NEXT GENERATION CATALONIA CONTENTS 1. Introduction.......................................................................................3 2. Next Generation EU: European roadmap for recovery.....................................................................................11 3. Financing....................................................................................15 4. Governance....................................................................................17 5. The priorities of the Executive Council of the Government of Catalonia.........................................................................................20 6. 27 flagship projects for recovery and transformation.................................................................................23 7. List of projects by pillars and areas of action.............................51 Glossary..........................................................................................61 Annex 1. Alignment of the 27 flagship projects with the European flagships and Spanish state levers ........................................................................................................63 2 1. INTRODUCTION NEXT GENERATION CATALONIA 3 INTRODUCTION The outbreak of the coronavirus pandemic has rocked the world and shaken up the global agenda. Initially, public authorities and health systems concentrated their efforts on emergency measures to protect healthcare systems, essentially by increasing intensive care capacity, purchasing ventilators and other supplies, and expanding the workforce of health professionals. Many countries put in place strict containment measures to curb the pandemic that had – and continue to have – severe social and economic consequences. To mitigate the impact of the pandemic on households and business, authorities worldwide have set in motion expansionary economic policies that include direct grants, loans, guarantees and tax exemptions. These actions were intended to protect the incomes of those hardest hit by the crisis and to avert the demise of productive sectors. Governments have a duty to reconcile health emergency management with the maintenance of incomes by activating ambitious recovery programmes to increase resilience and introduce structural changes. There is no return to the pre-pandemic situation and, instead, we must move forward towards a more environmentally and socially sustainable model. Armed with this vision, on 21 July 2020, the Government of Catalonia approved the Economic Reactivation and Social Protection Plan in Catalonia, which set out an effective, cross-cutting response to the economic and social challenges arising from the COVID-19 pandemic. THE ECONOMIC REACTIVATION AND SOCIAL PROTECTION PLAN IN CATALONIA Catalonia’s recovery programme was designed by its commission to draft the Economic Reactivation and Social Protection Plan (CORECO), which involved all Government ministries and non-government actors from diverse working groups. CORECO set three objectives on which public action should focus over the coming years: i) to strengthen production capacity and the capacity of the healthcare and social protection system; ii) to reduce the social inequalities made worse by COVID- 19; and iii) to make progress in the transition towards a more sustainable and resilient economic model. The Plan lists 20 key projects for Catalonia, grouped into five categories that, taken as a whole, paint a picture of the social, economic and institutional model toward which Catalonia must advance over the next ten years: 1. Economy for life 2. Ecological transition The Economic Reactivation 3. Digitalisation and Social Protection Plan in 4. Knowledge society Catalonia 5. Cross-cutting actions The Plan was devised to work in alignment with the 2030 Agenda and Sustainable Development Goals (SDGs) of the United Nations, the European Green Deal, and the Digital Europe Strategy. 4 NEXT GENERATION EU, THE RECOVERY PLAN FOR EUROPE On 21 July, the same date that Catalonia approved its own Reactivation Plan, the Council of European approved the Multi-Year Financial Framework 2021-2027 (MFP) and the “Next Generation EU” (NGEU) Recovery Fund. These tools will help reconstruct the European Union after the pandemic and support investment in the digital and ecological transitions. Its main instrument is NGEU, a EUR 750 billion fund that will be divided among Member States over the period 2021-2026. NGEU is, in turn, divided into various funds, including the Recovery and Resilience Mechanism (EUR 672.5 billion), which is the cornerstone of the package and is the largest in volume, and REACT-EU (EUR 77.5 billion), which affords continuity to the European cohesion policy while allowing greater flexibility. To ensure maximum social and economic return from RRM funds, Member States must produce a national recovery and resilience plan and submit it to the European Commission. These plans must involve substantial investment and reform proposals, and they must be consistent with the recommendations of the 2019 and 2020 European Semesters, the Guidance on the development of national plans, and the Annual Sustainable Growth Strategy 2021 (which establishes seven flagship areas). The Next Generation EU programme is a unique opportunity for Catalonia to make the necessary changes to adapt to new times and new trends, such as energy transition, the digitalisation of business and government, and reindustrialisation. The maturity and capacity of Catalonia's production sector, the consolidation and enterprising nature of our knowledge system, its creativity and experience in European projects are all factors in Catalonia potentially becoming one of the top beneficiaries of EU funds over the coming years. The arrival of Next Generation EU funds, in what could be a record figure, allows us to look to the future with optimism. These EU funds could be used to transform heavyweight sectors of the Catalan economy such as the automotive industry, trade and tourism, all of which are facing challenges brought about by profound changes in traditional patterns of consumption, but have the potential to renew themselves. Despite our optimistic view, we must keep in mind the flip side: the challenge that comes with absorbing such large volumes of funds in such a short period of time. Firstly, administrative changes will be required to streamline the management and implementation of the funds and, secondly, we must endeavour to achieve peak social and economic performance by investing in projects that increase the growth potential of the Catalan economy. FLAGSHIP TRANSFORMATIONAL PROJECTS WITH A POTENTIAL CUMULATIVE EFFECT The identification of booster projects that act as catalysts of profound change in the economy overall is a task that requires strategic thinking. Such a reflection needs to be broad and cross-cutting, which is why the Executive Council of the Government of Catalonia has sought advice from leading experts. Under Government Agreement 116/2020 of 6 October, the Catalonia-Next Generation EU Advisory Committee (CONEXT CAT-EU) was set up as a collegiate body whose function is to promote projects for economic transformation that the Government puts forward to receive Next Generation EU funds. 5 CONEXT CAT-EU is composed of 13 members: Oriol Altisench, Oriol Bota, Maria Buhigas, Joaquim Coello, Adelina Comas, Guillem López-Casasnovas, Miquel Martí, Andreu Mas-Colell, Miquel Puig, Mar Reguant, Francesc Reguant, Carme Trilla and Montserrat Vendrell. These experts have had access to more than 500 projects submitted by both government (the Government of Catalonia and local authorities) and by private companies, consortia and third-sector entities, which submitted their proposals through electronic mailboxes set up by the Government of Catalonia for this purpose. These mailboxes (see here and here) will remain open to new proposals until the Executive Council of the Government of Catalonia and the Central Government of Spain announce the first competitions to apply for the EU funds. In December 2020, CONEXT CAT-EU presented to the Executive Council of the Government of Catalonia its initial opinion on the projects that it considers to have greater possibilities of establishing dynamics that could transform the Catalan production model into a more productive, resilient and sustainable one. In their assessment, the experts have considered the feasibility of the projects, that is, the ability of their leaders to execute them within the time-scale set by the NGEU funds. The projects must also be a good fit with the Economic Reopening and Social Protection Plan presented by the Executive Council in July setting out its roadmap for recovery. The decisions on economic policy taken by governments over the coming months will largely determine the success of the recovery. In this document, the Government of Catalonia outlines its strategic focuses directed at the completion of 11 missions to transform Catalonia in the coming years. The proposals outlined here follow the criteria established by the European Union, the pillars and criteria of the Economic Reactivation and Social Protection Plan, and the opinions of experts, local authorities, and social and economic actors in Catalonia. The initiatives presented are highly strategic and likely candidates to benefit from the EU recovery funds (RRF, REACT-EU and others). These are investments with specific and broad- ranging purposes and one ultimate goal: to increase the welfare of Catalonia's citizens and to ensure that the