The challenge of accelerating European aid

The Government has designed a dozen large tractor projects with EU funds to promote recovery and has authorized the use of 30,000 million, but has only disbursed 12,000 and faces the challenge of streamlining its execution.

In the tortuous journey that is assuming the way out of the economic crisis unleashed by the Covid pandemic, now marked by an inflationary pressure unprecedented in decades fueled by the invasion of Ukraine by Russia, Spain is subject to an extraordinary lifeline: aid European Unions of the Recovery Mechanism. Specifically, the country aspires to receive 70,000 million euros in non-reimbursable transfers and to obtain up to 80,000 million more in soft loans in exchange for meeting the milestones and objectives agreed with the EU in the Recovery Plan. At the moment, Spain remains at the forefront in complying with the promised structural reforms, which has allowed it to be the first to request and collect the funds, but it faces the challenge of accelerating the execution of the investments proposed to ensure that actually reach the real economy.

To date, Spain has received 9,000 million in advance and a first semi-annual payment of 10,000 million, while it has already requested a second transfer of 12,000 million and is finalizing an addendum to the Recovery Plan that allows it to access European loans. "The pace of execution is equivalent to what we expect from the flow of European funds," the First Vice President and Minister of Economic Affairs, Nadia Calviño, recently told the Senate, asserting that after "radically accelerating" the management of the funds since the middle from last year the objective is to reach the cruising speed of execution in this exercise.

Faced with the gradual rate of official income, the Government has opted to advance the budget, via debt, the use of 24,198 million in 2021 and 27,958 million in 2022. Overall, the Executive has already authorized the use of 30,316 million, 58% of the budget allocation. However, the payments actually made between the two years hardly exceed 12,000 million for now, of which the bulk only involves transfers between the cash of the General State Administration and that of the autonomous communities, responsible for executing nearly half of the aid.

Thus, behind the relevance of the large figures hides a certain slowness in the real execution of the investments, weighed down by a significant bureaucratic burden and a crossroads of accusations between the regions, which demand more co-governance, and the central Executive, which makes a call for unity and responsibility.

SMEs, for their part, criticize their difficulties in accessing calls and analysts such as Fedea assume that the money will not really reach the street until the end of the year.

In parallel, the Government has already designed 11 large Strategic Projects for Economic Recovery and Transformation (Perte), to which it plans to allocate some 30,000 million public investment, thanks to community money, and with which it hopes to mobilize at least as much in private funds. The Government has already approved nine of these Perte, those aimed at trying to get Spain to lead the transition towards the electric and connected vehicle (endowed with 4,300 million public); boost personalized precision health (900 million); accelerate the ecological transition with the deployment of renewable energies, green hydrogen and storage (ERHA, for 6,920 million); reinforce the agri-food system in a green and digital key (1,800 million); develop the public and private ecosystem of the new language economy (1,100 million); move towards a circular economy (492 million); support industrial and innovative capacity in the aerospace (2,193 million) and naval (310 million) fields and improve the management of water resources with the digitization of the water cycle (1,940 million).

In addition, the Government has proposed two other Perte aimed at achieving strategic autonomy in the field of semiconductors and chips (12,250 million) and moving towards a new social care economy.

Despite notable absences, such as that of a Tourism Perte that the Executive has ruled out, there is consistency in the bulk of proposed tractor projects, although it remains to be seen if they are capable of doubling their firepower by arousing the interest of companies.