Politics & Economics

“Recovery Model”: from the Cohesion Policy to the EU Budget, what does it entail?

April 2024
By Editorial Staff

The Recovery and Resilience Facility as a model for managing the European budget. This is the proposal Budget and Administration Commissioner Johannes Hahn launched during the Annual EU Budget conference held on April 29th. The event was an opportunity to take stock of what has been done and what has happened during Ursula von der Leyen’s turbulent tenure, between a global pandemic and two ongoing wars. With such a rapidly changing reality, the long-term budget must be able to adapt and change its destinations, making itself “futureproof.”

RRF becomes, in Hahn’s speech, an important lesson on maximizing the impact of the European budget, thanks to its “performance-based approach” that has already helped the purpose. Hahn cites the Italian example of justice reform as a tangible result of its effectiveness, or even the Spanish labor market reform. Both projects have RRF funds behind them. The fund becomes, therefore, a model for the simplification and rationalization of funding programs, to which the European budget planning of the future must strive.

However, this is not the first time we hear about the “Recovery model”. We have already been hearing about it since October 2023, that is, since the High-Level Specialist Group on the Future of Cohesion Policy first mentioned it as a method for solving the problems that cohesion policy brings, such as excessive disparity in development between regions. The Recovery model, with its centralized management and approach based on tangible results, became a method for reviving a Cohesion policy that was enjoying less and less acceptance.

This solution, however, did not seem to go down well with Cohesion and Reforms Commissioner Elisa Ferreira herself. While looking forward to improving it, she made a plea about not disavowing the heart of the Cohesion Policy, conceived as a tool to help disadvantaged regions recover without the need to compete with richer territories.

The Commissioner’s appeal echoed through April 18, 2024, the day the European Committee of the Regions (CoR) approved a resolution that goes against the application of the Recovery model to the Cohesion Policy of the future. The CoR acknowledged the effectiveness of the RRF in terms of administrative simplification, but warned the Commission not to “question the successful multi-level governance model of Cohesion Policy and its nature as a long-term investment policy.”

These, for now, remain only warnings, intended for a future hold of the European Commission, which will have to be careful to balance strengthening European competitiveness on the challenges of the future with attention to the weakest elements, creating investment planning that truly, as Ferreira said, “leave no one behind.”