KBRA Releases Research – The End of the RRF: Trade Adjustment and Financing Challenge
19 Aug 2026 | Dublin
KBRA releases research examining how the end of the European Union’s (EU) Recovery and Resilience Facility (RRF) could affect trade balances and investment financing, as the policy challenge shifts from deploying EU funds to sustaining investment beyond the programme. Since 2021, RRF-backed activity has likely increased demand for imported capital goods and specialist inputs, widening trade deficits or constraining surpluses in import-intensive economies. As the RRF winds down in 2026, this pressure should ease, all else equal, although energy prices, global trade and geopolitical developments could offset the effect. The expiry of the programme also raises a funding challenge, with countries increasingly needing alternative sources to maintain investment momentum. KBRA expects remaining EU support and public financing to provide the main near-term bridge, while productive foreign direct investment (FDI) could play a greater role over time. The longer-term test is whether the programme has strengthened productive capacity and business conditions sufficiently to crowd in durable private capital.
Key Takeaways:
- RRF absorption has likely contributed to an investment-led import impulse in some European economies, weighing on trade balances during implementation.
- After 2026, lower RRF-related import pressure may reflect either stronger domestic supply capacity or weaker investment and demand, depending on the productivity gains generated by RRF-backed projects and reforms.
- Post-RRF financing pressures will be uneven. Other EU funding should partly cushion the adjustment, particularly where Cohesion Policy envelopes are large, while additional public borrowing will likely remain an important near-term bridge.
- Productive FDI could support a healthier longer-term adjustment, but the RRF remains only one driver of external balances alongside energy shocks, geopolitical tensions, and changing global trade conditions.
Click here to view the report.