Money, money, money. Also in the European Union That the accounts come out is the basis of everything, and there they remain, on the table, the recovery funds that were approved in the middle of the pandemic and that they are prepared for a long-term view. “To transform Europe,” those who know repeat; but then the big question arises: How is the implementation of this aid by the Member States going? The key is not only in the form, celebrated by many, historical and perhaps replicable in the future, but also in the substance. This is how countries are using Next Generation funds, or what is the same, the Recovery and Resilience Facility (RRF, for its acronym in English).
Italy, Spain and Croatia are the countries that have met the most objectives of aid, according to Brussels in your mid-term analysis document which includes the use precisely of these funds. After a sharp drop in economic activity in the first half of 2020 due to restrictions related to the pandemic, in the second half of 2020 a “vigorous and synchronized” economic rebound begansummarizes the European Commission.
In this sense, at the end of 2022, the EU production volume was 3.2% higher compared to pre-pandemic levels, while It was estimated that the EU’s aggregate public investment-GDP ratio could increase from 3% in 2019 to 3.3% in 2023. In contrast to previous macroeconomic crises, public investment remained solid during the Covid-19 pandemic and the energy crisis, they add in the document. Furthermore, the resilience of the EU economy was tested again by the Russian invasion of Ukraine, a shock from which, Brussels insists, the Union is also recovering apace.
In February of this year, according to the report of the Community Executive, 1,153 milestones and objectives out of a total of 6,266 that had to be achieved by 2026 had been evaluated as satisfactorily met and the Member States had notified another 1,238 as completed. This represents a progress rate of approximately 38% of the total number of RRF milestones and objectives. (with 18% of all milestones and objectives evaluated as satisfactorily met). Around 75% of the milestones and objectives planned for the end of 2023 were assessed by the Commission as satisfactorily met or reported as completed by Member States.
Daniel Gilanalyst at The Political Room and EU specialistexplains to 20 minutes that “deep down when we talk about these things, about whether or not we have forgotten the importance of this aid, what we are obviously referring to is media attention. And as is logical, time has passed, Lots of news have been emerging in the world we live in and it has taken a fairly significant second place.“But also for an obvious issue, Gil clarifies, that the funds have been executed, “the large tranches of money are already being executed or have already arrived and it is simply no longer new.”
“Now, in terms of the State, Next Generation funds continue to play a very important role in the budgets of all the Member States of the European Union and will continue to play it until 2027 reallyand its reform processes as well,” summarizes the analyst, for whom “public opinion seems to have turned a certain page or has simply assumed it as something that exists, that it is there, that the European Union is putting money into its city ​​for parks, infrastructure or whatever, and little else, and they continue with their lives.” However, these reforms continue to mark, he concludes, the agendas of the Member States.
The funds continue to play a very important role in the budgets of all the Member States of the European Union
Italy, Spain and Croatia have met the highest number of milestones and objectiveswith 178 (of a total of 527), 121 (of 416) and 104 (of 372) milestones and objectives met, respectively. For their part, Belgium, Ireland, Poland and Finland are further behind, as they requested payments later than anyone else, in the Polish case due to blockages also by Brussels. The number of milestones and objectives met by Bulgaria, Czechia, Denmark, Estonia, Spain, France, Croatia, Italy, Cyprus, Latvia, Lithuania, Malta, Romania and Slovakia They were also studied later. Likewise, no milestone or objective initially evaluated as satisfactorily achieved by the Community Executive has been subsequently annulled by a Member State to date, recalls the European Commission.
All this leads to several lessons learnedassures the Commission. The recovery fund has enabled “an adequate EU policy response to the unprecedented economic and social crisis linked to the pandemic and the subsequent challenges.” The plan, they maintain in Brussels, has contributed to sustaining public investment in the EU. “Unlike previous macroeconomic shocks, Public investment in the EU has increased after the Covid disruption“, in a formula that can be repeated in the future for topics such as energy or Defense.
Together with its distinctive allocation key, which favors lower-income Member States but also takes into account the impact of the crisis, the non-refundable nature of the financial support provided (and the possibility of requesting additional financing in the form of a loan) allowed the fund to support the recovery and economic convergence of the Union’s economies. “The EU’s coordinated approach is also expected to provide substantial benefits in terms of contagion effects between countries,” they conclude from Brussels.
And then comes the million-dollar question: Will this formula be replicated in the future? “The EU has great challenges to solve in terms of competitiveness, in terms of infrastructure, energy transition, defenseand they can only be resolved with greater investment,” says Gil, who uses the Draghi report as an example to understand that things “have to go in that direction.” But it will not be easy. “There are States that do not see it that way, that “They have a fiscal margin that from their point of view they have achieved with a lot of effort and with a lot of fiscal prudence” and that is why they are not betting on joint debt issuance. Of course, Gil warns: “It will be a debate that sooner or later will have to be opened.” .
Three questions to… Vicent MarzÃ
Vicent Marzà (Castellón, 1983) has just arrived at the European Parliament and his agenda is so full that his arrival has had no room for adaptation. You already know what the new MEP from CompromÃs is coming to, who landed last June in Brussels from the Sumar lists. Between 2015 and 2022 He was Minister of Education, Research, Culture and Sports of the Generalitat Valenciana.
The EU’s agenda is very full for the coming years, right?
Yes, we also have to talk about policies that fight against mass tourism, we are seeing it there and its consequence with housing precisely. And social cohesion policies, policies that will maintain jobs in Europe. This therefore involves the protection of our industries and our services and sectors. Work so that there really is a European short chain regulation. That is, what is produced in all the European states is consumed within Europe so that we can maintain jobs. We must invest, in general, in the reindustrialization of Europe.
Listening to him, I sense that he believes that the EU should have more powers in housing matters.
Without a doubt, yes. It is not something that affects one Member State or two, it is happening across the board. It is a graphic example of how the speculative economy has become disconnected from people’s lives. Our lives are being speculated upon to the point that we cannot even have a house to live in. Without a house to live in you cannot develop your life.
At national and European level there is talk of major reforms, and this is what the Draghi report calls for. What assessment do you make?
There are issues in the report that we like because they are in line with what we have always claimed. More and greater European investment to not only reactivate the economy, but to transform it. Especially in the space of ecological and social transformation. We need greater reindustrialization, more green economy, more fair and sustainable economy. For that you have to invest funds. Outside, the neoliberal framework of cuts and zero public investments has proven completely useless. We also need a very powerful public sector that invests and it is time to do it now, which protects the sector.
