Recovery and Resilience Facility implementation: what’s in it for cities?

EU flags outside the EP in Brussels

Ivan Tosics

By Ivan Tosics, on October 22nd, 2021

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Within the framework of its Recovery and Resilience Facility to mitigate the economic and social impacts of the coronavirus pandemic, the European Union is making EUR 723.8 billion available to support reforms and investments undertaken by Member States – EUR 385.8 billion in loans and EUR 338 billion in grants. In my previous blog from November 2020, I gave an overview of the planning phase of the national Recovery and Resilience Programmes (RRP), showing that in most countries, subnational actors were just informed, but not at all involved in the planning of this extraordinary and large financial package.

Approval of RRPs despite critiques from cities

In the course of summer 2021, already 20 RRPs were approved by the EU, despite the heavy critiques coming from cities regarding the lack of stakeholder consultations. Some cities were considering submitting official legal complaints to EU institutions based on the fact that no real consultations were held with cities and that all proposals from the local level were ignored.

However, in an online discussion organised on 21 May 2021 by the Urban Intergroup of the European Parliament (EP), Celine Gauer, Director General, Head of the Recovery and Resilience Task Force (RECOVER) of the European Commission, gave an honest, but very disappointing, answer regarding such ideas. She advised not to “waste time” drafting complaints, because the Commission would have to reject them. According to the clarification, the legal form of the RRF is a national instrument under direct Commission management, thus the European Commission has no legal basis to question the national governments for the omission of meaningful consultations.

Siegfried Muresan, member of the EP Urban Intergroup and Co-Rapporteur on the Recovery and Resilience Facility, explained that the EP was fighting for the involvement of local and regional authorities, to avoid the tool becoming a discussion element solely between the governments and the Commission. However, the Council opposed the idea that the local and regional levels take on a formal role, with binding rules to take their opinions into account.

The Commission did not support the EP position, and accepted uncritically the view of the Council. Muresan called attention to the 20 May 2021 resolution of the European Parliament on the right to information of the Parliament regarding the ongoing assessment of the national Recovery and Resilience Plans. Over 600 Parlamentarians voted ‘yes’ for the resolution, claiming that the Commission must regularly inform the Parliament of the status of the assessment of the national RRPs. The only ’no’ was from the group of Polish MEPs, while the Hungarians abstained.

The EP resolution also requires full transparency and accountability from the Commission in order to ensure and enhance the democratic legitimacy and citizen ownership of the RRF. On that basis, an EP Working Group of 27 members was set up, from the Economy and the Own Budgets Committees, to control the assessment of the national RRPs. This group is ready to discuss any complaints coming from subnational actors.

Transparency is vital for the implementation process

As described in my earlier blog post, there are substantial risks in the RRP implementation: there is a risk that many beneficiaries will leave Cohesion Policy, going towards this ‘easier money’ with fewer reporting requirements; there are risks of double funding and problems of absorption capacity. Moreover, failures and corruption might occur due to the shortness of the implementation phase. In the case of grants, 70% of commitments must be submitted by 31 December 2022, and 30% by 31 December 2023, while demands for loans must be submitted by 31 December 2023 at the latest; and payments for the measures committed must be completed by 2026 at the latest. These tight timetables push national governments towards less ambitious targets, while also minimising ’time-consuming’ discussions with stakeholders.

The main tool against these risks could be the transparency of the implementation process. The crucial issues in the implementation period are linked with the availability and openness of data and with the establishment of the monitoring process.

Recent developments in this regard are, however, not promising., a collaboration of non-government organisations and professionals working to ensure the fairness of public procurement, has shown in a recent report that in Member States’ national RRF plans, there is a very low level of willingness and commitments to open and accountable reporting on how that money will be used. Basic requirements, such as “data released in an accessible open data format” and “plan to publish Information about the final recipients of the spending” are included in the RRPs of only two countries among the 22 surveyed. More countries promise “proactive publication of RRF spending” and “information gathered in a single portal” – but these measures are not enough if the content of the publications, i.e. the real data, are not there.

In an online Euractive event, ‘The Recovery and Resilience Facility: Can effective oversight bring about true reform?’, on 25 May 2021, Eulalia Rubio, Senior Research Fellow of the Jacques Delors Institute, explained that unfortunately the RFF requirements on Member States to publish all investments clearly for the public are less obligatory than in the case of the Multiannaual Financial Framework (Cohesion Policy). Thus, during RRP implementation there will be less information about where the money goes, and the European Anti-Fraud Office (OLAF) will also get less information. During the Euractive debate representatives of the Commission downplayed these problems. Nathalie Berger, Director for Support to Member State Reforms, DG for Structural Reform Support (REFORM), European Commission, emphasised the importance of the performance-based character of the process, which means that Member States will have to follow their milestones and EP committees will do string control over the budgetary side of spending the resources of the Recovery and Resilience Facility.

The crucial issue of monitoring

In light of all this, an important question is: what structures will be developed in the Member States for the monitoring of RRP implementation? Cities are calling for a substantial role. For example, the Union of Polish Metropolises suggests the following Monitoring Committee composition: 1/3 representatives of the government sector (including institutions involved in the implementation of the RRP); 1/3 representatives of the local government sector; 1/3 representatives of the non-governmental organisations sector (entrepreneurs and other social and economic partners). They also demand that the Monitoring Committee should not only get information about the use of funds, checking the formal correctness of the process, but should also get real competencies to set and control the direction for the implementation of the RRP.

The reality, however, is very far from such ‘ideal’ suggestions. In the case of Hungary, for example, the same organisation will be responsible for implementation as for monitoring. This means that within the National Authority two organisational units get these tasks which will be functionally separated. Such ‘firewall’ solutions, however, do not allow for any form of external control, not to speak of giving any role to representatives of cities.

It is very likely that the probable forms of monitoring in most Member States will exclude cities from the possibility to have real information – or influence – on RRP implementation. If only EU bodies will have access to the data, the fears of the European Parliament come true: the RRF will become exclusively a business between national governments and the Commission – and any information requests from cities and other stakeholders will be rejected (by both sides) with reference to the confidentiality of data.

The reform-orientation of RRPs

It is easy to see that this is not aligned with the original intentions of the RRF. To give full power to national governments to decide on the use of this extraordinary opportunity is not only against the principle of partnership, but also threatens chances of achieving the goal of transforming societies with systemic reforms. In an analysis published in July 2021, ZOE (the Institute for Future-Fit Economies, a non-profit and independent ‘think and do tank’), in cooperation with the New Economics Foundation, developed a Recovery Index for Transformative Change (RITC), to assess the adequacy of 13 RRPs to contribute to the necessary transformation of society. The index evaluates “… the potential of—and risks associated with—the investments and reforms envisaged, against the criteria of a natural world, a just transition and systemic change.” The question was whether the investments would enable a fundamental shift towards a regenerative, distributive and resilient economy, rather than consolidating the status quo.

From the analysis it became clear that “… Member States are largely missing the opportunity to connect RRP investments with new reforms to lead Europe towards a climate-neutral and socially balanced future. Much more should be made of the recovery to build an economy that protects the climate and delivers social justice.”

It shouldn’t have been that way

In contrast to the traditional, non-reform-oriented strategies of most national governments, cities and metropolitan areas are much more prepared to become potential innovators. This recognition became the cornerstone of the new American Rescue Plan Act, the US 1.9 trillion federal COVID-19 relief package, of which US 350 billion is the amount of the  ‘Coronavirus State and Local Fiscal Recovery Funds’, giving governments a chance to move beyond relief, and seed a new trajectory by deploying the money smartly and equitably. With this fund, comparable in size to the grant element of Europe’s RRF, American state (regional) and local officials got the opportunity to ‘invest’ in their communities rather than simply ‘spend’ their significant allocations. And, needless to say, these officials are subject to strict scrutiny by their local voters, thus local debates about how to spend the extraordinary funding cannot be avoided.

In the EU, unfortunately, such a strong involvement of cities has become a missed opportunity. By now, only second-best solutions are possible, to lessen the harm. During the EP Urban Intergroup meeting, Ana-Lisa Boni, director of EUROCITIES, raised two ideas on how cities could achieve some influence, through better partnership, in the implementation phase of the RRP. Both proposals address the EU level:

  • The European Commission should set up a structured dialogue with all stakeholders, including networks of local and regional authorities, about the code of conduct, monitoring the implementation, complementaries with Cohesion Policy, and reviewing bureaucratic red tape. This dialogue should become part of the official governance of the RRF, and the midterm review.
  • Cities should establish a city-driven, pan-European project to contribute to the seven EU flagships identified in the 2021 Annual Sustainable Growth Strategy, such as Renovate, Recharge and refuel, Connect, Modernise, Reskill and upskill. The aim would be to create alliances, e.g. in city digitalisation, or urban forestation, put these ideas into the national plans, and set up multi-country projects. So far, such cooperation does not exist in this phase of the RRF.

These ideas are positive and forward looking, but can only partly counterbalance the lack of national debates and the resulting problems and risks associated with the RRPs.


Cities have lost the first battle about the RRF, as in most countries they were not involved in the planning of the RRPs. They have to continue now their fight at the national level, to become part of a meaningful monitoring process, to achieve the openness of data, and take on a role where they can influence the implementation of the RRF funding. Moreover, while pushing forward their integrated development ideas (Integrated Action Plans in the case of URBACT cities) for funding within the framework of the approved RRPs, they should step up with other innovative national actors for real reforms in urban development – in line with the original intention of the EU Recovery and Resilience Facility.

Besides fighting at national level, cities should create EU-wide networks and turn to the EP committee to lodge their complaints on not getting meaningful information about RRP implementation and not being involved in monitoring committees. In that way cities should achieve a change in the official governance of the RRF, pushing the European Commission towards a strong midterm review of the RRPs, to encourage the reform-oriented spending of this extraordinary resource.


I would be interested to hear about the situation in your country regarding the implementation of the Recovery and Resilience Plan and the institutional structure of the monitoring process. How are your country’s cities involved, and if not, how are they lobbying?

Please let me know! Contact me at:

Cover photo: copyright © European Union 2020 – Source : EP


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