· Published in RecoveryWatch

Guide to NextGenerationEU: doing more harm than good

An analysis of the European recovery and resilience funds: opportunities, shortcomings and proposals.

The Observatori del Deute en la Globalització (ODG), the Observatorio de Multinacionales en América Latina (OMAL) and Ecologistas en Acción have jointly published this guide with the participation of organisations and groups from organised civil society.

- Read the guide

It provides an in-depth analysis of the European recovery and resilience funds, known as NextGenerationEU (NGEU), pointing out their opportunities and delving into their shortcomings, concluding with eight proposals for the Spanish government to ensure that the NGEU funds can contribute to a truly eco-social and just transformation.

It is intended to be a practical tool for organisations and collectives, social movements, journalists, technical staff in local councils and public institutions, and for citizens in general. It answers the following questions:

Why this guide?
Why NextGenerationEU
What is NextGenerationEU?
How is NextGenerationEU financed?
Who decides how the funds will be distributed and what criteria do they use?
How will the governance of NGEU work?
Who proposes the projects to be funded by NextGenerationEU?
Who will implement NGEU-funded projects?
What role do private consultants play?
What is the timeline for NGEU?
What are the risks of NextGenerationEU in the short, medium and long term?
What can the Spanish government do?

When the COVID-19 outbreak was declared a pandemic by the World Health Organisation (WHO) on the 11th March 2020, public institutions at European and State level set various mechanisms and public assistance programmes in motion to rescue the European economy.

The first wave of bailouts has essentially been implemented with no regard to climate, ecological, social or gender criteria and has especially benefited large companies and conventional sectors such as aviation and energy. This second wave of rescues already points to a similar outcome.

According to the European Union, NGEU is a temporary instrument for financing the green, digital transformation and modernisation of the European economy. It contains €750 billion which will provide loans and grants to EU Member States over the next 7 years. €390 billion is allocated to grants, and slightly less (€360 billion) is allocated to loans.

However, the risks of NextGenerationEU in the short, medium and long term are worrying:

Overindebtedness and austerity
Concentration of funds in large companies
Could be a greenwashing exercise and ignores the lessons learned from the pandemic
Lack of transparency and citizen participation
Inconsistent policies to the detriment of the common good

The Stability and Growth Pact has been suspended since March 2020, but the European Commission can reactivate it at any moment. When this happens, and in the midst of the money shower hangover, states will be highly indebted and a return to the fiscal requirements will not be easy. Further cuts and austerity will accompany, undoubtedly demanded in exchange for the NGEU funds. Public money for the private sector, debt and austerity for citizens; a well-known recipe.

Knowing this, the Spanish government can implement eight concrete and viable proposals in the short, medium and long term for an economic reconstruction that reverses the growing inequality, curbs the health, economic, ecological, social and gender crises and allows for a just and true ecosocial transition:

-# Guarantee transparency and good governance at all levels

  1. Promote the deprivatisation and decommodification of basic services and strategic sectors
  2. Be a public source of support to help social projects and companies access recovery funds
  3. Reinforce public and public-community management models and reduce public-private partnerships
  4. Align with climate, ecological and social justice objectives, and avoid greenwashing
  5. Prevent IT companies and digitalisation processes from accumulating excessive funding
  6. Apply exclusion criteria to projects and companies which apply for NGEU funds or other public support
  7. Co-finance the recovery with other mechanisms, not only NGEU

Authors: Nicola Scherer (Observatori del Deute en la Globalització), Erika González Briz (Observatorio de Multinacionales en América Latina OMAL), Nuria Blázquez Sánchez (Ecologistas en Acción).

Editorial support: Aigua és Vida, Calala Fondo de Mujeres, Coordinadora en Defensa de la Bicicleta ConBici, Ecologistas en Acción, Extinction Rebellion España, GOB – Grup Balear d’Ornitologia I Defensa de la Naturalesa, Madres por el clima, Money Watchers: The Next Generation, Plataforma ciudadana OpenGenerationEU, Red Agua Pública.