Brussels allocates 19000 million euros Spain 2021, almost 25% of the disbursement planned by the European recovery fund for this year.

The European coronavirus recovery fund Next Generation EU is about to begin disbursing non-repayable grants and loans to finance EU partners ' plans to revive their economies after the collapse suffered during the pandemic. Thus, of the 800,000 million euros of this fund, the 27 will be distributed 80,000 million between the coming weeks and the month of December.

In the case of Spain, which will be the country most from this fund with 140,000 million allocated until 2026, a 17.5 per cent of the total, will receive almost 25% of the total outlay planned by Brussels for this year, that translates into 19,000 million euros, of which 9,000 million are advances provided after the approval of your Plan of Recovery and the 10,000 million remaining will come on December in the first ordinary delivery, depending on The Country.

The arrival of the first european funds is scheduled for before the summer because it is expected that the plan Spanish for the disbursement of the aid community to be the first to receive the approval of Brussels, according to the journal of the Prisa Group, highlighting that the president of the European Commission, Ursula von der Leyen, is traveling this week to Spain and Portugal for the launch of the recovery fund.

Brussels allocates 19000 million euros Spain 2021

However, the disbursement of the different tranches of European aid to the 27 is conditional on compliance with their national plans of investors and reforms, which is carried out by the EC technicians. In the case of Spain, they must confirm the fulfillment of the 390 objectives of the Npal of Recovery, Transformation and Resilience, which include labor, pension measures or for the reinforcement of digitalization or sustainability.

The achievement of 50% of the targets to which the Spanish Government has committed corresponds to the autonomous communities, according to El País, which assures that Brussels considers that this factor poses a risk that the Spanish plan does not reach its objectives, despite the fact that the EC expects the Executive to put in place coordination mechanisms to guarantee the disbursements of aid.

Brussels allocates 19000 million euros Spain 2021

The 19,000 million euros that Spain will receive in 2021 are 7,000 million less than the Government budgeted for this year, so it has resorted to debt to advance funds to the autonomies without having to wait for the approval of the EC. However, the funds that Spain will receive in 2021 are 9,000 million more than expected in March, when it was warned that delays in the implementation of the European fund could reduce what Spain expected to receive this year.

The advances with debt will be reimbursed as the Commission approves new tranches of European aid, in a series of revisions that will begin from July, when the European Council, in which the heads of State and Government of the 27 are represented, must give the definitive approval to the distribution of Community funds to which Spain aspires, according to the Madrid newspaper.

Brussels allocates 19000 million euros Spain 2021

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The increase in costs in shipping by sea will raise the price of products of all kinds: from coffee or sugar to furniture or electronics

The shortage of containers, saturated ports and the reduction of transport on all freight routes could bring an almost immediate impact to your pocket with price increases on hundreds of everyday products such as the coffee you drink every morning or other items such as toys or electronics.

As Bloomberg explains, currently, transporting a 12-meter steel container by sea from Shanghai to Rotterdam now costs 10,522 dollars (about 9,000 euros) 547% more expensive than the seasonal average of the last 5 years, according to Drewry Shipping.

Right now, 80% of all trade in goods is transported by sea and those costs could have a direct impact on the prices of anything. From toys, furniture and auto parts to coffee or sugar.

Markets are preparing for accelerated inflation.

"In 40 years in toy retailing, I've never known conditions so challenging from a price point of view," explains Gary Grant, founder and CEO of UK toy store The Entertainer, in an interview. Now it has stopped importing giant teddy bears from China because their price has doubled. "Will this have an impact on retail prices? My answer has to be yes."

In addition, the recent cases of COVID in Asian export centers such as China have made things even worse and have especially impacted the routes of greater distance. To give you an idea, shipping from Shanghai to Rotterdam is 67% more expensive than to the west coast of the United States.

Typically, shipping costs were negligible, but now it is becoming a serious problem. HSBC Holdings estimates that a 205% increase in transport costs could raise prices to euro area product by as much as 2%.

In this sense, retailers have three options: stop trade, raise prices or cope with rising cost, which would result in more expensive goods of all kinds.

Jordi Espin, manager of strategic relations of the European Council of Carriers is clear: "These costs are already being transferred to consumers," he said.

It is something that is being reflected in hundreds of products.

Anchovies from Peru, for example, are no longer imported into Europe because the costs are very high, explains Espin. Shipping jams and cost has also harmed Arabica coffee using Starbucks.

In addition, experts do not believe that it is a measure that softens in the short term and blame it on "there is no slack in the system", according to Lars Jensen, executive director of the consulting firm Vespucci Maritime in Copenhagen.

The companies most affected are those that offer large, low-value items, such as toys and furniture. "If they are bulky products, it means that you can't get many in the container and that will have a significant impact on the landing price of the products," says The Entertainer's Grant.

Right now, for furniture manufacturers, freight now accounts for 62% of retail value, according to Alan Murphy, executive director of the consulting firm Sea-Intelligence in Copenhagen.

"You just can't survive with this," he says. "Someone's bleeding a lot."

To try to get around the problem, many companies have stopped importing certain goods or are looking for raw materials in closer locations, as it is doing at Drewry Supply Chain Advisors, according to its founder Philip Damas.

” The longer these extreme ocean freight rates last, the more companies will take structural measures to shorten their supply chains, " Damas argues. "Few companies can absorb a 15% increase in the total costs of delivering internationally traded products."

Of course, on the part of the banks the vision is optimistic. Christine Lagarde said on June 10 that she expects the prices of products to rise, but that in the second half of this year, the effect will fade.