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Next Generation EU and National Recovery Plans

On 27 May 2020, the European Commission proposed a temporary recovery instrument called Next Generation EU (NGEU), meant to address the unprecedented crisis caused by COVID-19. Currently, Member States are rapidly formulating National Recovery and Resilience Plans on the basis of the European Commission’s recommendations before the deadline of 30 April 2021.

Next Generation EU: The basics

The Next Generation EU is an envelope of €750 billion representing the largest stimulus package ever financed by the EU and is designed to boost the recovery of EU economy on the basis of two clear targets:

  • 37% for green investments and reforms. Each Member State will have to include a minimum of 37% of expenditure related to climate and other environmental objectives.
  • 20% for digital investments and reforms. Each Member State will have to include a minimum of 20% of expenditure to foster the digital transition.

To achieve the targets outlined above, the Member States have until 30 April 2021 to advance a National Recovery and Resilience Plan. All Member States are now at work to set up their national recovery and resilience plans, with a constant activity following the guidance provided by the European Commission (I and II). The Member States will also integrate their recovery and resilience plans with the annual national reform programmes in line with the European Semester objectives.

The following weeks and months are a crucial period, and Dr2 Consultants strongly advises businesses to engage with their national governments and make sure that the draft national plans effectively address their specific digital and sustainability needs. Two concrete case examples in Belgium and Italy which are in the process of formulating their plans provide a vivid example of current and future opportunities for businesses to intervene in the sustainability sector.

Dr2 Consultants is expertly placed to assist your company in identifying the opportunities in the National Recovery and Resilience Plans. Our expertise in sustainability and digital topics neatly overlaps with proposed activities at national and European level.

National Recovery and Resilience Plans

Belgium

Regarding Next Generation EU in Belgium, the different governments have only recently (11 January 2021) found an agreement on the distribution of the allocated €5.9 billion from the Recovery and Resilience Facility between the federal and federated entities.

National Recovery Plan: Distribution of the allocated €5.9 billion from the Recovery and Resilience Facility between the federal and federated entities in Belgium

Distribution of the allocated €5.9 billion from the Recovery and Resilience Facility between the federal and federated entities in Belgium

Owing to its complex state structure, Belgium has not yet officially presented its National Recovery and Resilience Plan at the time of writing, which has to be agreed between the six different governments. However, it is clear that the plan will centre around five key themes:

  1. Sustainability;
  2. Digital transformation;
  3. Mobility;
  4. Social issues;
  5. Productivity.

Within the sustainability pillar, the plan will have a major focus on energy renovation of buildings, renewable energy sources, biodiversity and circular economy activities. The Belgian government(s) are expected to present their shortlist of projects shortly which will provide (industrial) stakeholders with the opportunity to elaborate on their potential involvement in concrete projects. Belgian companies which are active in the above mentioned sectors are thus highly encouraged to seek close contact with the cabinet of Minister for Recovery, Thomas Dermine.

Italy

On 12 January 2021, the Italian Government has approved the Piano Nazionale di Ripresa e Resilienza (PNRR) which has a budget of €224 billion and outlines the trajectory that the country will follow to achieve the goals of Next Generation EU.

Based on 6 missions spanning from digitalization to green transition and mobility, the PNRR covers various projects to make Italy a more modern, more digital, more sustainable and more inclusive country. The mission 2 called “Green Revolution and Ecological Transition” is at the core of the plan, envisaging to earmark €68.9 billion to four components:

  1. Green enterprise and circular economy;
  2. Energy transition and sustainable local mobility;
  3. Energy efficiency and building requalification;
  4. Protection and enhancement of land and water resources.

Mission 2 is predominantly oriented towards the pursuit of environmental sustainability, but it also has considerable digitization content. The investment actions will be accompanied by specific reforms aimed at promoting the energy transition and the use of renewable sources, providing the necessary infrastructure for their integration into the national electricity system.

The interventions will be consistent with the European Circular Economy Action Plan, with the aim of reducing the net production of waste and the landfill of all processed waste, and will ultimately contribute to the achievement of the EU objectives, made even more challenging by the review of existing legislation at European level (“Fit for 55 package”, which aims to reduce emissions by at least 55% by 2030).

The PNRR is currently under revision of the Italian Parliament and will undergo a final check with the local institutions and the social partners. The Government will also publish a governance model that identifies responsibilities for its implementation, ensures coordination with relevant ministers and monitors progress on spending.

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