On April 30, one year has passed since Spain formally submitted the Recovery, Transformation and Resilience Plan to Brussels. A year later, the success of the start-up of the Recovery Plan, the European Commission’s disbursement of 19,000 million for public coffers or the fulfillment of the first milestones and committed objectives coexist with a slow process of effective arrival of the funds to the real economy, doubts about the effectiveness and efficiency of some of the financed investments, as well as some uncertainty and caution about some of the reforms that are materializing. And, in this context, the economic consequences of the Russian invasion in Ukraine and the rise in inflation once again threaten the recovery.
After the important advance that the beginning of the deployment of the Spanish plan has meant, the first to receive pre-financing and the first European disbursement, we are in time to reinforce that initial impulse, correct the defects and enhance the virtues in this first year of execution of the recovery mechanism, to promote the transformation of the economy, while contributing to the process of European political and fiscal integration. The addendum to the plan, in preparation to incorporate the 80,000 million euros of loans not yet requested, as well as the incorporation of an additional 4,000 million in transfers, due to the worse performance of GDP in 2021 compared to what was initially forecast (which will raise the plan to 154,000 million), could be a great opportunity.
Apart from updating and expanding the plan, prioritizing and reinforcing actions aimed at reducing energy dependence and promoting reforms on the supply side, which will help mitigate the impact of shock caused by the Russian invasion of Ukraine, we are in time to give a new and definitive impetus to our country plan. In time to reinforce the political, social and territorial consensus around the definition, execution and monitoring of the plan; expand the ambition of the committed reforms and their alignment with the recommendations of the European Semester; reinforce the mechanisms for dialogue and co-responsibility between the different levels of Administration; continue accelerating the digitization of administrative procedures for the execution of investments; maximize the use of tax incentives as a channel for channeling funds, or incorporate other investment projects in human capital with a high capacity for absorbing funds linked to structural reforms (training and apprenticeship bonus, business aid for financing individual accounts of capitalization that promote labor mobility, or the promotion of a national profiling platform, reskilling/upskilling and labor intermediation, for example). In time to expand the participation of the financial system in the channeling of funds and strengthen the mechanisms of transparency, dissemination of information and communication of results, among other measures.
It is a great challenge, but we cannot miss this extraordinary opportunity offered by the European integration project, this time through NextGenerationEU. This anniversary that we are celebrating should commit us to giving a new and definitive impetus to our country plan.
Chus Escobar and Juan Pablo Riesgo are partners at EY.
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