Economists fear that the distribution of European funds will widen the gap between autonomies



"Leave no one behind." The mantra that the Government has decided to coin as an emblem of the 'just recovery' that claims to encourage the threat of leaking in one of the vectors defined as especially critical in its roadmap: that of territorial cohesion. According to the College of Economists of Spain, the autonomous communities of Andalusia, Extremadura, the Canary Islands and the Balearic Islands run a high risk of being disenfranchised from the
still incipient recovery of the Spanish economy
due to the greater impact that the pandemic has had on their economies and the worst thing is that European funds could further aggravate this situation.

The representative body of Spanish economists aligns itself with the already generalized thesis that the Spanish economic recovery is still weak and, furthermore, could be incomplete.

Normally this construction has been used to warn that there are sectors such as tourism, hotels, restaurants or transport that are still far from overcoming the crisis caused by Covid-19, but the College of Economists has taken advantage of the presentation of the edition of 2021 of the Regional Competitiveness Report of Spain to focus on the differences between autonomous communities that the reactivation of the economy may reveal and that could have a particularly detrimental impact on these four autonomous communities.

"There is a very important structural component in this situation, which stems from deficiencies that already existed before the pandemic or from the dependence of sectors that have suffered particularly in this crisis," he assured this Tuesday. Jose Carlos Sanchez de Vega, author of the report, who has specified that this greater exposure to not being able to engage in economic recovery also has to do "with the type of investment projects envisaged in the Recovery, Transformation and Resilience Plan", which will prioritize investments in areas in which these autonomous communities do not have an important specific weight.

Andalusia, Extremadura, the Canary Islands and the Balearic Islands are also the autonomous communities that are in the last places in the Regional Competitiveness Index prepared by the College of Economists, whose objective is to classify the different autonomous communities according to the attractive potential they have to attract investment or business projects. Andalusia and Extremadura have been occupying those positions in previous indices, but the Canary Islands and the Balearic Islands have fallen to those positions after the shaking that the pandemic has meant for the tourism sector.

The indicator places the Community of Madrid, Navarra and the Basque Country as the most attractive regions; places Catalonia and La Rioja in a second tier, with medium-high competitiveness; leaves Aragon, Castilla y León, Cantabria, Galicia and the Principality of Asturias in a medium range; and puts the Valencian Community, Murcia Region, Castilla-La Mancha at the lowest level in terms of attractiveness for investors. Balearic Islands, Canary Islands, Andalusia and Extremadura. Andalusia continues in the caboose despite the rise in the ranking of fiscal competitiveness that the indicator recognizes for its tax reduction policy.

Catalonia, weighed down by its institutional environment

Catalonia is no longer on the podium of the most attractive autonomous communities to invest in and economists have a very clear idea of ​​the causes. The Regional Competitiveness Index directly points to institutional instability and its burdensome fiscal policy as the reasons that have ended up expelling Catalonia from the club of autonomous communities called to pull the bandwagon of competitiveness of the Spanish economy.

The indicator that measures the contribution of the institutional framework to the good reputation of the autonomous community and that takes into account aspects such as the fiscal effort required of citizens, the level of inequality among citizens or the quality of government, leaves Catalonia in the 13th place of all the Spanish autonomies, far from the most competitive. Social pacification has allowed the indicator to stop worsening in recent months, but it has not prevented Catalonia from being one of the regions whose attractiveness has suffered the most from the pandemic crisis.

The fiscal context doesn't help either. The fiscal competitiveness indicator used by the College of Economists to build this regional competitiveness indicator indicates Catalonia as the autonomy with the least favorable fiscal framework for the generation of economic activity, mainly due to the existence of about twenty of its own taxes that they increase the cost of doing business in the region. On the opposite side of the ranking, the Community of Madrid, which accredits the tax system that is most conducive to economic activity, even above those of the Basque and Navarre leasehold estates.

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