EU Recovery Fund: Can Spain Reshape Its Economy?
Spain is one of the countries that are known to hold technological and economic growth in high esteem. This is why it has put all it could afford into making the country one of the most sought after. Among the development Spain is looking forward to making is the innovation of the electric vehicle, which aims at modernising the automobile industry. This development would help to preserve the industry in the same vein. This is the major reason Spain’s prime minister Pedro Sánchez and King Felipe VI’s visited in May the carmaker in Barcelona.
The project is the country’s attempt to utilise the grant of €70bn offered by the EU as a Covid 19 recovery fund. It took the country about four months to develop this idea, and if all things work right, it should be disbursed in 2022.
To What End Is Spain considering this Innovation?
With this opportunity;
- Spain expects to make one of the most conspicuous economic transformations.
- They will be using the best opportunity since its joining of the European Community over three decades ago.
- The plan, which is seen as a test run, may become a major project fitting for the EU’s overall €800bn Covid recovery program.
- It will serve as a measure to help modernise the European economy.
- Green technology will create employment opportunities for people, investments for the country, and reforms that will digitalise, educate, and train the people.
Other Effects of the Innovative Idea
These reforms are also expected to touch areas of reforms other than just investments. These reforms will touch areas such as tax. Apart from that, pensions will also be affected and are expected to help boost the economy. This is all based on predictions as Spain looks forward to becoming the second biggest in the EU, following Italy. The conclusion comes with the estimation that the country will end up with €140bn, including €70bn in loans which Madrid is required to request at some point in 2023.
Criticism on the idea and usage of the funds
There are insinuations from critics that Spain might be missing the vital reason for getting such a huge amount of €800bn recovery fund. The reason is that many believe that Spain is using the funds to turbocharge the upcoming elections in 2023 instead of using it for the much-expected reforms.
It is important to note that Spain, which operates hyper-partisan political deliberations, is unlike other countries. For instance, Italy has a national unity government and has formed a consensus on its plan. However, Spain has no national consensus focused on how to use the funds. This could lead to the government’s irresponsibility in the long run if care is not taken, but it also gives room for flexible changes to the plan over time as the country sees fit.
How Spain plans to spend the money
Based on Spain’s plan, there is a laid-out structure on spending the recovery fund, and it goes thus.
- 110 Solar panels installation on Valencia’s judicial buildings this year.
- 102 planned investment which includes €3bn for an electric car initiative.
- €4.5bn on renewable energy
- €7bn to increase the energy efficiency of structures.
- 800,000 planned reforms, which include changes to
- Training programs
- €3.5bn is to cater to as many as 1m small and medium-sized businesses and allow them to go online.
Most of these resources will be disbursed in 2022.
What are the implications for Spain and the European community?
There is the possibility of Spain facing the risk of indebtedness next year if investors see that the government has not made significant progress in the aspects of reformation. If the government is still struggling to reduce the public deficit, it could be heading for an economic downfall.