Economic Impacts of the Recovery and Resilience Facility: New Insights at Sectoral Level and the Case of Germany

Anne Michels, Daria Ciriaci, José Manuel Rueda-Cantuche, Luis Pedauga, Valeria Ferreira, Christina Kattami, Daniel Schulz and Marta Pilati

No 221, European Economy - Discussion Papers from Directorate General Economic and Financial Affairs (DG ECFIN), European Commission

Abstract: The Recovery and Resilience Facility (RRF) is the cornerstone of NextGenerationEU, the EU’s post-covid Recovery Plan. With a budget of EUR 650 billion, amounting to around 4% of the EU GDP, the RRF finances over 2,800 reform and investment measures aross the EU from 2020 to 2026. To date, most studies on the RRF have focused on the broad macro-economic picture or on specific policy domains and country experiences. This paper introduces a novel approach to enhance the understanding of the RRF. First, by leveraging artificial intelligence, a new sectoral database was created, which classifies all RRF reform and investment measures according to economic sectors and enables more detailed and systematic analysis of macro-economic, sectoral and policy impacts. The paper presents an overview of this classification, across the EU and for each Member State. The sectors benefitting most from the RRF include those related to the green transition, such as energy efficiency, renewable energy production and sustainable transport; those supporting the manufacturing sector and broader business environment, including digitisation, public administration and justice reforms; and those related to societal resilience, such as healthcare, skills and education. We also observe significant synergies between reform and investment measures in those areas. Second, by applying the well-established FIDELIO model to this new sectoral dataset, it is now possible to assess the direct and spillover impacts of RRF-funded investments and to break down these results across 64 economic sectors, for the EU and for each Member State. Looking at Germany by way of illustration, the analysis shows that, assuming full implementation of the 27 plans, the German economy stands to benefit from a medium-term stimulus of about EUR 66 billion (1.6% of Germany’s GDP), more than twice the size of Germany’s Recovery and Resilience Plan. This reflects both the direct impact of the RRF and significant positive spillovers, driven by the strong integration within the EU Single Market. This paper identifies the sectors that benefit most from these effects and highlights how these novel data and techniques can support further research and evaluations.

JEL-codes: C82 E61 E62 F15 F17 F41 F42 F62 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2025-05
New Economics Papers: this item is included in nep-eec
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