The local context and regional environment: keys for the Next Generation EU instrument

Lluis Inglada Renau; Director del área de innovación y desarrollo del territorio

Just one year ago, the European Council approved the creation of the Next Generation EU instrument (NGEU). This is a financing instrument endowed with more than € 800,000 million (2021-2027) designed to help overcome the health, social and economic crisis derived from the Covid-19 pandemic. It has the specific purpose of building up European economies and societies to prepare them to respond better to the challenges of ecological transition, digitisation and resilience. In its Spanish application, the NGEU adopts the name of “Recovery, Transformation and Resilience Plan: Spain Can“. It involves € 72,000 million of funding structured around 10 leverage policies covering the urban and rural agenda, infrastructures, the energy transition, modernisation of the administration, digitisation of industry, science, innovation and health, education, employment, culture and sports, and inclusive and sustainable taxation.

Thus, we are faced with a broad program. It has been conceived from a macro scale and scope. However, it is also undeniable that it will have, and is already having, repercussions locally and regionally.

From the moment that the NGEU was announced huge expectations were generated at all levels amongst public, private and social entities who perceive that they could become beneficiaries and yearn for funding. These expectations have grown even more since the presentation of the Spanish version of the programme.

However, paradoxically, the outbreak and the visibility of these local and regional expectations has occurred in an environment characterised by a lack of specificity and a great deal of uncertainty about the management and orientation of these funds. There are many unknown factors relating to, for example, deadlines, requirements, channels, payment mechanisms and financing conditions. These have resulted in recurrent questions posed by all those aiming to propose projects that they consider bankable. In this situation, the administrations, downstream of the central Government in the chain of competences, such as the Generalitat de Catalunya and the Diputacions (supra-municipal local administrations), have tried to be proactive by aiming to design a coherent policy to attract the funds according to the needs and opportunities of their regional and local environments. In addition, both these administrations and also many other types of regional and local organisations and businesses and social representatives, have made efforts to coordinate, stimulate, select and promote public, private and public-private projects in a “bottom up” approach. For example, in the case of the Generalitat de Catalunya, the Next Generation Catalonia program has channelled 542 proposals and has selected 27 strategic projects that would represent at least € 41,000 million.

In parallel, large companies and large consulting firms have developed their own way to position their projects. This has resulted in the, not entirely misguided, perception that the funds will be capitalised by large institutions and companies to such as extent that regional and local administration, SMEs and social entities will be partially disqualified from being able to develop their own projects. The result of all of this is a situation that is sufficiently confusing and confused to adversely affect the aspirations of the final beneficiaries.

Despite this confusion, the local effects that the NGUE will have can be clearly seen just from a glance at the nature of the mosaic of projects that have started to emerge at all scales and all over the territory. There are projects of all possible types: they come from the public, private and social sector and they have a completely multisectoral profile. What they all have in common is the capacity to generate a local transformation and offer new opportunities for the regions they involve. On the one hand, there are projects with a vocation for physical transformation. These range from regional and urban development plans, such as neighbourhood reform incorporating the criteria of digitization, energy transition and social transformation, to projects for infrastructures and equipment developments or upgrades (connectivity, logistics, railway network, power plants, treatment plants, food markets, etc.). On the other hand, there is a long list of more social type projects. These include public and/or social housing plans, community care programs, full introduction of technology in health and healthcare services and digital training. Economic transformation projects also abound. These include strategies for the development of economic clusters and local productive sectors (sustainable mobility, agri-food, audio-visual industry, etc.) and industrial transformation initiatives (decarbonisation, green hydrogen, industry 4.0, industrial symbiosis, etc.). Finally, projects linked to sustainability, related to aspects such as water management, circularity and forest policy for example, also stand out.

All of this represents a long list of projects or project aspirations that share the common vectors of territorial rebalancing, digitalisation, sustainability and social cohesion. However, this profusion of proposals means that many hopes and expectations will inevitably be frustrated given impossibility of financing them all with the NGEU funds. Although this frustrating situation might be considered a waste of resources to some extent in terms of the amount of time and effort dedicated to the preparation of proposals, it should also be valued because the incentive of the NGEU has stimulated the design and preparation of strategies and solutions that meet local needs and provide opportunities. Although they may not benefit from funding at this stage, they do constitute a promising pipeline of proposals prepared for promotion by other mechanisms and at other times. To some extent they have also empowered and legitimised the regions and their public, private and social actors to define and promote those initiatives that they consider best ensure their future.