Can Spain?

by Cristina Fuentes Antrás & Alberto Domingo Bayarri

On October 7, Spanish PM Pedro Sánchez presented with great enthusiasm the country’s Recovery, Transformation and Resilience Plan. Under the headline Spain can, this document is a roadmap that sets out guidelines for economic and social transformation after the ravages of the coronavirus pandemic. Specifically, it explains how the European recovery funds - Next Generation EU - will be used: €750bn out of which Spain is set to receive €140bn in 6 years, channelled both direct transfers and loans. The amount is not negligible – it equals 11% of the Spanish GDP in 2019 – and is certainly an opportunityto implement long due policies.

Green transition, digital agenda, gender equality and social and territorial cohesion are the main topics included in the ‘Spain can’ Plan. Almost 60% of the funds are to be distributed equally across three lines: Science, innovation, and reinforcement of the National Health System; Education; and Industrial modernisation. Green policies – nearly 20% of the funds –, social care and modernisation of the public Administration complete the framework.

The Spanish Government aims to commit the nearly 72,000 million transfers in the next three years to speed up economic recovery. Indeed, the General Budget for 2021 already includes 27,000 million from the EU plans. This poses a complex scenario as it requires the creation of a whole new infrastructure to channel a significant amount of funds in an extremely short period of time. Whether or not the administration will be able to meet the challenges ahead by increasing its capacities and efficiency at the same time are key issues to be discussed.

The management of these funds is another matter of high-level political debates. The national Government plans to create an Inter-ministerial Committee supported by a multi-stakeholder Council to decide upon the allocation of specific projects, both at national and regional level. However, distribution of funds across regions isthe key in the Spanish political puzzle. The intended centralisation of resource management by the national Government, while in line with a wide-ranging national plan, creates some uncertainties on the channelling of funds to the regions and the use they will make of them. Still, as the implementation of most policies fall within the region’s remits, regional governments are understandably demanding a front seat in the process. In other words, the success of the strategy depends largely on the capacity for coordination between national and regional authorities, so an appropriate balance in decision-making will be required.

On the other hand, the allocation of funds to the General Budget, instead of channelling them through an instrument ad hoc, draws a blurred picture where it may be necessary to distinguish the origin of the funds and avoid duplicities. To speed up processes, the Government proposes the creation of a special regulatory framework -in terms of public procurement- for projects financed by Next Generation mechanisms. Bearing all this in mind, it is essential for all stakeholders that administrations are capable of implementing agile, standardised public calls which are governed by uniform technical criteria.

In the meantime, Spanish policymakers and stakeholders will need to collaborate to solve certain paradoxes. First, a national political agreement between the main political parties is still needed to give credibility to the political goal of achieving a long-lasting impetus for the country’s transformation. Secondly, although certain steps have been taken to ensure social dialogue in this process, the role of stakeholders can be further clarified and defined to ensure that no one is left behind.

"Spain can" is potentially able to bring about a promising future, provided that there are mechanisms that allow the administrations to take the most value out of the recovery momentum. All stakeholders, from companies to NGOs to individuals should be encouraged to participate in this transformative process. In terms of public affairs, the current setting requires a highly structured, well-planned yet flexible approach that enhances the ability of public administrations to direct their efforts towards high value initiatives. Those who can contribute driving value for public administrations will in turn benefit the most from this opportunity.

All in all, the success of the strategy will depend mainly on the willingness to reach agreements and involve all social agents, as only through political action guided by the principles of good governance, efficiency and transparency will it achieve its ambitious goals. In light of this intricate setting of administrations, funding mechanisms, shifting priorities and changing policymakers, being able to navigate well through them is key to unlocking innovation across many sectors in the coming years. RPP is ready to help you drive your efforts in an increasingly complex yet promising environment.

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