Eurozone | A first look at NGEU spending and reform plans
The Recovery and Resilience Plans (RRPs) that EU member states have so far submitted to the European Commission to unlock funds from Next Generation EU (recovery instrument) haven’t triggered major adjustments to our baseline forecasts, as we had incorporated its impact last summer. The intended take-up of loans has so far been weak but is likely to rise when spreads widen, presenting an upside risk to our forecasts.
What you will learn:
- Based on our analysis of 18 RRPs formally submitted by mid-May, member states differ in the scope of their overall ambition, spending, and reform priorities. As expected, the main spending categories include green and digital investments as well as upgrading public services.
- The recovery instrument may become a central pillar of the EU’s macroeconomic governance, providing incentives for weaker member states to implement growth-enhancing reforms, although we see some key risks.
- Despite marking a significant milestone for Europe, it’s too early to say whether the instrument will become permanent in some form because this would face significant opposition from several member states.
Tags:
Related Services

Post
BoK’s monetary policy to tighten even as hiking cycle ends
Even without rate hikes, central banks' monetary policies can effectively tighten if the nominal neutral rate falls below the policy rate. We expect this will be the case for the Bank of Korea this year, as the gap between the policy rate and the nominal neutral rate widens.
Find Out More
Post
China: Emerging green shoots in Spring, but not out of the woods
We now incorporate a faster recovery from the post-Covid exit wave and raise our 2023 full-year GDP growth forecast to 4.5% (from 4.2% previously).
Find Out More