Roman Rodriguez (NC), Vice President of Canary Islands Government and Minister of Finance, Budgets and European Affairs, associates the loss of wealth in the Islands with the population increase, and stresses that the Archipelago will receive from Europe «more than 7,380 million euros until next year 2026». He made this reflection yesterday at the forum on European Next Generation funds organized by Prensa Ibérica and EL DÍA, sponsored by CaixaBank, JTI and Satocan, and the collaboration of the Cabildo de Tenerife, which took place at the Real Casino de Tenerife. This important economic flow will serve to improve the competitiveness of the Canarian economy and try to correct the progressive decline in per capita income. Of those almost 7,400 million, 2,380 correspond to extraordinary funds (630 million are already executed and there is a reserve of 1,750 million more charged to the Next Generation) and around 5,000 are ordinary budgetary commitments acquired with the Archipelago.
The president of the Economic and Social Council of the Canary Islands, José Carlos Francisco, stressed in the forum that “the great problem of the Canary Islands is that the per capita income has not stopped falling since 2000 compared to that of Spain and the rest of Europe. », and warned that «almost 20 points have been lost in the last 20 years». To which Román Rodríguez responded with a reference to the relationship between impoverishment and population growth: «So far this century, the growth of the Canarian population exceeds 38% and in Euskadi it was barely 4.8%, and that has an impact on the calculation of per capita income. That population growth is something that will also have to be addressed, although it is a fairly complex issue ».
The director of EL DÍA, Joaquín Catalán, was in charge of presenting this meeting designed to clarify, “in the current situation of uncertainty”, the destination and processing of the extraordinary funds that Spain will receive from the European Union. The territorial director of CaixaBank in the Canary Islands, Juan Ramón Fuertes, thanked EL DÍA and Prensa Ibérica for organizing this meeting on the funds created to underpin the recovery and help the productive fabric, “which can account for about 7 or 8% of GDP ». And he gave as an example of success “the Digital Kit, designed for SMEs, which make up 80% of the business structure in Spain, and can now receive a bonus of 6,000 euros to digitize for free.” An aid whose processing is complex, for which he sees “fundamental” the “role of the financial sector and its advisors, whose capacity was demonstrated with the ICO credits.”
Fuertes pointed out that “entities such as CaixaBank make themselves available to administrations and companies in the Canary Islands through their 230 offices to help, facilitate and simplify these processes. For us, having digitalized and better prepared companies is a guarantee for the future.”
The editor-in-chief of EL DÍA Daniel Millet moderated the forum in which, together with Román Rodríguez and José Carlos Francisco, the second vice-president of the Cabildo de Tenerife and Minister of Finance, Presidency and Modernization, Berta Pérez, participated. Román Rodríguez stressed that on this occasion the European authorities have reacted differently from the previous crisis: «Faced with austerity and cuts, expansion and investment are chosen. This change is very positive, also in monetary policy.” In addition, he made a point to also assess “the importance of the public debt generated in the two years of the pandemic (about 160,000 million) that has allowed us to stay afloat.”
The Vice President of the Canarian Government explained that “the 77,500 million euros of the Next Generation in Spain will be managed 50% by the State for public-private investment, and the remaining 50%, distributed among the rest of the public administrations, let’s go to capture in the Canary Islands at least 1,750 million euros for the entire six-year period, apart from the 630 that are already being executed, fundamentally for tourism, economy, education, health and ecological transition.
Berta Pérez added a key nuance by clarifying that the execution of these funds is not limited to 2023: «The Next Generation regulation says that legal commitments will be made for the application, such as contracts, in 2023, but the execution can be deferred until 2026”. José Carlos Francisco also recalled that “the president and his ministers expressly said that the funds in Spain had to be executed in 2022 and 2023. It was a decision of the Spanish Government that will not be fulfilled, since now we have until December 2026 to execute, as raised the EU.
The president of the Economic and Social Council of the Canary Islands recognized that the context in the region is difficult because “on the islands we are still recovering” and in the midst of that recovery process “we have also been asked to transform ourselves.” Despite everything, «the initial execution was good because they have been funds for hiring people and also for helping SMEs. ICOs, you are and direct aid has been a success, but the Next Generation is yet to be seen. At this time the evaluation is not too good, but we will have to wait until 2026 ». Like Juan Ramón Fuertes, Francisco does see in the Digital Kit “an example to follow”.
In Francisco’s opinion, “the impact of these funds on the economy has so far been practically nothing, barely 0.2 of GDP, but in the future they will not transform the Spanish economy either. Nor in the Canary Islands, although they can help a little. In his opinion, “you shouldn’t put so much hope in the Next Generation.” And he recalled that “official reports indicate that there are 10% of Next Generation bids that are deserted due to prices, which came out at another juncture”, prior to the start of the war in Ukraine.
Francisco was convinced that “with this way of dealing with the crisis in Europe there is less impact in the short term”, but he wondered if it would be possible “to give it much more continuity”. He understands that “probably not, since the increase in debt cannot continue. The public sector is stronger and bigger than ever, but that does not happen in companies. Nor is the unlimited growth of the public sector, which is fed by the private sector, sustainable. It is very possible that with this high inflation and probably high interest rates, we have to start thinking that the scenario is going to change strongly.
The insular vice president said that “you cannot underestimate what the Next Generation funds will mean for the islands, and even more so coming from another previous crisis in which the opposite was done.” She and she insisted that “we must hurry up in this execution”, which must now also adapt to the energy crisis.
The future regional budget was also introduced in the debate, which will grow by 10%, and the increase in the collection of the IGIC. An increase that Rodríguez wanted to clarify, since «compared to VAT, in the Canary Islands with the IGIC taxpayers save 5,000 million euros each year, and in the case of energy, in the Canary Islands it is practically zero. So, although the collection rises by 14.9% by the IGIC, public spending has almost tripled with external resources.
The public questioned the attendees about the advice of the institutions to SMEs in obtaining these funds. Pérez responded that work is being done along this line for which he considers it essential to advance in “the digitalization of companies and the modernization of administrations, two challenges that are underway.”
More budget for the islands
The regional vice president and Minister of Finance of the Government of the Canary Islands, Román Rodríguez (NC), announced in the forum that the Canarian budget “will grow by 10% in 2023, some 941 million euros more, with less public debt and without touching taxation ». The origin of this increase is, above all, in the collection of funds from the State and the European Union. The forecast is that the Archipelago will have a budget of around 10,098 million euros next year, with almost 75% of transfers from the State. IGIC collection also grew by 14.9% compared to the first 7 months of 2019.
