The Challenge of absorbing and spending the EU recovery funds

Zsolt Darvas from Bruegel, the economic “Think Tank” based in Brussels, analyzes in this article the use of the recovery funds of the European Union, finding how for some countries such as Spain or Italy "absorbing all these funds could be an immense challenge".

The article shows how Spain and Italy would only have used 39% and 40% respectively of the total of the European structural funds for the period 2014-2020. Both would be the countries with the lowest utilization rates (absorption rate) in the European Union as a whole and yet the largest beneficiaries of Next Generation EU recovery funds (NGEU).

That low absorption capacity of European funds, together with the fact that the NGEU recovery and resilience funds will have a much faster disbursement schedule than usual, will imply a huge challenge for some countries to spend them timely.

According to the author, absorbing these funds should not be an objective in itself, but to guarantee that they are used well: “Some countries might struggle to spend what they can get, even if they will have broad freedom to design spending programs. The focus should be on worthwhile spending, not just on absorbing EU funds”.