EU funds could create 60,000 jobs in Catalonia, says Catalan Government

The European Next Generation funds, created to combat the covid crisis and promote a change in the productive model, could contribute five percentage points to Catalan GDP between 2021 and 2026, and create 60,000 jobs between this year and 2024. This is the conclusion of a study prepared by the Generalitat's Finance Department and the University of Barcelona.

The report also concludes that the funds will have "persistent effects" on GDP in the medium and long term, as well as on private investment and wages. Specifically, it estimates that, in the medium term, private investment would increase permanently by 0.5 points of GDP (which would translate into an increase in demand for qualified professionals) and that this would increase real wages by 0.7%.

FAll these effects could be greater if the application of the funds were accompanied by structural reforms aimed at improving productivity, as explained by the All these effects could be greater if the application of the funds were accompanied by structural reforms aimed at improving productivity, as explained by Finance Minister Jaume Giró. With these eventual improvements, the impact of the funds could rise from 5 to 7.6 percentage points of GDP.

"The Government is clear about what these reforms are and we have already presented our reforms to the State," said Giró. The minister also explained that, for the moment, the State has ignored these suggestions.

More participation of regional governments

The director general of Economic Analysis and Prospects, Marta Curto, also asked that regional government have more of a say in the distribution of funds. If this were the case, the multiplier effect of European funds could be amplified, she said.

Giró complained that the same thing happens with European funds as with financing: Catalonia receives less than what it is entitled to. "The underfunding of Catalonia is counterproductive even for Spanish interests," he said.