The annual barometer of the European Committee of the Regions assesses the effects of the pandemic according to criteria such as the weight of the tourism sector, culture, hospitality, or young people without work
Although the health crisis is beginning to be left behind, the effects of the coronavirus on the economy will leave their mark for a long time. The recovery will be long and uneven. And the
annual barometer of the European Committee of the Regions (CDR) does not throw an exciting forecast for the Region of Murcia:
the structural characteristics of its economy place it in a very vulnerable position.
Specifically, the report published this Tuesday by the advisory body of the European Union places the Community among the
areas of the continent most likely to suffer a negative economic impact in the medium term (in the next 10 years). The barometer analyzes the consequences of the anti-Covid restrictions and criteria such as the
weight of the tourism sector, culture, hospitality or young people without work.
In the category of most fragile economies,
the Region is accompanied by seven other Spanish autonomies (Catalonia, the Balearic Islands, the Valencian Community, Extremadura, Andalusia, Castilla-La Mancha and the Canary Islands), areas of other Mediterranean countries, Eastern Europe and part of the Republic of Ireland. Instead,
the best protected regions are concentrated in France, the center of the continent and the Nordic and Baltic countries.
The key is that sectors such as tourism and hospitality, two of the most affected by the restrictions against Covid, have a great weight in Spain and, specifically, in the Region of Murcia. Furthermore, the report also highlights that
the rate of Murcia unemployed is, like the southern half of the country, at the highest levels in Europe, along with southern regions of Italy, Greece and Turkey.
A hole in the public accounts
The study highlights that the autonomous communities and municipalities of Spain suffered
a hole in its public accounts of 12.3 billion euros in 2020 due to increased spending to cope with Covid and falling revenues. Thus, the regional and local authorities of Spain were
the third most affected in absolute terms by this phenomenon, with a deficit in its public accounts of 12.3 billion euros, behind Germany (111 billion) and Italy (22.7 billion).
If the size of the losses is taken into account as a percentage of total revenue, the most affected Member States were Cyprus (25% less), Bulgaria (15.3% less) and Luxembourg (13.5% less). At a global level, this ‘scissor effect’ generated losses in regions and local entities throughout the EU of approximately 180,000 million euros. Most of it, about 125,000 million euros, is explained by the increase in public spending to face the pandemic, while revenues fell by 55,000 million as a result of lower economic activity.
The barometer prepared by the European Committee of the Regions also points out that
130,000 million euros of these losses were borne by the regional and intermediate levels, as well as that the municipal corporations assumed the other 50,000 million. “We must act effectively. The budgetary stability of the regional and local entities must be restored and fiscal autonomy must be expanded, so that we can invest in the specific needs of the people and not in a descending way, “claimed the president of the organization, Apostolos Tzitzikostas, in the presentation of the report.
Gap between the country and the city
On the other hand, the study reveals that
the gap between the countryside and the city “may jeopardize the recovery”, making it “urgent to support digital cohesion”. In fact, the text highlights the “huge gap” between local and regional authorities “that are already capable of harnessing the full potential of digital transformation” and “those that are not yet fully digitized.”
The difference between the countryside and the city in terms of the percentage of people who use the Internet daily, continues the barometer, is “especially high” in Bulgaria, Romania, Greece and Portugal. In contrast, the greatest digital cohesion in the EU can be observed in Sweden, Finland and Denmark. In the same vein, the European Committee of the Regions remarks that
current efforts “are still insufficient” because the digital divide between urban and rural areas ‘is only narrowing in Germany, Sweden, the Netherlands and Belgium’ and ‘remains significant in all other Member States’.