Alvaro Anchuelo, a professor of Applied Economics at the University of Alcalá de Henares, spoke at the XXXVIII Alicante Spanish Economy Conference. The event, organized by the UA Institute of International Economics in collaboration with the Association for Free Economics, featured a discussion focused on the current directions and obstacles facing the European scene.
Copying the title of the presentation, the host asked: What do Next Generation EU funds mean for the European integration process?
As outlined during the conference, the analysis often starts from the Spanish perspective, but a broader view of the European Union reveals how sovereignty has shifted in ways that address long-standing problems. The first notable outcome is the issuance of a common European debt, a move that met resistance in several member states. The second is the redistribution of resources, with the program’s impact expected to be uneven across the Union but particularly concentrated in southern and eastern countries such as Spain. In contrast, countries like Germany and France are not the primary beneficiaries. The third development involves creating new own resources to finance the Union budget in the future.
In this light, one of the most striking achievements is the collective response of the Union to shared challenges.
Yes, and the lessons from previous crises helped shape this strategy. The International Monetary Fund recognized that imposing restrictive policies in the midst of a recession would be ill-advised, especially after Brexit and the rise of populist parties in key countries. The EU could not function as a punitive actor and, in this instance, had to be part of the solution. The more expansive approach proved more effective than the financial crisis era.
Roughly stated, Anchuelo notes that the scenario includes changes in sovereignty that enable joint action, a common debt instrument, and an evolving budget framework that funds the Union through new own resources. These shifts underline the EU’s capacity to coordinate answers to large-scale shocks while supporting structural reforms across member states.
Anchuelo is pictured inside the UA optics faculty building, where the conference sessions took place. Rafa Arjones
Are Next Generation funds being used well?
This remains a crucial inquiry because the program runs beyond a single year and aims to transform the economy through digitalization and sustainability, while also addressing short-term needs. The plan extends over six years, with a pace that sometimes reflected emergency responses to recent events. Some processes were expedited to respond quickly to the pandemic, creating challenges in project selection and implementation. Nevertheless, proper execution by 2026 remains feasible, so longer, careful spending could yield stronger outcomes than rushed disbursements.
This time, the EU could not afford to be the bad cop. It was essential to be part of the solution, and the approach functioned better than in past moments of strain.
Companies have complained that the assistance does not always reach the real economy, though several steps are in progress to improve this flow. The six-year horizon allows for more deliberate selection and execution of investments, helping ensure that resources support well-targeted, high-impact projects. The aim is to move beyond perception and demonstrate tangible economic effects by 2026.
Was the PERTE figure successful? While some view it as a complex mechanism, its supporters argue that PERTE helps concentrate resources on large-scale actions that require substantial volumes. The European Commission may find value in supporting similar pan-European programs because economies of scale matter in strategic tech sectors. Europe has achieved notable successes through integrated projects such as Airbus, where components like wings and engines come from different regions, illustrating how cross-border collaboration can create competitive advantages.
Expert commentary suggests that the funds could indeed power a meaningful acceleration of growth if deployed with discipline and strategic alignment across member states.
Will the funds truly drive the economy forward? If used wisely, the answer is yes. A key Spain-facing issue is improving productivity, and reforms funded by the program could yield significant long-term gains. The objective is to translate large-scale investment into sustained productivity growth, anchored in structural reforms and smart spending.
Looking at the broader picture, the commentary emphasizes how deeply Spain is linked to the European economy. When the broader EU economy slows, Spain tends to slow as well, though there have been periods when the country outperformed due to tourism and other shocks. The overall trajectory points to a future where European-wide programs, including those similar to Airbus-like collaborations, play a central role in maintaining competitiveness and fostering innovation across borders. These insights echo calls for continued support of pan-European initiatives to maximize the shared benefits of large-scale, cross-border projects.
In sum, the analysis highlights the enduring importance of coordinated European responses to crises, the potential for lasting gains from Next Generation EU investments, and the ongoing need to monitor and fine-tune program implementation so that capital reaches the most productive channels within the real economy [citation attribution: University of Alcalá, Institute of International Economics].