March 1, 2021

The Fiscal Authority asks to eliminate the aid to the industry due to its high cost and low efficiency

The aid to the industry is useless. The direct loans made by the Ministry of Industry to companies in the sector "do not improve competitiveness", according to the Independent Authority for Fiscal Responsibility (AIReF). The minimal impact of the Reindustrialization and Competitiveness Industry (RCI) program and its high cost lead the body chaired by José Luis Escrivá to recommend that these aids not continue to be granted, as he explained in his sixth report of the expenditure review process, called " Spending Review ". The 4,900 million euros that were distributed between 2008 and 2016 hardly improved employment and investment of the companies benefited in a short-term period. These slight positive effects are offset by 5 years, so that there are no differences compared to similar companies that did not obtain.

The slight impact on employment is compounded by the very high cost for each job created, between 24,000 and 25,000 euros, which multiplies by almost five the maximum unemployment benefit. In addition, for each euro invested, the Administration has a cost of 55 cents. If a more prudent estimate were made, shortening the analysis to the period 2008-2014, the cost for each job would skyrocket to 35,000 euros.

The cost is very high, mainly derived by the years of the crisis. Although the management improvements between 2012 and 2016 have contributed to the reduction of losses in recent years, the program has been able to cost the public coffers more than 1,200 million euros. The State has also had to face a high delinquency rate (23%) that translates into losses of 670 million euros. Of this percentage of defaults, the Ministry of Industry hardly transmits a 4% to the Treasury. Of them, only half is recovered.

The Fiscal Authority highlights the difficulty in accessing loans. Less than a third of the companies participating in the program had knowledge of it through a public medium, reason why it considers that the diffusion of the helps is insufficient. It also points out the high dependence of external consultants on the application process, since 64% are carried out with the help of intermediaries.

This system is the only one in the world and the rest of the countries do not move because of its great inefficiencies. According to the institution, the publication and application processes are "complex", the evaluation is "not very flexible", the justification process is "slow and the follow-up, competence of the Treasury, is" uncoordinated ".

(tagsToTranslate) Ministry of Industry

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