Report | No recovery without citizens

  • New report shows lack of participation and access to economic recovery mechanisms by the public

  • These concerns are evidenced by the direct experience of eight civil society organisations that have been following the recovery funds complemented by the results of a survey from over 170 EU citizens from 21 Member States.

An extraordinary amount of EU funding and investment has become available in recent years through the EU budget, the EUR 806 billion NextGenerationEU recovery fund package and, more recently, an additional EUR 20 billion of new REPowerEU grants.

The Recovery and Resilience Facility (RRF) represents the largest portion of this overall recovery package. A new instrument designed to stimulate economic recovery after the COVID-19 pandemic, the RRF is also the first funding mechanism under the 2019 European Green Deal plan to make Europe the first climate-neutral continent. The RRF is driving new investments and reforms for building resilience and better addressing long-term challenges, such as climate change, biodiversity loss and resource shortages.

At the same time, InvestEU, a programme mainly financed through the European Investment Bank (EIB) that aims to trigger EUR 372 billion in investments, has green infrastructure as one of its main priorities and serves as a key instrument for financing the European Green Deal.

Lack of transparency and democracy in the management of funds

However, despite there being so much public money that has or will soon be allocated, decisions on how and where to invest these precious resources have increasingly been made behind closed doors, without the involvement of citizens and other key stakeholders.

Public participation is a key prerequisite for a green and transformative recovery. As such, the success of this recovery is dependent on the level of engagement and inclusion.

By being involved, citizens help identify and align investments with the actual needs of their societies and economies. They also ensure a better distribution of ownership and more efficient implementation.

Despite this, the public has largely been excluded in both the design and implementation of the recovery plans, with investments failing to meet citizens’ needs. Failing to ensure proper public involvement will only exacerbate existing inequalities and further erode European democracy, as well as limit the fund’s potential to reach green targets.

Two years since the regulation officially entered into force in February 2021, and now approaching the midway point for recovery funds to be disbursed, little progress has been made towards the European Commission’s target of recovering from COVID-19 and achieving long-term economic resilience.

Insufficient climate ambition

While InvestEU is a potential major source of financing for the European Green Deal, there are concerns as to whether it is fit for purpose. Our analysis shows that its main implementing partner, the EIB, does not unequivocally exclude funding for fossil fuels via the companies and investors it works with, and also runs the risk of mainly financing companies that are able to fund green projects on their own, thus failing to offer clear added value in terms of sufficiently increasing climate finance.

Furthermore, InvestEU lacks entry points for citizens to meaningfully participate in the decision-making process to decide what investments should be financed.

New challenges and opportunities are also arising from the REPowerEU package, the EU’s response to rapidly speeding up the transition away from Russian fossil fuels in light of Russia’s invasion of Ukraine. Additional resources have been made available to finance this shift, yet for these to be effective, open public consultation is crucial.

PLEASE NOTE: This report is part of the project Citizens’ Observatory for Green Deal Financing, funded by the European Union. Views and opinions expressed are however those of the authors only and do not necessarily reflect those of the European Union or the European Education and Culture Executive Agency (EACEA). Neither the European Union nor EACEA can be held responsible for them.

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