È a race against time what the European states are doing to approve i National Recovery and Resilience Plans and send them to Brussels by 30 April. The reason for such a hurry was explained by Prime Minister Mario Draghi in the Senate on Tuesday: “The April 30 deadline is not a media, is that if you arrive earlier you will have the funds sooner”, said the Premier. The European Union will go to the financial markets in May to borrow (at more advantageous rates) the funds needed to finance the first tranche of aid, equal to 13% of the total, to be disbursed by the summer. The money will go to those who have respected the deadline for the presentation set at the end of the month, the others will have to queue up. It is therefore easy to understand why in the last few days in all the countries of the European Union there is talk of nothing but the Recovery Plan. The “first come, first served” principle applies to everyone.
The first State to present its spending plan in Brussels was the Portugal, which sent a 22 billion document on 16 April which plans to spend around 17,5% of the funds on health care, 16,3% on housing for the weakest sections of the population and around 8% on fight poverty and inequalities. In Lisbon they joined today Germany and Greece.
Among other large states, Spain and France they approved the plan in the same hours in which Parliament in Italy gave green light to the resolution on the Recovery Plan and, according to forecasts, they will forward it to the EU by Friday. Indeed, just as Premier Draghi was busy presenting the Italian Pnrr to the Senate, the finance ministers of France and Germany, Bruno LeMaire and Olaf Scholz, held a joint press conference to unveil their plans. “We have wasted too much time. Chinese growth has picked up. The United States is booming. The European Union must stay in the running,” said Le Maire. “The Commission must analyze the national recovery and resilience plans as soon as possible so that they can be endorsed by the European Council in July at the latest. This will allow the money to be disbursed before the end of the summer”, reiterated the French minister. “Today is a good day for Europe – added Scholz – The EU recovery plan makes it possible for all member states to adopt measures that will make us emerge stronger from the crisis”.
“We can achieve robust and sustainable growth in the medium term only if we close the gender, generational and regional gaps” the Italian economy minister remarked today Daniel Franco, emphasizing that “inclusion is a general objective of the Italian Plan”. A project that aims to “repair the economic and social damage of the pandemic; build a more technologically and scientifically advanced economy while ensuring inclusion; a long-term change with an irreversible ecological transition”, concluded the minister.
We recall that Italy is entitled to 191,5 billion from the Recovery Fund (25 by the summer of 2021) and 13 from the React-EU plan. THE details on the Italian Pnrr Premier Draghi revealed them during his introductory speeches (and replies) held in parliament on 26 and 27 April. But how others will spend the money that will come from Brussels? Let's see what France, Germany and Spain plan to do.
The GERMAN RECOVERY
Germany will dedicate 90% of the 28 billion euros which it will receive from the European Union (25,6 from Recovery and 2,4 from React Eu) for ecological and digital transformation. “German priorities send a clear signal to the rest of the European bloc,” Scholz stressed. In detail, Berlin will spend approx 11,5 billion euros in green projects concerning the use of hydrogen, the energy efficiency of buildings, incentives for electric cars, buses and trains. Precisely on mobility Scholz highlighted that the aim is to finance half a million electric cars and 400 recharging stations installed on buildings, to which will be added 50 public recharging stations and 2.800 electric buses.
14 billion euros will instead be allocated for the digital transition which will pursue two main objectives: the reconversion of production processes in the automotive sector and the modernization of Education, Health and Public Administration. According to estimates by the German Economy Minister, the funds that will arrive from Brussels will lead to a +2 increase in GDP % and an increase in employment of +0,5%. Finally, during the press conference Scholz underlined the importance of pursuing a project concerning "the European cloud” and the urgency of developing a domestic production of latest generation processors and chips.
THE FRENCH PLAN
France will get from Europe approx 40 billion, which will finance part of the 100 billion plan already approved by President Emmanuel Macron in September 2020. Just under half of these 40 billion will go to ecological transition: 5,8 billion for energy conversion (decarbonisation of industry and restructuring of domestic systems), 6,5 billion for infrastructure and green mobility, 5,1 billion for green energy and technologies, with particular attention to hydrogen (which instead was scaled down in the Italian plan). A quarter of European funds will instead go to digital. Among the most important items, Paris will invest 2,4 billion for "technological sovereignty", ie in the development of strategic technologies to allow France and Europe to act as a counterpart to the US and China superpowers; and another 2,9 billion for the digitization of training and investments in digital skills. In addition, the French plan will use 7,7 billion of European funds for health and research.
France, like Italy, is also required to accompany the plan with a reform package: among these there are some that Macron has been trying to get approved since his election in 2017, such as the climate law (the aim is to include it in the Constitution), the simplification of public administration and entrepreneurial activity, the policies housing, some welfare regulations such as the controversial reform of the unemployment benefit, suspended during the crisis but which should come into force in July. Technically out of the plan but the awaited pension reform is also very central. Economy Minister Bruno Le Maire said he was confident he could have part of the total money available (as mentioned, the overall plan is 100 billion, 60 of which allocated by the government), 13%, by the summer.
THE SPANISH PRTR
In Spanish it is called “Plan de Recuperación Transformación y Resiliencia”. By 2026 Madrid will have available overall 140 billion euros, 9 of which are expected to arrive by the summer. The resources expected in the coming months will be joined by another 16 billion expected by December 2021 and a further 2 billion allocated by the EU as part of the React Eu fund dedicated to Healthcare. Overall by the end of 2021 Spain should therefore receive 27 billion of European funds. How will he spend it? The Government has already prepared a plan for 2023 calculated on 70 billion euros of spending. The project allocates 39% of resources to ecological transition, 29% to digital transformation, 10,5% to education and training. Settle down 6 major strategic plans concerning: the electric car, green hydrogen, the aerospace industry, sustainable agriculture, the development of artificial intelligence and the improvement of health system performance.
Also expected three major reforms: Pensions, Work and Taxation (the latter also takes into account the so-called "Google tax"). Among the fundamental objectives identified by the government led by the socialist Pedro Sanchez, the need to make the economy more sustainable and competitive stands out in order to create 800 jobs in three years and to contribute to the growth of the GDP. The Government expects an increase in gross domestic product of 6,5% for 2021 which could rise to 9,8% thanks to European funds. In 2022 the economy will expand by 7%, recovering pre-crisis levels, while in 2023 and 2024 GDP should grow by 3,5 and 2,1 percent respectively.
REJECTION OF RATIFICATIONS
After the green light from the EU parliament and the member states, it is up to the national parliaments to ratify the agreement on the 750 billion Next Generation Eu. The final deadline is set for June. If even one of the parliaments of the member countries does not approve the plan, everything would risk falling apart because the Commission would not be able to issue the bonds necessary to finance the Recovery Plan. To date, 19 Parliaments have ratified the European debt, while 8 have yet to do so.
In Austria the final approval of the agreement is scheduled for June, while in the Netherlands, after the go-ahead from the Chamber, the green light from the Senate should arrive on May 25th. They are also missing from the appeal Romania, Hungary and Estonia. In Tallinn, the far-right Conservative People's Party is attempting to slow down parliamentary work, which is why the government could soon decide to give confidence.
Instead, an agreement was found between the majority and the opposition in Poland, which after days of controversy initiated the ratification bill. L'Ireland, which however should not represent an obstacle, has not yet scheduled the approval, while some problems could come from Finland. The government in Helsinki is shaking more and more due to the lack of agreement by the majority on the new budget manoeuvre. In addition, the constitutional commission has established that the ratification of the Next Generation EU will have to be voted in Parliament with a qualified majority of two thirds, which means that the ok of the opposition will be needed. However, the National Coalition party, the main opposition party, has announced its abstention.
