Is the EU’s Covid recovery fund failing?

As a symbol of Europe’s ambitions, Princess Elisabeth Island is hard to beat.

The concrete platform off the coast of Belgium is unlikely to win awards for beauty. But the project, billed as the world’s first artificial energy island, is quietly revolutionary — an energy hub designed to connect offshore wind farms in the North Sea to Belgium’s electricity grid, and one day deliver clean energy across the continent.

Named after Belgium’s future queen, it is a piece of energy infrastructure that fulfils the European Union’s aspirations to innovate and invest in a greener future, with backing from the bloc’s unique post-pandemic recovery fund that came into force three years ago.

However, the funding from Brussels is being held up by a dispute between Belgium and the EU over pension reforms — making Princess Elisabeth island an emblem not just of Europe’s ambitions but also of the bureaucratic and logistical problems that are hampering its showpiece fund and limiting the bloc’s long-term ambitions.

The Next Generation EU fund, which includes the Recovery and Resilience Facility, was agreed in 2020 but came into force in February 2021 at the height of the Covid-19 pandemic.

Member states unanimously agreed to jointly underwrite €800bn of debt to meet two broad objectives: to both jolt their ailing economies out of the lockdown-induced recession and also to invest in shared priorities such as climate change and digitalisation to kindle sustainable growth.

Ursula von der Leyen, president of the commission, described the flagship policy as a unique opportunity “to invest in a collective recovery and a common future.”

But the funds came with a countdown clock. Reaching an agreement to issue common debt at an unprecedented scale was only possible on the premise that the fund would be a one-off, time-limited…