Economic Impacts of the Recovery and Resilience Facility: New Insights at Sectoral Level and the Case of Germany

Study on the economic impacts of the Recovery and Resilience Facility, making use of new insights at sectoral level.

Highlights

• The Recovery and Resilience Facility is the cornerstone of NextGenerationEU. With a budget of EUR 650 billion, it finances over 2,800 reform and investment measures across the EU from 2020 to 2026.
• By leveraging artificial intelligence, we create a new sectoral database, which classifies all RRF reform and investment measures into economic sectors.
• We apply the FIDELIO model and assess the direct and spillover impacts of RRF-funded investments.
• We find that the sectors benefitting the most from the RRF, both from reforms and investments, are those related to the green and digital transition, as well as societal resilience (health, skills, education).
• Over the period 2020-2030, we estimate the total impact of the RRF to amount to EUR 891.7 billion. This total includes direct impacts, amounting to EUR 546.2 bn, and spillover (indirect) impacts, amounting to EUR 345.5 bn.
• Looking at Germany by way of illustration, we find that the German economy stands to benefit significantly from spillovers, resulting in a medium-term stimulus of approximately EUR 66 billion: more than double the size of its Recovery and Resilience Plan. The manufacturing sector stands out as a large beneficiary of spillover impacts.
• We see that all countries benefit from spillover impacts. On top of Germany, countries such as France, Netherlands, Austria, Denmark, Sweden, Finland, Luxembourg Ireland, Belgium, the Czech Republic, Slovakia, Slovenia also stand to see an economic impact that is higher than their original envelope, when factoring in spillover effects.
• This new database and techniques open the way for further research, for instance to assess synergies between reforms and investments and to identify concrete achievements on the ground.

Information and identifiers

Discussion Paper 221. May 2025. Brussels. PDF. 38pp. Tab. Graph. Bibliogr. Free.

KC-01-25-020-EN-N (online)
ISBN 978-92-68-23675-8 (online)  
ISSN 2443-8022 (online)
doi:10.2765/ 4285022 (online) 

JEL classification: C82, E61, E62, F15, F17, F41, F42, F62

Disclaimer

European Economy Discussion Papers are written by the staff of the European Commission’s Directorate-General for Economic and Financial Affairs, or by experts working in association with them, to inform discussion on economic policy and to stimulate debate. The views expressed in this document are solely those of the author(s) and do not necessarily represent the official views of the European Commission.