The EU’s Recovery and Resilience Facility: Experience and Lessons for the Next Multiannual Financial Framework

Matthias Busse, Francesca Caselli and Alexandra Fotiou

No 2026/114, IMF Working Papers from International Monetary Fund

Abstract: This paper takes stock of the Recovery and Resilience Facility (RRF)’s economic impact as implementation enters its final phase and draws lessons for the design of the next EU Multiannual Financial Framework (MFF). Using sectoral and cross-country data, the paper finds that the RRF provided a short term demand boost, supporting employment and output growth—especially in countries with large allocations—while a substantial share of its growth impact is expected to materialize as absorption accelerates. Unprecedented joint EU level borrowing is found to have contributed to stabilizing sovereign debt markets and improving prospects for EU bonds as safe assets. Finally, the RRF’s performance based conditionality through improved national ownership has supported reform implementation in some member states. At the same time, challenges around the pace of funds absorption remain as implementation is still ramping up and the overall macroeconomic impact will ultimately depend on how effectively the RRF funds are utilized. Plan overambition and complexity, administrative capacity limits, and absorption bottlenecks have slowed disbursement in several member states, while the predominance of output based milestones and targets has limited the framework’s focus on results.

Keywords: Recovery and Resilience Facility; NextGenerationEU; EU policies; IMF working papers; Rrf fund; EU's Recovery and Resilience Facility; IMF Italy; EU policy; Securities markets; Labor markets; Structural reforms; Europe; Southern Europe (search for similar items in EconPapers)
Pages: 34
Date: 2026-06-05
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