EU Investment Capacity Group

Introduced in response to the economic crisis caused by the COVID-19 pandemic, the Recovery and Resilience Facility (RRF) was a historic EU initiative. By leveraging newly issued common EU debt, it provided fiscal support to help EU economies recover. Beyond crisis response, the RRF has played a crucial role in driving public investment in key sectors to advance the green and digital transitions, and in fostering structural reforms through a performance-based approach. 

Despite the success of the instrument in some of its core functions, challenges exist. The European Court of Auditors called the RRF a “missed opportunity for strategic focus in addressing the digital transition”. They recommend a clear requirement to address the main digital needs and appropriate outcome indicators for future funding schemes. Also, for the green targets, shortcomings in design and implementation were revealed. 

Policy brief presentation and discussion

The European Commission has announced a performance-based approach to funding in one of the next MFF pillars. To exchange learnings and discuss improvements, the EU Investment Capacity Group gathered on Tuesday, 20 May 2025 between 12:15 – 13:45 at FEPS HQ in Brussels and online. The event focussed on the policy brief “Lessons learned from the RRF for a future European fiscal capacity” (see above) by Atanas Pekanov.

The EU's strategic priorities call for large investments in the green, digital and social transitions as well as on defence. The EU budget negotiations that kicked off this year are crucial in strengthening European fiancial and investment capacity. However, there is a risk that new policy instruments for competitiveness, defence, and preparedness could sideline cohesion.

Ensuring that these instruments contribute to reducing regional disparities rather than exacerbating them is key. At the same time, cohesion policy itself must evolve—learning from the Recovery and Resilience Facility (RRF) to improve governance, simplify procedures, and enhance its effectiveness. Without a strong commitment to cohesion, Europe risks deepening inequalities at a time when economic integration and geopolitical instability demand greater unity.

To discuss the survival of cohesion policy, the EU Investment Capacity Group met on Friday, 14 March 2025, at the Giorgio Amendola Foundation in Turin, Italy. Among the speakers were MEPs Sabrina Repp and Brando Benifei, along with Eulalia Rubio (Jacques Delors Institute), Yiannis Latoudis (S&D Group), Chiara Gribaudo (Member of the Italian Parliament) and Amedeo Lepore (Università degli Studi della Campania “Luigi Vanvitelli”). The expert meeting addressed both European challenges on the EU budget and the specific case of Italy that is facing a constitutional change for differentiated autonomy that is putting territorial cohesion at further risk.

The European Parliament has started preparing for the discussions on the next Multiannual Financial Framework (MFF). With growing demands on the EU budget, from green and digital transitions to defence, competitiveness, and cohesion, there is a strong need for a well-balanced, long-term and forward-looking EU financing strategy.

On 20 February, the EU Investment Capacity Group met for a first closed-door brainstorming meeting. This served as a starting point for exchanging views on the key challenges and opportunities ahead, identifying priorities for the parliamentary debates, and shaping the Group’s approach and priority topics. To kick off the discussion, MEP and S&D Rapporteur on the MFF Carla Tavares provided input on the own initiative report of the European Parliament. This was followed by reactions from former MEP Margarida Marques and Marco Buti, Professor at the European University Institute (EUI), among other participants.