The EU, and especially Spain, is dealing with structural problems limit the growth of the inversion to a large square. This is reflected in much lower productivity growth compared to the EU bloc and China.
If the EU wants to regain its role in the global economy, it has to make a decision problems of fragmentation of the European market (both capital, labor and benefits and services); incertidumbre regulatoryia; leader in tip technology; energy and geopolitical uncertainty; and finally the inability to reverse and community bloc dynamics.
Everyone contributes to it Europe finds itself in a situation of extreme horror in the face of the weakness of the inversion. And for this imbalance, I recommend raising capital in other places.
In the financial markets of the EU alone, the inversion position in the EU document exceeds 7.2 billion euros, in other words 46% of the GDP of the eurozone.
The EU and Spanish networks are built on an initiative and a reform agenda that could lead to a turnaround both at the European level and in Spain, so looking for opportunities elsewhere was terribly ill-advised. Draghi (2024) proposes a joint strategy to increase turnover in green transformation, digitalisation, defence, advanced technologies and critical infrastructure. Industries that most affect production.
Spain Crece is an industrial and financial policy instrument created as a public vehicle for strategic inversion and capital movement
The bottom line is that public funds earmarked for inversion allow private inversion to open upbecause the weakness of the inversion is taking place throughout the private sector, as the public has increased its contribution, especially in Spain, through the Next Generation program.
The effect of this public inversion was not so desirable as the companies decided to abandon themselves and accumulate horror in property and deposits instead of devoting these resources to strengthening the productive capacity of the country.
de facto Spain’s economy has grown by 10% since the pandemic, so much so that corporate inversion fell 3.4% without discounting inflation.
with completion of the Next Generation program by the end of 2026 – although many projects may continue to be implemented later – a moderation in the growth of the Spanish economy can be foreseen.
It is the launch of the España Crece fund by the Spanish government that responds to this concern and aims to prevent a sudden drop in public and public-private inversion at the end of the period of implementation of European funds. That’s the theory.
In practice, no embargo the device is attached to large objects. In addition to ensuring an orderly transition, the new funding model has the ability to support strategic and large-scale projects, it is very important to recommend that the initial public investment of 10,500 million euros be converted into a conversion factor for private conversion, bringing the total turnover up to 120,000 million euros: this is a serious crime.
Spain Crece is an industrial and financial policy instrument created as a public vehicle for strategic inversion and capital movement, such as the Juncker Plan (EFSI), the current InvestEU program or national initiatives (such as France 20302) whose main objective is to catalyze private inversion in priority sectors.
If you are hoping for an ambitious movement of private inversion, articulated in two phases. In the first place, 10,500 million euros should be allocated to the capitalization of the Instituto de Crédito Oficial (ICO) to increase the balance and therefore the capacity of direct financing in the markets, allowing it to hover around 60,000 million euros.
The second phase is indeed the one that seeks to open up private inversion starting with public funds, because over 60,000 million financial capacities, private investment needs to be moved to achieve a total inversion of 120,000 million euros.
The fund’s sectoral priority is precisely oriented towards areas with high investment potential, technological content and contribution to productivity – namely, new strategic sectors: housing, energy, digitization, artificial intelligence (IA), reindustrialisation, circular economy, infrastructure, water and sanitation, defense and security.
The outcome of this tool will depend on the taste of the private sector: another network of the big calada. Both the quality of the financial projects and the effectiveness of the used risk mitigation strategies will be decisive. Because these industries concentrate not only the main growth potential, but also potential large companies.
It is very important to design financial instruments that reduce uncertainties and they spread risk appropriately to attract private capital.
For example, public resources are available to access bank and market financing; direct equity participations that encourage private investment without disrupting corporate governance; and two subordinated or participatory statements that allow us to absorb first losses and improve the ability to achieve reliability for other investors.
Does the ICO have sufficient capacity to locate in these areas as well as within the distribution network that is present in the country?
In the next few years, without the Next Generation funds, we are looking at an inversion and the future growth of the Spanish economy. To ensure that the new fund announced by the government will eliminate private inversion, it will not only fail; also cast reforms and movement of all actors.
*** Mónica Melle Hernández is a professor of economics at UCM.
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