What changed between the plenary report and the adopted text

7. Notes that the RRF has incentivised the implementation of some reforms included in the country-specific recommendations made in the context of the European Semester through the inclusion of such reforms in the NRRPs; underlines that there has been a qualitative leap forward in terms of monitoring RRF implementation; recalls that the RRF Scoreboard is used to monitor the progress made towards achieving milestones and targets, as well as compliance with horizontal principles, and in particular the six pillars, namely the green transition, the digital transformation, smart, sustainable and inclusive growth (including economic cohesion, jobs, productivity, competitiveness, research, development and innovation, and a well-functioning internal market with strong small and medium-sized enterprises (SMEs)), social and territorial cohesion, health, economic, social and institutional resilience with the aim of, inter alia, increasing crisis preparedness and crisis response capacity, and policies for the next generation, children and young people, such as education and skills; highlights that the overall uptake of country-specific recommendations made in the context of the European Semester remains low and has even dropped;

8. Highlights that in the context of the new economic governance framework, the set of reforms and investments underpinning an extension of the adjustment period should be consistent with the commitments included in the approved NRRPs during the period of operation of the RRF and the Partnership Agreement under the Common Provisions Regulation; observes that the five Member States that requested an extension of the adjustment period by 31 December 2024 relied partly on the reforms and investments already approved under the RRF to justify the extension; takes note of the fact that most Member States have included information on whether the reforms and investments listed in the medium-term fiscal-structural plans are linked to the RRF;

9. Welcomes the fact that the RRF provides support for both reforms and investments in the Member States, but notes with concern that the short timeframe for the remaining RRF implementation poses challenges to the completion of key reforms and large-scale investments that are to be finalised towards the end of the RRF and to the timely fulfilment of the 70 % of milestones and targets that are still pending;

10. Recalls that RRF expenditure should not substitute recurring national budgetary expenditure, unless duly justified, and should respect the principle of additionality of EU funding; insists that the firm, sustainable and verifiable implementation of non-recurrence, together with the targeting of clearly defined European objectives of reforms and investments, is key to ensure additionality and the long-lasting effect of additional European funds; recalls the need to uphold this principle and appeals against the crowding out or replacement of cohesion policy by the RRF or other temporary instruments, as cohesion policy remains essential for long-term sustainable territorial cohesion and convergence;

11. Highlights that prioritising RRF implementation, the lack of administrative capacity in many Member States and challenges posed by global supply chains have contributed to the delayed implementation of cohesion policy; calls on the Commission, in this context, to provide a comprehensive assessment of the RRF’s impact on other financial instruments and public investments, technical support, and the administrative and absorption capacities of the Member States;

13. Recalls its call to focus RRF interventions on measures with European added value and therefore regrets the shortage of viable cross-border or multi-country measures, including high-speed railway and sustainable mobility infrastructure projects for dual use that are essential for completing the TEN-T network, and the related risk of re-nationalising funding; notes that the broad scope of the RRF objectives has contributed to this by allowing a wide variety of nationally focused projects to fall within its remit;

14. Highlights the modification of Article 27 of the RRF Regulation through REPowerEU, which significantly strengthened the cross-border and multi-country dimensions of the RRF by encouraging the Member States to amend their NRRPs to add RepowerEU chapters, including a spending target of at least 30 % for such measures in order to guarantee the EU’s energy autonomy; is concerned by the broad interpretation adopted by the Commission, which allows any reduction in (national) energy demand to make a case for a cross-border and multi-country dimension;

15. Welcomes the possibility of using RRF funding to contribute to the objectives of the Strategic Technologies for Europe Platform (STEP) by supporting investments in critical technologies in the EU in order to boost its industrial competitiveness; notes that no Member State has made use of the possibility to include in its NRRP an additional cash contribution to STEP objectives via the Member State compartment of InvestEU; recalls that Member States can still amend their national plans in that regard; expects the revision processes to be efficient, streamlined and simple, especially considering the final deadline of 2026, the current geopolitical context and the need to invest in European defence capabilities;

16. Recalls the application of the DNSH principle for all reforms and investments supported by the RRF, with a targeted derogation under REPowerEU for energy infrastructure and facilities needed to meet immediate security of supply needs; encourages the Commission to assess the feasibility of a more uniform interpretation of the DNSH principle between the RRF and the EU taxonomy for sustainable activities, while taking into account the specificities of the RRF as a public expenditure programme;

Financial aspects of the RRF

17. Stresses that the RRF is the first major performance-based instrument at EU level which is exclusively based on financing not linked to costs (FNLC); recalls that Article 8 of the RRF Regulation stipulates that the RRF must be implemented by the Commission in direct management in accordance with the relevant rules adopted pursuant to Article 322 TFEU, in particular the Financial Regulation and the Rule of Law Conditionality Regulation; regrets that the Council did not agree to insert specific rules in the Financial Regulation to address the risks of this delivery model, such as double funding; considers that the rules of the Financial Regulation should be fully applicable to future instruments based on FNLC, including as regards fines, penalties and sanctions;

21. Takes note of the Commission’s target to fund up to 30 % of NGEU costs by issuing greens bonds; notes that by 31 December 2024 the Commission had issued European green bonds amounting to EUR 68.2 billion;

Design and implementation of NRRPs

22. Notes that 47 % of the available RRF funds had been disbursed by 31 December 2024, with grants reaching 55 % and loans 37 %, which has resulted in a high proportion of measures still to be completed in 2025 and 2026; is concerned, however, about the ECA’s finding that only 50 % of disbursed funds had reached final beneficiaries in 15 out of 22 Member States by October 2023; calls on the Commission to take the recommendations of the ECA duly into account in order to improve the functioning of any future performance-based instruments similar to the RRF, in particular in the context of a more targeted MFF;

23. Welcomes the fact that all Member States have surpassed the targets for the green (37 %) and the digital transitions (20 %), with average expenditure towards climate and digital objectives of the RRF as a whole standing at 42 % and 26 % respectively; notes that the ECA has cast doubt on how the implementation of RRF measures has contributed to the green transition and has recommended improvements to the methodologies used to estimate the impact of climate-related measures; highlights the fact that the same methodological deficiencies exist across all pillars of the RRF;

24. Notes the tangible impact that the RRF could have on social objectives, with Member States planning to spend around EUR 163 billion; underlines that such spending must be result-oriented, ensuring measurable economic and/or social benefits; stresses the need to accelerate investments in the development of rural, peripheral and outermost, isolated and remote areas, and in the fields of affordable housing, social protection and the integration of vulnerable groups, and youth employment, where expenditure is lagging behind; calls for an in-depth evaluation by the Commission, under the RRF Scoreboard, of the projects and reforms related to education and young people implemented by Member States under the RRF; regrets the delayed implementation of health objectives observed in certain Member States, given that the instrument should also improve the accessibility and capacity of health systems, and of key social infrastructure investments, including early childhood education and care facilities; stresses that these delays, in some cases linked to shifting budgetary priorities and revised national implementation timelines, risk undermining the achievement of the RRF’s social cohesion objectives;

25. Reiterates its negotiating position to include targets for education (10 %) and for cultural activities (2 %); encourages the Commission’s effort to evaluate these targets as a benchmark in its assessment of education policy in NRRPs, through the RRF Scoreboard;

26. Observes that a large majority of NRRPs include a specific section explaining how the plan addresses gender-related concerns and challenges; is concerned, however, that some NRRPs do not include an explanation of how the measures in the NRRP are expected to contribute to gender equality and equal opportunities for all and calls on the Member States concerned to add such explanations without delay;

27. Stresses the importance of reforms focusing on labour market fragmentation, fostering quality working conditions, addressing wage level inequalities, ensuring decent living conditions, and strengthening social dialogue, social protection and the social economy;

28. Notes the tangible impact that the RRF could have on the digital transformation objective, with EUR 166 billion allocated to corresponding plans; welcomes the contributions made under the smart, sustainable and inclusive growth pillar, in particular to competitiveness and support for SMEs; notes the need for an acceleration of investments in transnational cooperation, support for competitive enterprises leading innovation projects, and regulatory changes for smart, sustainable and inclusive growth, which are lagging behind;

29. Stresses that the success of EU investments depends on well-functioning capital markets; calls on the Member States to ensure a more effective and timely disbursement of funds, particularly for SMEs and young entrepreneurs, to streamline application procedures with a view to enhancing accessibility and to implement specific measures to provide targeted support to help them play a more prominent role in the process of smart and inclusive growth;

30. Is concerned that the achievement of milestones and targets lags behind the indicative timetable provided in the NRRPs, and that the pace of progress is uneven across Member States; regrets the time lag between the fulfilment of milestones and targets and the implementation of projects; highlights that the RRF will only achieve its long-term and short-term potential if the reform and investment components, respectively, are properly implemented; welcomes the fact that, following a slow start, RRF implementation has picked up since the second half of 2023 but significant delays affecting key reforms and investments still persist and have been attributed to various factors, including the revisions linked to the inclusion of REPowerEU, mounting inflation, the insufficient administrative capacity of Member States, in particular the smaller Member States, uncertainties regarding specific RRF implementation rules, high energy costs, supply shortages and an underestimation of the time needed to implement measures; notes that the postponement of key implementation deadlines by some governments to 2026 raises concerns about the capacity of some Member States to fully absorb the allocated funds within the set timeframe of the RRF; stresses the importance of maintaining a realistic and effective implementation schedule to prevent the risk of incomplete projects and missed opportunities for structural improvements; calls on the Commission to ensure that administrative bottlenecks are urgently addressed;

31. Recalls the modification of the RRF Regulation through the inclusion of the REPowerEU chapter; stresses the importance of the REPowerEU chapters in NRRPs and calls on the Member States to prioritise mature projects and implement their NRRPs more quickly, both in terms of reforms and investments, and, where necessary, to adjust NRRPs in line with the RRF’s objectives, without undermining the overall balance and level of ambition of the NRRPs, in order to respond to challenges stemming from geopolitical events and to tackle current realities on the ground;

32. Highlights the fact that the RRF could have helped to mitigate the effects of the current EU-wide housing crisis; regrets that some Member States did not make use of this opportunity and stresses the importance for the Member States to accelerate investments in availability and affordability of housing;

33. Highlights the role of ‘super milestones’ in protecting the EU’s financial interests against rule of law deficiencies and in ensuring the full implementation of the requirements under Article 22 of the RRF Regulation; welcomes the fact that all but one Member State have satisfactorily fulfilled their ‘super milestones’; recalls that the Commission must recover any pre-financing that has not been netted against regular payment requests by the end of the RRF;

34. Notes the high administrative burden and complexity brought by the RRF; stresses the considerable efforts required at national level to implement the RRF in parallel with structural funds; notes that between 2021 and 2024 the demand-driven Technical Support Instrument supported more than 500 RRF-related reforms in the Member States, directly or indirectly related to the preparation, amendment, revision and implementation of the NRRPs; takes note of the Commission guidance of July 2024 with simplifications and clarifications to streamline RRF implementation but expects the Commission to act swiftly on its promise to cut the administrative burden by 25 %; urges the Commission to give clear and targeted technical support to the Member States, allowing them to develop efficient administrative capacity to implement the milestones and targets; calls on the Commission to decrease the level of complexity of EU public procurement rules which apply to higher-value contracts;

35. Expresses concern over the complexity of application procedures for RRF funding, particularly for SMEs and non-governmental organisations, which require external consultancy services even for small grants; emphasises that such bureaucratic obstacles contradict the original objectives of the RRF, which aimed to provide rapid and direct financial support; calls for an urgent simplification of application and reporting requirements, particularly for smaller beneficiaries, to maximise the absorption and impact of funds and to assist with their contribution to the green and digital transitions;

36. Believes that implementation delays underscore the risk that measures for which RRF funding has been paid will not be completed by the 2026 payment deadline; welcomes the Commission’s statement at the Recovery and Resilience Dialogue (RRD) of 16 September 2024 that it will not reimburse non-implemented projects; considers it a shortcoming that RRF funds paid for milestones and targets assessed as fulfilled cannot be recovered if related measures are not eventually completed; encourages the Commission to take into account the ECA’s recommendations related to this and to assess, in cooperation with the Member States, the measures most at risk of not being completed by 31 August 2026; stresses the importance of monitoring these measures, facilitating timely follow-up and working towards solutions to overcome delays;

37. Notes with concern that the remaining implementation timeframe of the RRF is too short for the implementation of many innovative projects; further notes that innovative projects, by definition, are more difficult to plan and more likely to encounter obstacles during implementation, making them unsuited to the RRF’s strict deadlines; urges the Commission to create future programmes that are flexible enough to give proper answers in changing circumstances and that at the same time guarantee a certain degree of predictability;

38. Notes that some milestones and targets may be no longer achievable because of objective circumstances; stresses that any NRRP revisions should be made in accordance with the RRF Regulation, including the applicable deadlines, and should not entail backtracking on reforms, commitments or lower quality projects but should maintain the overall ambition and the efficiency of public spending;

39. Is concerned about the Commission’s uneven assessment of NRRPs, which has led to double standards in the application of the Regulation; is further concerned about the uneven and different definition of milestones and targets from one NRRP to the other, as consistently reported by the ECA;

40. Highlights that the duration of the Commission’s assessment of payment requests by Member States differs considerably among the Member States and stresses the need for more transparency from the Commission; urges the Commission to accelerate its assessments and to ensure the equal treatment of the Member States; highlights the need to ensure a level playing field across the EU for measures and indicators that are used to assess all RRF projects;

41. Urges the Member States to increase their efforts to address administrative bottlenecks and provide sufficient administrative capacity to accelerate RRF implementation in view of the 2026 deadline and to avoid concentrating RRF projects in more developed regions and capitals by enabling RRF funds to flow into projects in the most vulnerable regions, thereby serving the RRF’s objective to enhance the EU’s social, territorial and economic cohesion; emphasises the importance of fair regional distribution within the NRRPs while ensuring that RRF funds are allocated based on economic and social impact, feasibility and long-term benefits;

42. Calls for an 18-month extension of mature RRF projects through an amendment of the RRF Regulation by co-decision, if needed; emphasises that the envisaged extension of projects will be conducted by the Commission based on objective, clear and fair benchmarks; welcomes the possibility of establishing a targeted and performance-based prioritisation and transfer system after the 2026 deadline in order to allow for the finalisation of ongoing projects through other funding schemes, including the European Investment Fund and a possible new European competitiveness fund; urges the Commission to present a strategy to address the huge demand for public investment beyond 2026 without compromising budgetary resources in other critical areas;

43. Calls for an evaluation of how this framework could enable targeted investments in EU defence supply chains, strategic stockpiles and defence innovation, ensuring alignment with broader European security objectives;

44. Is concerned that some Member States might choose to forego parts of the amounts or entire amounts associated with their last payment request, thus avoiding the fulfilment of the last milestones and targets;

Transparency, monitoring and control

49. Notes that the ECA’s audits revealed several cases in which funding had been disbursed but the requirements related to the fulfilment of corresponding milestones and targets had not been adequately met; further notes that the Commission framework for assessing the ‘satisfactory fulfilment’ of the relevant milestones and targets contains discretionary elements, such as ‘minimal deviation from a requirement’ or ‘proportional delays’, and that the methodology for the determination of partial payments does not provide an explanation for the values chosen as coefficients, thereby leaving room for interpretation; asks the Commission to provide Parliament with further clarification;

50. Insists that, as a rule, measures already included in other national plans benefiting from EU funding (e.g. cohesion, agriculture, etc.) should not be included in NRRPs, even if they do not incur any costs; urges the Commission to remain vigilant and proactive in identifying any potential situation of double funding in particular in regard to the different implementation models of the RRF and other EU funding instruments;

51. Regrets the lack of a proper RRF audit trail and the persistent lack of transparency despite the bi-annual reporting requirement for Member States on the 100 largest final recipients, which was introduced into REPowerEU upon Parliament’s request; regrets the delays in reporting by some Member States and the limited informative value of the information provided, which ultimately prevents compliance checks by the Commission or the ECA; reiterates its call for the lists of the largest final recipients for each Member State to be regularly updated and published on the RRF Scoreboard and to include information on the economic operators involved, including contractors and sub-contractors, and their beneficial owners, and not simply ministries or other government bodies or state companies; further regrets that the current definition of ‘final recipient’ leaves room for interpretation, resulting in different final beneficiaries for similar measures among Member States; calls on the Commission, in this context, to ensure a common understanding of what constitutes a ‘final recipient’ so that this can be applied consistently;

52. Is concerned about persistent weaknesses in national reporting and control mechanisms, due in part to absorption pressure affecting the capacity to detect ineligible expenditure and due to the complexity of the audit and control procedures, which created uncertainty in the Member States and an overload of administrative procedures; calls on the Commission to provide assurance on whether Member States’ control systems function adequately and to check the compliance of RRF-funded investment projects with EU and national rules; calls for payments to be reduced and, where appropriate, amounts to be recovered in accordance with Article 22 of the RRF Regulation, should weaknesses persist in the national control systems; regrets the reliance on manual cross-checks and self-declarations by recipients of EU funds in the absence of interoperable IT tools and harmonised standards, despite the existence of tools such as the Early Detection and Exclusion System and ARACHNE, whose use is currently not mandatory, thereby risking that expenditure is declared twice; recalls, in this regard, the reluctance of the Member States to make progress in developing the relevant IT tools in a timely manner;

53. Shares the view of the ECA that the FNLC model does not preclude reporting on actual costs; notes that having clear insights on costs also facilitates the work of control and oversight bodies, as well as the EPPO and the European Anti-Fraud Office (OLAF), and enables enhanced public scrutiny;

54. Reiterates the role of the RRF Scoreboard in providing information for citizens on the overall progress in the implementation of NRRPs; underlines the importance of the Scoreboard in strengthening transparency and calls on the Commission to increase the level of transparency and data visualisation in the Scoreboard;

55. Recalls that the reporting on the progress of implementation in the RRF Scoreboard is based on information provided by the Member States on a bi-annual basis;

Role of the European Parliament

57. Reiterates the importance of Parliament’s role in scrutinising and monitoring the implementation of the RRF and in holding the Commission accountable; highlights Parliament’s input provided through various channels, in particular through various plenary debates, parliamentary resolutions, bi-monthly RRD meetings with the responsible Commissioners, over 30 meetings of the standing working group on the scrutiny of the RRF, numerous parliamentary questions, the annual discharge procedure of the Commission and the regular flow of information and ad hoc requests for information from the Commission; regrets that the model of using milestones and targets to trigger disbursement was not accompanied by adequate budgetary control mechanisms, resulting in a diminished role for Parliament compared to its scrutiny of MFF spending;

58. Recalls Parliament’s rights as laid down in Article 25 of the RRF Regulation, in particular the right to simultaneously receive from the Commission information that it transmits to the Council or any of its preparatory bodies in the context of the RRF Regulation or its implementation, as well as an overview of its preliminary findings concerning the satisfactory fulfilment of the relevant milestones and targets included in the NRRPs; encourages the sharing of relevant outcomes of discussions held in Council preparatory bodies with the competent parliamentary committees;

59. Recalls further the right of Parliament’s competent committees to invite the Commission to provide information on the state of play of the assessment of the NRRPs in the context of the RRD meetings;

60. Regrets the fact that Parliament has no role in the design of NRRPs and is not consulted on payment requests; criticises furthermore the fact that Parliament has not been provided with a clear and traceable overview of the implementation status of projects and payments; expects to be informed about the context of NRRP revisions in order to make its own assessment of the revisions and to have an enhanced role in possible future instruments based on the RRF experience;

Stakeholder involvement

61. Regrets the insufficient involvement of local and regional authorities (LRAs), civil society organisations, social partners, national parliaments and other relevant stakeholders in the design, revision or implementation of NRRPs leading to worse policy outcomes, as well as limited ownership; regrets that in the design and implementation of the NRRPs, some Member States have clearly favoured some LRAs or stakeholders to the detriment of others; recalls that the participation of LRAs, national authorities and those responsible for developing these policies is crucial for the success of the RRF, as stated in Article 28 of the RRF Regulation; recalls that Parliament supported a binding provision in the RRF to establish a multilevel dialogue to engage relevant stakeholders and discuss the preparation and implementation of NRRPs with them, with a clear consultation period; calls, therefore, for the maximum possible stakeholder involvement in the implementation of NRRPs, in accordance with the national legal framework and based on clear and transparent principles;