Correlation analysis: PNRR components
by Irimia Mihaela
2026-05-16
PNRR progress: Budget distribution and implementation outcomes
Warning: The dataset analyzed in this study was obtained based on the information available on different site and documents: platforma monitorpnrr; Comisia Europeana and platforma mfe.gov.ro.
Objective: The study focuses on the correlation analysis of the objectives (investments, reforms, targets, milestones, etc.) proposed and scheduled for funding through the approved PNRR plan.
Brief presentation of the main events – overview
National Recovery and Resilience Plan – PNRR
Proposal and approval of the PNRR plan
PNRR plan sau Recovery and Resilience Facility (RRF) was proposed in a geopolitical context marked by a series of crises such as: the pandemic or global health crisis, the energy crisis, inflation etc. with the major objective of absorbing European funds within a clearly established timeframe in order to achieve specific objectives.
Official proposal: The European Commission issued a favorable opinion on October 28, 2021, while approval from the EU Council (ECOFIN – Economic and Financial Affairs Council of the European Union) was obtained on October 29, 2021.
The total value initially approved was 29.2 billion EUR (of which the budget allocated for the grant financing component amounted to 14.29 billion EUR, while 14.92 billion EUR represented the budget corresponding to the loan financing component.).
Modifications and revisions of the PNRR plan:
The PNRR Plan underwent four major revision stages, each bringing significant changes regarding budget allocations, structure, and deadlines for completing the assumed objectives.
First technical revision (took place in June 2022, but was implemented in 2023): the revision was carried out in the context of Romania’s economic growth in 2021 (the value of the gross domestic product – GDP – was higher than initially estimated), which led to a reduction in the grant financing component and the inclusion of a new component dedicated to energy independence (REPowerEU) in order to preserve non-reimbursable funds. The total value of the PNRR plan was set at 28.5 billion EUR, consisting of the loan financing component amounting to 14.9 billion EUR, and the grant financing component amounting to 13.5 billion EUR, of which 1.4 billion EUR represented the budget allocated to the newly introduced component, REPowerEU – Component 16. Component 16 includes 2 reforms and 7 new investments in green energy, energy efficiency, and workforce reskilling in this sector. Approval for this version of the plan was granted on November 21, 2023 by the European Commission, while the EU Council provided final approval on December 8, 2023. The effects of these modifications were applied retroactively starting from June 2022.
Second revision and final version of the PNRR Plan (2025): due to the high risk of losing the entire allocation of non-reimbursable funds (~ 13.6 billion EUR), more than 140 projects were revised/replaced with more mature projects or projects financed from the national budget. Some projects were transferred to the non-reimbursable financing component, while new investments with high economic and social impact were introduced, such as the acquisition of ambulances and the capitalization of the Investment and Development Bank. The total value of the plan decreased to 21.4 billion EUR, of which 13.57 billion EUR was allocated to the grant financing component, while 7.84 billion EUR was allocated to the loan financing component. The number of milestones and targets associated with the plan decreased from 518 milestones and targets to 390 milestones and targets in order to improve monitoring. The plan was approved by the European Commission on October 22, 2025, while the EU Council granted final approval on November 13, 2025.
Dimensions of the National Recovery and Resilience plan (PNRR)
Dimensions of the PNRR plan: The dimensions of the PNRR can be analyzed across four levels: financial, structural (investments), operational (milestones and targets) and temporal.
Financial dimension
- Financial dimension: although the initial value of the plan was EUR 29.2 billion, it was subsequently adjusted. Currently, the value of the plan stands at EUR 21.41 billion. The allocated budget is divided almost equally between two financing components: the grant financing component (non-repayable funds) and the loan financing component (repayable funds obtained under favorable interest conditions).
Structural dimension
Structural dimension: the PNRR is built around six mandatory pillars, which branch into 16 thematic components:
Green transition which includes 6 components
Digital transformation which includes one component
Smart, sustainable, and inclusive growth which includes two components
Social and territorial cohesion which includes two components
Health, as well as economic, social, and institutional resilience which includes three components
Policies for the next generation which includes one component
Operational dimension
- Operational dimension: includes investments and reforms and represents the unit of measurement for the success of the PNRR, rewarding the achieved results.
- Package of measures: includes measures divided into reforms (legislative changes) and investments.
- Objectives (in the form of milestones and targets: every euro is conditional upon the achievement of specific objectives.
- Do no significant harm (DNSH) principle: this principle underlies all PNRR objectives — no investment financed through the PNRR is allowed to negatively affect the environment (projects leading to increased carbon emissions are not financed).
Temporal dimension
The timeframe within which projects must be completed and delivered places the greatest pressure on implementation. The deadline is 31 August 2026, and any delay transforms the expenditure into a burden on the national budget, since the amounts can no longer be reimbursed by the European Commission.
What does the acronym PNRR stand for?
The National Recovery and Resilience plan (PNRR) is an instrument designed to combat the effects generated by economic disparities and by the pandemic on the population. The objective of the PNRR is to attract the funds made available by the EU through NextGenerationEU in order to achieve the milestones and objectives related to reforms and investments, including: a timeline, objectives, indicators, detailed budgets, and an implementation schedule.
What are the principles underlying the PNRR?
The implementation principles of the PNRR are focused on the equitable distribution of funds at geographical level, decentralization, and the role of local authorities. , , .
Structure of the PNRR and its main components
Structure of the PNRR
What are the pillars/directions or the structure of the PNRR?
Romania’s National Recovery and Resilience Plan is structured around six pillars (Green transition, which includes 6 components; Digital transformation, which includes one component; Smart, sustainable, and inclusive growth, which includes two components; Social and territorial cohesion, which includes two components; Health, as well as economic, social, and institutional resilience, which includes three components; and Policies for the next generation, which includes one component), and a total of 16 components.
The components of the PNRR plan
What are the names of the PNRR components that make up the six pillars?
The main components of the PNRR are: Water Management (C1), Forest and Biodiversity Protection (C2), Waste Management (C3), Sustainable Transport (C4), Renovation Wave (C5), Energy (C6), Digital Transformation (C7), Tax Reform and Pension System Reform (C8), Support for the Private Sector, Research, Development and Innovation (C9), Local Fund (C10), Tourism and Culture (C11), Health (C12), Social Reforms (C13), Good Governance (C14), Education (C15), and REPowerEU (C16).
Distribution of allocated funds
Distribution of allocated funds by each component
Distribution of allocate funds by each pillars
Current status of PNRR projects
Components
Allocated budget
Execution budget
Number of investments
Number of reforms
Number of milestone and targets
Structure
Allocated budget
Execution budget
Number of investments
Number of reforms
Number of milestones and targets
Descriptive statistics
Histogram
Allocated budget
Execution budget
Degree of absorbtion
Number of investments
Number of reforms
Number of milestones and targets
Boxplot
Allocated budget
Execution budget
Degree of absorption
Number of investments
Number of reforms
Number of milestones and targets
Current status
The final version of the PNRR plan is the one approved in November 2025 and includes the latest adjustments to projects and financial allocations amounting to 21.41 billion euro.
Implementation status: by November 2025, Romania had received 10.72 billion euro from the total value of the PNRR plan.
The only payments made so far are:
pre-financing, and
the first 3 payment requests out of the total of 6 payment requests that can be submitted.
The fourth payment request, estimated at €2.62 billion, was recently submitted and validated by the European Commission (15.05.2026), the process being hindered by outstanding targets and milestones, as well as implementation deadlines.
The Figure presents the amounts allocated to each PNRR component, the amounts effectively spent, the absorption rate, the number of reforms and investments, as well as the proposed targets and milestones.
The Figure presents descriptive statistical indicators calculated for the analyzed variables. We observe that the average value of the allocated budget per component is 1338 million euro. We also observe that the difference between the mean and the median is large, reflecting the existence of components for which very large budgets were allocated.
We observe that the distribution of PNRR components by allocated budget is strongly right-skewed and leptokurtic (budgets corresponding to components such as Transport and Education influence the average allocated budget value). Therefore, the distribution of PNRR components by allocated budget is not uniform. There is a concentration of allocated amounts on certain important PNRR components (green transition (~41%) and digitalization (~21%), imposed by the European Commission in order to obtain financing).
The average value of financial execution is 520.82 milioans euro. We observe that the amounts effectively spent are not uniformly distributed, with several PNRR components dominating the absorption rate of the funds made available by the EU. Most components show limited progress in the absorption of EU funds.
We observe that the average value of the absorption rate is 35%, showing an approximately symmetrical distribution (the skewness coefficient value is -0.21, while the kurtosis coefficient value is -1.4, which is very low). Therefore, the absorption rate is slow to moderate, but far from the optimal value required for the successful completion of all projects.
Correlation analysis
The analysis of the relationship between the absorption rate variable and the variables: a) number of investments, b) number of reforms, and c) targets and milestones is presented below.
Execution vs. complexity
The analysis of the relationship between the variables absorption rate and number of investments highlights a weak inverse relationship (the correlation coefficient is negative and very small). We observe high variability in the area of low and medium values. Therefore, a large number of investments implies high operational complexity, administrative fragmentation, and coordination difficulties.
Reforms vs. execution
The analysis of the relationship between the absorption rate and the number of reforms shows that there is no relationship between these variables (no trend appears). This can be explained by the fact that reforms are legislative/institutional processes and do not involve immediate direct financial flows. Therefore, financial execution is not directly determined by the intensity of reforms, but rather by the implementation of investments.
Milestones and targets vs. execution
We observe that the relationship between the absorption rate and the number of milestones and targets is direct and weak. Milestones impose procedural discipline, stimulate progress, and condition the payments received from the European Commission. Thus, components with more milestones tend to be better monitored and, implicitly, better executed.
The relationship between the absorption rate or financial execution variable and the three structural dimensions of the PNRR components — number of investments, number of reforms, and number of targets and milestones — is presented above.
The correlation coefficient values
The values of the individual (Pearson) correlation coefficients and their interpretation are:
allocated budget – budget execution: 0.9158 (very strong positive). Projects with large budgets tend to have higher expenditures.
allocated budget – execution rate: 0.2211 (positive and weak). The size of the budget is weakly correlated with the execution rate.
allocated budget – number of investments: 0.2071 (positive and weak). There is a direct relationship between the allocated budget and the number of investments.
allocated budget – number of reforms: -0.2210 (negative and weak). There is a weak negative relationship between the allocated budget and the number of reforms.
allocated budget – targets and milestones: 0.0480 (very small, close to zero). There is no linear correlation.
budget execution – execution rate: 0.5237 (positive and moderate). High execution expenditures tend to be associated with a high execution rate.
budget execution – number of investments: -0.0338 (close to zero). There is no linear correlation.
budget execution – number of reforms: -0.2536 (negative and weak). Higher financial execution is associated with a smaller number of reforms.
budget execution – number of targets and milestones: -0.0859 (very weak and negative).
execution rate – number of investments: -0.2838 (negative and weak). A high execution rate is associated with a smaller number of investments.
execution rate – number of reforms: -0.0553 (close to zero).
execution rate – number of targets and milestones: 0.0448 (close to zero).
number of investments – number of reforms: 0.2282 (weak and positive). The number of investments and reforms are positively correlated.
number of investments – targets and milestones: 0.7045 (strong and positive). A large number of investments is associated with a large number of targets and milestones.
number of reforms – number of targets and milestones: 0.6514 (moderate positive). A large number of reforms tends to be associated with a large number of targets and milestones.
Complexity affects the execution rate: thus, as the number of investments increases, administrative complexity also increases, which may reduce implementation efficiency. The analysis of the relationship between the absorption rate and the number of investments suggests that, as the number of investments increases, the efficiency of financial execution tends to decrease, or the absorption rate declines, due to increased operational and administrative complexity.
Structural complexity (a large number of investments) reduces execution efficiency by increasing coordination costs and operational risks.
Reforms do not directly influence execution: Financial execution is not influenced by the number of reforms, suggesting a separation between the institutional and operational dimensions. There is a separation between the institutional and operational dimensions of the PNRR because reforms are usually implemented at the beginning (adoption of laws, changes to the legislative framework, etc.), actions which do not necessarily involve spending money but do impact projects or investments — they may either inhibit or accelerate the implementation of an investment or project, while projects themselves are carried out over a certain period of time.
Reforms generally have an indirect impact on projects or investments because they create the legislative framework, but they do not generate immediate execution (funds do not come from reforms, but from the implementation of associated investments). For example, component C14 – Good Governance has a very small budget, while the number of reforms that must be adopted is very large. Therefore, reforms are necessary for the functioning of the system, but they do not represent a direct determinant of financial execution in the same way that the effective implementation of projects does.
Milestones have an accelerating role: The existence of a large number of targets and milestones is associated with a higher absorption rate, highlighting the importance of monitoring mechanisms. The positive relationship between the two variables suggests that the monitoring mechanisms and financial conditions imposed by the EU contribute to increasing the implementation rate and accelerating financial execution.
For the reimbursement of funds, the European Commission verifies the objectives (milestones and targets) achieved and specified in the financing request (accompanied by supporting documents) and approves the payment requests submitted by the government depending on the degree of fulfillment. Thus, the ministries involved are required to deliver results and constantly monitor the progress of each PNRR project.
Conclusions
The analysis of descriptive statistical indicators shows that the distribution of budgets is highly concentrated, with a few major components dominating total financing. At the same time, the execution of funds is uneven, suggesting significant differences in implementation capacity. With an average progress rate of approximately 35%, the PNRR is at an intermediate stage, but there are clear risks for components with low financial execution.
The real risks associated with PNRR projects are linked to delays that may lead to the permanent loss of funds. The amount received so far (representing approximately 50% of the total allocation) consists mainly of pre-financing and the completion of easier projects. More complex projects (those related to infrastructure and major reforms) risk not being completed on time.
Structural complexity (a large number of investments) reduces implementation efficiency because it increases coordination costs and operational risks, leading to a lower absorption rate. In contrast, milestones and targets (used as monitoring mechanisms) have a positive effect on the absorption rate, accelerating financial execution and conditioning reimbursement through the verification of the degree of fulfillment of objectives assessed by the European Commission.
Reforms do not directly influence financial execution (funds do not come from reforms, but from the implementation of investments), but they play an indirect role by creating the legislative framework that can either accelerate or inhibit project implementation. Therefore, in order to understand the real absorption rate of PNRR funds, it is necessary to separate the institutional dimension (reforms) from the operational dimension (investments, milestones, etc.).
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