these funds to meet the needs of refugees arriving on their territory.
The EU budget is not and has never been designed for give and take. All Member States benefit from being part of the single market, tackling common challenges together. Funds from the EU, for example through cohesion funds or the Horizon Europe program, go to all corners of the Union.
How is the EU's long-term budget and NextGenerationEU financed? customs contributions from Member States based on Value Added Tax (VAT) contributions based on gross national income (GNI).
To finance NextGenerationEU, the European Commission — on behalf of the European Union — borrows from the markets on more favorable terms than most member states could obtain and redistributes the amounts. Even before NextGenerationEU, the European Commission has issued bonds, for example to finance loans to the EU and third countries, including up to €100 billion for the SURE program to support jobs during the COVID-19 pandemic. By 2026, the European Union will raise up to around €800 billion (at current prices) for NextGenerationEU through a diversified funding strategy.
A clear road map for new revenue streams to support loan repayments: In the interinstitutional agreement of December 2021, the European Parliament, the Council and the Commission agreed to work towards introducing sufficient new own resources to be used for repayments under NextGenerationEU.
In December 2021, the Commission proposed three new sources of revenue in the EU budget to help disburse the funds raised to finance the non-grant support component of NextGenerationEU. This proposal will also contribute to the financing of the Social Climate Fund, which aims to ensure that no one is left behind in the transition to a decarbonised economy.
On 20 June 2023, the Commission concluded its work on its proposal for the next generation of own resources.
The final package includes a new temporary own resource based on company earnings statistics. Following the political agreement on the Target 55 package, which aims to ensure that EU policies contribute to the climate neutrality of our continent, the Commission has also adjusted the proposals for own resources based on the emissions trading system (ETS) and the Carbon Border Adjustment Mechanism (BCM) compared to the original December 2021 proposals.
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Own resource based on the EU emissions trading scheme;
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Own resource based on the mechanism for the correction of carbon emissions at the borders;
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Temporary own resource based on statistical data on company profits.
In addition, the own resource is preserved based on the share of the residual profits of multinational companies that will be redistributed to EU countries under the recent OECD/G20 agreement on the redistribution of taxation rights ("first pillar"). The Commission will work with the European Parliament and the EU countries within the Council to quickly approve the new sources of revenue.
Everyone can benefit from the EU budget. Find current and upcoming calls for funding proposals, learn more about funding procedures and programs, and apply online.
Most EU-funded projects involve cooperation between organizations from different EU countries or associated countries. There are a number of search services through which you can find suitable partners. Any company, organization or NGO can be a partner, regardless of where it is based, provided it is financially viable and qualified to carry out the tasks specified in the project proposal. However, proof of its operational and financial ability to perform project tasks within the proposal must be provided.
Most EU-funded projects are joint projects of organizations from different Union or Associated States forming a consortium managed by a project coordinator. If a grant decision is made, a contract called a "grant agreement" is signed and the implementation of the project can begin. Guidelines are available at each stage of project implementation, including reporting templates and deadlines.
Once the proposal has passed the evaluation stage, applicants are informed of the outcome. If a grant decision is made, you will be invited to sign a detailed contract called a 'grant agreement'. At this stage, you may need to follow certain steps as an applicant: to provide legal and administrative data not included in the offer be prepared to amend your proposal as indicated in the evaluation report, if applicable.
To ensure that your project is delivered to the agreed standards and timelines, there are several elements to consider: • reporting — you must regularly send technical and financial reports to the Commission or the contracting authority • deliverables - depending on the project, you may need to provide specific deliverables, such as background information, a special report, a brochure with technical diagrams, lists, data on software development milestones, etc.) that are defined in the agreement for granting of grants
• communicating project results — effective communication is also an important element of successful EU-funded projects and cooperation programmes. You should plan communication activities from the start of your EU-funded actions — depending on the program or project concerned, there are certain visibility and communication requirements
The Commission will monitor the implementation of your project (during the process itself or after its completion) to ensure compliance with the grant conditions. The grant agreement defines the activities to be carried out, the duration of the project, the total budget, rates and costs, the EU budget contribution, all rights and obligations and more. The process of checks, audits and reviews depends on the grant and the project and may include:
• checks of the correct implementation of the action in accordance with the grant agreement, including an assessment of whether the results and reports correspond to the description and work plan • financial audits of the accounts of the recipient of the funds to verify the eligible expenses incurred
Sometimes your grant agreement may need to be amended. The reasons for this can be various. They may reflect the need to adapt to the changing conditions for the implementation of the activity/work program (e.g. change of the originally foreseen budget, extension of the period for the implementation of the action, etc.). They may also include changes related to the beneficiary (eg changes in the legal status, address, bank account, legal representative of the beneficiary). Grant agreements may only be amended in writing. Amendments become effective on the date of signature by the last party or on the date of approval of the amendment request. The amendments shall then take effect on a date agreed upon by the parties. For reasons of legal certainty and equality, the general terms of the agreement and the grant decision should remain unchanged. These conditions are usually published together with the call for proposals.
Under grant agreements, project results remain the property of the beneficiaries, unless otherwise stated. However, the European Commission has the right to use the results of the projects — all conditions of use and reuse are specified in the grant agreement. "Results" means any tangible or intangible effect of the activity, such as data, know-how or information, regardless of their form or nature and regardless of whether they can be protected, as well as all rights related to them, including intellectual property rights property.
It is important to keep records and keep supporting documents to demonstrate good faith management and execution of your project. This includes documentation of eligible expenses and relevant accounts.
Grants are usually paid out in several installments over the course of the project. After you sign the grant agreement, you will receive a pre-funding payment, which may be followed by one or more interim payments. The final payment will be made after the completion of the project. Interim payments and the final payment depend on the results of the project. It is important that you report on the progress of your project in accordance with the reporting schedule included in the grant agreement.
The list below includes an overview of funding opportunities under the 2021-2027 Multiannual Financial Framework and NextGenerationEU by function, cluster and program or fund (most programs under shared management are called 'funds').
PROGRAMS AND FUNDS
Regional development and cohesion
Investing in people, social cohesion and values
Environment and climate action
There are different types of funding: grants, financial instruments (loans, guarantees and equity instruments), grants, trust funds, awards and public procurement. Implementation rules for all types of funding are governed by the Financial Regulation.
HOW DO YOU APPLY?
Grants are direct financial support from the European Union budget provided in the form of a grant to third party beneficiaries (usually non-profit organizations) that carry out activities contributing to the implementation of EU policies. These costs are usually managed centrally by the European Commission, either directly by its own departments or indirectly through EU agencies, executive agencies or national agencies. Grants are a major part of European Union spending and fall into two broad categories:
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grants to finance activities contributing to the achievement of an objective that is part of an EU policy grants to finance the operating costs of organizations pursuing an objective of common European interest or an objective that is part of an EU policy. Grants are based on the costs actually incurred by the beneficiaries to carry out the relevant activities. The results of the activities remain the property of the beneficiaries
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Public procurement is an assignment by a given body (an EU institution or a local administration in a Member State) of the performance of services, supplies or construction works for payment. In principle, there is a clear difference between public procurement and grants: • in public procurement, the awarding authority receives products or services it needs for payment • for grants, the authority provides funding for a project carried out by an external organization or directly to the organization because its activities contribute to EU policy objectives.
Subsidies are a large part of the funding provided by the European Agricultural Fund for Rural Development (EAFRD), which offers, for example, direct cash payments to farmers to increase their incomes. The subsidies also aim to reduce economic and social disparities in the EU's poorest regions. Through the EU Cohesion Fund, subsidies are granted to support the financing of infrastructure projects and to protect the environment.
A trust fund is a pooled funding mechanism where several donors jointly finance an action based on their agreed objectives and reporting formats. Each EU trust fund has its own governing body that decides on the use of the pooled resources. An EU trust fund acts collectively on behalf of the Union and all entities involved in the funding of the fund.
Financial instruments represent financial support measures that are provided as additional support from the budget to realize specific objectives of European Union policies. Instruments may take the form of equity or quasi-equity investments, loans or guarantees or other risk-sharing instruments, and may be combined with grants where appropriate. Financial instruments can be used to achieve:
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financial impact — multiplying scarce budgetary resources by leveraging private and public funds to support EU policy objectives
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political effect — incentivizing the entities entrusted with the implementation of activities and financial intermediaries to pursue EU policy objectives by aligning interests
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institutional effect — leveraging the expertise of actors in the implementation chain.
In addition, these instruments, used in partnership with public and private institutions, help to overcome market failures in the provision of external financing (eg to small and medium-sized enterprises (SMEs)) and to avoid the crowding out of private financing.
Prizes represent financial resources provided as a reward within the framework of a competition. Through awards, the EU institutions:
distinguish outstanding achievements and work
encourage investment – incentive awards aim to direct investment to certain areas and are mainly used within the framework of the Horizon Europe programme.