EU Geopolitical Risk Update - Key Policy & Regulatory Developments No. 123

On 8 October 2025, the Commission published the Fourth Annual Report on the Implementation of the Recovery and Resilience Facility.* The Report covers data and information up to 31 August 2025, unless otherwise specified.

Backdrop. To recall, the Recovery and Resilience Facility (RRF) is the cornerstone of the unprecedented €800 billion NextGenerationEU package created in December 2020 to support Europe's pandemic recovery.

Disbursements. The RRF is set to disburse up to €650 billion in grants and loans to EU Member States, whose national recovery plans for implementing the RRF must allocate a significant part of RRF funding to measures for Europe's green and digital transitions.

As of 31 August 2025, total disbursements amounted to €362 billion, reflecting 2,586 milestones and targets (out of 6,985 in total) that the Commission had deemed as satisfactorily fulfilled. Thus, some 44% of the RRF allocation remains to be disbursed.

Challenges. The RRF's implementation has faced the challenge of successive crises, and in particular, Russia's war against Ukraine and the consequent energy crisis, high inflation, and supply chain disruptions. In response, Member States modified their national recovery plans by adding chapters reflecting the REPowerEU Plan launched in 2022 (see also Jones Day EU Geopolitical Risk Update No. 122 of 31 August 2025), aimed at reducing dependencies and energy imports from Russia and diversifying the EU's energy supplies.

Report highlights. These include, in particular:

• RRF accomplishments. The Member States' concrete outputs and results stemming from the implementation of RRF measures are featured in so-called common indicators covering 14 areas, such as the following (based on the latest reporting round, ending on 31 December 2024):
• • Deploying over 900,000 new or upgraded clean vehicle recharging stations, spurred by investments and reforms supporting charging stations for electric vehicles;
  • Connecting 16 million households to high-speed internet; and
  • Supporting 1.2 million enterprises to develop digital products, services, and apps.
• Accelerated RRF implementation – an ongoing priority. The Report emphasizes the need for Member States to fast-track implementation of their national recovery plans, as the RRF comes to a close in 2026. In this respect, the Report refers to the Commission's Communication on NextGenerationEU - The road to 2026 of 4 June 2025, which urges Member States to revise their national plans to only retain measures that can be expected to be fully and timely implemented (see also Jones Day EU Geopolitical Risk Update No. 122 of 31 August 2025).
• The Commission is currently reviewing a number of payment requests and revised national plans submitted by several Member States (see below Next steps for deadlines).
• Transparency. The Member States have improved transparency by releasing information on publicly accessible national websites about the 100 largest final recipients of RRF funds (see here).
• According to the latest Member State reporting in 2025, the majority of the 100 largest final recipients are engaged in measures to promote, in particular:
• • the green transition e.g., sustainable mobility and energy efficiency (23.6% of recipients);
  • smart, sustainable, and inclusive growth, e.g., R&D, building renovation/construction (20.6% of recipients); and
  • the digital transformation, e.g., digital public services and business digitalization (20.5% of recipients).

Next steps. As the RRF approaches its close in 2026, Member States must fulfill all milestones and targets by 31 August 2026 and submit their last payment requests for assessment by 30 September 2026. The Commission will make final payments by 31 December 2026. No payments will be made in 2027.

For an overview of implementation of the RRF and national recovery plans, see the RRF Scoreboard.

* For the Third Annual Report of 10 October 2024, see here.

Ahead of the Commission's planned revision of the 2014 Guidelines on State aid for rescuing and restructuring non-financial undertakings in difficulty (Rescue and Restructuring Guidelines), it conducted a call for evidence and public consultation (from 22 August 2025 to 14 November 2025). The Guidelines provide the conditions under which State aid to non-financial undertakings in difficulty may be considered in line with EU rules.

Since the adoption of the current Rescue and Restructuring Guidelines over a decade ago, the Commission notes that European companies are confronted by new challenges in the face of a shifting market and geopolitical context. Notably, the Commission argues that the European steel sector faces serious challenges to its competitiveness, and says that it does so particularly in light of alleged global overcapacity.

The revision of the Rescue and Restructuring Guidelines notably seeks to:

• widen the scope of the Guidelines to include the steel sector, which is currently excluded;
• amend the "undertaking in difficulty" (UiD) definition, in light of certain types of innovative start-ups having a specific growth model (e.g., high upfront innovation costs, covered by subsequent rounds of equity finance), as the current UiD definition may have unintended effects by:
• • inadvertently allowing such start-ups to fulfill UiD criteria, even if they are not in difficulty – this would contradict the objective of the UiD definition, which is to identify undertakings that will almost certainly fail in the short or medium term; and
  • unjustifiably excluding inherently viable undertakings from other types of State aid – this would contradict the objective of supporting and incentivizing innovation by European companies, including in particular start-ups and scale-ups; and
• align the Guidelines with recent EU case-law.

Looking ahead. In view of facilitating the proper revision of the current Rescue and Restructuring Guidelines (set to expire by 31 December 2025); the Commission prolonged their validity for one year (until 31 December 2026).

The revision of the Guidelines will build on feedback gathered during the Commission's consultation process. The forthcoming draft revised Guidelines will also be published for stakeholder consultation and discussion with the Member States.