Use and benefit of EU Recovery Facility slowly picking up in Estonia

The main beneficiaries of the European Union's recovery fund are currently the state and local governments, while businesses are only beginning to gain momentum. However, the use of recovery fund money has not contributed to improving competitiveness or export capacity, according to Aivar Sõerd, member of the Riigikogu Finance Committee and former foreign minister.
The European Union's Recovery and Resilience Facility was established in February 2021 to help economies recover from the COVID-19 crisis and support investments needed for green and digital transitions. Estonia has been allocated €953 million, which must be utilized by the end of August 2026. So far, Estonia has used less than half of this amount. However, former Minister of Finance Aivar Sõerd (Reform) remains optimistic.
"Yes, the initial phase took some time to get going and Estonia's recovery plan approval was delayed for various reasons, but the pace has improved. The latest figures show that €380 million, or 40 percent, of the €953 million has already been spent. As far as I know, Estonia ranks highly compared to other countries. I believe we will manage to use the full allocation by the end of 2026," Sõerd said.
A review of the list of the top 100 beneficiaries of the recovery fund reveals that businesses make up only a small portion of the recipients.
"The overall impression is that the state itself and local governments dominate the list. There should actually be more businesses, particularly exporting companies," Sõerd stated.
Anu Kull, a business consultant specializing in the recovery fund, noted that the entire green and digital transition was a new concept and developing the rules took time. She added that the fund was designed so that most investments would occur in the second half of its implementation period. According to her, it is too early to give a final assessment of how the funds have been utilized.
"Preparing the terms and conditions for granting support took a long time and it also took businesses some time to learn about the opportunities. The support programs specifically aimed at businesses are a novel feature, with such significant volumes of funding suddenly becoming available," Kull explained.
She also pointed out that the terms have been slightly relaxed on several occasions. "There is significant concern about ensuring that the final phase progresses in such a way that all the funds are utilized and benefit our economy."
Aivar Sõerd acknowledged that there is little time left to make substantial changes but emphasized the need to scrutinize how the funds are being used.
"There is a lot of green ideology involved," Sõerd remarked, citing €15 million allocated to developing skills to support the green transition. "The money is being fragmented across dozens of green economy curricula to train specialists who, for example, assess the ecological footprint of products or something similar. Is this really the most critical priority right now, considering our lag in other areas and competitiveness?"
Kull, who worked at the Ministry of Economic Affairs during the recovery fund's creation, agreed with Sõerd on this point.
"Part of these investments were labeled as 'investments in green transition awareness.' Under this label, funds were invested in developing curricula. I agree that this approach is somewhat fanciful."
Both Sõerd and Kull believe that the utilization of the recovery fund will accelerate, not only in Estonia but also in other member states.
"Other countries are facing the same issue: everything drags at the start of the period as implementation regulations are developed and negotiations are held with the European Commission, which takes time. Then, as the period enters its second half, the pace begins to pick up," Sõerd concluded.
--
Follow ERR News on Facebook and Twitter and never miss an update!
Editor: Mirjam Mäekivi, Marcus Turovski