April 16, 2021

Andalusia, Catalonia and Madrid, the most benefited in the distribution of 10,000 million from the REACT-EU Fund “to strengthen the Welfare State”


Andalusia, Catalunya, Madrid and the Valencian Community have been the regions most benefited in the distribution of the 10,000 million from the REACT-EU Fund. The Ministry of Finance has informed the Autonomous Communities this Monday of the distribution of this amount from the fund “intended to strengthen the Welfare State and reactivate the economy after the impact of the pandemic caused by COVID-19”, as reported by the department headed by María Jesús Montero.

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Andalusia is the region that will receive the most money with 1,881 million, 18.8% of the total fund; followed by Catalonia, with 1,706 million, 17.1% of the fund; Madrid, 1,284 million (12.8%) and the Valencian Community, 1,254 million (12.5%). Between the four Autonomous Communities they account for 61.2% of the total of this fund.

The resources from REACT-EU should be used to finance “operations in the field of education, health and social services, to mitigate the impact suffered on them as a result of the pandemic, as well as to strategically transform them for the future” . In any case, the Government leaves open the possibility that the CCAA may propose other areas of action that they consider relevant for economic reactivation.

According to what was agreed in the Fiscal and Financial Policy Council last October, the funds of the REACT-EU program will be distributed for its execution through the ERDF (European Regional Development Fund) and ESF (European Social Fund), within the operational programs of the State and the already existing CCAA, adding a new axis to them. Specifically, 8,000 million euros will be distributed in 2021 and 2,000 million in 2022.

In addition, another 2,436 million will be managed by the Ministry of Health in 2021, through the Pluri-regional Operational Program of Spain, for the acquisition of vaccines for the whole of Spain that, later, will be distributed to the Autonomous Communities. They will also be used for a Plan to Strengthen Primary Care and a Plan for the Renewal of Health Technologies that will be carried out by the territorial administrations and that will seek to increase the response capacity of the health system in the event of future emergencies.

The proposal for the distribution of the programming was advanced by the Minister of Finance in the Council for Fiscal and Financial Policy in October and follows the model and distribution criteria used by the EU with its Member States to face the consequences of a pandemic . Thus, three indicators are taken into consideration:

– The first is aimed at measuring the impact of the pandemic on the wealth of each Autonomous Community. This indicator has a weight equivalent to 2/3 of the total distribution.

– The second indicator measures the impact of the crisis on unemployment, with a weight in the total distribution equal to 2/9 of the allocation.

– The third indicator measures the impact of the crisis on youth unemployment (15 to 24 years), it has a weight of 1/9 of the total allocation.

Additionally, aid is included for the outermost regions such as the Canary Islands.

The REACT-EU fund is part of a broader European aid package approved by the European Commission in July this year that reaches a total figure of 750,000 million euros for all Member States. Of that amount, Spain has approximately 140,000 million, between grants and loans.

Regarding the development of the Recovery and Resilience Plan, the Ministry of Finance has informed the Autonomous Communities that it is currently under negotiation and discussion with the European Commission, “which makes it necessary to wait for further progress to define the participation of the Autonomous Communities. “, according to the Treasury. In any case, the Government of Spain “has promised that the communities participate in said plan by executing the programs that correspond to their sphere of competence.”

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