“European funds are not reaching companies. There is total inefficiency”

Isabel Dutilh

Isabel Dutilh, director of Elecnor, Banco Alcalá and Millenium Real State explains in an interview with Mari Pinardo in the magazine Consejeros that “Europe has to have control of the funds and this requires a certain amount of bureaucracy, but in the end it is so much bureaucracy that it generates frustration and people give up applying for them”.

Q – There are continuous and constant legislative changes, what do you think of the legislative “diarrhoea” we seem to be experiencing?

A – What most paralyses the entrepreneur is uncertainty. When you have no certainty about what the regulatory framework is, operations are paralysed because you cannot make long-term plans and the businessman looks at the medium to long term, especially when he has to make investments. Businesses need less regulation, more predictability and better quality. The hyper-regulation in Spain does not help either. We have European regulation, which affects us directly, state regulation, that of the autonomous communities and local regulation, and they do not stop, it is a diarrhoea of regulations and also of very poor quality. How do you reconcile the new regulation with the old one, what is the transitional period between one regulation and the previous one?… And what is happening is that they are not well drafted and are technically deficient.

Q- Most things are being done by Royal Decree, how healthy do you see the legislative process in Spain?
A – We have a system that is very well designed to involve all stakeholders in the ordinary legislative process. In a law that is processed through the ordinary system, citizens in general and the sectors affected can contribute ideas and make amendments. And this is how a law is enriched, by listening to those affected. But issuing a royal decree from one day to the next and without anyone knowing about it leads to nonsense. In just one of the last omnibus decrees, more than 100 articles of the law of criminal prosecution have been modified. In addition, a kind of blackmail is being practised by forcing a vote on several unrelated issues in one and the same decree. The decree law is bad, but the omnibus decree law is a real ‘totum revolutum’. Moreover, a bad law has a cost because all problems of interpretation of laws end up in the courts. The bad administration of justice in Spain has a high cost and is paralysed, among other things because ¡Covid generated a lot of litigation, the problems generated by the pandemic have not been solved. As a general rule, law firms were in a bad way in 2023. And many small offices have disappeared because they cannot bear the burden of the paralysis of the courts. In addition, we have to add the strikes by court officials, who may have their reasons, but the cost of preparing a trial that is then suspended is high and you cannot collect the bill for this procedural milestone. The drop in the number of members from small firms has been very noticeable. But the same thing has happened to the big firms because when there is a crisis, commercial law is usually more affected but it is compensated for by litigation or labour law, but litigation and labour law, with the courts as they are, have not been able to invoice. It has formed a ball that is difficult to digest, boosted by bad laws.

Q – Is there no limit to the creation of decree laws
A – Actually, the decree law according to our legal system is for cases of urgent necessity. Not everything is urgent, it is absolutely perverted. The system is fine, the problem is that it is not respected. And it happens with everything, politicians are misusing and perverting the institutions.

Q – Let’s talk about the European funds, have you seen them, are they there, are they expected?
A – European funds are not reaching companies. There is total inefficiency. They are not reaching companies or even individuals. They are not getting through. It is Europe’s problem. It is true that Europe has to have control of the funds and that requires a certain amount of bureaucracy, but in the end it is so much bureaucracy that it generates frustration and people give up applying for them.

Q – They have disbursed €60,000 million?
A – And you don’t know where those millions are. It’s a shame because in the end, when the deadlines are running out, they will be given directly to four or five big companies to resolve it instead of capillarizing all that money. But it is mainly due to the distrust of the public towards the private sector

About the Author

The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.