- “The goals of the digital decade. In this regard, member states can use national funding, but even more also, there are other EU funds that can be used for the digital transition. In terms of the fact that the final milestones and targets were not covering completion. So this is an issue, recurrent issue in some of the of the special reports. And here what we would like to highlight is that milestones and targets, they are there designed in order to monitor the progress in the implementation of the measure and most of the measures covered the completion, but we agree on the fact that they do not cover all the completion, because also this is not a legal requirement in the in the regulation in terms of the common indicators. So as you know, we have 14 common indicators for the whole facility. And they were designed in a way that in all the plans there were similar measures. And therefore the member States were able to to report on those. And we had to strike the balance between the transparency and the administrative burden. And also in this regard, the data is provided by the member States, and we have no legal mandate to be able to to change or even to request the member States to change the data that they bring to the performance, to the common indicators, and to highlight again, that the way we assess the progress in implementing the relevant measure is through the milestones and targets.”
Digitalization of public governance & administration
- “Now we'll go into the recommendations. Next slide please. So concerning recommendation one. So we can partially accept this recommendation in terms of taking into consideration the digital objectives. And here of course to highlight that the launch of the Digital Decade program that includes common digital targets was introduced after the adoption of the Recovery and Resilience Facility regulation. But of course, there there are some recommendations addressed to the member states that also have an impact on how we commission our drafting the country specific recommendations in the framework of the Member States. But we we will we take note of of the recommendation concerning recommendation two. Again, this relates to the issue of whether all the milestones and targets, uh, reflect the completion of the reforms and investments as highlighted before. Some of them, yes. Not at all. This was not a requirement in the in the regulation. So we can partially accept this recommendation in case measures are being amended when feasible and relevant. We can, of course, uh, look forward to convince the member States to include the completion milestones and targets on recommendation three. I would highlight the fact that also we can, uh, sorry, the slides. Yes, please. So we are in three. Next one please. Thank you. In recommendation three. So in terms of the common indicators. So to highlight that it's they were agreed through a delegated act that was endorsed by the European Parliament and the Council also. And we had to to to take into consideration this balance in terms of, uh, administrative burden for the member states.”
European Semester (social dimension)
- “Thank you. Thank you for the for the questions. So I would like to focus on five key areas. So the first one, the question about how to guarantee the sustainability of this type of reforms that are key reforms, investments that are key. I set my reply. So to highlight that, um, one of the reasons why from the commission we are pushing on reforms and investments in the same field is the fact that reforms will help these investments to have long lasting impact. And of course, this is in terms of the structure, the approach of digital transitions in given member states. But there is also the investment know how member states are going to continue with investments. So this regard we have now the Digital Decade policy programme that I mentioned before that also fits in to the European Semester process, country specific recommendations. And um, it's uh, mentioned that in the RF, the fact that the priorities by the member states were linked to the country, specific recommendations helped them to prioritize some of the investments. So within the framework of Digital Decade policy programme, we hope that to be seen in the proposals on the next MFF that they can also base the use of EU funds in terms of priorities that have been agreed at EU level for for each individual member state. Second, concerns the plans themselves. So we always say and we say it because it's true that the member states are the owners of their own plans. What we commission had to do was to assess whether they were in line with the legal requirements, in order to allow for funding for the implementation of those measures.”
European Semester (social dimension)
- “Thank you for the question. Concerning the first question, I think you are hinting at the reversal procedure that can be used in case a member state completes a milestone and target but afterwards they change the reform in a different way so it doesn't comply with the Council implementing decision, the wording of the relevant reform in particular reforms. In this regard, the Commission published in September twenty twenty-three the reversal methodology. This reversal methodology in a way mirrors the suspension procedure. We enter into a dialogue with the member state, we issue a letter to the member state, and we give some time to the member state in order to reverse back to the situation that was initially envisaged. If they don't do so, we apply the suspension methodology. This is the type of procedure concerning the second question. Yes, we have examples. We are in a process with Spain, and we are publishing these decisions on the website. So yes, we have, and there are all member states, but the first one that I'm dealing with is on Spain. Concerning your second element about initial reforms, because we agreed on these plans in twenty twenty-one, circumstances change, and member states have implemented reforms. There might be considerations, and I'm not talking about the specific one that you mentioned, but in general, there might be considerations that make what has happened in the past now not fit for purpose. If this was the case, we could look at the reform, and it has happened with one member state, look at the reform and see whether there are elements that would need to be changed in order to keep the ambition but with the right content. I can tell you that in particular there was a case on a pension reform where we had to reformulate because what was envisaged in twenty twenty-one was not fit for purpose now. The plan was amended, and then the real reform was fit for purpose. I don't want to speculate on the specific issue that you just highlighted because it's on a case-by-case basis. Knowing, in particular, for instance, on the Romanian plan, just to highlight that when we talk about fiscal reform, we do not go into a specific sector. It is the member state that has introduced that reform in the plan, and then it's up to the member state to implement it to achieve those objectives. We never go to the objective of saying fiscal reform on ICT. Thank you.”
Conditions to access EU budget · EU fiscal rules and oversight of national budgets · Rule of law in Spain
- “Thank you Chair. Good afternoon. So we thank you for the report and and Mrs. Gall-pelcz for the for the presentation. So first of all, we would like to to highlight the positive findings in the report in the next slide, please. So it is clearly stated that the Commission has applied correctly the digital tagging methodology that is leading to all in all, 26%. So 6%, 6%, 12 points above the legal threshold. And this means, as the chair mentioned at the beginning, an amount of 150 billion in estimated cost. And it means around 2000 milestones and targets in the 27 member States plans to be implemented in this field. Also, it states the report that there are some measures with multi-country projects, so it incentivises some of these multi-country projects, and it highlights the report that the majority Of the digital measures achieve the expected outputs, and that we check from the European Commission side when the member states submit a payment request. In our preliminary positive assessment, in the next slide, we will see the criticisms and and the Commission's position in this regard. So one of the key elements in the report is that the member States were not devoting their funding to the Digital Economy and Society Index, the Dead Sea areas where they were underperforming. It's clear that the requirement in the Recovery and Resilience Facility regulation was to address all or a significant subset of CSRs, and to achieve this 20% threshold in terms of investments. So the Daisy has been used by the Commission in order to inform the country specific recommendations addressed to the Member states. But it was not a legal requirement just to base the prioritisation of the Member States measures into the Dead Sea, and to highlight that, of course, the Recovery and Resilience Plan is one of the fundings that member states have the sources of funding the Member States have to achieve their desire.”
Digitalization of public governance & administration
- “Thank you. So concerning the first question about the amendments, to highlight that most of the member states are amending the plans now following our communication and following the fact that one of the rules in the regulation is that all milestones and targets, meaning all investments and reforms, have to be implemented by August twenty twenty-six. If we have objective evidence that this is not happening, then we cannot maintain that measure in the plan. So this is one of the reasons we are amending the plans. We have received already several requests. Some amendments have already happened even before the summer. For Czechia, for instance, we did already simplification and full amendments. Other amendments are coming this week for the ECOFIN in November, and many more will come for the December ECOFIN. We are proceeding in a very transparent way because the Commission has to publish our proposal to amend the Council implementing decision, and we explain well in our recitals what is being changed in the plan. So all this information will be fully available. Please take into consideration that negotiations are ongoing now, so you might not know now, but it will happen, and it will happen in line with the legal requirements. Country-specific recommendations, all or a significant part, have to be addressed. The do-no-significant-harm principle applies. Minimum investments on green and on digital remain, so the key principles. Of course, issues related to the protection of the EU financial interests are key, so those cannot be changed. Concerning your question about what the funds are being spent on, member states are, of course, obliged to apply and use the logo of the NextGen EU for people to see that those projects relate to the NextGen EU. We have our map with the projects, thanks also to the call from the European Parliament. We are asking member states to communicate about this. On top of that, of course, we have the milestones and targets that are implemented, for which at the end of the process we'll have the end and finalization of all the relevant investments and reforms. There will be publication of these reforms and investments and some communication actions from our side. In addition, there is the audit and control process by which the relevant auditors—national, European Commission, European Court of Auditors—will have access to all data related to the implementation of all these projects under NextGen EU. Then your third question about the loans: some member states see that some of their investments cannot happen by August twenty-six. Some member states see that, for instance, for some of the measures, financial instruments that they had envisaged, there is no sufficient demand in the market. Therefore, as we have to make sure that all what is in the plan can be implemented by August twenty-six, they are revisiting their plans. We have seen in the first plan, which is the one of Czechia, that has reduced the loan envelopes, as the honorable member mentioned. Romania, for instance, already submitted a formal revision of the plan. We are assessing it but also substantially reduced the loans envelope. All the member states are considering this. You mentioned a given member state; at this stage, they have not yet formally submitted any revision, but there are several member states considering it. Thank you.”
Size of EU budget · Conditions to access EU budget · EU fiscal rules and oversight of national budgets
- “Thank you. I will start with the housing question. To highlight that twenty member states have included reforms and investment in the housing sector. Twenty is quite a lot. In terms of the investments overall, we have around twenty billion in this sector. We have published a thematic fiche in this regard, and there is more specific information that I can give to you. To highlight that, as you know, one of the assessment criteria regarding resilience plans were the country-specific recommendations. A significant subset had to be implemented, and therefore some member states had specific country recommendations on the housing area, and that's why they were more proactive in including them. Others are dealing with the issue but maybe in different ways. To highlight that in the European Semester process, we are publishing the country reports, and the housing sector is key because it's key for all European citizens. We have these reviews on the implementation of the measures on housing. In this regard, I would like to reply to Madam Chair about the fact that the impacts of the reforms and investments in the plans now are being examined in the framework of the European Semester. In the country reports, we see some data already with regard to the impacts of those reforms and investments. In addition, we are publishing what we call some spillover impact documents. We have published one on Germany, and we are moving forward on publishing others related to other member states for which the impact of the RRF goes far beyond what was the initial envelope of their plans. So we have data in this regard. Of course, in the framework of the regulation, we have a provision that mandates the Commission by twenty twenty-eight to publish an ex-post evaluation. For this reason, our colleagues in DG XFIN are organizing a big event early next year with academia and researchers in order to put together all the necessary figures to assess this socioeconomic impact. With regard to the amendments, I would like just to mention that we have published recently, last week, the twenty twenty-five annual report where we have mentioned some of these amendments. Clearly, as I highlighted now, in the ECOFIN in November and December, we'll have several more. What I want to highlight is that all this is done in compliance with the regulation, so we are not breaching any type of regulation. We can understand that what was envisaged in twenty twenty-one with this long timeline until August twenty twenty-six, many things, many objectives, circumstances can happen, and that's why we were allowed, in accordance with the regulation, the member states were allowed to amend the plans. Thank you.”
European Semester (social dimension) · Size of EU budget · EU housing policy
- “So thank you, my chair. Good afternoon. So I'm going to present some slides on the state of the implementation of the RRF and the partial payment procedure. As you can see in this slide, we have these boards until now: three hundred and sixty-six billion in the framework of implementation of milestones and targets in the national recovery and resilience plans. We still have a lot of work to do because, as you all know, the deadline for implementation of milestones and targets is thirty-first of August twenty twenty-six. So we have three hundred and twenty days. But in terms of disbursement of the grants, we still have to disburse thirty-seven percent of the grants. In terms of the current loan envelopes, we have to disburse still fifty-one percent. Concerning milestones and targets, the non-completed ones are forty-four percent of the existing milestones and targets. But you might have read the communication of the Commission on the road to twenty twenty-six, adopted on the fourth of June this year, in which we present a process in order to revise all the Council implementing decisions. In the sense that we are checking with the member states all the investments that they have in their plans, and if they cannot be achieved by August twenty-six, we are amending the plans to replace those investments, remove if necessary, scale up or scale down some of the investments. In addition, we are streamlining the content of the Council implementing decisions in order to keep the essence of the measures and remove those elements that are not really essential. In the next slide, you can see the number of payment requests by member states. We have received more than one hundred payment requests. We have disbursed already eighty-six payment requests. Just to highlight that in this last week, including today, we have pending adopted positive primary assessment for five member states, which estimated amounts for disbursements are four point five billion dollars. We have ten payment requests under assessment. In terms of the speed of disbursements, you can see in this graph that France is the member state that has reached already eighty-five percent of implementation of the plan. The other member states are behind, some of them far away from the eighty-five percent of implementation, but they are moving towards implementing all the plans. For instance, in terms of payment requests, Italy has submitted already eight payment requests, and Hungary is zero. So each member state is an individual case that has to be dealt with on a case-by-case basis. In terms of absorption, I presented this slide last July in accordance with Eurostat data. Member states have spent more than eighty percent of their grants received. We hope that we'll get data soon in twenty twenty-five from Eurostat. Now I move to the specific section on the partial payment under the RRF. The RRF regulation allows to suspend part of the payments in case a milestone or target is not satisfactorily fulfilled. In this case, the regulation allows the member state to have an additional six months period in order to take necessary action to fulfill that milestone and target. In the next slide, you see a complex graph, but I'm going to, by speaking, simplify the process. When a member state submits a payment request, the European Commission has in principle two months to assess that payment. If the Commission finds that all milestones and targets are satisfactorily fulfilled, we show positive preliminary assessment that then goes to the EPCFC and comitology for disbursement. In cases where one or more milestones and targets are not considered satisfactorily fulfilled, the Commission issues, at the same time as the positive preliminary assessment for the positive milestones and targets, a letter in which we explain the findings related to the non-fulfillment of the milestone or target. This is sent to the member state for a one-month observation period. After that, the member state submits its new evidence or interpretation, and the Commission can take action, either being that the milestone or target is positively assessed or considering that it's not yet positively satisfactorily fulfilled. In that case, the Commission issues a suspension decision, and the member state has six months to implement the milestone or target. In this suspension decision, of course, we include what we call the partial payment because we calculate the amount suspended. This amount is calculated in accordance with the suspension methodology that the Commission adopted in February twenty twenty-three. After the six months, well within the six months, the member states present their new evidence, and the Commission assesses whether the relevant milestone or target is satisfactorily fulfilled. If it is satisfactorily fulfilled, then we go through the positive assessment and the comitology process for disbursement. If it is not satisfactorily fulfilled, then the Commission issues a decision in order to reduce the amount of contribution available to the member state, calculated again, of course, in accordance with the suspension methodology. We notify a letter to the member state, and the member state has two months of observation period. If after these two months we don't find new evidence, then the relevant amount is decommitted. How do we calculate these suspended amounts? In accordance with the methodology, these suspended amounts are calculated differently. They are different per each member state and per each measure. Why different? Because first, we calculate the unit value per each of the plans for the grants envelope and for the loan envelope of a single plan. We divide the total allocation of the RRF for grants and separately for loans by the relevant number of milestones and targets. So with that, we have what we call a unit value. Then we have some coefficients in order to correct the value. The coefficient is a multiplier of five for the entry into force of CSR-related reforms, or a coefficient of two for very large investments. Also, we have a coefficient of zero point five for small investments or interim and exposed steps. In addition, we apply then an adjustment to the downward and upward adjustment to the value. The downward adjustment and reductions are proportionate to the implementation gap of the relevant milestones and targets. Upward adjustments are applied in particular when we have an element related to country-specific recommendations. On the right side of the slide, you see that when a milestone or target is related to audit and control system in the member state, then we suspend the full installment of annual future payments. Member states have to deal with that shortcoming as soon as possible in order to proceed with implementation. In these slides, and it's very small but you will be able to read it, you find all the list of suspensions that the European Commission has issued until now. So this mechanism has been used and is effective but not always used, in the sense that sometimes other procedures are being used in order to deal with the payment for member states to be able to implement relevant milestones and targets. From the list, what I would like to highlight is the fact that in several instances the six months allowed the member states to satisfactorily fulfill the milestones. So in most of the instances, this means that this is a good procedure to allow member states to have more time to implement. There were two instances in which we had to decommit funds. This happened for Lithuania, so eight point seven million of the grants envelope were decommitted in May twenty twenty-four due to the unsuccessful implementation of a milestone on a tax reform. Then also for Romania, there was a reduction of ten point eight billion on the loan envelope due to some problems with public procurement. In some instances, when you see in the list the suspension rescinded, it was due to the fact that the suspension procedure became superseded because the plan was amended. Here you see two examples of suspension. One really successful in the sense of Portugal: eight hundred and ten million were suspended, but within the six months the member state was able to provide and finalize all reforms. Therefore, the suspension was completely lifted and the money disbursed. Then we have the example of Lithuania, where there were tax reforms at stake. Some of these reforms were implemented by Lithuania during the six months period, but not all was done, and therefore there was the decommitment I just mentioned. The window to use the suspension procedure is shrinking. Why? Because we are coming to the end of the implementation of the RRF, and it means that no suspension can be initiated after thirty-first August twenty twenty-six. This leads to the fact that the suspension starting after first March twenty twenty-six will de facto be shorter than the usual six months because we have to take into consideration the fact that all milestones and targets have to be implemented by thirty-first August twenty twenty-six. The last slide from my side is about the lessons learned for the next MFF. We don't want to enter into any discussion on the next MFF but just to show that we are learning from experience. In the midterm evaluation on the RRF, we highlighted that member states reported that this fixed composition of the installments of these groups of milestones and targets for each payment request were too rigid. Also, states considered that the suspension methodology published by the Commission was unclear and thus they considered it was not sufficiently transparent. So in this regard, in the proposals for the national and regional partnership plans for investments and reforms, there is no installment in the way we had it in the RRF, so no fixed installment. In addition, there is a much more transparent process in terms of the value of the relevant milestones and targets because it is known in advance for each individual milestone and target. Thank you.”
Size of EU budget · Conditions to access EU budget · EU fiscal rules and oversight of national budgets
- “So then in order to make sure that the new measure complies with the legal requirements, we revise the costing of that measure. But it's based on the estimated cost for the measure. So to highlight, we don't use the actual cost for the payments because this is not in line with the regulation. But when a member state revises the plan, if we are aware and we thank for having checked sometimes these elements and brought them to our attention. So we we discussed with the member states, but the whole concept of the recovery and resilience facility was based on estimated costs. And it's clear that for some member states are losing money in the sense that at the end the investment was more costly than the initial estimated cost. And we have the figures on this and sometimes might have happened. But if we get aware of it, we act that that is the the other way around. And to highlight that we have very robust audit and control systems also in order to assess what Member States are doing. So from the commission side, we are fully aware of what the Member States are doing and what have been achieved, and it's through the assessment of the payment request. When we publish our positive preliminary assessments, that we are checking all the evidence in order to assess whether the milestones and targets have been satisfactorily fulfilled. And thus we are only disbursing the funds when we are satisfied that the evidence is really in line with what has been agreed by the council.”
Discharge of EU institutions and agencies · Accounting and auditing of EU budget · Conditions to access EU budget
- “In the and the Council implementing decision, which is the contract between the member states and the European Union. In terms of the delays. Yes, we are fully aware that there are delays through that. Some Member States are late in submitting the payment request, but also take into consideration, please, that the deadlines in the council implementing decision were indicative deadlines. So it's clear. And this you can see it in the flagship that the European Commission published on the 6th May, with the title Linking Money to Results How the Recovery and Resilience Facility supports Transformation in Member States. So there we have a chart. Chart number one, in which we bring to the attention to the reader the milestones and targets per member states, the percentage of milestones and targets per member states that have been already assessed as fulfilled by the commission, but also the self-reported completed as completed by the Member States. And we can see that some member States have lots of milestones and targets already fulfilled in, in accordance to, to their reporting, but they have not yet been assessed by the Commission because the payment request has not yet been submitted. So we consider that we have only 15 months until August 26th, but the member states are really making progress in the implementation. Transparency in terms of transparency, as you know, public transparency, the legal requirement is that member states have to publish the list of the 100 final recipients.”
Transparency requirements of EU institutions · Discharge of EU institutions and agencies · Conditions to access EU budget
- “This was the agreement by the legislators. We take note of the remarks by ECA and the European Parliament and all stakeholders about the fact that more transparency is needed. And this was the reason why last September, um, there was an agreement on the recast of the financial regulation in which it is included that for the future, uh, more information should be available on the on the final recipients for the future instruments. But we are from the European Commission encouraging. And it's also thanks to, to to letters that the chair sent to the European Commission encouraging member states to to be more transparent. And we we said an expert group meeting in which some member states were explaining their best practices. And we can mention that Croatia, for instance, is one of those member states that really goes beyond the legal requirements. And then as the last item to highlight about the impacts of these measures, of course, some of these measures, we will see the impacts a bit later. And that's why the co-legislators decided that there would be, by the end of 2028, an expert export evaluation report on the impacts of the RF. But we would like to highlight that from the European Commission side. We are seeing already the impacts. And if you check macroeconomic data and some of the member states, it's thanks to reforms and investments in the plants that they are moving forward in the in the right direction. Thank you.”
Financial regulation · Transparency requirements of EU institutions · Transparency requirements for interest groups
- “And that's what we did, and that's why we had the co-legislators agreed on key legally legal assessment criteria that we followed closely. Country specific recommendations, 20% minimum of investment on, on, on, on digital when we talk about the digital transition. So clearly when we did the initial assessment, also we took into consideration the envelope that co-legislators had allocated to each individual member state, and therefore it was through the estimated cost of the individual measures that we calculate this envelope. And we, together with the member state, the member state, drafted these milestones and targets. And the way these targets. Numerical targets were set took into consideration. These estimated cost that we consider was plausible and reasonable in accordance with the legal requirements. So this was the initial calculation of the estimated cost. And according to the legislation, this is when we use the cost. So there are lots of calls in terms of you should use actual cost in order to pay for the funding. But this would be not would not be in line with the regulation. So the regulation is performance based and not based on actual cost. To highlight that when member states come to amend and this this goes to the delays. When member states come to say we want to amend measures, and we have already assessed these measures, and we have seen that there was a big variation on the costing.”
Conditions to access EU budget
- “But of course, we take note for the future instruments. And in the last slide, please. Um, so on recommendation three here, we'd like to highlight that this recommendation, uh, we cannot accept because as highlighted before. So in the regulation is the legal responsibility of the member states to report the data on the common indicators. So the Commission cannot be, uh, responsible, uh, legally to alter or reject this data. However, of course, what we are doing is, uh, Through bilateral discussions and through the. Expert group, we are ensuring that Member States get sufficient guidance in order to be able themselves to detect problems, and we are contacting them as much as we can in order to help them to implement this obligation that is on their side in order to achieve the right result. Just a last sentence to to finalize my presentation. So what I would like to highlight is that, of course, all the potential or the impacts of these measures in the plants related to the digital transition investments and reforms is not yet known because member states have still a few months, 15 months know this morning until August 2026 to implement all these measures. And we hope that given the fact that it's a key priority for the European Union. Member states will implement them in due time and by the end of 2028, when the Commission will present the ex-post evaluation report, will have all the necessary data in order to assess all these impacts. Thank you.”
European Semester (social dimension) · EU Single Market harmonisation