The EU put billions on the table to help governments rebuild their economies after the pandemic. Now they have days left to turn those promises into reality before the funding window closes.
EU countries have until 31 August to complete the reforms and investments linked to the bloc’s post-Covid recovery fund. They can submit their final payment requests and supporting evidence by the end of September. But actions taken after the August deadline will not count towards meeting the targets. The European Commission must assess the claims and make all remaining payments by 31 December. The deadlines cannot be extended.
A Commission spokesperson told EU Perspectives that its priority in the final phase remained supporting structural progress. “We call on the member states to spare no effort to achieve the maximum number of milestones and targets set out in their respective Recovery and Resilience Plans within this final stretch,” the spokesperson said.
The recovery fund totals €577bn in grants and loans, of which more than €400bn has already been disbursed. Payments are conditional on governments delivering the reforms and investments set out in their national recovery plans. The Commission can reduce payments if countries miss individual targets.
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Covid response became investment programme
The EU created the Recovery and Resilience Facility in 2021 as the main instrument of NextGenerationEU, its wider post-Covid recovery package. For the first time on this scale, the Commission borrowed on financial markets on behalf of the EU to finance grants and loans for member states.
Under the facility, each member state agreed a national Recovery and Resilience Plan setting out the reforms and investments it would deliver in return for EU funding. At least 37 per cent of each national plan had to support climate objectives and 20 per cent had to contribute to digitalisation. The EU later added REPowerEU measures intended to reduce dependence on Russian fossil fuels.
Although created in response to the pandemic, the programme was designed to go beyond immediate crisis relief. It has financed healthcare, business support, digital public services, building renovations, transport, renewable energy, and wider economic reforms intended to make member states better prepared for future shocks.
The Commission described NextGenerationEU as a “historic and highly successful initiative” that had provided a post-Covid economic lifeline while also supporting long-term resilience, the green transition, and digital progress.
Countries must deliver results
The recovery facility differs from traditional EU funding because payments depend on results rather than the precise cost of projects. Each country agreed with the Commission on a list of milestones and targets, which the Council then approved.
Milestones generally cover qualitative changes, such as legislation entering into force, a public body becoming operational, or a new administrative system being introduced. Targets measure results, including buildings renovated, railway lines completed, renewable-energy capacity installed, businesses supported, or people trained.
Payments are released only after the Commission verifies that the agreed results have been achieved. Governments often cover the initial costs through national budgets, EU pre-financing, or earlier instalments before claiming the corresponding support. The September submission period allows them to document work completed by 31 August; it does not extend the implementation deadline.
Bulgaria shows how payments work
Bulgaria’s recent payment request illustrates the process. In April, Sofia requested its fourth grant instalment, covering 26 milestones and targets. The Commission’s preliminary assessment concluded in June that Bulgaria had satisfactorily completed 23 of them. They covered administrative justice and renewable-energy installations, as well as contracts for medical equipment and outpatient facilities.
For several targets involving large numbers of recipients, the Commission examined samples of individual files rather than relying only on national summaries. Bulgaria also had to confirm that it had not reversed reforms linked to earlier payments.
The example shows that a payment request is not an application for money to begin the work. It is a claim submitted after a government considers the agreed results to have been delivered. The Commission then examines the evidence before releasing the corresponding instalment.
Plans reduced as deadline approached
Inflation, supply-chain disruption, political instability, and slow public procurement have made some original commitments difficult to complete. Governments have consequently revised their plans, replacing measures considered unrealistic or reducing their use of EU loans.
Eight countries had relinquished a combined €74bn in recovery-fund loans by the end of January 2026. Spain accounted for most of the reduction, while Belgium, Cyprus, Czechia, Poland, Portugal, Romania, and Slovenia also reduced their borrowing, according to the Financial Times. Loans became less attractive as the deadline approached and some governments found that borrowing independently was no longer substantially more expensive.
The Commission can reduce final payments when countries fail to fulfil particular requirements. It can also withhold or recover funding if previously completed reforms are reversed or if it identifies fraud, corruption, conflicts of interest, or inaccurate information.
The end of August therefore closes the implementation phase of the central instrument in the EU’s financial response to Covid-19 and will help determine how much of its promised economic transformation member states actually delivered.
