Why have only 6,000 Spanish companies out of 3.7 million benefited from Next Generation Funds?

spanish companies next generation funds

More than 2 years have passed since the start of Covid and only 6,000 companies, out of the 3.7 million existing in Spain, have received funds from the Recovery Plan, the Next Generation, according to data from the Ministry of Economy.

Why have only 0.2 per cent of all companies in our country benefited? That is the mystery.

Three experts who took part in the meeting agree that, despite the interest aroused, the shortcomings are notable.

Among the main weaknesses, the lack of consensus on the implementation of the Plan stands out.

Juan Pablo Riesgo, partner in charge of EY Insights, explains that in the period from 2021 to 2027, Spain could receive up to four times more than in the previous period.

In fact, he points out that last year 24 billion was budgeted, "and what had been executed from the previous programme between 2013 and 2021, at the level of other European funds, was 20 billion". Therefore, this means that there is still an amount to be executed from the previous period.

"The problem is that the administration is neither four times bigger nor four times more efficient," he explains, so "we have to work in a different way to be able to absorb the European funds.

Nicolás González-Deleito, for his part, believes that there is still time to change the management model of these Next Generation European Funds, given that "we must know how to spend the money that comes to us".

Miguel Temboury, a state lawyer on leave of absence and former undersecretary of Economy under Luis de Guindos, now at the head of his own office, believes that there must be a change in the management of the European Funds. "The fact that the European Funds are not distributed is the biggest failure we can have as a country", he stresses.

According to Temboury, we need a specific body "to manage all this money coming from the EU".

Juan Pablo Riesgo, partner at EY.


Miguel Temboury considers that what would work best is an independent agency, a specific and exceptional mechanism that would work in a more agile way with the arrival of these European Funds.

State agencies have special budgetary regimes that allow them to carry over cash surpluses to the following year, which allows for more autonomous and agile management in this type of situation. "In any other state agency, if you haven't spent it, the budget is cancelled and lost," he explains.

In this way, "nothing would be lost, while at the same time allowing for specific governance, with all the actors involved and a more agile management", he points out.

This expert recalls that the initiative to centralise activities in an Independent Agency was already raised by Pablo Casado to Pedro Sánchez in his day.

In the opinion of this jurist, there is a need for an Agency that, as an exceptional specific mechanism, such as the arrival of these European Funds, works in a more agile way.

Nicolás González-Deleito agrees with the need to create an independent agency, which he believes would have helped to centralise activities and involve all the administrations. "We have to realise that the model that has been followed for tenders and subsidies is complex, both in its processing and in its subsequent awarding," he adds.

Another of the weaknesses in the management of these funds is the administrative procedures required for the publication of calls for tender for contracts and subsidies.

Miguel Temboury, State lawyer on leave of absence.


From González-Deleito's point of view, it is essential that there be better collaboration between these administrations and a change of orientation for greater flexibility in this type of management.

"As a general rule, the administrative apparatus is slow, unless they adopt other measures to speed up their activity, without diminishing the guarantees that prevent the misuse of European funds and any signs of corruption," says the expert.

This expert also speaks of the dispersion that exists at the level of the various bodies that manage these issues, adding further complexity. "Nobody knows how these types of entities work. It is a question of the funds being distributed and reaching the recipients," he reiterates.

This problem is also pointed out by Riesgo, who considers that next month thousands of companies could be receiving benefits from a different implementation of the measures, rather than through calls for tenders and subsidies, which can take almost a year to process.

In his opinion, there are two issues to be implemented, one of form and the other of substance.

As for the question of form, he considers that it is difficult to implement a country plan in which all the public administrations are involved unilaterally". He pointed out that in countries such as Italy, where reforms were agreed with Parliament, they were easily approved.

In Spain, 50% of the investments are programmed to be executed by the Autonomous Regions, however, this expert points out that these entities had little participation in the Recovery and Resilience Plan submitted to the EU.

"This is another opportunity to change the way we act," the expert stresses. Money has to be spent here, the problem is that the mechanism for managing subsidies and tenders is not very agile," concludes Temboury.

Nicolás González-Deleito, partner in Cuatrecasas' Public Law Department.


At the same time, Riesgo is in favour of new instruments to transfer public resources to the productive fabric, tax incentives and deductions or reductions in Social Security contributions. "The Treasury and Social Security are the most digitised administrations, you can reach the productive fabric immediately," he says. "Tax incentives can be operational in a month and generate benefits," he explains.

On the other hand, he points out that a complementary measure "would be to incorporate the financial system as a channel for funds". He gave the example of the CAP, which reaches hundreds of thousands of farmers by means of a flexible mechanism for managing funds through the financial system. "It could also help to channel European funds".

Temboury is also in favour of promoting tax incentives.

González-Deleito also clarifies that some of the companies with which Cuatrecasa collaborates are concerned about the high level of documentation required and the slow management of these matters. He points out that "it is even more complicated if we are talking about an initiative of groups of companies".

As for the PERTES, one of the key elements of this recovery programme, this expert explains that "the criteria for awarding these programmes are not clearly known, nor how many are going to be implemented".

In his opinion, the delay in the distribution of European public funds was foreseeable.
Source: confilegal.com

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