cover image: BLOG POST - An ambitious plan without adequate financing? - How to address the underfunding

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BLOG POST - An ambitious plan without adequate financing? - How to address the underfunding

15 Jun 2022

In addition, the plan intends to generate €20bn in new grants through the auctioning of Emission Trading System (ETS) allowances from the existing Market Stability Reserve and to allow the transfer of funds from cohesion policy (up to €26.9bn) and the Common Agriculture Policy (up to €7.5bn from the EAFRD) into the RRF. [...] Similarly, the use of the market stability reserve to create additional revenues might, in the end, only transfer resources from national budgets and EU ETS Funds (Innovation Fund, Modernisation Fund) to the RRF, as the selling of additional ETS allowances has a negative impact on the carbon price and thus on national and EU revenues linked to the ETS. [...] 5 of the 2020 Own Resources Decision (ORD) specifies the share of grants and loans, meaning that an increase of the grant component in the RRF would require unanimity plus the ratification of an amended ORD in all 27 EU Member States, in addition to changes to the European Recovery Instrument (EURI) regulation and the Jacques Delors Institute • 3 . [...] 6 of the ORD, as the temporary increase of the own resources ceiling to cover the liabilities of NGEU common borrowing includes the full amount of €750bn already. [...] First, an amendment of the ORD, EURI and RRF regulations would allow to better articulate the solidarity mechanism to respond to the 2022 Russian invasion of Ukraine and its consequences, instead of relying on the solidarity logic underlying the common response to the Covid-19 pandemic.
Pages
5
Published in
France