EU Recovery Plan: we need an EU concerted action to prioritise the built environment!

While the Covid-19 pandemic is still ongoing and the analysis of its impact will require time, the European institutions are discussing the Multiannual Financial Framework (MFF) and the EU Recover Plan, notably the overall financial size of the package and its funding priorities.

In that context, EBC has identified lines of work to establish a recovery plan in which the construction sector and the built environment are among the highest priorities, as presented by EBC Secretary General during the last High-Level Tripartite Strategic Forum of Construction 2020 hosted by the European Commission.

Regarding the EU budget proposal made by the European Commission President Ursula Von der Leyen, a substantial amount divided into €1100 billion for the MFF and €750 billion for the new recovery instrument “Next Generation EU”, EBC welcomes the focus on the green and digital transition of the European economy. Indeed, even though there is no specific focus on any sector, such orientation leaves marge of manoeuvre to the Member States when it comes to priorities. And the built environment can and should be prioritized!

Indeed, not only are there huge investments needs in our sector, both basic and for the green transition, high percentage of equity losses due to the crisis, and high investments needs in terms of social infrastructure, but the European Commission has explicitly targeted an “at least doubled” annual renovation rate of the existing building stock, with clear references to the energy efficiency of buildings, renovation, social and transport infrastructure in its different programmes as well.

We thus need to act immediately with an EU concerted action, developed on one side by the European Commission and on the other side by the whole European value chain, aimed at prioritising the built environment in the national demands for EU funding access.

In that sense, the European Commission is invited to carry out a proper assessment of funding opportunities for the built environment in the EU budget proposals, but also to immediately establish a platform with Member States to assess national initiatives and make sure they prioritise the built environment in all needed plans guide on the Recovery Plan opportunities. On their side, EBC and its Construction 2050 partners should cooperate with the EC in the assessment of the different programmes and keep a permanent dialogue with Member states with the support of their national associations. Among our initial ideas are:

  • Recovery and resilience facility: ensure that the Renovation Wave is a priority in both the national recovery plans within the European Semester and the National energy and climate plans (NECPs)
  • REACT-EU: follow national demands for the fund in 2020, 2021 and 2022 to highlight construction priorities
  • Just Transition Fund and public loan facility: ensure that construction priorities are included in the just transition plans
  • InvestEU and Solvency Support Instrument: engage with Member States to make sure that requested project financing targets construction priorities

Prioritising the EU built environment in national funding demands will not be enough. We thus need to make sure that the new funds will reach construction companies and entrepreneurs, technical assistance and guidance (e.g. one-stop-shops) is necessary, as well as a proper monitoring banking system in order to ensure access to funding.

To this end, it is necessary to take into account what is currently happening with current EU liquidity programmes. According to SMEUnited survey (May 2020) on access to loans, banks use the same approach towards risks as before the crisis (many rejections or higher interest rates between 6 and 10%), while not using public support for additional loans, but to restructure existing ones. Moreover, highly complicated application procedures and limited administrative capacities hamper a fast roll-out of support measures, with often additional fees asked by banks, which can be up to 20% of the loan.

EBC is fully available to investigate further how to implement these various initiatives, and will maintain a permanent dialogue with the European institutions and its Construction 2050 Alliance partners in that sense.