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The Recovery and Resilience Facility (RRF), also known as the EU’s recovery fund, has weaknesses in its monitoring system that make it insufficient for measuring overall performance, according to a new report by the European Court of Auditors. Although the existing system helps to track member states’ progress towards the reforms and investments they agreed upfront in exchange for funding, it fails to provide a full picture of how the funded projects contribute to the RRF’s objectives, such as making the European economy greener and more resilient.
The RRF is worth €723 billion – up to €338 billion in non-repayable grants and €385 billion in loans. The fund is aimed at financing member states’ reforms and investments, such as in labour markets or nature protection. These reforms and investments should in turn fall under six policy pillars, including green transition and digital transformation. Unlike for most other EU programmes, the Commission disburses funding as countries achieve milestones and targets linked to reforms and investments, rather than on the basis of actual costs.
“The EU recovery fund provides member states with more money than ever, but citizens need to know whether its fundamental goals are met and how the money is spent,” said Ivana Maletić, the ECA member in charge of the report. “We are in a paradoxical situation where for the EU’s largest fund that is claimed to be performance-based, we can measure progress but not performance itself.”
The RRF’s performance-monitoring structure is based on two main building blocks: milestones and targets for tracking member states’ progress on reforms and investments; and 14 predefined common indicators for monitoring success in achieving the RRF’s objectives. However, the auditors find that these two monitoring elements are insufficient for assessing the RRF’s overall performance. Although they help to track progress on making reforms and investments in the member states happen, milestones and targets are only steps in implementation (e.g. adopting a law, selecting projects, or signing contracts) and largely focus on what the projects finance (e.g. the number of people attending training, the number of square metres renovated, or the number of electric vehicles purchased), instead of measuring results (e.g. the number of people employed, savings in energy consumption, and a reduction in CO2 emissions). The vast majority of common indicators do not measure results either, and they will often not provide enough information on how projects on the ground contribute to the RRF’s general objectives. This is due to the fact that some reforms and investments could not be linked to any indicator, such as major structural reforms (economic, labour market and judicial reforms) or investments in infrastructure and public transport. In addition, the common indicators cover the RRF’s objectives only partially, as there is no indicator covering areas such as the rule of law, the financial sector or taxation....
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