The Government confirms the proposed amendment to the Recovery and Resilience Plan
The Government confirmed the proposed amendment to the Recovery and Resilience Plan that complies with the significant changes of circumstances that occurred after it was approved by the EU Council in July 2021. The Government will submit the amended plan to be formally harmonised and approved by Brussels by the end of the week.
The Recovery and Resilience Plan is a national programme of measures (reforms and investments) intended to mitigate the consequences of the COVID-19 pandemic in Slovenia. The plan serves as the basis for drawing the funds from the Recovery and Resilience Facility, which is financially the most extensive section of the European recovery and resilience instrument, NextGenerationEU.
According to the calculations published by the European Commission (EC) in June 2022, Slovenia will be able to utilise EUR 1.49 billion of grants from the Facility by the end of 2026 and not EUR 1.78 billion, as anticipated upon the approval of the plan. For the measures contributing to the objectives of the European plan, REPowerEU, to rapidly reduce dependence on Russian fossil fuels and fast forward the green transition, Slovenia will utilise an additional EUR 117 million from the Market Stability Reserve in connection to emissions trading and EUR 5 million from the Brexit Adjustment Reserve to help the EU member states tackle the negative consequences of the withdrawal of the UK from the Union.
Once the Government adopted the starting points for drafting the adjustment proposal on 16 March, the Recovery and Resilience Office continued with informal harmonisation of the content with the EC representatives in cooperation with ministries. The temporal aspect of investment implementation was additionally examined in this procedure. In order to harmonise the content for a new REPowerEU chapter, a public consultation with the stakeholders was held. At a special event, the starting points for adjusting the measures due to a decrease in available grants were presented to the interested public.
Based on the additionally gathered information and harmonisation, the Government drafted a final adjustment proposal of the plan that did not interfere with the basic concept of the plan. When drafting the amendment, the Government particularly strove to retain the investments which will closely follow the planned timeline to the greatest extent possible and thus generate revenue for the state budget.
In the reform section of the plan, the Government still addresses all the challenges defined in the recommendations of the EU Council for 2019, 2020 and 2022. The reform measures addressing these recommendations are namely the conditions for the influx of resources for recovery and resilience. The milestones and targets relating to the reforms cannot be changed by the member states; however, they may propose to the European Commission a certain delay in the timeline or a postponement to a later instalment, but only upon suitable argumentation.
When drafting the adjustment proposal of the plan, the Government also observed the mandatory contribution of the planned measures to climate and digital targets.
The key differences between the original and final adjustment proposal of the plan involve three investments:
- "Greening of Educational Infrastructure in Slovenia": After a re-examination and receipt of assurances by the University of Ljubljana or the Faculty of Medicine that the Campus Vrazov trg project was underway as per the planned timeline and that it would be implemented within the plan timetable, i.e. by mid-2026, the Government decided to keep the project in the plan.
- "Effective management of infectious diseases": Upon the approval of the investment, the construction of a new infection clinic in Maribor was also part of the plan. The timeline of project implementation is being significantly delayed and a serious risk exists relating to its completion in mid-2026, which would endanger the drawing of recovery and resilience funds due to the failure to attain the milestones and the target linked with the investment. Following the timetable risk assessment of the investment, the Government adopted the decision to eliminate the project from the plan and implement it within an adjusted timeline with domestic funds.
- "Reducing flood risk and the risk of other climate-related disasters": Based on the additionally gathered information, the Government assessed that the projects planned to enhance flood protection, the financing of which was anticipated from the Facility grants, were not being implemented in accordance with the planned timetable. As these are complex projects with regard to the aspect of preparation and implementation, the Government proposes that the investment be implemented to a lesser extent regarding grants, which is realistically feasible in view of the risks identified for a timely implementation. It proposes that some EUR 120 million of grants are earmarked for this field and not EUR 280 million, as anticipated initially. The projects that will not be implemented within the plan are expected to be funded by domestic resources and as per their own timelines.
Slovenia proposes to the EC a lesser utilisation of grants, i.e. in the amount of EUR 545 million and not EUR 705 million as anticipated upon the approval of the plan.
The Government will seek other sources for financing the content eliminated from the plan, which will be assessed in regard to its importance for Slovenia’s recovery.
The Government also proposes to the EC the postponement of certain milestones and targets from the initial instalments to a later time in order to prepare and harmonise key reforms with quality, implement investments and accelerate payments of the planned instalments from the Union budget.
The Government expects the final approval of the adjustment proposal of the plan by the EU Council this autumn.