As the NextGenerationEU (NGEU) recovery initiative approaches its conclusion, a significant share of funding remains unused. To date, only 58% of the Recovery and Resilience Facility (RRF) has been paid out, leaving almost €270 billion still to be distributed before the program’s deadline at the end of 2026. This slow rate of absorption threatens both economic growth and the long‑term structural goals of the European recovery strategy.
EU GDP forecasts 2025: 1.5%; 2026: 1.4%
- €806.9 billion : total size of NextGenerationEU, including €650 billion for the Recovery and Resilience Facility
- 58% : Share of RRF funding released so far (≈ €270 billion still to be disbursed by the end of 2026)
- +0.4%/year : Expected average EU GDP boost (2020–2030), now likely revised downward due to implementation delays
Data source for the graph in .xlsx format (26 Ko)
A Bold Recovery Plan Confronted by Implementation Realities
Introduced in 2021, NextGenerationEU was designed to help the European Union recover from the Covid‑19 crisis while accelerating structural transformations. With an unprecedented envelope of €806.9 billion, the program seeks to finance reforms and investments across six strategic pillars, with particular emphasis on green and digital transitions.
Yet, by early 2026, just over half of the funding had been released, and an even smaller share had actually been spent on projects. This gap between commitments and execution puts both short‑term stimulus and long‑term competitiveness at risk.
Why Fund Absorption Has Been Slower Than Expected
Several factors explain the delays in deploying recovery funds:
- Administrative complexity and limited execution capacity at national level
- Political changes and evolving priorities within member states
- External shocks, including the war in Ukraine, rising energy prices, and high inflation
These pressures have forced governments to revise national recovery plans, slowing approvals and payments. In addition, the policy reforms required in exchange for funding—often politically sensitive—have been postponed or renegotiated in countries such as Spain and Italy.
Some governments have also reassessed the attractiveness of EU loans. Spain, for instance, has announced it will abandon €67 billion of the €83 billion available in RRF loans, preferring market financing due to improvements in its credit profile.
Uneven Outcomes Across Europe
Countries such as Greece, Croatia, Italy, and Portugal have drawn more actively on recovery funds and are currently benefiting the most. Nevertheless, at the European scale, the overall macroeconomic impact of NGEU is likely to fall short of initial expectations.
Commission estimates suggested that fully deploying the funds could have lifted EU growth by an average of 0.4% per year between 2020 and 2030. However, time constraints are increasingly prompting governments to prioritize quick‑to‑execute projects rather than deep, high‑impact structural reforms.
Despite the historic scale of the European recovery plan, its success ultimately depends on effective execution. Weak absorption or poorly targeted investments could undermine its ability to support growth, both now and in the future, at a time when public finances are already under significant strain.
says Laurine Pividal, Coface economist for Southern Europe.
Looking Beyond 2026: Limited but Targeted Support
Once NextGenerationEU expires, part of the funding gap may be addressed through alternative mechanisms, including SAFE loans under the Readiness 2030 framework. These loans could provide up to €150 billion between 2026 and 2030, primarily for defense‑related investments.
However, their narrow sectoral focus and more flexible sourcing rules—allowing up to 35% of spending on non‑EU products—are likely to reduce their broader economic impact compared with the diversified and reform‑driven approach of NGEU.
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