While national ministers are making difficult decisions to limit social contacts during the Christmas period and avoid a third coronavirus wave, Member States are still trying to find agreement on the EU budget and recovery funding within the European Council.

During the summer the European Commission announced a stimulus package – Next Generation EU – to kickstart the recovery of EU economies after the detrimental economic impact of the pandemic. But discussions on the recovery funding among EU heads of government are still ongoing, with Hungary and Poland vetoing the EU budget and the NextGenEU package because of the conditions of respect for the rule of law tied to the funding.

Despite these roadblocks, whether the recovery funding will become available does not appear to be the question. The Commission is already looking into options to move ahead without Hungary and Poland, as it has committed to channel funds to Member States by next summer and to reach the overarching objectives outlined by President von der Leyen at the start of her term.

The Commission has set the overall available budget and is driving the recovery mechanism. But the allocation and implementation of funds is up to Member States. They must come up with national recovery and resilience plans that indicate the areas they will reform and in which they will invest. These plans will be assessed by the Commission and need to be approved by the Council. Investments which contribute to reaching the objectives of the green and digital transition will be more likely to gain approval.

So while the Commission and Council have important roles to play, the final decisions on where the funding will go lie with national governments. Organisations hoping to obtain some of this funding will have to make detailed assessments on where to go knocking, as priorities and focus areas will be different in each Member State.

But regardless of local priorities, national and regional governments will generally be looking to support future-proof companies that are bringing money back to local economies and that are sustainable and socially responsible – or can at least prove they are moving towards higher standards.

Governments will favour organisations that are

  • Future-proof: governments will consider whether certain technologies will still be needed in a couple of years’ time or if better, longer-term solutions are on the horizon. If these alternative solutions are digital or green, governments are likely to prioritise them.
  • Bringing money back to local economies: the economic impact of the Covid-19 pandemic will be immense, and governments will want to ensure their investments will have returns for their local societies and economies. Local impact such as the creation of jobs or investments in R&D will stand out and be welcomed by national governments.
  • Sustainable: the Commission’s Green Growth agenda is a major driver underpinning the recovery activities. Governments will be keen to support companies who can ensure that when local economies recover, they will take a further step in the green transition.

Many funding opportunities are up for grabs, but there will be fierce competition between a wide range of interested parties. Those who are successful in outlining how they contribute to the above points will more easily get a piece of the cake. Those who need the funding better come early with an understanding of the process to increase their eligibility.