design ORGANISATIONAL AND ENVIRONMENT/ Laura Bello

"We are living through one of the variants of the greatest crisis the world has suffered in recent decades, especially in terms of its global impact. We have before our eyes a major economic crisis and we do not know very well what its magnitude will be", Ignacio Ferrero introduces the discussion. European institutions have come together to provide a cost-effective response, much more forceful than the one given in the 2008 financial crisis," he adds. 

One of these economic recovery mechanisms agreed by the EU in the face of the current crisis was the Next Generation Funds, and it is the main topic of the seventh cycle "Stop & Think" of the University of Navarra. To talk about how Spain will implement the funds, Ana de La Cueva joined the conversation with the Dean of Economics, the administrative office of State of Economics, Ana de La Cueva. The Madrid-born economist has been in public sector positions for more than twenty years and in the latter since 2018, being the head during the pandemic of the Spanish economic recovery strategy.

The pillars of the Next Generation are "recovery, resilience and strengthening the welfare state, with the goal to make Europe greener, more digital and more resilient". In order for countries to access the funds, they must draw up a strategic plan and be C by Europe. In the case of Spain, the EU allocated "140 billion euros, due to the magnitude of the pandemic that the country experienced", explained administrative assistant .

design of Plan Spain

There is a first doubt that arises when thinking about the plan, and that is who the budgets will be allocated to: "In Spain, 13% of GDP depends on tourism, perhaps the sector most affected by the crisis", said Ignacio Ferrero, who wonders whether "priority will be given in the distribution of funds to a specific sector, for example, the tourism sector on which the Spanish Economics depends so much". To which the administrative assistant affirmed that, "the plan is designed in a transversal way, not just in one sector, because it is the ideal opportunity to transform the Economics and our way of producing".

Therefore, the strategy aims to address "the major weaknesses that the pandemic has revealed, including: the functioning of the labour market; the lack of training; the digital transformation and of course a part aimed at industry and making sectors such as tourism more resilient and sustainable".

However, the emphasis was not only on sectors, but also on the growth of different types of companies. The administrative assistant said that one of the reasons why the country has been so affected by the crisis is because of the size of its organisations, which is why it is "necessary for one of the reforms to be a law on business creation and growth". As a result, SMEs have been quite affected and in the Spain Plan, "there are elements specifically aimed at these companies, both in the areas of renewables, energy, waste, Economics circular, tourism, and industry is a part of the productive fabric with a huge need for digitisation and growth," explained de La Cueva.

In the process of strengthening companies, de La Cueva adds that: "we have seen the need to collaborate with the private sector and especially with financial institutions as important, so that we can take advantage of the knowledge that the latter have of the needs of many other companies and make a joint work for the benefit of all". As soon as the plan is structured, companies will be able to submit calls for proposals to participate in the projects already proposed by the government.

Investment in renewables

The conversation continued with one of the main themes of the Next Generation Funds: "Spain is an attractive country to invest in renewable energies", says Ignacio Ferrero. This is evidenced by data from the International Agency Irena, which states that this sector increased by 7.9% in Spain during 2020, and Spain is part of the top 8 economies that currently invest the most in this sector. "Around 20% of the plan will go to development in this sector",

A year and a half ago, the National Integrated Energy and Climate Plan had already been agreed, designed to reduce emissions, penetration of renewable energies and energy efficiency. This is now being strengthened with the recovery plan, which, according to administrative assistant , is estimated to "increase GDP by 8% by 2030". An achievement that will be given among several reasons: "If included in the plan the training, because there are many sectors with production, but need workers with the necessary technical training to carry it out," he adds.

Evolution of ERTE

Another topic that came up in the conversation was the ERTE, as described by Dean: "Its application is considered to be one of the most effective for the solvency of companies during the crisis". However, he adds: "It also has a negative side because of the fatigue caused by a prolonged ERTE, and the concern that in many cases it will end in an ERE as has happened with several financial institutions".

Ana de La Cueva, responds to the concern: "In Spain, during the confinement, 3,400,000 people were sent to ERTE, as an instrument to stimulate companies, and what shows us that it worked is that right now there are 650,000 left, that is to say that the majority have managed to continue working, training and finally re-establishing their work space". However, he assures that they are concerned, "to be adjusting the regulation to the needs of each moment, to prevent it from becoming an instrument that is no longer useful. For example, at the beginning of the pandemic, companies were encouraged to have a worker on ERTE, then in the de-escalation period, companies were exempted more for reincorporating workers than for keeping them on ERTE; then we have adapted the incentives more to some sectors than to others". The ERTE measure is intended to remain within the strategic plan, but "in an efficient and sustainable way", he adds.

Research support

Given the relevance of having this conversation at the University of Navarra, and being leaders in Spain in the generation of academic content, Ignacio Ferrero closed the round of questions with the question of what the government plans to do with the funds to promote research as "a fundamental engine of transformation". For the administrative office of State of Economics it was a pertinent question because: "for two years now we have seen that investment in the public, private and research research and development is one of the country's shortcomings".

For this reason, the economist assures that, "in the recovery plan there are 3.8 billion earmarked for investment in the science system and research, which will serve, among other things, for: public and private funding, mechanisms to facilitate and simplify administrative processes for researchers, and to reach 2% of GDP at research and development".