‘A constructive approach is needed to make the RRF a success story in every Member State’
Interview with Mikuláš Bek, Minister for European Affairs of the Czech Republic
By Gaston Moonen
As a new EU instrument, many aspects of the Recovery and Resilience Facility (RRF) stand out, such as the financial amounts involved, its emphasis on performance as a disbursement criterion, and its limited disbursement period. A common thread in many RRF aspects is the role of Member States in the submission of the national plans, in their implementation, in monitoring adherence to EU rules, and when it comes to the Council’s final approval of payment requests. During this second half of 2022, the Czech Republic holds the Presidency of the Council. In this capacity, the Czech government, and particularly the Czech Minister for European Affairs Mikuláš Bek, deal with RRF‑related issues on an almost daily basis, including how to use RRF resources to tackle ongoing energy concerns. We asked Mr Bek about his views on the RRF and which RRF‑related issues are currently on the Council’s agenda.
The RRF — a great opportunity for modernisation
As Minister for European Affairs, what does the NextGenerationEU initiative, and particularly the RRF, mean for you and your country?
Mikuláš Bek: The RRF and National Recovery and Resilience Plan are a key priority for the Czech Republic, through which we want to implement, among other things, important reforms and a number of projects in the field of digitisation and green investments. I see the RRF as a great opportunity to significantly modernise the Czech Republic.
You currently have the EU Presidency. What are the core issues going on at the Council regarding the RRF, which RRF topics have you recently had to deal with, and what are the key RRF issues coming up during your Presidency?
Mikuláš Bek: We very much welcome the fact that the European Commission has come up with the REPowerEU initiative. In particular, the proposed REPowerEU amendment to the RRF regulation is key to enabling the Member States to financially foster reforms and investments directly contributing to the implementation of the REPowerEU plan, to a total of €20 billion.
As the Presidency, we strive to reach agreement, especially in sensitive negotiations, on the allocation key and the source of funding. That is why we are very proud that on 4 October at the ECOFIN Council we managed to achieve the General Approach of the Council. According to this General Approach adopted by the Council, financial support intended exclusively for the measures of the specific chapter devoted to REPowerEU should be obtained by transferring some of the resources from the upcoming Innovation Fund and also by frontloading the auction of emission allowances under the ETS system. Grants should be distributed between Member States according to a new allocation key that takes into account population indicators, nominal GDP per capita, the share of fossil fuels in the energy mix of gross domestic consumption, and inflation of investment costs.
We believe that this General Approach is a good basis for negotiations within the trilogues with the European Commission and the European Parliament. We will strive to have the final version of the RRF regulation ready by the end of this year.
The concept and the rollout of the RRF are very different from other EU programmes, such as those related to cohesion, agriculture or research. Do you think the RRF approach can serve as a model, as input for future EU initiatives regarding investment and reform support?
Mikuláš Bek: In general, the Czech Republic perceives the RRF as a positive tool, and it is already clear that this tool can bring the necessary investments and reforms to the Member States. However, I believe it is premature to suggest that the RRF should be a model for other funds. For example, cohesion funds work very well from the point of view of the Czech Republic, and our country has had a very good experience with them.
The RRF is built around six EU policy pillars, such as the green transition and the digital transformation. One of the discussion issues has been the comparability of the milestones and targets set between Member States, for example different Member States having rather different milestones regarding the green transition in terms of what is considered green. Is this an issue of concern within the Council and how do you think this comparability and a harmonised approach on this can best be addressed?
Mikuláš Bek: Currently, in relation to the RRF, the main topic at the Council is the proposal to revise the relevant regulation in connection with the REPowerEU initiative. At the same time, the Council continuously approves Council Implementing Decisions and payment requests from individual Member States. Achieving comparability and a harmonised approach is of course very difficult given that each Member State has different conditions.
Significant risks need to be addressed in every Member State
What do you think will be a major issue of concern for the realisation of the National Recovery and Resilience Plans in Member States?
Mikuláš Bek: I believe that the implementation of National Recovery and Resilience Plans is a challenge for all Member States. Clearly significant risks are the limited length of the RRF period as well as sufficient personnel capacities within the public administration. The current enormous inflation — especially in some sectors — is also proving to be a significant challenge. A constructive approach by both the Commission and the Member States is needed to make the RRF a success story in every Member State.
The European Parliament has expressed some concerns regarding fraud and corruption and conflict of interests with RRF funds. How do you see the role of the Member States vis-à-vis the Commission in this area? Have Member States, for example the Czech Republic, taken specific measures to certify RRF expenditure on this issue and can you give examples of measures taken?
Mikuláš Bek: We take the European Parliament’s concerns about fraud and conflict of interest very seriously. The Czech Republic has an independent audit body for the RRF under the Ministry of Finance and we have deployed a robust control and audit system to prevent the risks.
One of the new elements in the RRF, beside of course performance orientation, is the General Conditionality Regulation, linking financing to the rule of law conditions in Member States. This is currently a topical issue in view of payments having been suspended for one Member State. What, in your view, are the key issues to be observed from a Council Presidency perspective?
Mikuláš Bek: We consider the issue of the rule of law to be very important and we take the role of the Council in this context very seriously. We welcome the fact that the European Court of Auditors plans to develop an analysis of compliance with the rule of law.
How does the RRF instrument align with the principles of the EU single market? Do you see any risk that it may interfere with these principles and cause some disruption in this respect? What kind of relationship do you observe between the RRF and the European Semester, in particular the Country-Specific Recommendations?
Mikuláš Bek: From our point of view, the single internal market is a tool to increase and maintain economic prosperity, by removing obstacles that prevent the use of the economic potential of its participants.
The Czech Republic generally considers the European Semester to be a useful and established mechanism for coordinating economic and social policies. The Czech Republic is ready to continue actively participating in dialogue with the Commission within the framework of the Semester, which is integrated with the dialogue on the implementation of national recovery and resilience plans. However, it is important to make every effort to avoid duplication and to make the best use of existing synergies in order to avoid unnecessary administrative burdens.
Key role for Commission and Council
In September 2022, the European Commission reported that it had assessed over 290 milestones and targets as fulfilled. What role and action do you see for the Council if the Commission assesses some of the milestones and targets agreed upon as not being fulfilled and withholds disbursement to a Member State when the Member State disagrees with the Commission on this?
Mikuláš Bek: In general, we believe that such situations should ideally not occur. This should be preceded by an ongoing constructive dialogue between the Member States and the Commission. According to the regulation, the final approval of the payment request is within the competence of the Council.
Where do you see a particular role for the European Parliament regarding the RRF instrument? Who do you consider ultimately responsible for the implementation of the RRF — the Member States or the Commission? And how and where do you consider that the European Court of Auditors can provide the most added value?
Mikuláš Bek: We are aware that the binding document for the implementation of the Recovery and Resilience Plan is the Council Implementing Decision, from which the obligation for the Member State to fulfil milestones and targets by a certain date results. However, it is necessary to keep the European Parliament updated on the latest developments of the RRF implementation. I personally see the European Court of Auditors not only as an important player to protect European taxpayers’ money and point to any risks for fraud. I also acknowledge the value of the European Court of Auditors through its reviews, reports and opinions, which can provide us with inspiration on how to adjust our management, control and audit systems designed for RRF implementation.
This article was first published on the 2/2022 issue of the ECA Journal. The contents of the interviews and the articles are the sole responsibility of the interviewees and authors and do not necessarily reflect the opinion of the European Court of Auditors.
