The European Union will inject 140,000 million euros to face the economic effects that the health crisis has had on the Spanish business fabric. Companies that favor digitization, ecology or social cohesion will have preference when opting for these grants
The economic crisis derived from the pandemic has led the 27 Member States to make the unprecedented decision to provide the European Union (EU) with an extraordinary joint budget of 750,000 million euros to face the financial disaster. Of these, 140,000 million euros will go to Spain. Although the amount is already known, many other questions have not yet been resolved: When and how will this aid reach Spain? Which companies will be able to request it? On this question the webinar organized by HUB Banco Sabadell company titled European Recovery Fund: opportunity for Spanish companies, celebrated on October 20.
“At the moment we only have the headlines and we are missing a lot of small print, but some answers are already known, such as that this money will go, above all, to digital transformation or to favor the sustainability of companies ”, says Josep Lladós, Professor of Economics at the Universitat Oberta de Catalunya (UOC).
They are an extra injection that is included within the European Recovery and Resilience Plan, also called Next Generation EU. This figure is added to the EU’s ordinary spending plan of 1,074 million euros planned for the period 2021-2027, known as Multiannual Financial Framework (MFF).
Of the 140,000 million euros earmarked for Spain, 72,700 million euros will come in the form of transfers (direct aid), according to government calculations. The Bank of Spain, however, puts the amount at 65.8 billion euros based on its estimates. The rest (67,300 million euros or 74,200 million, depending on the valuation of one institution or another), will be in the form of loans.
In turn, these 72.7 billion of the European Recovery Fund They will be articulated through two instruments that will channel resources: the Mechanism for Recovery and Resilience – whose purpose is to support investment and State reforms to achieve a Recovery sustainable and that they can face ecological transition and digital -, which concentrates the bulk with some 59,000 million euros in non-reimbursable transfers, and the REACT-EU – a structural fund that comes to cover extraordinary expenses derived from covid-19, destined to support health services, policies active of job, social services … – from which Spain will receive 12,400 million euros. Of this last amount, some 10,000 million euros will be allocated to the autonomous communities, while the remaining part will be sent to the Ministry of Health so that it can distribute it among the different regions for the acquisition of vaccinations, the reinforcement of primary care or the revocation of medical supplies.
This injection of money, equivalent to 11% of the Spanish Gross Domestic Product (GDP), will be delivered between 2021 and 2023. During the next two years, 70% of the total will arrive, while the remaining 30% will be distributed from 2023 It will not be until mid-2021 when the funds are expected to start arriving. “We must prepare for change and get going now,” says Cristóbal Álvarez, postgraduate professor at ESIC Business & Marketing School.
In the first instance, these European funds will be received by the central government and the ministries. Afterwards, its execution and distribution will be extended through the autonomous communities and, possibly, local entities that will have an active participation in the proposal and development of the projects.
Although at the moment there is no protocol that specifies how companies can apply for these funds, interested companies must present their projects or plans according to the calls launched by the ministries, as stated in the National Recovery and Resilience Plan published by the Government central on October 7.
While waiting for a specific date for this, initiatives have been launched by public and private organizations to advise companies. For now, the autonomous communities and some associations have opened information windows. This is the case of the Spanish Confederation of Business Organizations (CEOE) which, together with the consulting firm PwC, launched the CEOExEuropa digital platform in July to inform anyone who wishes about these funds for free. “Now we offer advice and when the bids are published from the ministries or autonomous communities we will work so that companies, large or small, can present their project and opt for aid,” they explain from the CEOE.
The chambers of commerce are also exercising information. “In times of crisis, the company needs support and accompaniment to know what is the best way to approach its future project. The companies that benefit must be prepared to later justify these funds in the terms required by the European institutions ”, explains Elsa Salvadores, vice president of the Madrid Chamber of Commerce.
Banco Sabadell is developing support and support plans specially designed so that companies can take advantage of this aid and make better decisions throughout the process. As it became clear in the webinar hosted by HUB Company and led by the deputy director general Blanca Montero and the chief economist of Banco Sabadell, Sofía Rodríguez, companies are so in need of information on the matter that registrations were exhausted in a very short time.
The objective of European funds is not only to support the economy with aid, but to contribute to its transformation. Therefore, industries that promote the digital sector, ecology, that promote social and territorial cohesion or Gender equality.