The EU hopes to give the green light on the issuance of almost €7.5 billion of ‘green transition' spending from early March, as part of its post-Covid-19 recovery and resilience fund (RRF).
The European Parliament yesterday voted to formally approve the €672.5 billion RRF budget which forms the central plank of its Next Generation EU Covid recovery strategy.
The heads of EU member states who make up the European Council of Ministers now need to formally sign off the budget – the terms of which they thrashed out with the parliament in December – so the presidents of the parliament and of the Economic and Financial Affairs Council (ECOFIN) of the Council of Ministers can sign the policy into force. ECOFIN is composed of member states' economic and finance ministers.
The European Commission yesterday welcomed the vote by the parliament and said it expected the RRF to be approved this month. After approval, member states will be able to submit national RRF plans for scrutiny and will be able to access 13% ‘pre-financing' of the funds allocated to them. With the RRF insisting at least 37% of all the cash disbursed be spent on ‘climate objectives', at least €7.47 billion of that initial €20.2 billion pre-financing slice of funds must be devoted to that end.
A green transition is one of six pillars of the RRF fund, along with digital transformation; economic cohesion, productivity and competitiveness; social and territorial cohesion; health, economic, social and institutional resilience; and policies for the next generation. The RRF also stipulates at least 20% of the cash be devoted to digital investment.
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