Rail, construction, public works, carmakers, local authorities – who gained from the EU’s post-Covid recovery stimulus?
France’s Banque Publique d’Investissement; the Spanish rail network operator Adif; and Rete Ferroviaria Italian, its Italian equivalent – these are just three examples of the entities that have received the most funding from the EU’s post-Covid Recovery and Resilience Facility (RRF).
Who comes next? We now know the 100 biggest beneficiaries of the RRF in each country. Since a European Parliament decision in 2021, member states are obliged to publish this list and update it twice a year.
“This is a welcome improvement”, agrees Karolis Granickas of EU Open Spending, an NGO which advocates greater transparency in state aid. “But we were starting from a terrible position. The Commission did not include any obligation for member states to report on the beneficiaries of European money, probably because it was focused on spending the money quickly.”
What do these lists tell us? First of all, the share of each country’s funds channelled to its 100 biggest beneficiaries reflects the greater or lesser concentration of resources in the hands of a few. In Italy, the top 100 recipients shared 34% of the money received by Rome. This proportion is fairly close to that of France (27%), but higher than Spain (14%).
The second takeaway is that these lists do not reveal who actually makes use of the funds. That is because many of the names are public bodies that merely act as intermediaries between the government and the organisations that use the money on the ground.
Such is the case with BPI, France’s state investment agency. As France’s biggest official beneficiary, BPI has received more than €2 billion to date. But it only retains in its coffers the margin it earns on each of the funding applications it processes. The remainder ends up with businesses, which it helps with innovation in order to drive forward the green transition.
“The quality of the data provided is very disappointing. It’s a form of non-compliance with European law”, complains Kévin Gernier, head of anti-corruption advocacy for the NGO Transparency International France. ”You have to go down to thirteenth place on the French list to find the first real final beneficiary.” Namely the company Nacre, whose aim is to create a biorefinery in the Pyrénées-Atlantiques region.
Over in Italy, public intermediaries are also plentiful, particularly in the form of local authorities. The Italian top 100 includes 16 regions, 12 municipalities, 16 central state agencies and 5 ministries, alongside 27 private companies.
With this limitation in mind, it is nevertheless possible to identify the sectors favoured in each country. National governments are responsible for implementing the priorities laid down by Brussels, which include allocating 37% of the funds to climate projects and 20% to ICTs.
What Spain and Italy have in common is the priority they give to developing rail transport. SNCF (the French rail operator) is well within France’s top 100, but has received only €50 million (divided between its “Stations and Connections” and “Passengers” branches). In comparison, Italy’s RFI has received €22 billion and its Spanish counterpart €2 billion.
Elsewhere in France’s transport sector, €175 million went to the national rivers agency (Voies Navigables de France, VNF), which came ninth in the table. Between 2020 and 2024, this sum “enabled more than 100 operations to be carried out”, including the “renovation of structures, restoration of dykes and riverbanks, automation of locks, development of services for users, work to supply water to rivers and canals, and preservation of water resources and biodiversity”, according to VNF, which operates 80% of France’s navigable waterways.
Most of France’s public-sector recipients are in the cultural domain (€561 million, or 7% of the total distributed to the top 100) and the university and research sectors (€1.2 billion, or 15% of the top 100’s total).
The latter included 14 universities and 7 student service providers (Crous), which mainly received funds for the thermal renovation of their buildings. “€6.7 billion was allotted to energy renovation in the French recovery plan, of which €5.8 billion was funded directly by Brussels”, clarifies Etienne Charbit, Europe project manager at Clerc. “Two-thirds of it was earmarked for public buildings.” This was a matter of urgency, notes France Stratégie, a government think tank, since these buildings tend to be “very dilapidated and consume a lot of energy”.
Have the renovations helped to reduce that consumption? While the French finance ministry boasts that it has renovated 8.75 million square metres of public buildings, Etienne Charbit advises caution: “Many of the renovated buildings only required changes to the lighting”, he points out. As of today, “France has not carried out the measures needed to meet the minimum EU target of 30% energy savings per renovation project”.
And what of the actual companies commissioned by the ministries to carry out the renovation work – in other words the real final beneficiaries? France Stratégie offers details: “83% are small businesses, accounting for 63% of the total cost of the work. […] Next come mid-sized companies, which carried out a third of the work in terms of amounts, and then large companies at just 3%.”
In addition to its positive effects for emissions and the national public purse in a tight budgetary context, the focus on renovating public buildings is having a welcome impact on the labour market. Etienne Charbit explains: “It has allowed for the training of groups of tradespeople, as there is currently a shortage of labour for high-performance renovations.” However, this shortage has not affected the heritage sector, which is the current priority of France’s Ministry of Culture.
The Centre des Monuments Nationaux (CMN) acknowledges that “thermal renovation has been a central element of the stimulus plan, which may have led to saturation in the building sector”. To date, it says that it has received €253 million from the RRF. “However, the CMN’s projects are in the field of heritage restoration, which is not in direct competition with thermal-renovation projects for modern buildings. The companies involved have specific expertise, which has limited the impact of labour shortages on our worksites.”
Turning to the private companies in the member states’ top 100 lists, the majority are large firms.
This is the case for Greece. Athens has vaunted its support for small businesses using RRF funds: out of 330 companies assisted, 166 SMEs received a total of €2 billion. But the 20 large private companies on the list took €3.7 billion, according to the Greek outlet MIIR, a partner in this survey. Most of this was received in the form of loans, and carried the aim of expanding and greening the energy network. Gek Terna Group, for example, received €250 million to build a large-scale energy-storage facility at Amfilochia on Greece’s east coast.
In Spain it is the automotive sector that stands out, a reflection of the country’s specialisation. Of the €1.3 billion received by the biggest private players, €409 million was used to boost battery production (1) and €456 million went to carmakers to develop electric cars. The recipient firms included Volkswagen, Stellantis, Mercedes and Ford, according to the Civio Foundation.
In France, a similar role is played by the country’s large industrial concerns in sectors such as cement, wood, paper, electricity generation and heating. This is consistent with the emphasis placed by the French recovery plan on industrial regions, as documented by France Stratégie. Decarbonising production processes is the overall objective, which is then tailored to the specific characteristics of each sector.
In France, the list of the 100 biggest beneficiaries includes six companies that operate one or more sites among the country’s 50 biggest emissions sources. One example is the steel giant Arcelor-Mittal, which in September inaugurated a new furnace at Fos-sur-mer which uses more recycled steel, all with help from the RRF.
Another of Arcelor-Mittal’s stated goals is to replace coal with gas in its blast furnaces. In this sector, points out the Bruegel Institute, the ultimate stage of decarbonisation remains green hydrogen.
“In 2023, industry emitted 17.5% of [France’s] national greenhouse gas emissions”, according to the Climate Action Network (CAN), and “71% of industry’s emissions come from three sectors: steel, chemicals and construction materials”. So it’s only logical that these major players should be among the top 100 beneficiaries of the RRF in France.
Aurélie Brunstein, head of industry at CAN, elaborates: “The French economy cannot be decarbonised without including highly polluting sectors. And financial support from the state seems essential, given the massive investments that need to be made without delay. But there is also the question of the conditions attached to the public aid received, whether European or French.”
That imperative was echoed by the European Trade Union Institute following the publication, in late February, of an EU strategy for the decarbonisation of industry.
Indeed, there is a prime case study in France: the chemical giant Arkema has received €14 million from the European recovery plan. However, the company is currently in the spotlight because of an ongoing redundancy plan at one of its sites in Isère, and because of its role in pollution by PFAS (the family of toxic compounds known as “forever chemicals”) south of Lyon.
The non-industrial private companies in France’s top 100 are all in the digital sector (SFR, Orange, SCC France and Sopra Steria Group). Their task is to upgrade government services, with a focus on cybersecurity.
The roll-out of fibre-optic networks has been another French priority, as demonstrated by the presence in the top 100 of two syndicates of local authorities seeking to improve their infrastructure. The Dordogne’s Syndicat Mixte Périgord Numérique and Brittany’s Mégalis Bretagne both collected €72 million. The two regions are notably under-served.
In conclusion, the national lists give a somewhat clearer picture of how RRF money is being used on the ground. But to improve the transparency of this unprecedented European initiative, higher quality data is needed. The existing gap poses serious risks, which will be explored in the next paper in this series.
(1) According to the Bruegel Institute, Spain currently has 7 companies producing batteries for electric vehicles. Capacity is set to increase significantly over the next few years, given the projects already underway or announced.
Translated by Voxeurop
Original source: https://www.alternatives-economiques.fr/fonds-europeens-post-covid-secteurs-gagnants-pactole/00114303
