Sanchez unclogs system to ask for anti-pandemic funds for businesses

Projects eligible for European funds may receive 50% of the money in advance


The amount of money that will reach Spain from European funds - 140 billion - has forced the State to propose regulatory changes to make the access to funds by companies as agile as possible. The Spanish government is finalizing a law that aims to strengthen both public-private partnerships and the access to funds in order for companies to promote projects of a "strategic" nature.

The proposed draft states that the selected projects can receive up to 50% of the budget they request in advance in order to speed up the implementation, as Cadena SER advanced this Tuesday.

In addition, in order to reduce the necessary administrative procedures, controls and reports, the draft the Spanish government is working on is considering the operations' audit to not exceed five working days, since "the exceptional regime of urgent processing" will be applied to all contracts that receive European funds.

This would also mean that processing times would be halved, and requirements and reports would be eliminated, despite the fact that all grants exceeding 12 million euros will have to be approved by the Council of Ministers. Finally, there will be one log window (through a web portal), as the Ministry of Economy already advanced, for those projects interested in applying for funds.

As this newspaper previously explained, a new body called  Proyectos Estratégicos para la Recuperación y la Transformación Económica (PERTE) (which stands for Strategic Projects for Economic Recovery and Transformation) will be created. It will depend on the Ministry of Industry, and once the law is approved it will have three months to create a list of entities that will take part in the public-private figure that has to choose outstanding projects.

State agencies will also be taken over as public bodies, returning to public administration in order to achieve more "flexibility in management".

Political control of funds

Everything will go through Sanchez. The Spanish Prime Minister already informed the regional leaders in July, within the framework of the Conference of Presidents, that he would be in charge of leading the management of the recovery funds through an inter-ministerial commission. It seemed this commission was headed by Sánchez and 11 ministers, 10 from the PSOE and only one from Unidas Podemos, the Minister of Labour, Yolanda Díaz - which meant Podemos leader Pablo Iglesias was left out.

Until this Tuesday morning, this decision, which Iglesias knew about since last week, generated internal unrest in the Spanish government, and Iglesias' department hoped that the decision would be rectified. Despite this, in a press conference that took place after the ministers' council on Tuesday, the Minister of Finance, María Jesús Montero, confirmed that it will finally be the council of ministers who will control the allocation of funds. "These are express instructions from the Spanish President that are not included in the draft", Montero said. "The President already decided a few days ago that it was better this way, instead of creating an inter-ministerial commission", Montero insisted.

A technical commission will also be created to provide technical and legal support, and a monitoring department that will also depend on the presidency of the Spanish government. As for the work with the communities and sectors involved, the draft includes the creation of "high-level" forums and the will to recover the sectoral conference of European funds with the autonomous communities.

This is a draft of the future law that the Spanish government intends to approve this December in order to speed up the arrival of the 27,000 million euros expected from the European anti-pandemic funds, which are already included in the general State budget for 2021. In this sense, Montero insisted that the text is susceptible to changes.

The negotiations in Brussels

In fact, European funds are not ready. The recovery package that the leaders agreed on last July (750 billion euros over the 1.1 trillion euro EU budget until 2027) is still not a reality because negotiations have run aground in Brussels. After the great political agreement of the summer, several issues had to be discussed: on the one hand, the mechanisms that have to give the Commission permission to get into debt in order to get the money; on the other hand, the conditions linked to the granting of the funds in economic terms, the architecture and the amount of the European budget, and finally the linking of the money to the compliance with the fundamental principles of the rule of law (freedom of expression, judicial independence, separation of powers...).

All these issues have been discussed separately with the European Parliament, and also again with the capitals, which have to give their approval. However, both the Commission and the Council are proposing the negotiation to be a big block where all parties have to approve in order for it to start working. This has allowed countries that have more problems with the rule of law, such as Hungary and Poland, to block full approval of the funds because they are opposed to linking them with respect for the rule of law. In the face of the veto, the German Presidency of the Union has continued to negotiate behind the scenes, and on Tuesday German Foreign Minister Heiko Maas shed some light on the issue: "We are in the last phase of the negotiations. [...] I am absolutely convinced that in a couple of days we will be able to take decisions in order to release the money". The delay, however, means that in practice the fund will not be in place until next summer.

Has the Spanish government ventured too far in budgeting the European money if it will not be a reality until next summer? The plan provides for a retroactive clause that will allow businesses to apply for the money after it has been spent or budgeted for. To pay for it, the Spanish government has already said that it would issue public debt, which it would then compensate for with European money. In addition, it has 6.4 billion euro in advance for 2021. This is an advance that all states have.

Access to subsidies

Companies interested in applying for the funds will find that the financial restrictions for accessing the different procedures - and therefore for receiving subsidies - have been increased. For now, these are the limits being studied by the Spanish government:

  • Simplified and shortened open procedure: work contracts up to 200,000 euros and supply and service contracts under 100,000 euros.
  • Ordinary simplified open procedure: works, supply or service contracts of less than 5.34 million euro, when these are contracts awarded to companies. And, in the event that they are awarded to the State, autonomous communities, or the Seguridad Social [Social Security], contracts of less than 138,999 euros. If they are contracts for social services, the value must be less than 749,999 euros.

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