EU finance ministers approved on Monday (26 July) the recovery plans of Croatia, Cyprus, Lithuania and Slovenia, bringing the total number of approvals to 16 out of the 27 Member States.

The Economic and Financial Affairs Council’s approval was based on the European Commission’s positive assessment of the reform and investment proposals put forward by these four countries to unlock their part of the €672.5 billion Recovery and Resilience Facility, the main pillar of the EU’s recovery fund.

Early this month, the Council approved the plans of Austria, Belgium, Denmark, France, Germany, Greece, Italy, Latvia, Luxembourg, Portugal, Slovakia, and Spain.

Countries will access their funds once they fulfil a series of targets and milestones that gradually implement the agreed investment and reform plans. As a starter, they will receive 13% of their recovery money as prefinancing, once their plans are adopted and the paperwork has been completed, which should happen in a matter of weeks.

The executive vice-president of the Commission, Valdis Dombrovskis, raised in the markets €45 billion to cover the prefinancing transfers, a bit short of the €51 billion needed to cover at least the first 12 approved plans. Still, Dombrovskis was confident that the Commission will be able to cover the prefinancing needs “in full” when the first disbursements are required once the member states sign all the documents.

The Commission and the Council are in the process of approving most of the pending recovery plans just after the summer break. The Netherlands and Bulgaria are the only countries that still need to submit their proposals due to delays in forming new governments in each of them.

The plans sent by Hungary and Poland, however, remain stuck in the pipeline, as both are clashing with the EU executive over rule of law concerns. Warsaw accepted an extension of the Commission’s assessment until the end of August to improve its original proposal. The Commission also offered an extension to Budapest until the end of September to strengthen its anti-corruption and auditing mechanisms in order to access the €7 billion in grants, but the government led by Viktor Orban rejected the suggestion.

Image © European Commission, 2021