The EU’s Recovery and Resilience Facility: Experience and lessons for the next multiannual financial framework

Summary — “The EU’s Recovery and Resilience Facility: Experience and lessons for the next multiannual financial framework” (CEPR VoxEU, Matthias Busse, Francesca Caselli & Alexandra Fotiou, 8 July 2026)

Drawing on new IMF analysis, this column assesses the EU’s €650bn Recovery and Resilience Facility (RRF) as a test case for performance-based fiscal policy ahead of the next Multiannual Financial Framework (MFF) negotiations. On economic impact, the authors find about half of RRF disbursements went to the construction sector in 2024, generating sizeable short-term demand effects, while AI-based textual analysis of the top 100 fund recipients per country shows spending concentrated in future-oriented areas like R&D, infrastructure and innovation hubs. Using a standard fiscal multiplier, they estimate the RRF raised EU annual GDP growth by around 0.3 percentage points in 2025, with effects exceeding one percentage point in Greece, Croatia and Latvia. The facility also helped deepen EU fiscal integration through large-scale joint borrowing, improving sovereign bond market liquidity. On implementation, the performance-based milestones-and-targets system strengthened reform incentives and national ownership, but overly complex plans — some exceeding 500 milestones per country — created administrative bottlenecks and slowed disbursement (by end-2025, only about 66% of the grant envelope had been disbursed). The authors draw three lessons for the next MFF: link reforms and investment but keep plans focused and prioritized; calibrate ambition to administrative/absorptive capacity; and preserve flexibility to adapt programmes as conditions change.

The EU’s Recovery and Resilience Facility has become a central test case for performance-based fiscal policy. Its experience offers lessons for the design of the next Multiannual Financial Framework. This column reviews evidence on the facility’s economic impact, implementation, and use of milestones and targets. It argues that the facility has supported demand, helped advance…

Source: CEPR / VoxEU · July 7, 2026