European funds: uncertainties in the face of a historic opportunity

BarcelonaWill the European funds be the panacea to the economic crisis that some predict or, on the contrary, will they arrive too late? How many will reach the medium and small companies that make up the bulk of the Catalan business fabric and how many will be for large companies? In a debate held this week at the Ateneu Barcelonès and moderated by Antoni Bassas, the ARA brought together five expert voices on the subject: Joaquim Coello, member of Conext CAT-EU -the advisory committee on the funds of the Generalitat-; Ariadna Marín, CEO of the coatings company Coatresa; Jacint Soler, director of external relations of Pimec; Kilian Garcia, director of the international department of Foment del Treball, and Joana Artís, business consultant.

The objective was to analyse in detail at what stage is the approval and distribution of the Next Generation EU and what companies and administrations of the country have to do to obtain them and take advantage of them.

The design of the funds

22.400 million in the State budget for 2021

"Spending this money is not at all simple", assured Coello, who recalled that Spain has included 22,400 million of the approximately 70,000 million it has to receive in direct transfers in the 2021 State budgets. "This money will go to two purposes. The first is to repair the damage of the crisis, help companies, pay furlough schemes, etc.. There is a second part, 10,500 million, which will go to create a new economy - and this I think is the amount that interests us most - that is, to create a new, more efficient economic system", Coello added.

The concern, however, is whether they will really help. "The amount of money available to the public administration per tender is important, but it would be much more important for this money to reach the productive economy", said Kilian Garcia. "The project presented by the Spanish government is quite well worked out because there has been a previous discussion with the Commission", he said, although he recalled that it can still undergo changes, especially in the reform plan that conditions the obtaining of resources.

The role of the Generalitat

The management of the funds will be controlled directly from Madrid

The hopes that the Catalan government or the city councils could have some kind of control over the direction of the money vanished a few months ago. "The money will be distributed from Madrid, that is, it will be given to the autonomous regions for predetermined things, but it will not be determined by the Generalitat", Coello said during the event.

"The most important thing the new government has to do is to define, within this money that Spain will receive, which projects we want to carry out in Catalonia", he added. However, is this useful, given that the decision-making centre is in Madrid? "If Catalonia does not express it, nothing will happen. If it expresses it and is not listened to, it can complain. Catalonia has presented good projects to the central government", the Government's advisor reiterated.

The PERTE, the centerpiece

The Spanish government will give priority to large strategic projects

"A decree law was passed in December of last year, which establishes the way to speed up the distribution of these funds for projects called PERTE, which are projects of great importance", explained Coello. This is the case, for example, of the electric car or batteries.

In the PERTE, the largest companies will play a central role, but Garcia also recalled that "a PERTE has to be present in more than two autonomous communities, has to have a very clear tractor effect, cover the entire value chain, more than 40 million euros and that 40% of the companies have to be SMEs".

The pymes, forgotten

Employers bemoan low funding for smaller companies 

"We did not like the fact that the programme dedicated to SMEs within the Spanish recovery plan is relatively small, 4,800 million euros out of a total of 72,000 million", lamented Jacinto Soler. However, he was hopeful that "SMEs can benefit as suppliers of other programmes included in the plan".

On the lack of money that will end up coming directly to small businesses, Soler highlighted as an example the digitisation program, which "has a lower allocation than the digitisation of the administrations, when SMEs have three times more workers than the public administration" in Spain. In this aspect he agreed with Garcia: "We see with good eyes all that is the digitisation of SMEs with 3,000 million euros, although, if you divide, in the end are 2,000 euros per company. What digitisation process can be carried out? Surely a quite small one", said the director of Foment. The two representatives of the employers' associations agreed in pointing out that the Spanish government is not prioritising small companies as, according to them, it would be convenient.

"The role of SMEs would have to be even bigger within the recovery plan that the Spanish government has sent to the European Commission. As for SMEs, everything that can be done is not enough and the money has to reach them as soon as possible", Garcia said. "We would like to see a guarantee that the leading companies will count on SMEs and that the calls for proposals are really transparent, so that not everything ends up being decided in the council of ministers", Soler added. 

General uncertainty

Companies do not know how or when to ask for the funds

"There are too many unknowns today", said Soler. An opinion shared by all the speakers. "The normal, everyday SME, the majority in Spain and above all in Catalonia, what they are seeing is a wait and see approach. Everything is very open, very scattered", said Ariadna Marín, who asked for specifics on "what exactly" the Spanish programme will be about. "Sustainability? OK, but what will we specify? If I want to buy solar panels, when do I do it?" she added.

"The Spanish government's programme tells us that we will have greener housing, electric cars, faster communications, that digitalisation will be better, but it doesn't explain how this will be done, and this is a big problem, because a plan has to explain which levers have to be used", Coello lamented. And Artís also agreed on the high level of uncertainty.

"An SME has limited resources, both personnel and financial, and wants to put them into what gives it the highest certainty of a return", he said. Even so, he believes there will be room to take advantage of the funds. "We haven't activated anything right now, but I don't have the perception that nothing will come to us, but that it will come to us for various sectors". Artís saw it the same way: "Almost everyone has a hole to get into, perhaps not directly, but also because of the public-private collaboration that will be possible at certain times".

Slowness

It will take more than a year for the money to reach the companies

 "I don't have a project as big as those of companies that can move more money to dedicate a certain amount of money or people from my team to work on things that you don't know how they will end up", said Marín.

According to Soler, the funds have "enormous delays". The agreement between the EU-27 was in the summer of 2020, but "the European Parliament did not approve it until December 16" and it was not until last February that the regulations were published in the official EU journal, he recalled. In addition, "the Spanish government and other states presented the plan on the last day, April 30, and now there are two months to comment on it with the Commission", which will lengthen the process until summer.

These delays are also changing the plans of some companies. "We are finding companies that are delaying investments waiting for the manna of this European money", explained Soler.