The Recovery and Resilience Facility: Boosting Investment in Social Infrastructure in Europe?

Abstract

Moving away from the austerity conditionality approach towards a new expansionary investment–led growth strategy, the Recovery and Resilient Facility represents a break with what went before and is an innovative instrument to support public investment in Europe. In particular, by placing the objectives of upward social convergence and implementation of the European Pillar of Social Rights at its core, the RRF is expected to help boost investment in social infrastructure in the EU after a decade of underinvestment. Zooming in on a sample of six countries (Austria, Belgium, Germany, Italy, Portugal and Spain), this article investigates the extent to which the social investments included in the plans are truly additional. It finds that the RRF has indeed fasted-forward the implementation of investments in social infrastructure, which would have otherwise been remained merely on paper, especially in those countries with limited fiscal capacity (Italy, Spain, Portugal but also Belgium). By contrast, in countries such as Germany and Austria, RRF social spending is used largely to replace already planned or budgeted investments. Even in the former group, however, the article shows that around one-third of the social spending is allocated to already planned or ongoing projects.