The macroeconomic impact of the Recovery and Resilience Facility: An analysis for Italy, Spain, and Greece

Summary — “The macroeconomic impact of the Recovery and Resilience Facility: An analysis for Italy, Spain, and Greece” (CEPR VoxEU, Dino Pinelli, 14 July 2026)

This column presents preliminary descriptive evidence — not formal causal estimation — on the realised macroeconomic impact of the EU’s Recovery and Resilience Facility (RRF) in Italy, Spain and Greece, the three countries with the largest allocations (9.1%, 6.8% and 16% of GDP respectively). Comparing each country against a control group of low-allocation euro area states and against pre-Covid trend extrapolations, the analysis finds real GDP was 10.8% above its 2019 level in Greece, 10.2% higher in Spain, and 6.4% higher in Italy, compared with an increase of only 5.4% in the control group by 2025. Labour market gains were even stronger: hours worked rose 7.4–8.1% across the three countries versus just 2.6% in the control group. The clearest effect is on investment — total investment as a share of GDP rose by 3.7, 0.3 and 5.9 percentage points in Italy, Spain and Greece respectively, while it fell roughly 2 points in the control group, suggesting RRF-backed public investment crowded in rather than displaced private investment. Growth-accounting evidence points to encouraging early contributions to potential output from capital, labour and total factor productivity (TFP) — though Italy’s weak TFP remains a drag on its longer-run potential growth. The author frames this as preliminary evidence complementing existing model-based simulations, and calls for future work to establish more rigorous causal estimates, while stressing implementation and reform momentum must be sustained to lock in lasting productivity gains

The EU Recovery and Resilience Facility was launched to support post-Covid recovery while accelerating structural transformation through investment and reform. This column provides a preliminary descriptive assessment of the macroeconomic impact of the facility in Italy, Greece, and Spain, three countries with large allocations. Using simple counterfactual comparisons, it presents evidence consistent with a positive…