Evaluation Insights: EU Recovery and Resilience Facility

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Series Evaluation Insights for Policy and Programming

(TL;DR) The EU Recovery and Resilience Facility, the EU’s EUR 723.8 billion pandemic recovery instrument, is broadly on track at its halfway point. By end 2023, EUR 225 billion had been disbursed and roughly 75% of planned milestones met, with economic modelling projecting a GDP boost of up to 1.4% and employment gains of up to 0.8% by 2026. What worked particularly well was the combination of reforms and investments in integrated national plans, strong country ownership, and the instrument’s built-in flexibility to adapt when crises hit. What fell short was administrative simplicity: overlapping audits, rigid milestone definitions, and insufficient involvement of local authorities and civil society created friction and implementation delays. The core lesson is that performance-based EU funding works, but only when backed by adequate administrative capacity and meaningful stakeholder inclusion from the start.

The European Commission’s mid-term evaluation of the Recovery and Resilience Facility (RRF) provides a comprehensive assessment of the EU’s flagship pandemic recovery instrument at its halfway point, offering rich evidence on what has worked, what requires improvement, and how the instrument is reshaping EU public spending more broadly.

Context

The RRF was established in February 2021 as the centerpiece of NextGenerationEU (NGEU), the EU’s historic recovery instrument designed to address the devastating economic and social fallout from the COVID-19 pandemic. Operating across all 27 EU Member States, the RRF targets a wide range of populations, with a deliberate concentration of support on lower-income and more vulnerable Member States hit hardest by the pandemic. The instrument responds to a dual development challenge: managing immediate crisis recovery while simultaneously accelerating structural transformation toward green and digital transitions. The strategic relevance of the RRF is further underlined by its unprecedented scale, with a total financial envelope of EUR 723.8 billion in grants and loans dedicated exclusively to the RRF component of NGEU.

Intervention Overview

The RRF operates through a performance-based disbursement model in which Member States design comprehensive national Recovery and Resilience Plans (RRPs) containing reform and investment packages, and receive funding upon demonstrating satisfactory fulfilment of agreed milestones and targets. Each RRP must allocate at least 37% of expenditure to climate-related measures and comply with the “do no significant harm” (DNSH) principle, which applies as a horizontal general eligibility criterion for the first time in EU funding history. A distinctive feature is the REPowerEU chapter, added in 2023, allowing Member States to access additional resources to diversify energy supplies and accelerate the green transition in response to Russia’s war against Ukraine. The instrument runs until end 2026 and is designed explicitly as time-bound, creating strong urgency and accountability incentives throughout its implementation lifecycle.

Evidence: What Worked

By end 2023, more than 1,150 milestones and targets had been assessed by the Commission as satisfactorily fulfilled, with EUR 225 billion already disbursed across EU economies. The Commission’s QUEST macroeconomic model estimates that NGEU has the potential to increase EU real GDP by up to 1.4% in 2026 above a no-NGEU scenario, with employment gains of up to 0.8% in the short run and persistently higher real wages in the medium term. Between a quarter and a third of the total estimated GDP impact is projected to result from positive cross-border spillover effects generated by the simultaneous implementation of investments across Member States, with lower-income Member States expected to benefit disproportionately.

The RRF demonstrated particular effectiveness in incentivizing long-standing structural reforms. The share of country-specific recommendations (CSRs) reaching at least “some progress” increased by 17 percentage points between 2021 and 2023, compared to only 6 percentage points in the two years before the RRF was established. The performance-based disbursement approach increased predictability and accountability, with stakeholders noting that having specific results defined in advance in Council Implementing Decisions significantly improved Member States’ ability to plan. The instrument also proved agile, with all RRPs successfully revised in 2023 to address new external shocks including inflation, supply chain disruptions, and natural disasters.

Evidence: What Did Not Work

Implementation difficulties emerged particularly around the complexity of the audit and control framework. Member States’ authorities at all levels found procedures too complex, and complaints arose about overlapping audits by national authorities, the Commission, and the European Court of Auditors simultaneously. This administrative burden adversely affected implementation speed and was exacerbated by the parallel implementation of cohesion policy funds, which operate under different rules and cost-based controls.

Member States also found the definition of milestones and targets too detailed and the fixed composition of groups of milestones and targets for each payment instalment too rigid, causing implementation delays and increased administrative workload when unforeseen circumstances arose. Local and regional authorities, social partners, and civil society organizations reported insufficient involvement in the design, implementation, and monitoring of RRP measures, partly attributable to the urgency of crisis-context planning but identified as a structural shortcoming with consequences for ownership on the ground. Additionally, the focus on RRP implementation contributed to delays in implementing structural funds in some Member States, indicating that managing two parallel EU funding streams simultaneously stretched administrative capacity.

Lessons Learned

The combination of reforms and investments within a single, medium-term national plan proved to be one of the most effective design features of the RRF, enabling coherent sequencing and synergies that would be difficult to achieve through separate instruments. Country ownership, achieved by allowing Member States to design their own plans within EU-level criteria, was a key enabler of reform implementation, particularly for measures requiring national parliamentary approval. The performance-based approach represents a paradigm shift in EU spending, transferring the focus from costs incurred to actual results delivered, and has already inspired successor instruments such as the Social Climate Fund and the Ukraine Facility.

An important and unexpected lesson concerns agility: the RRF’s embedded flexibility provisions, which allowed plan revisions, proved essential when external shocks (energy crisis, inflation, natural disasters) made original commitments unachievable. Germany’s and Luxembourg’s targeted plan revisions were assessed and approved within two months, demonstrating that swift adjustments are operationally feasible when revisions are focused and well-justified. Administrative capacity constraints emerged as a persistent challenge, with the Technical Support Instrument (TSI) providing critical support through more than 400 approved projects linked to RRP preparation or implementation.

Implications for Policy and Programming

Policymakers should prioritize further administrative simplification in any future performance-based EU funding instrument. The entry costs created for national administrations by the RRF’s control framework are disproportionately burdensome relative to the instrument’s performance-based logic, and simplification must be pursued without compromising the financial integrity of EU funds. The model of combining reforms and investments in integrated national plans should be retained and refined, as it demonstrably improves policy coherence and structural reform implementation compared to standalone investment instruments.

Donors and future program designers should invest in institutional capacity building as a precondition, not an afterthought. Sufficient administrative capacity at national and subnational levels directly determines absorption rates and implementation quality. Improving the meaningful involvement of local authorities, social partners, and civil society from the outset is essential to strengthen ownership and implementation on the ground. The RRF’s experience with milestones and targets also reveals that overly detailed or rigid performance frameworks can backfire, and future instruments should embed sufficient procedural flexibility to accommodate unforeseen circumstances without triggering full plan revisions.

Potential for Scaling and Transferability

The RRF’s performance-based architecture has already proven transferable, with the Social Climate Fund and Ukraine Facility explicitly modeled on its approach. The instrument’s core design logic, linking disbursements to verified reform and investment outcomes rather than cost claims, is applicable across different sectoral contexts, provided that milestones and targets are defined with appropriate precision and flexibility. However, the enabling conditions for success are demanding: Member States required substantial upfront administrative investment, technical support, and close bilateral coordination with the European Commission. Replication in lower-capacity contexts would require significantly enhanced technical assistance and a longer design phase.

The RRF also demonstrated that simultaneous implementation across multiple countries generates positive cross-border spillovers that benefit all participants, suggesting that coordinated multi-country instruments offer measurable added value beyond the sum of their national parts. This finding has strong implications for future EU-level and multilateral funding architecture in areas such as climate finance, infrastructure connectivity, and digital transformation.

Methodological Notes

The mid-term evaluation applies the five standard evaluation criteria used by the European Commission: effectiveness, efficiency, relevance, coherence, and European added value. It draws on a diverse evidence base including an independent study conducted by a consortium of external contractors published in parallel, broad stakeholder consultations, and the Commission’s QUEST macroeconomic model for estimating GDP and employment impacts. An important limitation is that, at the halfway point, many investments are still in early or mid-implementation phases, making it premature to assess full outcomes and longer-term impacts. Macroeconomic model results represent ex-ante projections under stylised assumptions rather than ex-post empirical assessments, and focus primarily on investment rather than the structural reform components, whose macroeconomic effects are considerably more difficult to model. Self-reported milestone completion data from Member States also introduces a degree of verification uncertainty for a subset of results.

Stakeholder Perspectives

Member States broadly supported the performance-based approach and the country ownership model but called consistently for greater flexibility in milestone definitions and plan revision procedures. Local and regional authorities, as well as social partners and civil society organizations, expressed concern about insufficient involvement in RRP design and implementation, a perspective that the evaluation validates as a systemic challenge requiring structural attention in future programming cycles. The European Parliament engaged actively through 14 Recovery and Resilience Dialogues and 34 working group meetings, reflecting strong institutional interest in transparency and accountability. Beneficiary-level examples, from Austrian KlimaTicket users to Croatian social mentoring recipients and Bulgarian minimum income scheme beneficiaries, illustrate that RRF-supported measures are delivering tangible improvements in people’s daily lives.

Key Data Points and Indicators

Indicator Value
Total RRF financial envelope (grants and loans) EUR 723.8 billion
Total NGEU budget EUR 806.9 billion (2021 prices)
Total disbursed by end 2023 EUR 225 billion
Milestones and targets fulfilled (assessed or self-reported) by end 2023 ~75% of those planned
Estimated GDP increase in 2026 (QUEST model, NGEU) Up to +1.4% vs. no-NGEU scenario
Estimated EU employment increase (short run) Up to +0.8%
Climate expenditure in RRPs (average share) 40% (minimum required: 37%)
Total climate-tagged RRF expenditure ~EUR 275 billion
REPowerEU chapters approved 23 of 27 Member States
Additional funding via REPowerEU chapters EUR 60 billion
CSR progress improvement (2021-2023) +17 percentage points
TSI projects linked to RRP preparation/implementation Over 400

 

Further Resources and Links

Implementing Organizations and Institutions

Technical Assistance

Related Knowledge Platforms

Report Citation

European Commission. “Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: Strengthening the EU through Ambitious Reforms and Investments.” COM(2024) 82 final, Part 1. Brussels: European Commission, 2024.

Disclaimer: The author did not participate in this evaluation. The opinions expressed are solely those of the author and cannot be attributed to any affiliated organizations. Portions of the text and images were supported by artificial intelligence.