Connect with us


How to spend it: EU recovery plan faces bottleneck, economists warn



Italy and Spain, the two largest recipients of Brussels’ €750bn Covid-19 recovery fund, face administrative bottlenecks in spending unprecedented EU financial support over the coming years, experts and economists have warned.

Proposed grants for EU member states to counter Covid-19 recession, top 10 (€bn)

From mid-2021, the European Commission will begin disbursing borrowed cash from its landmark Next Generation EU recovery fund to member states aiming to jump-start their economies after pandemic-induced lockdowns. Italy and Spain, which are among the EU’s biggest and worst-hit countries, will be the top two recipients of the aid which is designed to fund long-term investment projects and encourage growth.

Map showing How to spend it, EU countries absorption rates based on payments between 2009 and 2015

But the two countries also have a historically poor record in spending EU money — a process known as “absorption” — leading to concerns that the cash from Brussels may not be spent because of bureaucratic and administrative hurdles. Spain has the worst absorption rate of EU structural investment funds from 2014 to 2020 at 39 per cent, while Italy’s is 40 per cent, according to figures from the European Commission. In 2019 alone, Italy had the slowest absorption rate in the EU with only 30.7 per cent of funds being paid out, according to the European Court of Auditors.

Marcello Messori, an economist at Luiss University in Rome, said Italy’s earmarked €208bn of EU recovery money, a combination of grants and loans, was a “colossal opportunity but also an unprecedented administrative and managerial commitment for Italy”.

All EU member states must submit detailed reform plans to Brussels by April, laying out how they plan to use the loans and grants which are designed to boost innovation, digitalisation and facilitate the green transition. Brussels will then scrutinise the reforms and disperse money from the second half of 2021 and until the end of 2023.

“There is still much ambiguity concerning the state of the preparation of the Italian plan and in many cases the scope is too wide,” said Mr Messori. “With over 50 undetailed projects proposed, Italy still hasn’t narrowed down the proposals, but above all has not yet solved the problem of who has to supervise project implementation.”

Spain’s socialist-led government plans to use about 70 per cent of the €72bn of grants due from the recovery funds between 2021 and 2023 on green investment and digital transformation. (It could receive up to €140bn in grants and loans between now and 2026.)

The country’s socialist-led government has also passed a decree designed to help Spain overcome its difficulties absorbing and spending EU funds efficiently. The measure aims to help modernise public administration, increase public-private sector collaboration and allow more to be spent under urgent contracting rules.

Manuel Hidalgo, a senior fellow at the Esade Centre for Economic Policy, said Spain’s large and compartmentalised bureaucracy — with 8,000 entities spread over national, regional and local levels — combined with a complicated public contracting law cause an average lag of a year to adjudicate a contract. “We need to reform the public administration,” said Mr Hidalgo.

As Spain has already made big infrastructure investments in highways and high-speed trains, the government will have to design and oversee many smaller and more complicated investments in digitalisation, low-carbon technologies, and business development, said Juan Viesca, the former general director of European Funds and Projects for the region of Valencia, and current European Funds Director at the Brussels-based Finnova foundation. He points out that poorer countries like Poland have earmarked money for projects like “highways, hospitals, and ports which you absorb faster”.

In addition to receiving money from the emergency Covid-19 relief plan, EU governments will also have to spend a €1.1tn new common budget that begins this year and includes hundreds of billions in cohesion money to fund catch-up growth in the poorest member states. Henning Fahland, head of the Recovery and Resilience Task Force at the German Ministry of Finance who negotiated the budget package, has described absorption as a “challenge to everyone”.

Enzo Moavero Milanesi, former Italian foreign minister and Europe minister, said the country “had never been given the chance to spend a sum of this kind in recent years” but warned Rome’s national recovery plan had yet to “get off the ground”.

“We have not yet turned to the business side, to companies, to firms, so that the concrete projects come directly from the ground. It is difficult to think that everything can be worked out at an administrative level,” said Mr Milanesi. He said the country has suffered from an “endless number of rules and administrative constraints that complicate the market” and also been historically hampered from public spending by having the second highest public debt-to-gross domestic product ratio in the EU.

“In theory, the problem of public debt could be overcome by drawing on European funds. The opportunity is incredible, but if we delay everything these resources may not produce the desired effects”, said Mr Milanesi. 

Source link

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *


'It’s more than sport – every day we are fighting for our rights to be equal’




French pro basketball player and podcaster Diandra Tchatchouang on her role beyond the court

Source link

Continue Reading


Emily Dean on how allyship amplifies the female experience on film




You can enable subtitles (captions) in the video player

When I was six years old, I decided to be an artist. When I was 12, I decided to be a filmmaker. And instead of saying no, you can’t do that, or it’s not possible, my mum bought me a video camera.

After several years of working in the industry, I’m working with a female director for the first time. And it’s been such a gratifying experience. Women express leadership in different ways. Maybe you don’t have to be the loudest person in the room. But you can have great ideas.

And the best thing about being mentored by women and being a mentor to women is that make friends with women.

There’s something so powerful the women coming alongside other women, especially in a group setting. Because it means that you can and back each other up. You can support each other’s decisions, and you can amplify each other’s voices.

It’s about seeing yourself in your work. Seeing some part of yourself reflected is really gratifying. It’s also important that we speak up for female characters. I want to see girls and women on screen who have the whole cacophony of experience of what it’s like to be female.

I want to see their flaws. I want to feel their struggles. I want to see their joy. That is so important to making a character feel real. And it took me a little while to settle into myself and realise, if the characters I like to come up with are not your everyday run of the mill characters you see in animation, that’s fine. Because this is who I am.

When you walk into a story room, when you’re working on a film, you have to leave your ego at the door. I think that can be interpreted like keep your ego out of the work. But I’d also say for women who are maybe more shy that leaving your ego at the door means you walk in. And your job is to focus on what’s best for the story and for the film.

The story needs you. The film needs you, and it needs your best ideas. It won’t thrive unless you speak up.

Source link

Continue Reading


Crimea ‘water war’ opens new front in Russia-Ukraine conflict




When a cyclone drenched Crimea in rainfall last month, rivers burst their banks and thousands of people in the Russia-annexed peninsula had to be evacuated from the floods.

The silver lining to the deluge was that the rains also filled Crimea’s depleted reservoirs, temporarily alleviating a crisis brought on by an extended drought and a Ukrainian blockade of the Soviet-built canal that previously provided up to 85 per cent of the peninsula’s water supplies.

Moscow’s struggle to supply Crimea’s 2.4m residents with fresh water has become a flashpoint in an undeclared war, seven years after Russian troops seized Crimea from Ukraine. An even longer conflict between Kyiv and Russian-backed separatists in eastern Ukraine has claimed more than 14,000 lives.

Russia has accused Ukraine of “genocide” over the building of a concrete dam across the North Crimean Canal, in addition to the existing sandbag and earth dam that was built in 2014. Kyiv fears that Moscow is plotting a military incursion to secure water flows from the nearby Dnipro river.

Coupled with surging food prices and international isolation because of western sanctions, the water shortages threaten to undermine President Vladimir Putin’s promise of a better life for Crimeans under Russian rule.

Though state-run pollsters claim Putin remains more popular in Crimea than on average across Russia, the patriotic fervour that sent his approval ratings to record levels after the 2014 annexation has long since subsided.

Map showing Ukraine and the North Crimean Canal, Crimea

“The water reserves and fields have dried up,” said Viktor, 47, a Crimean who regularly travels to Ukraine for work. “Each year it’s getting worse and worse. We didn’t have this problem before annexation,” he said, adding that most Crimeans blamed Ukraine for the crisis.

A $3.7bn bridge across the Kerch Strait linking Crimea with mainland Russia has become a conduit for trucks ferrying water for locals to take away in plastic containers. Popular Black Sea tourist resorts can turn on their taps for just a few hours a day during peak droughts, while the canal has filled with grass and weeds.

Crimea’s agricultural output has fallen owing to a lack of irrigation, making it all but impossible to grow water-intensive crops such as rice.

Construction of the canal began in 1957 after the Soviet Union transferred the arid peninsula to the Ukrainian Soviet Socialist Republic to manage rebuilding after the second world war. The waterway allowed for the cultivation of arable land and helped transform Crimea into a haven for tourists.

“The canal symbolises the stupidity of the Kremlin in occupying Crimea. They didn’t weigh the consequences at a moment of electoral euphoria that was fed by their own propaganda,” said Oleksiy Reznikov, Ukraine’s deputy prime minister in charge of reintegration policies for the occupied territories.

“Why didn’t you think about water?” he asked.

The North Crimean Canal is seen with a low level of water
The severely depleted North Crimean Canal previously provided up to 85% of the peninsula’s water supplies © Pierre Crom/Getty

Workers collect potatoes on the North Crimean Canal
Workers collect potatoes on the North Crimean Canal. Ukraine blocked the irrigation channel after Russia’s 2014 annexation of Crimea © Pierre Crom/Getty

Russia, while pressing Ukraine to reopen the waterway, has launched a Rbs50bn ($680m) programme to bolster Crimea’s supplies, repairing crumbling infrastructure, drilling wells, adding storage and desalination capacity.

Russian prosecutors last week filed a lawsuit in the European Court of Human Rights accusing Ukraine of “flagrant violations” over the issue. Crimea’s governor plans to file a separate complaint demanding up to Rbs1.5tn in compensation.

“Kyiv has essentially used Crimea’s infrastructure dependence on Ukraine, which came about in the Soviet era, as a weapon of mass destruction against all Crimeans. The water blockade is an act of state terrorism and ecocide, but the international community is failing to notice the Kyiv regime’s crimes,” Sergei Aksyonov, the peninsula’s governor, said in written comments to the Financial Times.

Reznikov said Russia, as the occupation force, was responsible under the Geneva Conventions for securing water and other basic needs for local the population. Ukraine has filed its own multi-billion-dollar claims against Russia, citing losses caused by what it describes as an illegal land grab.

With tensions rising, Russia deployed tens of thousands of troops and advanced weapons to Crimea this spring, as well as to the border of the two breakaway eastern regions where Moscow-backed separatists have battled government troops into an eighth year.

Col Kyrylo Budanov, chief of Ukraine’s army intelligence unit, said Russia was looking to seize the canal as well as adjacent territory to connect Crimea with the breakaway regions. Russian troops could advance on Nova Kakhovka, the Dnipro river town where the canal begins.

Some Crimean Tatars, an indigenous ethnic group whose members largely opposed Russia’s annexation, have set up a makeshift camp near the dams to make sure the water flow does not resume.

A Crimean Tatar activist on the North Crimean Canal
A Crimean Tatar activist enters his base on the North Crimean Canal. Tatars have set up camp to make sure the water flow does not resume © Pierre Crom/Getty

A Ukraine military vehicle drives past a Soviet monument marking the entrance to Brylivka
A Ukraine military vehicle drives past a Soviet monument marking the entrance to Brylivka, a village on the North Crimean Canal © Pierre Crom/Getty

“It will be a full-scale war,” said a 55-year-old activist who gave his name as Alibaba. He said he and his fellow activists were willing to take up arms to defend the blockaded canal. “There will be nowhere to hide in these fields. Let them try,” he added.

At the Kalanchak border crossing near the new dam, Russian and Ukrainian troops have dug trench positions a few hundred meters apart.

Tensions have also flared in the Black Sea, not just with Ukraine but also with western navies. Russia fired warning shots in the path of a British destroyer sailing through contested waters off Crimea last month. Sevastopol, Crimea’s largest city, is home to Russia’s Black Sea fleet.

Moscow has insisted it would not go to war over Crimea’s water supplies, even as it conceded that Ukraine was unlikely to restore them. “All these hysterical statements from Ukrainian politicians are completely baseless — they’re just stupid, aggressive propaganda aimed at inciting hatred between the Russian and Ukrainian people. There won’t be any ‘water war’,” Crimea governor Aksyonov said.

Reznikov, the Ukrainian minister, said Kyiv was ready to provide Crimea with humanitarian assistance, including drinking water, which it already does for the separatist-run eastern territories, but no request had been made.

“For Russia to admit they’re weak is very difficult . . . it would amount to an admission that they made the wrong decision,” he said.

Source link

Continue Reading