NextGenerationEU: European Commission endorses Austria’s recovery and resilience plan

NextGenerationEU: European Commission endorses Austria’s recovery and resilience plan
Date: Tuesday, 22 June 2021 04:46

The RRF – at the heart of NextGenerationEU – will provide up to €672.5 billion (in current prices) to support investments and reforms across the EU. The Austrian plan forms part of an unprecedented coordinated EU response to the COVID-19 crisis, to address common European challenges by embracing the green and digital transitions, to strengthen economic and social resilience and the cohesion of the Single Market.

Commission President Ursula von der Leyen said: “Today, the European Commission has decided to give its green light to Austria’s recovery and resilience plan. Austria is already a forerunner in the green transition. By placing a special emphasis on investments and reforms that further support our climate objectives, Austria is making a clear statement. We have endorsed your plan because we fully agree that bold action is needed to deliver the green transition.”

The Commission assessed Austria’s plan based on the criteria set out in the RRF Regulation. The Commission’s analysis considered, in particular, whether the investments and reforms set out in Austria’s plan support the green and digital transitions; contribute to effectively addressing challenges identified in the European Semester; and strengthen its growth potential, job creation and economic and social resilience.

Securing Austria’s green and digital transition

The Commission’s assessment finds that Austria’s plan devotes 59% of the plan’s total allocation to measures that support climate objectives. This includes reforms to Austria’s tax system that target reducing CO2 emissions through incentives for climate friendly technologies, preferential tax rates for low- or zero- emission products, and pricing of CO2 emissions. These measures are flanked by targeted tax relief for companies and households in need. Other measures invest in energy efficiency, renewables, the decarbonisation of industry, biodiversity and circular economy. These investments are accompanied by related reforms, including the overhaul of the support framework for renewables and the phase-out of oil heating systems.

The Commission’s assessment of Austria’s plan finds that it devotes 53% of its total allocation to measures that support the digital transition. This includes considerable investments into connectivity, with a particular focus on the widespread deployment of Gigabit-capable networks and the establishment of new symmetrical Gigabit connections in underserved, disadvantaged and rural areas. The plan also includes significant investments in the digitalisation of education, e-government and SMEs.

Reinforcing Austria’s economic and social resilience

The Commission considers that Austria’s plan includes an extensive set of mutually reinforcing reforms and investments that contribute to effectively addressing a significant subset of the economic and social challenges outlined in the country-specific recommendations addressed to Austria. The full-time labour market participation of women is expected to improve due to an increased availability of quality early childcare facilities. The long-recognised challenge related to the gender pension gap is tackled through measures in the plan. The plan addresses some of the social and economic challenges that have emerged or were exacerbated during the COVID-19 crisis. Targeted compensation of educational and learning deficits due to the pandemic will combat an increase in inequalities in education outcomes. A series of active labour market policy measures are expected to address the increased need for help to the low-skilled and raise the labour market opportunities of disadvantaged groups.

The plan represents a comprehensive and adequately balanced response to Austria’s economic and social situation of Austria, thereby contributing appropriately to all six pillars referred to in the RRF Regulation.

Supporting flagship investment and reform projects

The Austrian plan proposes projects in seven European flagship areas. These are specific investment projects which address issues that are common to all Member States in areas that create jobs and growth and are needed for the twin transition. For instance, Austria has proposed to invest €159 million to retire outdated oil and gas heating systems and €543 million on the construction of new train lines and the electrification of existing ones.

Economy Commissioner Paolo Gentiloni said: “Austria’s recovery and resilience plan contains a truly wide-ranging set of initiatives that will improve the lives of citizens and the competitiveness of businesses in all parts of the country. Measures include the important eco-social tax reform — an excellent example of how taxation policies can help to protect our climate in a way that is socially fair. Together with measures like the phase-out of oil heating systems and the mobility masterplan, Austria will receive a strong boost in its efforts to be climate-neutral by 2040. I also welcome reforms will support health and long-term care, childcare facilities and education.”

The assessment also finds that none of the measures included in the plan significantly harm the environment, in line with the requirements laid out in the RRF Regulation.

The control systems put in place by Austria are considered adequate to protect the financial interests of the Union. The plan provides sufficient details on how national authorities will prevent, detect and correct instances of conflict of interest, corruption and fraud relating to the use of funds.

Next steps

The Commission has today adopted a proposal for a Council Implementing Decision to provide €3.5 billion in grants to Austria under the RRF. The Council will now have, as a rule, four weeks to adopt the Commission’s proposal.

The Council’s approval of the plan would allow for the disbursement of €450 million to Austria in pre-financing. This represents 13% of the total allocated amount for Austria.

The Commission will authorise further disbursements based on the satisfactory fulfilment of the milestones and targets outlined in the Council Implementing Decision, reflecting progress in the implementation of the investments and reforms.

For More Information

Questions and Answers: European Commission endorses Austria’s recovery and resilience plan

Recovery and Resilience Facility: Questions and Answers

Factsheet on Austria’s recovery and resilience plan

Proposal for a Council Implementing Decision on the approval of the assessment of the recovery and resilience plan for Austria

Annex to the Proposal for a Council Implementing Decision on the approval of the assessment of the recovery and resilience plan for Austria

Staff-working document accompanying the proposal for a Council Implementing Decision

Recovery and Resilience Facility

Recovery and Resilience Facility Regulation