Article written by: Martino Da Col and Andrea Graziano
European countries have been among the most hit by the health, economic and social crisis brought about by the COVID-19 pandemic. The European Union, through the Multiannual Financial Framework (MFF), the Recovery and Resilience Facility (RRF), and other complementary initiatives, commits a total of €1.8 trillion to sustain the post-pandemic recovery and to improve the long-term prospects of Europe and its citizens. NextGenerationEU (also branded Recovery Fund), which adds €750 billion to the MFF, was agreed upon on 21 July 2020, becoming the largest stimulus package ever financed through the EU budget. By submitting a comprehensive national plan, every Member State is eligible to obtain funds to enhance resilience, mitigate impacts of the crisis, as well as support the green and digital transitions.
European Generation believes in the historical significance of this project, and realizes how big of an opportunity this is. Hence, we believe it is crucial, for all European citizens, to understand what national and European leaders are doing to seize such an opportunity. This is the final aim of this series of articles, which we have entitled “YOU are the Next Generation” as to underline the direct impact the decisions taken in the Recovery and Resilience Plans will have especially on younger generations, as well as the responsibility each and every one of us has in shaping the present and the future of Europe.
Spain is the 4th biggest economy of the Eurozone and second biggest recipient of the Next Generation EU funds. The Iberian country decided, for the first three years, to take solely advantage of the subsidies granted by the European Union without requesting any long-term loan, the reason being the postponement of three pivotal reforms to at least 2022. These necessary steps, namely the reforms of pensions, labor market and the national fiscal balance will take up a considerable amount of future European flows and represent a political challenge that the current government of Sanchez is willing to postpone. €69.50 billion thus will be coming into the form of subsidies (meaning funds that do not have to be paid back), 20 of which theoretically within 2021. Moreover, it plans on borrowing an almost equivalent amount for the 2024-2026 period. Spain has therefore achieved the highest subsidy surplus of the Eurozone (€43.1 billion): some may argue that this advantageous surplus is justifiable, being Spain arguably one of the harshest hit country by the social distancing measures and closures, with a 11% drop in production in 2020, the worst since the civil war.
With this in mind, the recovery plan, for Spain as well as for other economically weak countries like Italy and Greece, can be seen as of utmost importance to stir the countries towards the bridging of social gaps and the modernisation and recovery of their economies.
Spain has drawn inspiration from UN Sustainable Development Goals to draft their plan, while following the European Commission directives. As a result, the transformation and resilience plan, duly presented to the Commission on the 30th of April, presents the investment plan for the 2021-2023 period, along with the 100+ reforms that are going to keep Spain busy in the near future.
The plan has four “transversal axes”, namely principles on which the Recovery, Transformation and Resilience Plan is drafted and which will guide Spain in the implementation of the reforms in the years up to 2026, when all of the projects will have to be up and running.
The first, a Green Spain, emphasizes the importance of increasing sustainability of the productive sectors, of stopping ecological deterioration in the country and promoting less impactful infrastructure; all while promoting a legal framework that encourages these steps.
Secondly, a Digital Spain, aims at increasing the digitalization of businesses (especially SMEs and start-ups) and the industry while training the entire population to the digital world.
The third axe is Spain, a Country Without Gender Gaps. Following the first she-cession in the records, the Iberian country emphasizes strongly on the bridging of the gender gap and the generational divide, which increased in the 2009 financial crisis and were cemented during this last pandemic crisis. Spain focuses on reducing barriers to an equal labor market, starting from education. This is a fundamental step for a country with the highest youth employment in the continent and a gender gap index of 0.778.
Finally, we find the last axiom, namely a Cohesive and Inclusive Spain. This last principle encourages a mixture of employment and social policies and budgetary stability as recipes for reducing inequalities within the country (young-old, urban-rural, male-female) and achieving sustainable growth.
A major emphasis was put on the necessity to mobilize private investment starting from 2021, says the vice president of Spain and minister of the economy Nadia Calviño. With this regard, the government has already borrowed €27 billion in advance, so as to enable strategic sectors to beat the European competition.
The structure of the plan consists of a list of ten priority policies, called structural reform levers which, for organizational and comparability reasons, we will divide in 3 macro areas.
Sustainability and green transition
Three priority policies distinguish thems