 Hello, good afternoon. We are going to open this series of roundtables and this one will be dedicated to economy and taxes. And with the session we initiate, we are going to end with this series of roundtables. It was four with today's session and they had to do with important topics such as biodiversity, energy transition and the agri-food system. All of them have to do with a key plan for ecology transition of the economy and the society. We are doing this series of talks for the green transition for Europe at a time when we have a sanitary crisis that has no equal. It's a unique moment in our story. This is a global crisis that is showing that we can't, when crises are global, we find ourselves before huge hurdles and we require the collaboration of all the institutions, all the countries, national as well as international to be able to face the consequences of such a crisis, of a crisis such as this one that we are facing, the COVID crisis and it also shows that the COVID crisis overlaps on top of the environmental crisis and climate crisis that the world suffers from. And as the whole international community shows the relationship between health crisis and environmental crisis, climate crisis. So we believe that the fact that we finish this cycle of roundtables on green transition for Europe with a roundtable dedicated to economy and taxes is very much relevant because obviously an ecological transition for the economy and the society requires economy policies and tax policies that are consistent and that make it possible. And in that sense we thought that it was very much needed to end with this topic in a series of roundtables, so that we could largely at ease debate on the changes that we require that are seminal in order to be able to initiate our journey in this transition towards an economy that is really sustainable, that is really green. And we are doing this at a time when we know that the EU has for the first time given a united answer, a strong answer when facing a general crisis, a health crisis in this case, that is very different to the response that they had in 2008 with the financial crisis and that showed that other political, other economic crisis could be faced in such a way so that we can really tackle this crisis. So we need to have an answer, a response, an economic response, but not just an economic response also, a monetary and tax response. And for the first time the EU has set up an economic response by uniting our debt with economic instruments, financial instruments and tax instruments that are EU instruments. An answer that shows that if Europe stands stronger it is easier to face this crisis. And an economic answer or response of such a dimension, of such a huge dimension in the sense that huge amounts of funds are going to be destined by the EU to respond to this crisis. Obviously is an extraordinary opportunity so that these resources are destined to fighting against climate change in a deeper way and tackling green transition for our economy. These are challenges that the EU already had but now we have a unique opportunity, a huge opportunity to accelerate this to really tackle this in a decided manner with many more economic resources than we previously had or that we could previously have had in a case of Spain in a clear and obvious way. Because if something has been seen thanks to the COVID crisis is the fact that there is no economy without health and also what is clear, what is obvious and every institution, every international institution says so and the science says so and political figures also say that there will not be economy without ecology. So to talk about this and to talk about the response that Europe is giving to this and the resources that are going to be destined with their next generation program and with the budgets that we have in the budget for the EU. We currently have two extraordinary speakers who have had the generosity of being here with us and we think that we are closing this session of roundtables at the highest level. And first of all we will give the floor to Natalia Fabra who is professor from the Department of Economy of the Carlos de Ferreira University in Madrid. She is a member of the consultant committee for economic affairs in the Ministry of Economic Affairs and Digital Transformation. In 2014 she was awarded with the Sabadella Herredo Prize for her research in the field of industrial economy and with the Julian Marías Award for her research in social sciences. Natalia has been an associate researcher at the Center of Economy and Policy Research and she is an editor of the Journal of Industrial Economics. She is also a publisher of the New Economic Papers and she is also a member of the Economistas Frente da Crises. She is a colleague of mine because I'm also a member of the Economistas Frente da Crises and she is one of the best experts in economy for energy. So it is pretty pleasure to have her here today and it is a luxury to have her here. The second speaker will be Ernesto Tassoul, an economist, a diplomat and a politician. He comes from Barcelona. He is a European MP. He was in 2014 a member of Ifiera Plural and now he is Catalanin Común integrated in the Green Group. A diplomat who has different responsibilities at the Ministry of Foreign Affairs and Cooperation. He currently is one of the vice presidents of the Green Group of the European Parliament and he is a member of the Commission of the European Parliament for Economic Reconstruction. So he is the person who is the lab where this fund is being designed and where the regulations for the fund are being designed as well. So they are setting the conditions under which this fund will be managed and used by the different countries. So as I was saying, the EU has set up public resources that are unique for countries who were most impacted by Covid. Spain is one of those countries. We will have around 140 million years from the EU for these next years. Part of that money will be alone but another part will not be alone. And we will have the possibility of having a very important amount of money so that we can also accelerate the plans that our country had for the fight against climate change and for ecological transition of our economy for the generation of green jobs. And as I was saying, it is a great opportunity and if we were not to use it as we should it would be a great pity and it would be a stone over our heads that would be a hurdle in our progress and our development in the next decades if we are not to profit from this benefit from this opportunity for the ecological transformation of the economy. And with no further ado we will start this session since the previous sessions the speakers had the possibility of doing a presentation of 15 minute intervention. We will do that this time as well. All the participants can use the chat so that they can write down their questions to whatever topics they wish to ask on and we will send those questions to the speakers and after this first intervention we will have interventions from the different speakers answering the questions and talking in depth about the different topics that have not been dealt with and with no further ado I would like to thank the people who are connected to this session. I would like to thank the Foundation Transitium Verde and La Casa Entendida for organizing this series of roundtables and I will now just give a floor to our first speaker to Natalia Fabra. Thank you very much. Well thank you, thank you very much Fernando and I would like to thank the rest of organizers for organizing this session and this interesting conversation amongst all of us present here today. So during this first intervention I wanted first of all to talk about the status of the crisis here in Spain and then talk about some matters that have to do with the opportunity that the recovery fund is offering us and the measures that I believe should be taken into account so that we can really benefit from all the potential of this recovery fund as a lever for the transformation of the country in general. I'm saying this from an economic point of view but also from a social point of view. It's been two years of a systemic crisis of an enormous depth. Actually there are no precedents to this crisis. We are in a context of great uncertainty. We are at the peak of a second wave. We don't have any certainty of the economic implications and social implications that this could have. As a matter of fact this could also have political implications and we don't know where the end of this crisis lies. I believe that if we have some power in this crisis is the fact that we have learned that austerity measures will not get outside of this crisis but on the contrary would dig our grave deeper. This crisis would be even more serious and would have horrible consequences not just on the economy but also with regards to inequalities and the distribution of revenue and wealth and also inequality and education and the health of our citizens and also everything that has to do with gender inequalities. So I think that we have gotten to this crisis having learned the lessons known what we do not want to repeat and in my opinion I believe that there is consensus. Consensus that I hope will last with regards to really the convenience of setting up policies that will stimulate the economy instead of smothering it like we did in 2008. Spain quite possibly is one of the countries that is most affected by the economic crisis not just due to the intensity with which the pandemic has hit us but also due to our sectorial composition because we are really dependent on the services sector and the tourism sector that for obvious reasons has been very much impacted by this pandemic. During the second wave the expectations I believe are getting worse and this could have very serious consequences on consumption and investment and even on the destruction of jobs. So I believe that measures are needed, measures that will not just contribute to maintaining salaries such as the policies that have been implemented with quite some success up till now where all the job regulation schemes and loans to production that the ICO has set up but also other policies that could reactivate the economy. And the recovery fund that everyone is talking about and that everyone is hopeful for is not going to have this role. The recovery fund that I will talk about now is going to be a unique opportunity for us to transform our economy but in order to transform our economy in the need to long term not to reactivate our economy now it's not the stimulus that we need right now to reactivate our economy presently. The funds, the resources that come from the recovery fund will get here during the next year and regardless of whether we approve the budgets or not those resources might be put in circulation in the economy. We are talking about funds that are going to be invested that are going to be spent all through a six year period so it's a period that will go beyond the recessive cycle that we are currently living and it has a series of conditions in this case these are conditions that are very different to the conditions that we were used to in 2008. This is a positive condition. It has to do with where we are going to be using those funds but these conditions are going to be compromised because these funds can be understood as a plan that is not a plan for the stimulus of demand and if it is not a plan for the stimulus of demand we will have to set up other measures that are capable to restimulate consumption and stimulate investment and also strengthen our capacity to be able to get taxes so that we can finance those additional measures to sustain people's income. So this is a reactivation that I am referring to all through this conversation especially after having when we have seen the proposals of budgets we will be able to see how the state needs to be able to reinforce its capacity to collect taxes. So what I want to say during this first word is that if the recovery fund is not a plan to stimulate demand what is it? Well the recovery fund is actually a lever, a lever for the change of our production model and our social model in our country. If we manage to benefit from this potential in six years we will find a completely different country to the one that we currently know a country that could have completely transformed itself as it did when using the European funds at the end of the 80s and beginning of the 90s the government has established four axes for a green Spain, a digital Spain, a Spain with no gender issues, a Spain that is inclusive those four pillars are the ones that will be the basis of the policies that we will set up with the recovery fund. I believe that not only will it allow for a change of the productive model but it will also be a source for productivity in this country. We will be able to work on policies on the energy sector, deployment of renewable energies together with a deployment of storage assets that will allow us to access if we do it well, if our reforms are the right ones, will allow us to access consumption and an electrical supply at a lower cost which will have an impact on the productivity of companies because for many of them electricity, energy input has a very big weight in their cost structures and also with regards to the income of companies, revenues of companies because you know that energy is one of the main vectors for the decarbonization of the economy so this will have an impact on the success of this strategy for electrification and not only with a reduction of energy costs but also through the digitization and the improvement of our mobility, the improvement of services that will be provided thanks to digitization by the administration, services provided by the administration so this is a project to change our country that will provide us with economic benefits, with social benefits as well and many of the people present here today have been fighting for ecological transition as a change lever as a package of policies that could reactivate the economy, generate jobs, quality jobs and creating an industrial and entrepreneurial fabric so there is a great satisfaction to us to see that thanks to the EU in line with the policies that they were setting up, that the government was setting up here in Spain ecological transition is now at the first line of policies that we are betting on so there was a time when we were talking about picking winners as something that was actually frowned upon and now we have modified this and we have changed that term for the mission oriented policies I think that it is a great satisfaction that we do not feel ashamed when saying that policies and politicians should prioritize certain measures and not others and that lesson and that decision should not be taken by the market but rather by politicians because we know that sometimes the market fails with regards to ecological transition because private sector does not internalize all the social and economic benefits that come with ecological transition so welcome these resources, I welcome these opportunities and I welcome this change in discourse and narrative because in the end it conditions the policies that are set up the recovery plan are not just resources, they are resources and reforms I want to highlight here the complementarity between resources and reforms because it is not about just investing or about reforming but rather investing by reforming because reforming without resources would not have an impact and resources invested without reforms that will last longer would have very limited effects so once again I think that the example of renewable energy since we are talking about a green transition providers with an example that really shows how complementary the need for reforms as well as investments is we have been working to decarbonize our electrical sectors and for that we have to massively invest in renewable energies as the weight of renewable energies grows and the electrical mix and say its marginal cost is very low the prices of electricity go down and these investments if they are being paid for only through the prices of the market they will get a point when they will not have enough profitability they will not have a perspective for future income that will justify those investments to be put in place so the resources might exist and there might be a wish by the entrepreneurial fabric to do it but if the regulation does not recognize the nature of the technology in this case renewable energies then those investments will not take place so it is necessary to have those objectives and those resources with regulatory reform and how well by the use for instance of tenders such as the ones that we will have with the change of climate change because if we have these options that will take place during the moment of investment the prices that will result from that option will set the average price of those investments and not the marginal price of the product itself so we need to have objectives, resources and reforms going hand in hand because in many fields in many aspects without those three axes without those reforms then the objectives will not be met so I think that the script is written it is a script that has actually music that I like and now we need to make this film and when we make this film I know that we will get the Oscar we already have the resources that have been allocated for Spain we now have to give them the best use possible we have to give those resources the best use possible those transfers mainly and I think that this is where most of the key of the matter lies how are we going to allocate those resources so that we manage to put in place projects that are transformative projects with the capacity of creating new jobs and creating industrial fabric and to do it at the lowest cost possible because that way instead of doing 10 projects we will be able to have 20 projects and that will depend on how we design those mechanisms we are in a context where there is a very serious problem of asymmetric information the regulator or in this case the government has to assign those funds and obviously they do not know all the details that have to do with the projects for instance what will be the amount what will be the cost of each of those projects and to what extent are these projects that will give some added value so projects that could not be done without these funds well in practice in the practice of regulation for instance the regulation of public services so there are experiences on how to deal with these funds how to allocate funds and how to set prices when there is asymmetric information and I think that we have a lot to learn from those practices we need to use auctions we need to use tariffs per threshold this could be set up with quite success to select amongst all the companies that are willing to do a project that could do it in the best way possible and with a lesser cost and this will obviously depend on the project because there will be cases where only one company can develop one project so we have to think of other mechanisms that are not competitive mechanisms for this to happen I think that transparency and clarity when setting up these mechanisms those criteria for allocation are basic so that we can avoid something that worries me which is trying to find an income the government has to spend a certain amount of resources and there will be a long queue of companies looking forward to spending that money but we want for those resources to be spent in an efficient way and not through revisiting activities so asymmetric information is very important and it refers to the aspect of additionality we don't want for those resources to be used to finance projects that would have been put in place in any other circumstance we don't want a crowding out effect we don't want to replace private resources with public resources and we also want for allocation mechanisms to be able to understand if this additionality effect exists or not there is a matter that also worries me with regards to how those funds are going to be allocated and it has to do with the market structure we are going to be financing projects for future activities and I wouldn't want for those funds to be used to provide resources to the same usual suspects because we would be consolidating their dominance in the market there are companies that nowadays might not exist but that would exist if they were to receive those funds or companies that are small enough to be able to set up the application for those resources so it would be good for us to think of a mechanism that would allow to give money from those funds to startups and to companies that are very dynamic and that could allow us to de-concentrate the structure of the market or at least to not have an impact on that concentration of the market and there is another topic and I will not take more of your time so that Ernest also can take the floor because I am sure that he will be telling us very interesting things and more specific details about the topics that I am tackling here there is something that worries me which is the public return of those investments beyond the dynamising effects that they could have on the economy for instance I can think if we have decided that through these funds we are going to be financing the deployment of the optic fibre networks in the cities and Telefonica was the company that was in charge of doing this investment through these tender processes we have understood that for this project to be able to be put in place then Telefonica needed at least 10% of the total amount of the project then I understand that what would be fair would be that if the state is paying for 10% of that project then the state should be the owner of 10% of that project and it could be done by a joint venture between the state and the company Telefonica which I understand that Ernest I could tell me that this could be compatible with the current framework of subsidies, state subsidies so all of us as taxpayers because the European funds also come from our taxes would benefit from the situation we would benefit from the capital of those projects and it would value something that has been forgotten which is the value of the public sector and entrepreneurial sector and finally because I don't want to take more time I would like to just throw on the table a topic that we could maybe tackle it seems to be a unique opportunity to add value to something that had lost some value which is the value of industrial policies we want these investments to take place we want to plant windmills and solar plants in our fields we want for them to generate electricity free from emissions but we also want in that process for industry to be used we want industry that could generate jobs and entrepreneurial fabric in our country so without falling in the trap of protectionism I do think that we have to use it as an opportunity to show the value of the policies that allow for an industrial sector to also participate in this process and that will be my final contribution so that Ernest can take the floor thank you thank you very much Natalia and well you have said very interesting things and it couldn't be any other way the recovery fund as an extraordinary level, a lever that would change our model for green reindustrialization a new way of producing and a new way of consuming as well the ecologic transition is of the first division of politics and we now have actually made it and we are in all the debates and even the recovery fund mainly talks about the ecologic transition as well as digitalization and the funds have to fight for that and you said something else that was also very important and we have to be vigilant so that it's not companies as the usual suspects that are doing what they always do and they're getting the same funds by greenwashing themselves and we have lots of experiences in greenwashing we have seen it in many activities that are not green but they greenwash themselves and now that we have that experience we have to be vigilant so that we will not finance that which was going to be done either way but this is a new way for them to finance their projects and that would also be a pity we would be losing resources if that were to happen so we have touched the very interesting topics and you have said something that I think is seminal in parallel to this recovery fund which are resources we need reforms and I remember that in Spain and maybe in Europe there are some reforms that should take place in the parliament such as the climate change law the whole circular economy package and waste law there is the whole package of mobility in Europe we have the common agricultural policy we know that this common policy is not going in the right direction it is not promoting an ecologic transition in our way of producing food and it's not enough to just have resources we also have to do reforms and those are the two complementary elements ok so with no further ado I will give the floor to Ernesto Pashon thank you very much Natalia and we will continue with our debate and digging deeper on all the matters that you have put on the table thank you very much ok thank you Fernando can you hear me? ok so thank you Natalia it is a real pleasure to be here with all of you these are days of heated debates about the recovery fund and the economic crisis that we are facing and it is a pleasure because we always learn a lot during these roundtables and especially with interventions such as the one that Natalia has just made because she has really placed very well the challenges that we have especially with regards to the transformation of the productive model in Spain and where we are headed I really think that we still have to think about this we need more reflection about this and I love your intervention because you touched upon some important elements and I will complement it with my European vision and how the negotiation of the fund is going on and the European response or how this European response is being given especially compared to the response in the previous crisis maybe we should start from them I think that in the previous crisis the states basically were getting out of a very harsh economic crisis and they had an enormous cash flow crisis due to the design that the European Central Bank has designed that was completely chaotic and this is a battle that we have been fighting since 2010-2011 until now with the Bundesbank who did not want to modify the policy and all the countries pushing towards another direction and it is a battle that we have won and we think I think we need to say that nowadays Spain could present the budget that it presented the other day with a very high deficit because the European Central Bank is buying debt in the secondary markets and is maintaining our mission of debt at a very reduced cost and that is currently I would say that that is the main safety buffer that we have in this crisis and there are obviously problems linked to that program and also to the purchase of corporate bonds that we have been talking about in the European Parliament how this could help or not help the ecological transition but I wanted to say this because I think it is an important part of the response that we are giving to this pandemic regardless of this the response that Member States are giving to the EU and despite the buffer that we have the response is quite asymmetric the level of public expenditure in different countries is completely different Germany and France for instance well Germany, well I don't have the updated figures but a few months ago Germany had actually put 50% of the resources of the whole Eurozone to answer to this pandemic and that is creating some distortions competitive distortions in the internal European market and Spain has a problem and we have to see how we can face that because obviously if our partners, if our neighbours are investing more money and they intervene their companies more than ours that is going to affect the competitiveness of many of our companies in this internal market and this was a problem I wanted to mention because I think that the recovery fund is actually a way of trying to balance the situation and fighting against that imbalance obviously we are not going to have the same tax response in all countries because as Natalia said this is not a fund thought as a counter-cyclic fund although it will have counter-cyclic effects but rather thinking about the transition of the productive model but nevertheless it is a very important instrument and if we take this whole package I usually say that the EU has changed its consensus since the economic crisis it has gone from very neoliberal linked to the Troika to positions that are a bit more rational more social democrat that take us to a better answer although it is still not perfect with a more expansive monetary union including the debt markets and with the williness of developing tax mechanisms at the EU so in July we saw the birth of the recovery fund and I think that what we have created it is important but what we have created are the bonds for a very long time we talked about euro bonds and we finally have created federal debt it did exist but not at this volume we are now going to issue 750 billion euros in debt that will be transferred to the countries directly for the first time these community instruments are not for loans with conditions with all the limits that they had but rather to make transfers and this is the big news of the July agreement now obviously we now need for that money to be well used and in the right trend and direction but mainly we mustn't misspend that money and that's one of the fights that we currently have and I will explain that to you we mustn't misspend that money by empowering the fossil fuel sector because that is one of the debates that we are currently having in the European Parliament and some people want to use that money to keep on investing in gas and the fair transition of coal and they are making it so long that it's no longer a transition but well that is the debate that we are currently having in the European Parliament about this fund so just to set the context with regards to roadmap and the decision mechanism because nobody knows really what it is that we are discussing in the Parliament with regards to July well in July the member states agreed upon the instrument but then that instrument has to be developed in different regulations because it's not just one instrument it's different instruments so there is one instrument which is the mobilization of private investment which is an extension of the Juncker plan then we have another instrument which is called just transition mechanism for the transition of polluting energies then there is another instrument called technical assistant facilities to help member states to absorb the funds and that's important as well then there was another instrument that we really learned which was something called solvency support instrument which was to help from Europe to the solvency of SMEs which is an important challenge that we also have here in Spain that has failed because the council killed it and then we have the RF which is the recovery resilience facility which is the one that is going to channel 80% of the investments and that is the regulation of the fund let's call it that and that is a regulation a European regulation it has the it is like a law within the legal, European legal system and we are now doing a co-decision process so the parliament and the council co-decide about this regulation so with the idea because the council has already voted on it and tomorrow I think we will vote on the parliament's decision and position with regards to trilogues you know that in legislative procedures in Europe when we have parliament, council and commission we have to be in agreement with the idea that the regulation will be enforced on January 1 so that on February 1 the funds will get there we have some delays that's unavoidable but it's not dramatic because that first period those 27 billion euros that should get to Spain that the government has already included in its budgets the mechanism to channel those funds is for the government to simply write a provision of expenses and income where they include those 27 billion the government puts that money forth and then they recover that money as they fulfill the targets of the plan they present and I'm saying it because some people will say the money will not be here on February 1 or in July or in September yes but that Spain can start spending because Spain is putting that money forth and then we'll recover it later on but that is the schedule we're working with so what do we have on the table as star topics of the debate well first of all I'll start with the green because since it is something that you have organized with the support of the Green-European Foundation let's talk about the inside of things first of all we wanted to increase the climate objectives up to 40% at least so 40% of the money of the fund needs to be used for the adaptation and mitigation of climate change I think that we are going to achieve this in the parliament and that is important but then there is a more important debate there what sort of accounting is going to be set up I want to explain this to you because this has been one of the biggest fights that we have had these days how do we calculate what is an investment and what isn't an investment that can be included in that 40% well we have a regulation a European regulation the taxonomy regulation that explains that an investment in nuclear energy is not green that gas is not green it is fossil fuel so it limits the use of gas and that's this regulation that is very very important and that the political party Pepe hates they don't want that Pepe does not want for that 40% to be referred to that regulation because then they will not be able to spend that money in for instance doing gas pipelines or helping coal mines and financing nuclear energy so this has been a brutal fight that I believe we are going to win and that 40% will be referred to the taxonomy and that is a great piece of news if we manage to do that the other topic is that we want for the rest of the investment not that 40% but the rest the principle of not damaging significantly the environmental objectives this is a legal principle of the did not want that either and what does that mean that the other 60% you may not spend it on activities set up by the taxonomy but you can not spend it in activities that will effectively harm the environment and our fight against climate change and that was a very important part as well and I think that we will also manage to win that fight so from that point of view green matters seem to be good that is the parliament position but then we have to negotiate it with the council but these green matters are going to be well reflected and that was very important because we had a very important risk we were running there because 750 billion euros in next four years in Europe if this is not aligned with a green deal with a European green deal then forget about the green deal because we will never achieve neutrality in 2050 and we will not reduce 60% by 2030 so that instrument was very important and needed to contribute to our fight against climate change so it was a very hard fight but I think we are in the right direction we have another debate tomorrow we'll see how it ends and something else we didn't want that was also a very hard fight was that the European Commission and I'm sorry for the way I am talking there is this fund to stick their foot where they shouldn't because the egg fin civil servants sometimes love to to get their head in rooms where they're not invited and some bureaucrats of the commission wanted to benefit from this so that they could have a say in things where they shouldn't they wanted to reform the labour market or reforms that had to do with the pension funds and so on by linking it with the European semester I'm not going to take much time on that but we have that fight and it's still there and what we're saying is that the regulation that we're going to pass has some very specific objectives with regards to digital and green and so on the parliament is going to include a social component that is very positive but we didn't want it to be linked to the semester that would allow the commission to come to Spain and say well but the labour market since you are getting some of our fund I'm going to tell you how you have to do this and that because some euro and piece, a Spanish euro and piece liberal and right-hand side really wanted for that to happen I think that will not they will not win there either and then we had another fight another fight with regards to the microeconomic conditionality if you're going to link that fund to fulfilling the tax norms and that's something that the right wanted to happen what does that mean it means that right now as you know the stability and growth pact has been suspended until next year that is what allows Spain to have to do the deficit without having an infraction procedure started that is great news and it is a historic agreement in Europe this this agreement has been suspended and we had to do it because we are at a level of debt and deficit that is very high because we needed to face the pandemic and it's normal but we wanted not for next year but for the next year for the general clause of the escape clause and the pact to be once again enforced and that there would be a very strong conditionality if you could not start respecting the deficit pact that the commission would set they could suspend the funds from the recovery fund for you and that will be a very hard battle in the trial of that in the parliament we will be able to win that and use the position of the parliament to be stronger in the trial and I think it's important for some other reasons because we are at a moment and Natalia might be able to talk about it as well of rethinking what the great dogmas of the economic policies have been not just because of what the bank has done but because the stability pact being suspended is something very relevant and now at the commission and even the commissioner of the economy saying that the pact cannot go back to being what it was and that is great news I think that if we can start reviewing those dogmas of the limit of the 3% deficit and the output gap and structural balance and all of these variables that are impossible to respect to establish tax consolidation of countries I think that would be a very good piece of news so trying to land this topic I'm going to say that the regulation needs to be green I haven't said it but it's very important we are also going to have having gender impact evaluations in national plans so that we take into account what are the measures that are going to be put in place and what their impact in gender equality will be and that's very important because anti-cyclic politics never had any consideration traditionally for the impact that they had in gender equality for instance I always put the same example Zapatero when he was our president he did an investment plan it was all for public works and that is an activity that we all know that is intensely masculine labor where no women work so when we do a plan such as this one you have to also see how you maintain salaries and income not just for men but also for women and that will be included in the regulation and I'm very happy for that because it was very important for us so I will just end by saying that we will see this regulation and we hope to finish it in November I think it will have a nice green color it will be good for the environment and also for social elements and I think that from that standpoint it is a very good opportunity for Spain as Natalia was saying previously we also were very lucky I want to say this because the regulation is going to be piloted by a progressive government who has really shown their willfulness and their will to reduce inequalities and problems we had in the last few years and for the environment and I wanted to end with something that Natalia also said with the willfulness of diversifying economic sectors and that is a very important challenge that we have because something that I found shameless was the way in which the Junkers plan was executed in Spain because all the big companies in Spain got the Junkers plan and I think that that is what we need to avoid with the fund and that was what Natalia mentioned so I'm going to stop talking now because I think I talked for too long I hope it was interesting and I'm sure that there will be lots of questions and we will be able to answer them all thank you very much thank you so much Agnes yes it was very very interesting everything that you have told us telling us what happens behind closed doors and you know all of those things that happen in the EU those regulations that are not under that are not the protagonists but are in the end the key to everything else and to how things are done and how funds are being distributed so this is what in the enterprises are so let's see if in the end we have the results that you mentioned you have explained very well everything that has to do with the fund and to how it's structured and the possible uses for the fund that they have to go to climate change you talked about the taxonomy and that they shouldn't harm the environment that that is very very important because obviously we are seeing in these last few months that the immediate response to a crisis in certain cities and regions is to clearly start building again so they are betting on breaks and getting out of the crisis by speculating and building and eliminating environmental barriers to make these projects faster in the name of the job creation so that is very very important and we also have talked about the fact that the response to this crisis has not just been a response from the monetary policies through the European Central Bank but they also have been political tax policies we have suspended the economic dogmas of austerity and neoliberalism that had been that have brought us to a situation of worsening of our economy in 2028 with the great crisis of 2028 till 2013 until those effects were reduced but we are in a situation of risk as you said and actually the Bank of Spain and other bodies have said well yes that's very good but in 2021 and 2022 we can spend but then afterwards we have to stop spending and we have to start once again with the adjustment of the deficit by reducing our expenses so once again we face the danger of austerity policies to raise their heads once again so I don't know if we are really seeing how important this is and I wanted to ask you now to talk about other aspects we know of the importance of green taxes to go hand in hand with these transition processes and this ecological transition by sending signs by incentivizing and by de-incentivizing also certain policies certain activities, certain economy, certain investments certain production models but we also have seen although it didn't surprise us it did worry us to see that well the general budget of the state has been presented by this government, the only thing that has been debated on is the moderated increase of diesel prices which is just taking the difference of negative taxes that it had when compared to gas oil so they're not reverting it completely they're simply improving it a bit and this has started a whole battle not just amongst the right in feudal anus but also amongst the PNV that's a winner of the government that was the only topic up till now that was the only topic that has started up the debate so going back to taxes and green taxes that really worries me we know that Spain is one of the European countries that has less green taxes that less green taxes has and we know that in general terms our country has a 7 point deficit with regards to GDP and a tax collection when compared to the rest of the EU and now that we have seen the general budget for the state we see that there is a moderate increase of certain taxes certain tax rates but it is not sufficient to be in the right journey to reduce this tax deficit when compared to the rest of Europe and especially with regards to green taxes so what do you think about this how do you think we should act do you think it is the right time to respond with a more aggressive tax policies with regards to tax collections or do you think we have to wait for the economy to be a bit stronger what do you think about taxes green taxes where should we act upon what aspects should we consider to develop new tax rates and have new taxes or increase the current green taxes so tell us tell us about these taxes green taxes and I also wanted to ask you as well about the fact that big company groups in this country big construction companies have been really working to be the first ones to to be at the head of this effort to create infrastructures because under the umbrella of infrastructures there are lots of different things there is for instance water treatment plants or even highways so how do you see this with regards to the dangers in infrastructures what infrastructures should be covered by this fund and what infrastructures shouldn't tell us what would be the priorities in this ecologic transition because except for energy that has already been mentioned and it's a clear case what other sectorial policies do you think should be helped by these funds in order to make this transition a more agile transition since they necessarily have to tackle that thank you yes Natalia please yes one and the other you have talked about many different topics very important topics I would say with regards to green taxes and with regards to the fact that the taxi diesel seems to have been erased from the budget instead of the potential of the green taxes in consumption decisions investment decisions research and development decisions by companies we have seen it in the electric sector for instance where the price of carbon with regards to emissions and not just in Spain but in every country in Europe has really gotten the call out of the mix and that has allowed for a greater a greater production of electricity with gas instead of coal and mainly that was due to the fact that we set up a tax for coal it has created that disadvantage between the one and the other obviously we cannot leave it at that I completely agree with the evidence that gas is also a fossil fuel that generates less emissions than coal than burning coal but it's also fossil fuel and we mustn't forget that and obviously it should not receive recovery funds so I am convinced of the power of taxes of subsidies and fiscality in general to guide consumption decisions and investments now as for diesel regardless of the amount with regards to tax collection I think it is a lost opportunity because I think that although I mean I could although I think that the elasticity and not having changed the diesel consumption is not so high so we will not have managed to reduce the number of miles that are being covered with diesel vehicles we would have had a very low impact on the composition of the fleet and I don't know but what I do think is that the power of messages is important the message we send is we are decided to start this transition this ecological transition with the help of green taxes and then let's do it but we can't at our first try say ok where we thought there should be tax to at least have the same taxes for diesel and gasoline then we will withdraw it and what's the problem behind this well it's the fact that this is not the first chapter we also saw that previously where taxes to fossil fuels were behind the triggering of the yellow yellow vests in France and others we mustn't forget that taxes have to go hand in hand with other measures like compensation because although I do agree that we have to have a fiscality for fossil fuels we also have to take into account that certain collectives certain people cannot avoid for that tax too to have an impact on them for instance people who cannot change their vehicle they already have a diesel they cannot use public transportation because they live in so when we adopt a measure whether it's tax or whether it is a closing carbon coal plants or nuclear stations then it has to go hand in hand with other measures measures to compensate the situation so that those losers will not oppose to the change so that the PNV will not be against that measure or that the foreigners will not go against that tax so that they are not opposed to that tax that is part of the general budget compensating compensatory measures that have to be designed so that they do not lose that insatiating element for instance giving all citizens a check for the amount that will be collected at equal parts for that new tax that new diesel tax so that the citizens see that tax green taxes have benefits because money is being collected and so that they make the link between what they pay for diesel and the benefits that they get with that check so we have to think about taxes but we must not just think about the taxes and subsidies we also have to think about compensations I could maybe add that well there is a great debate about the reform of taxes in general in Europe and environmental taxes taxes in general because it is still one of the great problems we have with tax havens with regards to taxation competency of the different companies for instance corporate taxes there are measures that we have not been able to fight for for instance organizing a common basis for company taxes so that there are not certain companies in countries that become tax havens with their deductions and so on taxation is still one of the topics where we have to improve the situation we have an internal market that is very integrated and we have 27 different taxation jurisdictions that compete against each other and it's a great disaster and it is one of our greatest challenges for the next few years but we have making progress towards new tax figures that will allow for us to collect money but that will also allow for us to modify certain certain activities and certain decisions is advancing and there is now a debate with regards to the new resources out of those 750 billion in debt that we are going to issue the member states in July we are not in agreement with regards to how to repay that and that is a topic that is not known by everyone but we don't know how that debt is going to be repaid it has not been decided and there is a worry there because if we do not make a decision about the new resources of the union because we are the ones who have to repay that debt it will have to be the budget that will repay it and in the long term it could create cuts in the union programs that will be amazing and we have to avoid that so there is a debate about new resources of the union and amongst those new resources environmental taxes will have a very important role what we are currently debating our new figures such as the European tax to plastic that would be a great piece of news we are also talking about tax to kerosene planes and the right does not want us to talk about that not even talk but you know that you know that airspace industry does not pay any taxes for the kerosene that the EU and that was a measure that was put in place to allow for the development of this sector but now that we know that we need to reduce the air traffic within the EU we need a tax to kerosene that would be very important that is blocked the tax to plastic is not as blocked as the kerosene tax debate and another topic that is on the table is a tax for coal in the borders and this is something that is going to be approved I think it will be seen by all of us and it's the fact that products that have been manufactured outside of the EU that have been produced with high coal intensity will have to pay for an entrance tax and that is on the table and we will see some examples of that sort and they will have a very important role in the repayment of this recovery fund I think that this is something that is well thought of we are going to issue debt and the repayment will be achieved with some new taxes and some of those taxes need to be linked to the environment so we haven't won this battle because these new resources have not been decided no one has decided how this debt is going to be repaid but I think that we are opening the way to that road and that's what we need to fight Ernest, I think Fernando if you don't mind I have a question I would think it would be the greatest news to have that tax on coal at the customs at the border, I think it would be something that would help other countries to also be a part of this tax on coal because that would that would somehow allow them not to pay for those custom fees when they export to Europe I think that that would somehow allow for a fight against this delocalization so I think it would be really positive but I have doubts and that is why I am asking you this question because it's not a field that I understand or that I know from what point from the point of view of international relations is it something really feasible because I am scared of the fact that if the EU really fights for this custom fee for coal at the border and we set it up could this trigger sanctions commercial sanctions or custom fees wars because maybe the threat could be the one that would prevent us from adopting this tax well we have a bad precedent with this which is the digital tax the digital tax that should have been introduced a long time ago since Trump threatened us with a commercial war we haven't we haven't included it and this is a problem and I think that it's always better to develop this in the G20 when you adopt this decision in the G20 because this is something that they are waiting for I mean they are all waiting for Trump to lose the election so that we can reactivate this in the G20 and so that we can do it together with all the big economies this digital tax so the tax of coal at the borders should also be something that we could agree upon in a multilateral framework the EU is not doing anything we have to do it at the G20 that's how we have done it in the last few years but it's a risk but I think that the EU also has to risk things we have to be brave and I think that there is a risk of this getting a harsh response commercial war against the EU but the EU also has a strong position because in the end the market is the main market everyone wants to come and sell here so starting a war against the EU is not easy either so that's why when we talk about what interest do we have and having integrated instruments at the EU well in any case if that tax exists individually we could not do it as a country we either do it as Europe or we cannot do it that well the digital tax indicates that those dangers are there because we actually decided not to do it because of the threat that Trump issued but I think that the parliament at least has to fight so that the EU is braver and risks it because the EU in environmental issues should be the one that sets the threshold and the policies so that tax could then be copied by other economies this call but yes it's a very relevant question the one you asked me thank you okay let's see I have been listening to some of the questions that have been asked in the chat those people who are following on the debate and some have to do well some of the questions are for you Ernest how can we guarantee that the resources will be sent to where they should be sent and so that we do not misspend the monies and we don't fall into the traps that you have been mentioning is it guaranteed with the regulations that are going to be established and who would be the supervisor to make sure that the investments that did not fulfill the requirements and that did not meet the targets or goals should be paid back or should be cancelled that's one of the worries and the other question for Natalia has to do with the fact that energy transition is all very well and fine and promoting renewable energies and end-way fossil fuels but you have not said anything about the need to reduce consumption and have a degrowth in energy consumption how do you see that what part of the problem solution has to do with efficiency and saving degrowth of our energy consumption and I also wanted to ask you because it has been mentioned very often that we have to choose hydrogen as the great solution a great potential a great industrial technological development how do you see it both of you and Natalia Ernest and take into account that we only have 15 minutes left so try and answer but taking into account that we only have 15 minutes for the both of you if that's alright Ernest tell us how how Europe is going to make sure that the funds are well used I didn't say it but in the regulation we are trying to improve that we are trying to set up lots of expenditure control mechanisms and I think that is really worth it and actually that is quite cutting all the political parties I agree with that measures against the corruption and fraud and expenditure control mechanisms we are giving taxation authorities to the Olaf the anti-fraud office so that they have more competences with regards to controlling expenses and Olaf works very well they have uncovered lots of frauds in the use of European monies and we are going to empower them in the regulation that is the first measure now the commission is also going to be very vigilant with regards to the plan's objectives being respected so with regards to the semester reform part we don't really like that is why we tried for that to be weaker in the regulation there are other parts where we want the commission to be very vigilant and more specifically for instance with regards to the execution of that 40% that has to be destined to biodiversity and climate and if the taxonomy is the reference we are going to ask the commission and we at the parliament are going to be very vigilant as well we are going to ask the commission to be all ears and all eyes so that the taxonomy is fully respected we will include that in the regulation and we can even think about if we manage to include the taxonomy and I'm sure we will do it no one will even think about financing a gas structure because many countries want to use the money for that that is just a reality that's what they want the money for so those mechanisms against fraud and so that the money is well spent we are trying to reinforce them and I think that that will be very important but I also wanted to say something about that it's also going to be very important to have national controls because the discretionality of the government is going to be very very high and the commission is going to control this and it will be important but also in Spain I think it's important to demand from our government to our government at least to it's my government we will demand from them to be very strict in the execution so I don't know if it has been foreseen there should be a mechanism for the control of expenses of the European funds that will take place here in Spain I mean it would be a very good idea I'm sorry but we are I think that Devnes has lost connection we cannot hear him, he is frozen so different kinds of producing hydrogen I'm sorry, once again he's frozen I understand that it can be a non-polluting activity and a strategy on green hydrogen for Spain that could be very interesting but I will let Natalia talk about this because I don't want to talk about topics where I'm no expert ok I wanted first of all to talk about the topic of degrowth I think that what we have to do is grow better we have to have a technological change that will allow us to keep on producing but that production should not generate a emission of greenhouse gas I think that the pandemic has shown how costly it is from an economic and social point of view to degrowth how much should we degrow for without changing our technology that degrowth would turn into an enough reduction of emissions to be on the right track of not heating up the planet and not emitting too many CO2 or greenhouse gas effect gases I think that degrowth is not the solution and it would bring costs that we would not be willing to face and the first thing that we would have against us would be the reaction of society because growth is resources is activity is jobs is what we live of we will not want to fight against climate change if that causes degrowth and thus a loss of wealth but we don't have to degrow to have an economic activity that is compatible with a fight against climate change what we need to do is to grow better we have to invest in efficiency in energy efficiency of course but when we invest in efficiency in energy efficiency that investment is not translated into saving and reducing emissions because if we are capable of being more efficient from an energy standpoint it also means that the energy cost is lower and when the cost of something is lower its amount increases so there is a rebound effect and it will not neutralize all of the investment in energy efficiency but it does mitigate that initial savings so energy efficiency can be good although it might mitigate the effect of emissions of course it is but we mustn't think that if we save 100% of that investment it will in the end turn into a reduction of emissions I think and you were asking us Fernando at the beginning during one of your first interventions that one of the strategic things we need to do to have economic growth and to have a better ecological transition is to invest in R&D and the limits of current technologies are unsurmountable the only thing that will allow us to make progress is to have research because it will allow us to identify materials that are less costly but that are more efficient from an energy point of view or that allow us to store more gas or that can reduce losses so we really have to bet on R&D and I am saying this as a researcher I think that that has multiplying effects that are very powerful I think that in Spain there is lots of talent we have people that are really willing to put in place projects that could be very innovative and they cannot do it because they do not have access to funds or to investment and that goes hand in hand with the first step of hydrogen Hydrogen is a technology that will allow for the storage of energy and its direct use in certain industrial processes for which electricity is not feasible so we will have to generate electricity with renewable energies but if we don't have access to those renewable energies then hydrogen could be an alternative decarbonisation path it's very interesting, I am not a technologist so I cannot really assess whether the current maturity of the technology is enough or what are the skills that we currently have in Spain if we are in an ideal position but I do think it is very interesting to start thinking about certain strategic lines and to adopt as as a strategy for the country in order to develop hydrogen I insist we need R&D we need research and development and I think that both are complementary well about hydrogen Fernando if you allow me I just wanted to say that something that is worth mentioning without being an expert is not that I was saying there are activities where electrification is not possible and hydrogen does offer a solution one of those situations is the airspace sector for instance electricity in planes is very complicated and there is currently working on the development of a hydrogen commercial plane for 2030 so I don't know if that is a possibility but we have to find an alternative for the airspace industry because it is an important problem and that is why the taxing kerosene is so important because if we tax kerosene then other companies will also find or look for alternatives and that is what really triggers that whole technological process so taxes don't just affect consumption they also affect the incentives and the way in which companies try and find alternatives ways of providing the same service then I think that the airspace sector as Ernest was saying is one of the most polluting sectors and they have not been limited enough and I think that taxing kerosene would be a catalyst of R&D to find alternatives and as Ernest was saying hydrogen could be one of those alternatives Pepe Larios is telling us in the chat that no way that hydrogen is very bad so I see that there is lots of debate in that sense yes it's true hydrogen is part of a very hard debate and degrowth as well I know that my position is that we need to degrow a lot in unsustainable activities and grow in sustainable activities we need to find that balance I don't know what the final balance would be in GDP but I know what the balance would be in terms of job creation that will be very positive for the creation of the health of the planet and all of us and of the economy in general so since we don't have much time Natalia you said that you wanted to talk about one topic and it is actually quite relevant because it has to do with all the doubts that we have we have the policies that we have we have the state that we have which is a state a plural state and that has different levels of competencies, jurisdictions and administrations so in Spain we have our president of the government say that the distribution of the funds will also have a component a territorial component and that the regions are going to manage 50% of the funds and Agnes was saying that things have to be done as they should be done and funds will not be sent and the activities that are not the ones that we agreed upon and states have a fundamental role in the control of how the money is spent and we see that the presidency has created an office that will be directly linked to the presidency and the ministry of the economy about the role of the regions and the way we spend these funds how do you think this will work Natalia what do you think about this system that the government is setting up for the said funds so that we do not misspend the money and so that this is not inefficient and so that it is relevant to the objectives that the EU sets up and then lastly, I would like for both of you to have a couple minutes to just give us some general idea about what it is that we are that we are risking in Spain and in the EU where this ring transition with the policies and the resources that we have what would happen if this failed what would happen if this were not done if our country did not really benefit from this opportunity that we have what would be the consequences well Fernando I have to apologize because I really don't know what would be the final design of the governance of the plan but I can tell you I can share some ideas with you with regards to that I don't think it's bad that part of the money is distributed close to where the investments are taking place but I think that the state needs to have a central role and they have to follow up on the management and in the mechanisms of allocation and so on and it is so much the case that I would say that the decision should not be for the national states but even the the EU should be the one deciding if we want to invest in renewable energies instead of allocating money to each of the countries or to each of the regions because it would be simply an allocation with different criteria than the ones that are going to be applied to decide how the investments are going to be done than we should say in Europe we want to have a thousand megas of solar energy to do that investment well obviously it will be Spain, it would be Italy, Greece the southern countries if we do a distribution by national quotas then we will maybe violating the principle of where it would be best to do those investments because maybe solar in Spain, Italy and Greece but maybe hydraulic would be in Denmark and in Germany so there are reasons why the allocation should be done at the highest level so that it is more efficient obviously there should be some mechanisms to create some equality amongst different territories but applied to the Spanish case I think that the decision, the decision of the lines and the projects where we need to invest should be at a higher level the level of the central state regardless of the fact that there will be more investment in recycling in certain regions in other regions there will be more investment in factories for the manufacturing of electric vehicles and if that allocation is being done before the definition of the projects and then we will distort the correct allocation of those funds and let me just be a bit more precise to the hydrogen because I limited to one of the ideas that I said at the beginning that has to do with complementing reforms and interventions and I think the hydrogen is an important thing we can invest in hydrogen but if we do not change the regulation of electricity so that hydrogen can benefit from the low costs of producing renewable energies then it's not private to reduce the cost to produce hydrogen if we do not make sure that the low cost of producing electricity where the renewable energies also will benefit hydrogen because you know that with electrolysis we are creating hydrogen so hydrogen requires electricity for its production so yes investing in hydrogen yes but with reforms on electric regulation that will allow for those lesser costs that would then have to impact on prices well with regards to the management of funds in Spain well I think that the government wants to share the management of the funds there were recently there was recently a conference of autonomic presidents where we said that we want to involve the regions and obviously it makes sense I mean there's only going to be a big military and it will all go through the general budget of the state but it does make sense to have a co-governance in a country that is so decentralized as ours if one of the programs is going to be the digitization of the administration because it's very important as a civil servant I have felt the delays that we have in that sense when I worked for the ministry of foreign affairs but I think that the administrations also require this so I think that this collaboration is going to be much needed and then there is another topic we're insisting on which is the participation of city councils part of the fund is linked to climate change and it will have to come from renewing buildings, mobility and so on that will be an important part of the fund and city councils have to have an important role in that sense and they have sent this letter to the negotiators of the fund to all the groups but also to the president of the commission the mayor of Barcelona, Paris, Milan of Budapest, Warsaw asking us to have a direct management of part of the fund and I actually support that, that will be an important part and then to answer to your last question Fernando, we are risking many things here so this operation needs to be successful due to many reasons first of all because the first big project of common debt to make transfers to different member states needs to be successful because otherwise those of us who have been fighting for euro bonds for integration of not just the single market but also political tools, fiscal taxation and so on this is a great step forward and if it does not if it does not turn out to be successful then it will explode in our faces so this needs to be the embryo of a real European union with capacity, with investment capacity and then from a Spanish standpoint obviously we are risking the transition of our productive model that we require we cannot keep on paying the electricity bill that we are paying because we are dependent on other countries we cannot just depend on tourism because that's why our economy is suffering so much I mean tourism is a sector that is suffering a lot and we need to give them our support and they always tell me that when we have debates I know that's true it requires help but we cannot live just of tourism the percentage of tourism and our GDP cannot be that high we need to develop leading industries and energy or in the case of Barcelona for instance which is the case that I know health there are lots of possibilities of really launching sectors that are in a transition process or that could be leading sectors we haven't talked about that but we need to really win the race of electric vehicles that is very important for our country cars I know that we environmentalists have a very complicated relationship with the automotive industry but there are lots of jobs in that sector and it is a sector that we have to push towards electrification so we have to win this race the EV race from an industrial standpoint that's very important because if we do not win this race and the electric vehicles are manufactured somewhere else we are going to really suffer from a job standpoint job creation standpoint and with regards to production so that race needs to be won and these funds could be useful in that sense so we really are risking lots of things so those are the two things that I would say we have to continue with that new idea of Europe that we're starting to imagine and then the transition of our productive model that we need in Spain so I would like to say to finish that I completely agree with everything that Ernest has said so I'm not going to repeat it I will simply be a bit more dramatic I think that we are playing this match point we are we are fighting against the the dominance of the extreme right in Europe if we do not have a successful result then the extreme right will win austerity brought poverty brought inequality and it brought extreme right and I think that if this project this European project fails then once again we will be giving wings to that extreme right and they would be in the institutions and they would end with this project ok well thank you, thank you very much Natalia Ernest it was a very interesting debate you were you had very interesting interventions extraordinary interventions and we have run out of time we talked for six more minutes than expected I wanted to thank the foundation Transiton Verde the European foundation for organizing these sessions and I think that we have to congratulate them for the success because of the number of participants that we had in each of the sessions and also because of the level of the participants and the importance and depth of the topics that were dealt with we are not going to close the sessions so with this because we are going to organize more debates actually on November 5th the foundation Transiton Verde is going to organize a debate on transformative cities cities of the future on November 19th we will have another session on third transition and on December 3rd we will have one on the touristic model that we currently have in Spain that cannot have the GDP weight it has so that keeps us submitted to the risks that a pandemic such as this one entails with tourism going down so thank you once again Natalia Ernest and we invite you all to be present during the next activities that the foundation Transiton Verde is organizing you will find all the information on the foundation Verde.es and well I wanted to thank you for being here for participating and that is all thank you thank you very much I hope that this recovery fund for ecologic transition of our economy is a great success so that Spain can really face its present and future challenges much better than it has done until now