BRUSSELS (Reuters) – Plans submitted by EU member states so far for spending a record 1.8 trillion euros to rebuild economies wrecked by COVID-19 fall short on reforms and must be improved, in the view of the European Commission, three diplomatic sources said.
The EU executive’s downbeat assessment, shared with envoys from the 27 member states at a closed-door meeting on Jan. 7, highlights the uphill battle the European Union faces in spending so much money.
Red tape, political wrangling and a track record of fraud risk hampering efforts to put EU countries on a more even footing after the pandemic, which has exacerbated the wealth gap across the continent.
“The plans lack structural reforms, strategic vision, concrete targets, and cost-effectiveness. A lot of work remains to be done,” said one Brussels diplomat, relaying criticism by the Commission at the meeting.
A second diplomat said the Commission had stressed that some plans were not concrete enough and lacked measurable targets.
A third added: “Most governments are good at spending money but not so good on reforms. They need to update these plans to take that on board. They have to work a lot to be able to absorb the money quickly and spend it on decent projects.”
At stake is 1.1 trillion euros from the bloc’s 2021-27 budget and an additional 750 billion euros from the EU’s first-ever joint borrowing.
The Commission did not say which countries had submitted the poorest plans, the sources said.
NET PAYERS TO BLOCK?
The 27 national capitals have until the end of April to submit final proposals to the Commission. They then have to be endorsed by other EU countries before the money is expected to start flowing in the second half of the year.
“If these preliminary plans are not improved, if they are rubbish, they shouldn’t be accepted by the Commission. Even if they were, the net payers would block,” the third person said, referring to wealthier member states such as the Netherlands that are especially keen to avoid waste.
Fewer than half of EU countries have so far submitted their initial plans and the Commission has told those which have not to hurry up, according to the sources, to avoid delays in disbursing money meant to lift the bloc from a record recession.
The European Commission had no specific comment on the Jan.7 meeting.
European Economic Commissioner Paolo Gentiloni said on Monday, after discussing the national recovery plans with euro zone countries, that “good progress” was being made but that there was a need to “increase the ambition of reforms”.
Many draft plans need to be “strengthened” with more details on timings, targets and milestones to ensure the money is spent well, he said.
(Reporting by Gabriela Baczynska; Editing by Gareth Jones)