Next Generation EU

The ancient Roman Agora is illuminated during the Next Gen EU event, in Athens, Greece, on June 16, 2021

Next Generation EU (NGEU) is a European Union (EU) recovery instrument designed to support member states in addressing the economic and social impact of the COVID-19 pandemic. It aims to foster a sustainable and resilient recovery by promoting green and digital transitions, as well as enhancing economic and social resilience.

Overview

Next Generation EU is a temporary recovery instrument with a financial capacity of €750 billion. It was agreed upon by the European Council in July 2020 and is set to run until 2026. The funds are raised by the European Commission on behalf of the EU through the issuance of bonds on the capital markets.

Components

NGEU consists of several key components:

Recovery and Resilience Facility (RRF)

The Recovery and Resilience Facility is the centerpiece of NGEU, accounting for €672.5 billion of the total funds. It provides financial support to member states for investments and reforms, with a focus on green and digital transitions. The RRF is divided into grants (€312.5 billion) and loans (€360 billion).

React-EU

React-EU (Recovery Assistance for Cohesion and the Territories of Europe) provides an additional €47.5 billion to existing cohesion policy programs. It aims to support job creation, maintain employment, and provide assistance to health systems and small and medium-sized enterprises (SMEs).

Horizon Europe

Horizon Europe is the EU's research and innovation program, receiving an additional €5 billion from NGEU. It supports research and innovation projects that contribute to the green and digital transitions.

InvestEU

InvestEU receives an additional €5.6 billion to support investment in sustainable infrastructure, research and innovation, and SMEs.

Rural Development

An additional €7.5 billion is allocated to the European Agricultural Fund for Rural Development to support rural areas in their recovery efforts.

Just Transition Fund

The Just Transition Fund receives an additional €10 billion to support regions most affected by the transition to a green economy.

RescEU

RescEU, the EU's civil protection mechanism, receives an additional €1.9 billion to enhance disaster response capabilities.

Implementation

Member states are required to submit national recovery and resilience plans to the European Commission, outlining their proposed investments and reforms. These plans must align with the EU's policy objectives, including the European Green Deal and the Digital Strategy. The Commission assesses and approves the plans, and funds are disbursed based on the achievement of agreed milestones and targets.

Impact

Next Generation EU is expected to have a significant impact on the EU's economic recovery and long-term growth. By promoting green and digital transitions, it aims to create a more sustainable and resilient economy. The instrument also seeks to address social inequalities and enhance the EU's strategic autonomy.

See also

• European Green Deal
• Digital Strategy
• European Commission
• European Council
• COVID-19 pandemic