A post by our Junior Consultant, Carmen Salvo, about NextGeneration EU, the European funds allocated to innovation and improvement, and the opportunities they offer for the Spanish economy.
The European Union continues to bet on progress. The latest measure adopted by the Commission is the approval of NextGeneration EU (NGEU), a program intended for the allocation of funds for innovation and progress, especially in the areas of energy efficiency, health and infrastructure. The multi-million-euro aid package, of which Spain will receive no less than 140 billion euros, represents an extraordinary opportunity to relaunch the country’s economy.
The Recovery, Transformation and Resilience Plan (RTRP) prepared by the Government to channel the funds includes a series of projects the aid will be destined to and which meet the Commission’s objectives, although the details have yet to be specified. For the time being, the Government expects to destinate 26,634 million euros to projects during 2021 and thus accelerate investment, although the first payment from the Commission (5.9 billion euros) is not expected until April of this year.
The Commission’s condition for granting the NextGeneration EU fund is the presentation of detailed projects and a strategy for the implementation of the different milestones, for which strong institutional mechanisms are necessary. Spain, which is at an intermediate level in terms of public sector efficiency, has room for improvement. For the moment, the management of the funds will be the responsibility of an Interministerial Commission led by the President of the Government, and it is expected that there will also be some involvement from the private sector.
Another requirement for access to the fund is the implementation of measures to ensure that the effects of the projects presented will be maintained in the future, thus conforming to the European Semester. In other words, the objectives of the RTRP cannot be 2021-specific, but must have a certain projection. In the case of Spain, a reform has been recommended in two areas: encouraging the signing of permanent contracts and ensuring the sustainability of the pension system.
In summary, the NGEU is presented as a great opportunity to boost the Spanish economy and favor the growth of many sectors. In addition, the program is fully committed to progress and innovation, but to get the most out of it, good project management and expense planning will be necessary. The program, which will undoubtedly have a very positive impact on the European Union as a whole, is a unique opportunity to relaunch the economy in a period of health crisis.
Many companies are going to benefit from the EU’s investment in Spain – you could be one of them! Contact us to find out how.