25 minute read 24 July 2023

Futureproofing Europe: How the NextGenerationEU programme is inspiring companies to transform

The European Union is incentivising more resilient, innovative, digital, and sustainable business models across Europe

Stefano Alfonso

Stefano Alfonso


Luca Bonacina

Luca Bonacina


Miguel Eiras Antunes

Miguel Eiras Antunes


Carlos Bofill

Carlos Bofill


Hilde Van de Velde

Hilde Van de Velde


Introduction – the European Union’s bold transformation vision

The European Union (EU) is investing significantly in its ability to transform the economic underpinnings of member states. The NextGenerationEU (NGEU) programme was created in the depths of the COVID-19 pandemic to help countries power up after the pandemic had passed. Overall, it is much more than a simple recovery plan.

The EU put €806.9 billion1 on the table as part of a vision to fundamentally change how countries within the bloc create, produce, and deliver products, goods and services.2 While many intertwined aims are contained within the NGEU stimulus package, the overall intention is to help Europe transform itself into a more resilient, innovative, digital and sustainable economy.

Two missions, in particular, stand out. The first is to move Europe towards net-zero, so that by 2050 the continent produces no more greenhouse gases than it absorbs. This will require a significant overhaul of infrastructure, buildings, energy systems, public spaces and industries. The second is to stimulate innovation by promoting widespread use of digital technologies across European economies, societies and businesses.

The €800 billion fund offers significant financial opportunities that can allow individual member states to capitalise on these objectives. The funds apportioned to respective countries also aim to narrow divergence between the different regions of the bloc and entice countries to undertake structural reforms.

Though the funds stem from the EU, member states are responsible for allocating them, subject to pre-agreed milestones and reforms, and so the success of the NGEU programme hinges on the ability of national governments to deliver the expected reforms and projects on time and the budget. The private sector will also play a crucial role as companies will be the catalyst to make the EU’s aims concrete. Given this, two years after the adoption of NGEU, we asked EU business leaders what they know about the programme and how it is inspiring them to transform their companies.

This is the focus of this Deloitte report. We asked 1,000 EU businesses about their understanding of NGEU, how the programme’s priorities align with their business objectives, and how – if in any way – they are shaping and influencing their strategies in response.

About the research

The research is based on a quantitative business survey conducted in April 2023 across nine European countries: Belgium, Finland, France, Germany, Italy, Netherlands, Portugal, Romania and Spain.

Overall, 1,000 leaders and representatives from private companies with more than ten employees have been interviewed to capture their perception of NGEU-related challenges and opportunities and analyse their outlook on future trends and business prospects.

All survey respondents were owners, presidents or C-level executives, including chief executive officers, managing directors and chief financial officers. The executives represented organisations from services, manufacturing and construction, and wholesale and retail trade in each country.

The report reflects the status achieved by mid-June 2023 and therefore does not speak regarding potential later developments.

NextGenerationEU – an unprecedented initiative from and for Europe

In mid-2020, with the world in the grips of COVID-19, the EU took a bold step to help member states rebound after the pandemic. As part of a comprehensive package of €2,018 billion, EU leaders established €1,211 billion for the long-term budget (2021-2027), known as the Multiannual Financial Framework, and €806.9 billion for a temporary recovery effort known as NGEU3.

The NGEU is historic for several reasons. The first is size. NGEU represents the largest investment the EU has ever made, with almost half the amount (€386 billion) offered as loans to individual member states and the rest as grants – split into different funds.4Altogether, it is worth around 6% of annual EU gross domestic product (GDP), to be disbursed over a period of six years, and comes on top of the stimulus efforts of individual national governments.5

Second, the NGEU grants are debt-funded at the EU level rather than coming from member states’ existing budgets. The loans will be repaid by the borrowing member states. Previously, it would have been unthinkable on grounds of fiscal probity to suggest a role for debt backed collectively by member governments of the bloc. But the pandemic caused a significant rethink on what was ‘normal.’ In 2020, leaders agreed that the European Commission, acting on member states’ behalf, may incur debt on an unprecedented scale. The NGEU will be funded by borrowings over six years. Bonds will be issued at maturities extending up to 2058.

The funds are to be allocated to assist different regions in the bloc according to their needs. This means small countries such as Greece, Romania and Croatia stand to receive grants equivalent to more than 10% of their respective annual GDP while countries like Denmark, Germany and the Netherlands will receive funds worth less than 1% of their respective GDP. The NGEU also gives stronger support to countries with lower capital stock per capita, such as Italy and Spain.6

NGEU can make a significant difference to European economies, raising the bloc’s long-term growth potential. The European Commission estimates that if it is fully implemented, the NGEU could increase the level of real GDP in the euro area by up to 1.5% by 2024.7

Perceptions in practice  – how companies are reacting to NextGenerationEU

The centre piece of the NGEU programme is the Recovery and Resilience Facility (RRF) through which grants and loans are made available to member states. The initiative to access funds must come from the member states. To access funds, member states have drafted National Recovery and Resilience Plans (NRRP) that comply with guidelines set by the European Commission, such as directing at least 37% of spending to climate initiatives and at least 20% to digital transition.

The national plans are performance-based, so that as countries fulfil agreed milestones and targets, they unlock regular payments. When funds are released, they will be at the discretion of governments, ministers and regions to spend.

European companies have the chance to join in transforming their countries via investment in six main policy areas:

  • digital transformation
  • green transition
  • smart, sustainable and inclusive growth
  • social and territorial cohesion
  • health, economic, social and institutional resilience
  • policies for the next generation.

This report focuses on European organisations and their awareness of the opportunities the NGEU presents to futureproof their companies, particularly in the two primary focus areas of digital transformation and the green transition.

With so much money on the table, how do European companies intend to capitalise on the once-in-a-lifetime opportunity offered by the programme? To what extent are European companies aware of or already benefitting from the programme? Do the priorities of European businesses align with those of the EU, and is the NGEU prompting European companies to rethink their strategic plans?

NextGenerationEU – responding to a world turned upside down

NGEU was conceived when the world was in the middle of the first pandemic in a century. But the world that has emerged from the pandemic has proved to be even more complex.

Russia’s invasion of Ukraine in February 2022 delivered a further blow to the world economy as it struggled to shake off the aftereffects of the COVID-19 lockdowns. As the conflict has dragged on, it has disrupted global supply chains, brought increased market volatility, prompted energy price spikes and sparked high inflation that has caused financial and economic uncertainty indicators to soar again.8

Then there is the climate crisis. In March 2023, scientists delivered a “final warning” as rising greenhouse gas emissions pushed the world to the brink of irrevocable environmental damage.9 The EU has made tackling climate change and minimising its effects as a priority. Member countries must cut greenhouse gas emissions by at least 55% by 2030, while the EU aims to be climate-neutral by 2050.10 Climate change and the policies pursued by the EU have significant implications for companies in terms of transition risks and cost pressures.

As a result, European companies find themselves in an increasingly complex environment, with high uncertainty and further disruptions. But there are also some encouraging signs. While inflation remains high at an annual rate of 7.1% in the EU (May 2023),11 it seems likely that the EU will avoid a recession in 2023 and 2024, with GDP expected to grow by 1.0% and 1.7%, respectively.12

These conditions make business leaders across Europe cautiously optimistic. In the Deloitte survey, 49% said they were confident about their country’s economic growth prospects. They are also confident about their ability to adapt to the new competitive environment. About 81% believe they can navigate the current unchartered waters and emerge stronger than before.

European business leaders are also optimistic about the performance of their own companies, with France and Portugal (92%, respectively) and Italy (89%) being the most confident. The confidence of EU executives is such that 22% are willing to take on new entrepreneurial risks to increase the company’s competitiveness and reap business opportunities. An additional 64% are ready to do so in response to the evolving competitive landscape or the legacy of previous strategic decisions or investments.

Only 13% feel this is not the moment to take new risks. The most risk-averse companies are found in Italy (28%), Finland (26%), and Germany (22%), while Portugal (5%), Belgium (3%), and the Netherlands (1%) are where companies state they are mostly prepared to embrace risk.

Eighty per cent of European business leaders are also optimistic about the performance of their companies.

A roadmap to a greener, smarter and more innovative Europe

More than half of EU business leaders are positive about the NGEU. Companies in countries with economies most severely affected by the pandemic or the energy crisis expressed the most favourable opinions. In Germany and Italy, 72% and 64% of respondents, respectively, see NGEU positively.

Business leaders see the EU’s role as crucial to accomplishing the transition to a more resilient, innovative, digital, and sustainable economy and providing a fertile ground for their future growth. The EU business community calls for a streamlined and optimised process to ensure the intervention is as targeted and timely as possible. Specifically, business leaders want greater responsiveness in decision-making (44%), a limit to the number of stakeholders involved (41%), better alignment among the European institutions involved (40%), and a stronger ability to reconcile any potential divergent interest between member states (37%).

In addition, 62% of companies in Europe would welcome mechanisms similar to the NGEU during possible future systemic instability caused by geopolitical tensions or energy and environmental crises. Again, companies in countries most impacted by the pandemic and energy crisis are the most enthusiastic, with 74% in Italy, 72% in Germany and 70% in Spain viewing such a model positively.

Yet, given that the NGEU is appreciated as a tool that could boost a country’s competitiveness and productivity, it is surprising that companies show only a modest degree of knowledge and familiarity with their own country’s NRRP. While 30% say their organisation is informed about the NRRP and the main areas of intervention, 19% have never heard of it, and only 3% have studied it in detail.

Companies in countries with the largest share of allocated funds have the most mature understanding of their national plans; Spain (47%), Italy (45%), and Romania (41%) are all well above the average in terms of understanding the plans. These figures highlight the need to enhance communication of the national plans to the local business communities to increase the overall level of awareness in all member states so that opportunities are not left on the table. This is especially important as the clock is ticking: all agreed reforms and investments must be made by the end of August 2026.13

Fifty-four per cent of respondents were optimistic about NGEU and its ability to steer member states’ economies towards a growth trajectory, improve their competitiveness and modernise their country.

European businesses motivated to transform by NextGenerationEU

European business leaders generally agree with the focus of their country’s NRRP in terms of reforms and projects. Some 50% consider the core focus of the NRRP as essential and strategic for the national economy, especially in Germany (69%) and Spain (60%).

Moreover, 68% leaders believe that these interventions will result in modernisation and greater competitiveness for the national economy over the next five years. The responses were particularly strong in the Netherlands (85%) and Belgium (81%). Even in countries where the responses were more muted, such as Finland (58%) and Portugal (53%), more than half of respondents believe the NRRP can help futureproof their economies.

EU business leaders are also highly confident about the impact on their companies. The majority (60%) believe that the reforms and investments envisaged by the national plans will positively affect their company’s long-term performance, leading to sound and sustainable growth. Thirty-six per cent of business leaders report that their company is already experiencing tangible benefits from the implemented projects and reforms.

Notably, a majority (58%) emphasise that these funds (and embedded reforms and projects) will aid their transition to more sustainable business and operational models. France (72%) and Belgium (69%) were the countries where this was most strongly felt to be true. Portugal (50%) and Italy (45%) were not as convinced, although the percentages are still high. Moreover, the transformational power of these funds is key in evolving European companies’ business by leveraging the potential of innovation and digital technologies (62%) so to match their business priorities and their sources of potential growth.


Given that the business community perceives NGEU’s benefits, it is unsurprising that 39% of executives report they have reviewed and updated their strategic planning in response to direct and indirect opportunities potentially arising from the programme at the national level. Fifty-seven per cent agree that NGEU funds will mobilise significant additional private investments.

All this indicates NGEU’s transformative potential for EU companies and their ability to deliver better performance and, ultimately, sustainable growth. However, 72% of business executives would like to receive more direct support from the EU, for example, through direct grants, incentives and subsidies, to support entrepreneurship in the short term.

Sixty per cent believe that the reforms and investments envisaged by NRRPs will positively affect their company’s long-term performance, leading to sound and sustainable growth.

NextGenerationEU in action – the challenges ahead

One of the impediments to companies making greater use of NGEU opportunities is the significant effort required. Firms must understand the programme, the allocation logic and the significant formal processes that must be complied with.

Only 3% of EU companies report applying for an NGEU-related tender. Spain (8%) and Romania (5%) have the highest rates of applications. The low rate is based on multiple factors, including the limited number of tenders currently open, partially targeting very niche recipient groups. Sometimes, the precise nature of the tenders reduces the pool of possible applicants, and some countries, such as the Netherlands, have only recently begun executing their NRRPs.14

However, 80% of EU companies want to participate in tenders. Indeed, 22% have identified tenders they want to participate in. This interest should see participation figures climb in coming years as the number of calls for tenders increases.

Most NRRP funds are directly channelled by central governments and local administrations through traditional forms of public procurement. In this case, companies must understand how to navigate the regulatory framework in order to avoid missing opportunities. Business leaders want better communication and more support from national and local institutions to make these opportunities more easily accessible.

The EU companies surveyed see several challenges when applying for opportunities that stem from NRRPs. First, the eligibility and evaluation requirements are often too specific, or sometimes, unclear (66%). This is especially a problem in Belgium (80%), the Netherlands (77%) and France (74%).

Business executives also list tight project-delivery deadlines (42%) and availability of information (29%) as main impediments. Tight delivery deadlines were most acutely felt in Belgium (66%) and the Netherlands (56%), while lack of information (29%) was identified as a leading problem in Italy (44%) and Spain (43%).

To overcome these challenges, 31% of business leaders in the EU would appreciate more support from institutions throughout the process. This was particularly requested by business leaders in Germany (43%) and Italy (38%), among the countries most exposed to the recent crises. Many also believe that greater flexibility and simplification of tender rules would speed up procedures and reduce red tape. For example, the Italian government recently postponed legality and administrative accounting checks until the conclusion of the contract.15

It is not only in tenders that challenges arise. EU companies, particularly small- and medium-sized enterprises (SMEs), 16 can also access incentives, tax credits and grants – 63% are willing to request them. But again, EU companies report difficulties in accessing these opportunities due to stringent requirements (69%), lack of information (55%) and the slow transfer of incentives (28%).

One source of support for companies is third parties, as 42% of business leaders state. Engaging with third parties enables companies to stay updated on the many and continuous innovations in their field, to access specific capabilities in evaluating tenders, determine the best way to access the funding, and deliver the project in a manner consistent with their strategy and objectives.

Europe seeks to encourage digital innovation

At the beginning of the 21st century, 41 of the world’s 100 most valuable companies were based in Europe, today only 15 are. In 2000, nearly a third of the combined value of the world’s 1,000 biggest listed firms and a quarter of their profits was in Europe. Today, those figures have fallen by almost half.17

One of the reasons for this is the rise of Chinese companies as global business powerhouses. But another often cited factor is Europe’s lack of innovation in recent decades, especially digital innovation, from which trade and investment follow. However, the EU believes this is changing. Innovation performance in the bloc has increased by about 10% since 2015, overtaking Japan and narrowing the gap with countries such as Australia, Canada, South Korea and the United States.18

The NGEU programme is a tool that could further accelerate innovation in Europe, particularly digital innovation. This could turn many challenges companies face into opportunities likely  to deliver digital innovation within and beyond corporate boundaries, and generate spillovers in individual nations and the EU as a whole.19 Some 28% of NGEU funds are to be channelled to strengthening Europe's capacities in new digital technologies, in order to open up further opportunities for businesses and citizens.20

Sixty-seven per cent of EU executives interviewed broadly agree with the EU’s digitalisation objectives. They consider innovation the most crucial business priority and that business leaders must be increasingly involved in its empowerment – especially if the company is not ready to change.21 Many European companies are substantially rethinking their strategy for innovation(36%) and digitalisation (40%). And some business executives are prepared to act quite radically rather than take incremental steps to change, taking advantage of the favourable momentum.

Seven per cent of European businesses are preparing radical steps in innovation, and 6% in digitalisation. Twenty-nine per cent are taking incremental steps in innovation and 34% in digitalisation.

Innovation in an age of uncertainty

In times of disruption and uncertainty, building new businesses (rather than cutting costs) becomes critical to improving an organisation’s ability to thrive. From a historical perspective, periods of crises can be seen as the seed of innovation and entrepreneurship; the creative spirit comes to the fore.

European businesses expect the future to become more stable or predictable. They are preparing themselves to have the capacity to innovate rapidly by repurposing existing knowledge, resources, and technology, and leveraging new ones. More specifically, the business leaders surveyed emphasize that difficult times lead companies to:

  • harness innovation (especially digital innovation) to develop new business models and approaches to the market (44%)
  • encourage the generation and scaling up of ideas through increasingly pervasive innovation programmes so that companies can seize new opportunities within their own and potential new markets (24%)
  • increase adoption of digital technologies (20%) to favour the innovation process. According to 52% of respondents, digital technologies support companies in rethinking, simplifying and/or optimising their operational and creative processes.

Business leaders say that in an increasingly uncertain world, organisations need to be able to innovate quickly. More digitally mature companies are expected to have an edge.22

Sixty-six per cent of EU companies surveyed say they are satisfied with their current level of digital intensity.

Hurdles to innovation

Although there is a willingness to implement innovative digitalisation programmes, European companies face four substantial obstacles. First, there are regulatory barriers, including red tape (52%). In addition, 42% report a need for appropriate skills and competencies to support their innovation programmes.

There are also financial issues: innovation is expensive, according to 36% of the respondents, and highly uncertain, regarding outputs and returns (17%). Finally, 15% of European business leaders believe it can be difficult to break their corporate status quo and spread the right corporate culture to support innovation (11%).

Beyond addressing any potential market failures, governments can help by being a catalyst of innovation for the public good.23Leveraging NGEU, European businesses expect to make moderate to significant investments in innovation (58%) and digitalisation (61%) in the medium term.

Public funds, tax incentives and reliefs, particularly those of the NGEU programme, are inspiring businesses to invest more in innovation than they otherwise would. Overall, thirty-three per cent see the public-funded opportunities as essential for those investments – especially in Italy, where the percentage rises to 72%, alongside traditional forms of financing, such as self-financing (71%) and the banking system (57%).

Companies within the EU want government support to encourage innovation (42%). In particular, they would appreciate a policy that removes barriers to innovation as much as possible and allows a faster time to market. Companies see support in the following areas as being beneficial:

  • greater financial support through incentives and tax reliefs (69%), including innovation in the funding mechanism by developing specialised investment structures that support experimentation in areas where private investments are insufficient 
  • developing simplified national regulatory frameworks more receptive to digital innovation (55%), rolling out state-of-the-art facilities and infrastructure (35%), and empowering human capital in developing skills and competencies (35%)
  • reinforcing collaboration between public and private sectors through EU-wide, agile and innovation-driven partnerships with EU institutions, national and regional authorities, and businesses (16%).

Fifty-two per cent of EU companies surveyed complain that the current legal and regulatory framework cannot fully support innovation.

Encouraging collaboration

European business leaders see that NGEU can also play an essential role in encouraging collaboration that connects across boundaries and enables ideas to be exchanged and knowledge to be shared.24 Some 94% (and up to 99% in Germany, Finland and Spain) of business leaders report having collaboration with specialised third parties already in place. Typically, these are suppliers (63%), clients (49%) and research centres or startups (15%).

Sixty-three per cent of business leaders believe the NGEU funds and NRRPs can play a distinctive role as a catalyst for collaboration and technology transfers25. Moreover, an even greater share of companies in the EU (67%) expect that the ‘new NGEU-shaped environment’ will be characterised by greater, more intense, multi-dimensional and open collaboration among the various actors, with Horizon Europe, the EU’s €95.5 billion funding programme for research and innovation, also as a factor. Indeed, one in five business leaders feel highly positive about this.

A greener and more sustainable Europe is economically stronger

Deloitte estimates that by 2070 a failure to combat climate change would cause Europe about six trillion euros in economic damage and 110 million fewer jobs. By comparison, a transformation to a net-zero economy could add 730 billion euros to Europe’s economy.26

The EU aims to become climate-neutral by 2050. The European Green Deal outlines a series of objectives to achieve this, with the main one being to eliminate or offset greenhouse gas emissions to limit global warming to 1.5-2°C above pre-industrial averages. Interconnected goals cover almost every element of society and the economy, including decoupling economic growth and resource consumption by moving to a ‘circular’ economy. Sixty-nine per cent of business executives strongly believe that a circular approach to business will be the foundation of their strategies.

The NGEU is central to this transformation as countries accessing the grants and loans must agree to spend at least 37% on Brussels-approved, climate-friendly projects. Business leaders must now think about their sustainability strategy not just from the customer, product or competitive point of view, but also with an awareness of their own organisation’s impact on society and the environment.27

As this shift occurs, European companies need to mould their sustainability plan towards a purpose-led model that creates greater value for the community. This means a company’s strategy and social purpose are increasingly interrelated and will directly impact on how organisations deal with their clients and all the other stakeholders in the community.

Companies respond to stakeholder pressure

Business leaders acknowledge that there is growing pressure to take action on sustainability from multiple stakeholders within and outside companies. One in five states that responding effectively and convincingly to all stakeholders’ needs is the main reason to invest in sustainability. However, sustainability is complex, and companies must carefully balance and manage a multi-faceted set of priorities and preferences.

This can impose significant costs but also generate important advantages. For example, by 2030, according to 64% of interviewees, the benefits of a sustainable and responsible business model will already have exceeded the related costs. At present, to successfully implement a more sustainable business and an operational model, companies are already considering a sustainability strategy focused on improving energy efficiency along the overall value chain (53%) and exploiting the power of innovation to further enhance their sustainability efforts (46%), for example, by developing and marketing greener products and/or services.

The Deloitte survey confirms that the efforts of EU companies go well beyond concern for reputation management. They are also seeking to capture value through growth and return on capital.

European business leaders recognise the crucial role of NGEU in the environmental transition. In fact, half of them believe that if further funds are available from 2026 onwards, sustainability and the green transition should be considered as the most crucial area to be financed. The cost of inaction is too high from an economic, social and continuity-of-operations perspective.28

In addition, 60% are convinced that the NRRP will play a key role in improving their companies’ sustainability efforts also due to the enhancement of strategic and climate-resilient infrastructures.

Sixty-nine per cent of European companies surveyed believe that in the future, plans based on a circular economy will in most cases guide their sector’s strategies and business processes.

The opportunities inspire a hard rethink on corporate sustainability strategy

All the above means that companies need to review their business models and underlying strategies to create more value over the long run and benefits for wider society. In this regard, 31% of those interviewed state they have rethought their sustainability strategy in a radical (7%) or incremental (24%) manner to leverage NRRP-related opportunities.

Rethinking sustainability strategies implies intervening two main variables: the degree of formalisation and the extension across different business areas. Forty per cent of businesses state they already have “a formalised sustainability strategy” that applies to the entire organisation (13%) or at least to selected initiatives (27%). Just over half (53%) are already developing one or intend to do so.

Moreover, the NRRP stimulates private investment: 52% of interviewees stated that their companies would increase investments significantly or moderately due to the NRRP. NGEU offers unique support for the green transition as a multiplier and accelerator of current corporate investments.

This is further confirmed in responses to why companies invest in sustainability projects. Forty-eight per cent do it primarily to access new business opportunities, such as those enabled by the NRRP. This is especially true for Belgian companies (71%).

Moreover, many companies have adopted a proactive approach to sustainability. For example, 37% forecast that sustainability investments will increase significantly (4%) or moderately (33%) over the next 12 months. Another 55% will keep sustainability investments stable. This underscores how companies believe in a greener and more sustainable future as well as in their role in contributing to the bloc’s ecological transition.

Forty per cent of businesses state they already have “a formalised sustainability strategy”.

Looking to leadership from the EU and national governments

While companies are convinced that their future depends on being greener, the role of institutions is fundamental to this occurring. Twelve per cent rely on (EU or national) public funds to assist them with the transition. Twenty-five per cent also consider tax reliefs and incentives essential (over 40% in Italy and Germany), in addition to more traditional forms of financing, such as self-financing (67%) and the banking system (50%).

European companies increasingly rely on tools and solutions offered by institutions, which must respond to this need by outlining policies aimed at supporting the green transition of the broader business ecosystem. Organisations would welcome more comprehensive and substantial support from national institutions, especially in the form of fiscal incentives (57%).

They believe the role of national institutions must go beyond fiscal and financial considerations and encompass areas of intervention, such as favouring the adoption of renewable sources of energy (47%), improving green and circular infrastructures through dedicated public investments (39%), and simplifying the regulatory framework (31%).

For most companies, the main challenges to sustainability initiatives are the economics and financials (57%), and regulatory complexity (51%). Companies expect institutions to favour their transition towards a more responsible business model with more fiscal or financial incentives and tangible intervention to simplify the related regulation.

Timely implementation at risk

The distribution of NGEU funds has so far exceeded €150 billion.29 This amounts to about 20% of the total amount expected to be requested by EU member states by 2026. While the programme seems to be progressing well, there are concerns that the timetable may slip.

For example, while France and Spain have reached 22% and 29% of their milestones and targets so far, respectively, and Italy 18%, only 11% have been completed across the entire EU.30 Several countries have postponed disbursement requests. In some cases, this happened because the structural reforms required as a precondition were delayed, with a knock-on effect on the payments schedule.

More concerning is the underspending, especially as EU countries were able to absorb 67% of the European Structural Investment Funds between 2014 and 2020.31According to the European Central Bank, NGEU expenditure plans for 2021-22 were not executed fully.32 However, forecasts for 2023-26 indicate that countries plan to catch up on their investment objectives in the remaining years.

The energy crisis and inflation have been creating new challenges. First, due to higher inflation, procurement contracts and public tenders often need to be revised; then there are supply bottlenecks for necessary materials, equipment and skilled workers. Second, member state priorities are changing. Third, sluggish and complicated bureaucratic procedures create political hurdles obstructing the faster use of funds.

While feasibility studies and protection against the misuse of funds are required, the problem with a slow rollout is that the success of NGEU rests on the ability to spend the money quickly and efficiently. If this fails, the opportunities to futureproof Europe will be left on the table.

Most business leaders in the EU (63%) are optimistic that their government can execute the projects and reforms agreed under their NRRP within the allocated time. This is especially true in Spain where the percentage rises to 78%. Just as the European countries benefitting from the NGEU, the EU itself is interested in making the recovery fund a model for similar future plans.

Where to next, NextGenerationEU?

Changes to the geopolitical and economic environments since the creation of the NGEU have prompted business leaders to suggest a revision and update of the NRRP (66%). They are asking for a different distribution of the funds and stronger support from the EU to deal with the consequences of the Russia-Ukraine war and inflation, and to continue to drive the transformation (66%). This is particularly true for Belgian (81%), Spanish (73%) and Italian (71%) companies.

As of today, however, only Finland, Germany and Luxembourg have made (minor) amendments to their respective NRRPs, and these changes have not impacted the timelines for disbursements. Between March and mid-June 2023, another eight member states – Denmark, Estonia, France, Ireland, Malta, Portugal, Slovakia and Spain – have submitted a modified version of their respective NRRPs, also taking into consideration the need to add a chapter dedicated to REPowerEU, the European Commission’s plan to save energy, produce clean energy and diversify energy supplies after Russia’s invasion of Ukraine33.

Should NGEU or a similar programme continue after 2026, business leaders believe the following areas should be its focus: sustainability and the green transition (51%), corporate digitalisation (49%), innovation (49%), development of future competence and skills (30%), and tangible support for companies, particularly SMEs and startups (28%).

Moreover, if NGEU or similar mechanisms further extend their scope or become available in potential future crises, it is of vital importance that the EU not only builds on the lessons learned so far, but also considers the following:

  • ensuring that the attractiveness, competitiveness, and strategic ambitions of the EU grow further by consciously focusing on key selected strategic areas; all related initiatives and investments need to be consistently paired with the digital and green transition commitments of the bloc; the Green Deal Industrial Plan34 is just one example of how the EU is moving the net-zero transition forward, beyond NGEU
  • leading and subsidising the development of EU-wide, integrated and interoperable digital public services to reduce barriers and ensure seamless cross-border accessibility and exchange of information, spurring innovation and growth within the bloc
  • further strengthening the bloc’s security and social cohesion through an integrated, centrally managed and shared policy and investment approach that continuously improves the prospects for EU integration and growth.

Conclusion – the transformation has only just begun

The leaders of the European Union have an ambitious vision for the bloc in digitalisation, innovation and going green, embodied in the NGEU programme. However, it is now that the hard work begins. National governments are ramping up their spending of the funds, and companies will have increasing opportunities to leverage incentives to revitalise and transform their businesses.

The Deloitte survey finds that European business leaders enthusiastically support the reform and investment plans of the EU, which they see as substantive and essential. For business leaders, the EU’s role is crucial in transitioning to a more resilient, innovative, digital and sustainable economy. NGEU is inspiring them to re-examine their business strategies, and they believe it will also encourage further private funding.

The business community is calling for a streamlined and optimised process to ensure the intervention is as targeted and timely as possible. They fear that the potential benefits could be lost in bureaucratic procedures. Specifically, business leaders are seeking greater responsiveness in decision-making from their national governments and the EU. They also want to limit the number of stakeholders, achieve better alignment among the European institutions, and see the EU enhance its ability to reconcile any potential divergent interests between member states.

For European institutions, it is vital that funds are spent wisely and that economic growth in the euro area accelerates. This is essential to the NGEU programme’s success – and to the running of similar future plans, which many supporters of the scheme are hoping for. Political leaders need, however, to pay attention to business concerns and the real hurdles companies see that obstruct achievement of the programme’s ambitions.

The larger underlying question is whether Europe can pull off the desired transformation. If Europe fails to attain its goals on the digitalisation side, it risks being relegated to the status of an also-ran in the global economy. And in terms of its ‘go green’ ambitions, if Europe – a forerunner on climate change initiatives – fails to reach its net-zero objectives, the implications for the planet will be grim.

The NGEU programme has created the possibility that Europe can succeed in both areas. It provides the means to build clean-energy infrastructures, transition to renewable energy and improve the energy performance of buildings and vehicles. It can also spur the benefits that will flow from digitalisation. Europe has given itself the means to become future-proof and needs to grasp the opportunity.

  1. The data reported around NextGenerationEU (NGEU) are in current prices.View in Article
  2. European Union (EU), “NextGenerationEU,” accessed 11 July 2023.View in Article
  3. European Commission, “The 2021-2027 EU budget – what’s new?,” accessed 11 July 2023.View in Article
  4. European Union, “NextGenerationEU”.View in Article
  5. Maximilian Freier, Charlotte Grynberg, Marguerite O'Connell, Marta Rodríguez-Vives and Nico Zorell, “NextGenerationEU: A euro area perspective,” European Central Bank, accessed 12 July 2023.View in Article
  6. Ibid.

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  7. European Commission, April 2022.View in Article
  8. The World uncertainty index, after reaching new heights during the pandemic, soared again in February 2022 after Russia’s invasion of Ukraine.View in Article
  9. Hoesung Lee et al., AR6 synthesis report: Climate change 2023, Intergovernmental Panel on Climate Change, 20 March 2023.View in Article
  10. European Commission, “2030 climate target plan,” accessed 11 July 2023.View in Article
  11. Eurostat, “Euroindicators - Annual inflation down to 6.1% in the euro area, down to 7.1% in the EU,” 16 June 2023.View in Article
  12. European Commission, “Spring 2023 economic forecast: An improved outlook amid persistent challenges,” accessed 12 July 2023.View in Article
  13. EUR-Lex, “Regulation (EU) 2021/241 of the European parliament and of the council of 12 February 2021 establishing the recovery and resilience facility,” Official Journal of the European Union 57, February 2021: pp. 17–75.View in Article
  14. European Council, “Council implementing decision on the approval of the assessment of the recovery and resilience plan for the Netherlands,” 27 September 2022.View in Article
  15. Italia Official Journal, “Decree law 24 February 2023, n. 13,” 24 February 2023.View in Article
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  18. Directorate-General for Research and Innovation, , European innovation scoreboard 2022, 14 September 2022. View in Article
  19. The 28.53% of the total Recovery and Resilience Facility (RRF) funds are allocated to the digital pillar and 47.24% to the smart, sustainable and inclusive growth (including economic cohesion, jobs, productivity, competitiveness, research, development and innovation, and a well-functioning internal market with strong SMEs).View in Article
  20. European Commission, “Recovery and resilience scoreboard,” 19 June 2023.View in Article
  21. Tim Smith, Brenna Sniderman and Diana Kearns-Manolatos, How to lead digital transformation from the top, Deloitte Insights, 31 August 2022.View in Article
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  25. Innovation is not happening in isolation anymore. It benefits from interaction from different parties (e.g., organisations, technology suppliers, policymakers, research institutions, incubators, venture capitalists) with different backgrounds, expertise and competences that deliberately come together in meaningful ways to solve shared challenges and meet shared objectives. Effective ecosystems enable a cumulative ‘network’ effect for participants and create value greater than the sum of parts, driving higher performance and creating exponential results. View in Article
  26. Deloitte, “Europe’s turning point: Accelerating new growth on the path to net-zero,” 31 March 2022.View in Article
  27. Dr. Florian Klein, Gordon Grundmann and Frederik Josten, Sustainability in business: Staying ahead of the curve, Deloitte Insights,14 September 2022.[a] Bruce Chew, Irena Pichola, Richard Longstaff, Tiffany Fishman and Hiroshi Hamasaki,  View in Article
  28. Climate-resilient government: How governments are addressing climate change, Deloitte Insights, 24 March 2022.

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  29. European Commission, “Recovery and resilience scoreboard 2023 - disbursements,” June 2023.

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  30. European Commission, “Recovery and resilience scoreboard – milestones and targets,” June 2023.View in Article
  31. European Court of Auditors, Report on the performance of the EU budget – status at the end of 2021, accessed 12 July 2023.View in Article
  32. Ettore Dorrucci and Maximilian Freier, “The opportunity Europe should not waste,” European Central Bank blog, 15 February 2023.View in Article
  33. European Commission, “Recovery and resilience scoreboard – timeline,” June 2023.View in Article
  34. European Commission, A Green Deal industrial Plan for the Net-Zero Age, 1 February 2023.View in Article

The authors would like to thank Mariangela Campalani, Marco Tirelli and Mario Filice of Deloitte Italy and Hannah Caslin of Deloitte UK for their contributions to this article.

Cover image by: Mark Milward


Deloitte’s NextGenerationEU (NGEU) programme services

The NGEU is much more than a simple recovery plan. With over €800 billion on the table, its primary goal is to transform the EU into a more resilient, innovative, digital and sustainable economy. At Deloitte, we want to support this vision by drawing on our globally connected multi-disciplinary expertise and knowledge. We can help lay the foundations needed to move forward by supporting companies and public administrations in accessing EU funds while also helping them in the journey towards sustainable and digital transformation. Together, we can help shape the Europe of the future, one that is more resilient, sustainable, digital friendly and inclusive.

Stefano Alfonso

Stefano Alfonso

Deloitte Central Mediterranean Growth leader | Deloitte Italy


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