The European Funds Programme New generation EU was designed to revitalise the economies of the European Union member countries, particularly after the impact of the Covid-19 pandemic. One of its main objectives was to increase productivity, which is key to ensuring sustainable long-term economic growth. However, Initial analyses suggest that the impact of these funds has been more moderate than expected, at least in the short term.
According to the General Council of Economists (CGE) and the Foundation for Applied Economic Studies (Fedea), during the 2021-2022 biennium, real productivity increased by only 0.5% per year. This modest increase raises questions about the immediate effectiveness of the program and the factors that influence the slow improvement in productivity. Yes ok The positive effect of the funds is undeniable In some sectors and regions, the pace of growth was weaker than expected.
Several factors explain this limited performance. On the one hand, The implementation of projects financed by European funds has encountered bureaucratic difficulties and delays in its implementation, which have prevented a rapid realization of its benefits. On the other hand, the structural nature of many problems affecting productivity in various European economiessuch as labor market rigidities or digitalization gaps, require more time. In addition, the study recently published by the Juan de Mariana Institute (IJM) also analyzed the development of the program New generation EU in Spain between 2021 and 2023, highlighting important deficiencies in the management and execution of fundsSpain was due to receive 163 billion euros, but only 45.5% of payments were made in 2021, 39.6% in 2022 and 27.3% in 2023. only 20 billion actually reached the real economywhich is 75% less than expected, showing implementation below expectations.
Data from the General Intervention of the State Administration (IGAE) show a progressive decrease in government authorizations for the use of European funds New generation EUfrom 91.4% in 2021 to 79.2% in 2023. This has led to a reduction in committed funds and recognized obligations, which have also decreased significantly during this period. The report highlights several key issues, such as inefficient execution of funds, lack of transparency, excessive bureaucracy, limited real economic impact, distortions of the economy and the implementation of counter-reforms.
Experts also suggest that the impact of these funds could vary across regions and sectors.. In those that were already more advanced in terms of digitalization and sustainability, the funds New generation EU They have been able to accelerate the necessary transformations, but in other areas, which are more backward, the process of adaptation and absorption of these resources could take longer.
Strengthening strategic sectors
The president of the General Council of Economists, Valentín Pich, and the director of Fedea, Ángel de la Fuente, propose in a joint document measures to reverse this situation, such as promoting the knowledge economy and strengthening the pillars of education, research and technology. development. Both economists agree that it is not enough to increase spending in relation to GDP, but that it is crucial to redirect these resources towards intelligent investments in different forms of capital, including human, technological and social, both in their tangible and intangible dimensions.
Another point highlighted by Pich and De la Fuente is the relevance of ensuring a solid institutional environmentwith legal security and political stability, to attract investment. In this context, improving financing channels for companies, particularly those in the technological field, is presented as a key priority.
Likewise, economists highlight the need to promote a greater transfer of knowledge between universities and companies, as well as a productive structure that values and encourages human capital. They also propose strengthening degrees in STEM fields and developing training programs within companies, in order to specialize the workforce in sectors with high potential for future growth.
Public sector monopolizes funds
The allocation of public funds has generated distortions in the functioning of the market, displacing the private sector and causing a worrying increase in structural expenditure. State intervention has increased significantly, while private investment has declinedwhich raises serious implications for the economic growth model. The majority of European funds have been channelled to the public sector, with 80% of resources directed to various state entities and less than 20% to private companies. In a scenario where almost 80 billion euros have been committed in non-repayable aid, the government has allocated an additional 37 billion euros to structural expenditure, subsidies and grants.
The Juan de Mariana Institute proposes to stop the execution of European funds that have not yet been allocated and to promote a broad program of tax incentives to redirect resources to the private sector. According to the entity’s analysis, until June, the government has only committed 483 million euros in a limited line of tax incentives for R&D, which represents barely 0.6% of the total non-reimbursable aid of the Recovery, Transformation and Resilience Plan.
