UK markets open in 5 hours 5 minutes
  • NIKKEI 225

    +630.78 (+2.27%)

    +390.25 (+1.38%)

    +0.18 (+0.27%)

    +5.60 (+0.30%)
  • DOW

    -54.34 (-0.16%)

    -132.31 (-0.41%)
  • CMC Crypto 200

    +40.55 (+3.39%)
  • ^IXIC

    -50.93 (-0.38%)
  • ^FTAS

    -9.17 (-0.23%)

Half of EU countries likely miss deadline for recovery plan submission

Jan Strupczewski
·2-min read
FILE PHOTO: European Union flags flutter outside the European Commission headquarters in Brussels

By Jan Strupczewski

BRUSSELS (Reuters) - Only half the European Union's 27 countries are likely to submit their EU-financed spending and reform plans by the deadline of the end of April, but that should not delay first disbursements being made in July, EU officials said.

Under the EU's 750 billion-euro plan to turn the economy greener and more digital by 2026, each EU government is to present to the European Commission by April 30 a plan on how it wants to spend its share of a mix of EU loans and grants that would finance the transformation.

So far, only Portugal has formally submitted its spending and reform plan. Officials said the complexity of planning multi-billion-euro investment and reforms in line with jointly agreed EU rules meant many countries would miss the soft deadline.

They expect the rest of the plans in May.

"We will see a very steady stream of submissions coming in, with probably another dozen submissions or so in the next week," one senior EU official said. "This is not a small thing, drafting plans that cover up to six years ahead is a huge task, in particular in the middle of a pandemic."

"These plans will shape the economy for the coming years, so we really emphasize quality over speed," the official said.

The EU-financed scheme requires governments to spend 37% of the money they get on reducing CO2 emissions in their economies and 20% on digitalising them, for instance through improving computer literacy or building high-speed Internet networks.

The Commission has two months from the moment it gets a national scheme to check whether it meets the required criteria. EU finance ministers then have another month to make their own evaluation, before the submitting country gets its first cash.

"At the earliest, we will see some money flowing in July and then the rest will follow as time goes by," a second senior official said.

Under the terms of the scheme, for which the Commission will borrow on the markets in the name of all EU governments, each EU country can get an up-front payment of 13% of its share of the money, once the scheme is approved.

For the whole of the EU, that means around 44 billion euros this year. The rest will be paid out in instalments as projects and reforms spelled out in the plans reach agreed milestones and targets and their completion is verified.

For any money to be disbursed, however, the EU's 27 national parliaments must first ratify a law that increases national guarantees to the EU budget that is the ultimate guarantor of the joint EU borrowing. So far, 18 have ratified.

Changes to the approved plan can be made at a later stage, for instance because of a change of government, but such a change would require going through the whole EU approval procedure again.

(Reporting by Jan Strupczewski, editing by Larry King)