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The Recovery Plan: Between Its “Sequential” Layout and Final Cost Problems

Applied Economics Research Foundation (fedea) in a report released this Monday highlighted the contrast between the “coherent” rollout of the recovery plan and problems with final costs. The think tank notes that almost 70% of the initially planned amounts of European funds have been implemented, but calculates that the final implementation will be 30%-40%.

“Since the start of the recovery plan from the summer of 2021 until now, almost 70% of the originally planned expenses have been implemented (through aid calls and tenders for contracts or transfers to autonomous communities), which means a “growth rate”. 23% per semester, which would in principle correspond to the original plan (without additions) in 2023,” he explains. Angel of the fountainExecutive Director of the Foundation.

The government recently announced that the call for €22,000 million has already been settled. “Very important progress has been made in the implementation of PERTE [Proyectos estratégicos para la recuperación y transformación económica]Fedea’s economist admits.

“With the new call, the volume of mobilized resources almost doubled, from 6,650 million euros in June to 12,300 in December,” he continues. “If we exclude from the denominator the PERTE chip, which is still being developed and will be funded by the recovery plan annex, the PERTE start rate (61%) is close to the plan’s totality. (69%)”, he explains in detail.

However, in terms of budget execution, “the situation is more difficult,” notes Angel de la Fuente. Official figures on implementation show a good balance, at 85% compared to 2021 and 2023 budget expenditures. However, “in many cases, this only means that these resources have started their journey to their final destination, which may involve several transfers between administrations or before reaching the public institution that will ultimately be responsible for managing the relevant calls or tenders”.

For this reason, this expert advises to distinguish between the temporary execution of the recovery plan funds and the final execution or final spending, “reserving this last term for the final recipients of aid or companies making tender investments. The first corresponded to transfers between administrations or public institutions en route to the final destination.

“We have very limited information on the ultimate performance of European funds,” he adds. “Available data and estimates point to an allocation of between 0.6 and 0.8 points of GDP per year, and an even lower allocation level, which represents around 30-40% of what was expected at the time,” he concludes.

“Difficulty” in concessions

Just a few weeks ago, a report by EsadeEcPol-EY Insights, an observatory of EU next-generation funds, stated that “it is possible to confirm that the pace of [en las convocatorias] It has been more important in recent months.”

“As I said, the benefits are still coming at a slower pace, depending on the administrative procedures that require more complexity and therefore a longer period of completion,” he concluded.

Fedea’s report includes other reasons that may have contributed to the slowdown in final costs. “The experience of the most advanced PERTE shows some difficulties in attracting applications of sufficient quality to exhaust the available aid, especially in calls from companies,” he says.

“Presumably, in order to mitigate these problems, the government is starting to revise the main orders of some large projects to simplify the necessary conditions and make them more attractive for companies,” he notes.

Adding a recovery plan

At the end of 2022, First Vice President and Minister of Economy Nadia Calvino presented the main features of the project to add to the recovery plan. “This is the second stage for the full deployment of European funds, which corresponds to Spain,” he defended. 160,000 million in total, which will increase the level of GDP (gross domestic product) by 3 percentage points until 2031.

Source: El Diario





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