What does the new reconstruction fund proposed by the European Commission mean?
It is a package of non-repayable loans (non-repayable) and loans with an added value of 750,000 million, of which Spain would correspond to about 140,000 million. The fund is intended to reactivate the economy at the end of the crisis associated with covid-19. The money will go to projects that favor tourism, commerce, energy, industry, transport and construction.
How will the plan be financed?
If the Commission’s design is approved, the resources would be financed through debt issues backed by the Community Budget and with long-term maturities. Likewise, the Community Executive proposes the creation of new own taxes, including a tax on imports of products whose manufacture generates CO2 emissions and a “eurotasa” that would be taxed by large multinationals.
What conditions must beneficiary countries meet?
In principle, Brussels proposes a loose “conditionality”. This is, contrary to the rescue plans of the previous crisis, there would be no reinforced vigilance on the accounts of the countries and their economic policies, although the governments should make commitments to undertake reforms, as is already the case nowadays. .
What is the Just Transition Fund and how does it change?
It is one of the instruments to support the territories that will lose employment and economic activity due to the closures of thermal plants, mines and other industries associated with the European commitment to eliminate CO2 emissions. Until now, the European Commission had proposed a fund of 7.5 billion euros between 2021 and 2027, of which 376 million euros corresponded to Spain. The new budgetary framework proposed by Brussels entails a five-fold increase in the size of green funds, to 40 billion, in addition to reinforcing other financial instruments. The Commission is now proposing € 1,807 million for Spain. Asturias may be one of the Spanish regions most benefited by the subsequent distribution within the country
What route do the new plans lack to be approved?
Both the new reconstruction fund and the green funds and the whole of the new budgetary framework must be approved by the European Parliament and unanimously by the 27 countries in the European Council. This will require an arduous negotiation process in which the main obstacle may be the qualms of a group of four countries in the North (Holland, Austria, Sweden and Denmark), in favor of replacing direct aid with loans subject to stricter conditions.
The plans recently presented by the European Commission to stimulate the economic recovery after the covid-19 crisis and also to face the energy transition are seen by the Asturian Government and by the social partners as an opportunity that the region should “take advantage of maximum”. Although such initiatives still have to overcome an arduous political process before their approval, the Asturian Federation of Entrepreneurs (FADE) yesterday called for “act now”, promoting projects, so that the region “does not lag behind” in European reconstruction . The regional executive assured that, in the case of the decarbonisation process and aid to compensate the affected regions, Asturias is already identifying concrete strategies and actions to make money profitable that Brussels will offer.
The turn that the EU’s budgetary policy would take in the event that the proposals outlined on Wednesday by Úrsula von der Leyen, President of the Commission, are approved, includes two far-reaching decisions that open up great expectations for Spain and, in one of the cases, particularly for Asturias. On the one hand, the proposal for a recovery fund endowed with 750,000 million assigns to Spain 140,000 million between non-repayable aid and loans, an amount equivalent to 11% of the national gross domestic product (GDP), money that, according to the provisional design, will come largely to the tourist, commercial, energy, industrial and construction sectors. At the same time, the Commission is proposing a much more ambitious deployment of resources to help regions affected by the energy transition (closure of power plants and coal mines). The so-called Fair Transition Fund (“green fund”) would go from 7,500 million to 40,000 in the period 2021-2027, which, according to the first estimates, would put Asturias in a position to receive between 500 and 800 million euros.
“It is not just a matter of economic amounts, but it is necessary to study in detail the new indicators that are proposed and the distribution between countries, to see how they affect Spain and Asturias,” Belarmina Díaz, general director of Energy and the person from the Asturian Government who coordinates the policies related to decarbonization. “Prudence must be maintained because what is on the table is a proposal from the European Commission. We continue to ask the Spanish Government and parties with representation in the European Parliament to work in favor of the proposal to expand the Just Transition Fund” he added.
According to Belarmina Díaz and the Director General for European Affairs, Javier Vila, the Asturian Administration is already working “to develop strategic lines” and “to identify good projects” to attract aid and European financing for the regions most affected by the energy transition. Vila also said regarding the European reconstruction plan that its creation and endowment (750,000 million, with priority for Italy and Spain, the countries most affected by the coronavirus) is “good news”. However, he stressed that it is still unknown how this fund will be distributed within each Member State.
FADE urged the region to react without delay in order to get the best possible return on the resources that Europe finally offers. “The increase in funds for the just energy transition is especially positive for Asturias. It opens up an opportunity for us that we cannot stop. We must act now, Administration and companies to fight so that Asturias does not lag behind. It will not be easy, but we must fight it with all our strength, “said Belarmino Feito, president of Asturian businessmen. And he stressed in relation to the European plan to deal with the crisis of the covid-19: “We wish that in Spain those resources have economic reactivation as their main and priority objective. For this, it is necessary to make the company the main recipient of the themselves. “
“Welcome the greater ambition and commitment of the EU, because the challenge is enormous, and it was something that we had been demanding from the union. The future of Europe will be in doubt if it does not respond now to the economic and social devastation caused by the pandemic. With decision, generosity and urgency. The funds must be distributed in solidarity and caring for people, because we cannot leave anyone behind, “said José Manuel Zapico, head of CC OO in Asturias. The region “has to rise to the challenge,” he added.
Javier Fernández Lanero, Ugetista leader, stressed that, especially thanks to the expansion of the so-called “green funds”, “more money will come to Asturias, very important resources for tremendously urgent needs that we have” in different sectors. But he also warned: “We are also going to need direct aid to the industry, which generates stable employment and is the driving force behind the rest of the activities. We will play a lot in a lot in the coming months.”