The unequal distribution of recovery funds: 42% of the money granted to entities is taken by 150 companies

ECONOMY / By Luis Moreno

Private companies are the main recipient of European recovery funds. Most of the money that the Spanish administrations have managed to execute and has already reached the real economy has gone to the private sector. Furthermore, with a very unequal distribution. Of the half a million entities that have received funds – not counting self-employed workers and individuals – 42% of the tenders and subsidies have gone to a group of about 150 companies that lead the execution. In other words, 0.1% of fund recipients have shared 42% of the money.

This is one of the most striking conclusions of the latest report on the evolution of European funds published this Thursday by EsadeEcPol, Esade's economic studies center.. The researchers who participated in the study have combed the databases of grants and tenders to keep track of all the calls that have been made under the plan.. Detailed information that the Government has not disseminated so far with such granularity.

Esade data suggests that the large final recipients of the funds—that is, the entities that win the tenders and receive the subsidies that are called—are in the private sector.. Specifically, 91% of the money granted to the known beneficiary has gone to private entities. This is 29,000 million euros, compared to another 3,000 that are distributed among public companies, other entities and local organizations.

Of those around 32,000 million euros already granted, seven out of ten have gone to private companies. But the distribution of these amounts has not been exactly equitable. The 10% of the companies that have taken the most funds share 90% of the pie. If we continue to refine, we see how the 1% of the firms that win the most tenders and subsidies concentrate 72% of the money. And if we get to the top of the list, we see how 0.1% of the companies – about 150 – have pocketed 42% of the funds.

The final destination of the recovery funds that Spain has received from the European Commission has been plagued with unknowns until not too long ago.. The complexity of the mechanism and the lack of detail in the execution data that the Government has been transferring made it quite difficult to know how European money was reaching the real economy.

The publication by the Executive of the list of the 100 largest recipients of funds at the request of the European Commission already shed some light, but the figures released were not detailed enough to know who was really taking the tenders and subsidies that they were being published. In fact, the Government list indicated that 61% of the 100 largest beneficiaries were public entities. However, it clarified that, in the case of tenders, the final recipient was identified as the convening public entity.

At Esade they point out that their analysis of the destination of the money contrasts with others, precisely because they focus on the final links in the chain of dissemination of funds, which are tenders and subsidies.. For this reason, they point out that “it is expected” that the total proportion of funds that is already observed in the hands of executors – mostly private – will rise.

Euskadi and Castilla-La Mancha, leaders

At the territorial level, the distribution of funds is more or less consistent with the population. Andalusia, Valencia, Catalonia and Madrid are the communities that have used more funds than they have been allocated.. However, when the focus is placed on the money that has been spent on each inhabitant, the image changes.. In this section, the Basque Country (365 euros per inhabitant), Castilla-La Mancha (€344), Aragón (€329), Castilla y León (€325) and La Rioja (€308) are the communities that occupy the first positions on the list.

European funds executed in each autonomous community (as of January 2024). Esade

Then there are the Balearic Islands (€274), Galicia (€267), the Valencian Community (€251), the Canary Islands (€230), Asturias (€223), Extremadura (€222) and Cantabria (€208).. Below 200 euros per capita are Murcia (€173), Catalonia (€158), Andalusia (€150), Melilla (€142), Community of Madrid (€131), Navarra (€90) and Ceuta ( €18).

Regarding the sectors of the economy that are receiving the most funds, the main protagonist is construction, which accounts for one in every four euros awarded to date (4,241 million euros).. Next comes commerce (2,688 million) and in third position is the information and communications sector (2,060 million euros).

“The sectoral distribution of funds reveals a significant concentration in construction, reflecting the priority given to infrastructure as an engine of recovery,” says the Esade report.. The researchers are struck by how “key sectors such as digitalization and education, despite being pillars of the Recovery, Transformation and Resilience Plan (PRTR), do not lead in terms of funds received, which indicates areas of potential readjustment in future assignments.

Halfway through the term, 42% of the plan has been executed

The report published by Esade gives an idea of how advanced the execution of European money is.. The conclusion is that, of the 80,000 million that correspond to Spain for the recovery plan, 41% has already been executed. That is, 32,925 million euros, Esade estimates. The Government's calculations are along similar lines.. On Tuesday, the Minister of Economy, Carlos Body, estimated the progress of the plan at 45%.

The pace of execution is a fundamental variable to measure the success of the program for a very simple reason: all money that has not been awarded by August 31, 2026 will be lost. For Esade researchers, if the objective is to reach 100%, “both the pace of granting and awarding would have to be accelerated considerably”. In any case, they point out that the speed that Spain has achieved has reached a level similar to what could be expected before the implementation of the plan.. European funds are a very complex instrument loaded with bureaucracy, which makes it difficult for administrations with less experience and resources to execute quickly.