(Financial Times Europe, Paola Tamma, 13 May 2026)
European Union countries have used just over half of the €577 billion from the Recovery and Resilience Facility, the stimulus plan launched in 2021 to address the economic shock of the pandemic. By the end of 2025, about 53% of the funds had been spent, with Italy, Spain, and Poland having used 57%, 44%, and 26% of their allocations respectively.
The delay is partly due to high inflation following the energy shock from the war in Ukraine, which created supply surpluses and slowed construction work, but also to initial difficulties in launching the programs. Poland accumulated delays mainly due to the blocking of funds by Brussels during the rule of law dispute with the previous right-wing government. Despite the delays, the Commission estimates that the cumulative impact of the plan on the EU GDP has been about 0.8-1% annually between 2021 and 2026, although the medium-term effect will only be assessable in the next two years.
Governments have until September to request the remaining €172 billion, but an extension beyond 2026 seems unlikely due to opposition from frugal countries like the Netherlands, which accepted the common debt only as a one-time measure with a strict deadline.
Delays in fund absorption
“By the end of last year, EU countries had spent about €310 billion, or 53% of the available resources. Italy, Spain, and Poland, the main beneficiaries, have used only 57%, 44%, and 26% of their respective allocations, partly due to high inflation following the energy shock from the war in Ukraine that slowed construction work.”
Limited impact on growth
“The cumulative impact of the Recovery Fund on EU GDP is estimated between 0.8 and 1% annually between 2021 and 2026. However, the medium-term effect will only be assessable in the next two years, because from 2022 to 2024 the European economy was hit by energy shocks, reducing the scope and execution of the plan.”
Imminent deadline and future uncertainties
“Governments must submit requests for the remaining €172 billion by September. An extension beyond 2026 seems unlikely, as frugal countries like the Netherlands accepted the common debt only as a one-time measure with a strict deadline.”
Need for structural reforms
“‘It is very difficult for governments to claim to support the union of savings and investment markets if they then say ‘no, we oppose this specific transaction’.”
Modernization of the banking system
“‘The German banking system, very fragmented, needs to be modernized while facing major economic challenges.’”
(Excerpt from the newsletter by Giuseppe Liturri)
