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GOVERNMENT investment in public works and services has plummeted by 90 per cent in the last three years due to funding cuts, according to the Organisation for Economic and Cooperative Development (OECD).

Expenditure on infrastructure and scientific research – which includes medical investigation – went up by 3.6 per cent on average every year between 2002 and 2007, and in 2006 reached over 46 billion euros, rising to 46.7 billion by 2009.

But in 2013, spending in these areas nosedived to just eight billion.

Investment in medical research went down by 7.22 per cent, following the trend of the previous year, 2012, says the Higher Centre for Scientific Investigation, which was nearly facing closure last year due to lack of funding, and the Prince Felipe Investigation Centre in Valencia, which was forced to make 114 scientists redundant in 2012.

Spain, with its change in government and policies, went from sustaining its investment levels in 2010 with measures such as the so-called Plan E for building local infrastructure, to suffering a fall in this expenditure of 13 per cent by the end of the year, by 36 per cent in 2011 and then by 48 per cent in 2012, according to European think-tank Bruegel.

Public investment in the first nine months of 2013 was 9.7 lower than in the same period in 2012, but the full figures for the year have not yet been released.

The budget for 2014 includes just 12 billion euros – just over a quarter of that which was set aside for infrastructure and scientific research five years ago.

Only Greece and Portugal have suffered greater falls in public spending on services and tangible assets, Bruegel says.

And in the case of Spain, many major works which were started in 2006 or 2007 have been abandoned at half-mast ever since because of lack of funds.

The ‘metro-tunnel’ providing a transit train link between the Oviedo and Gijón campuses of the University of Asturias was abandoned after work started on the 280-million-euro project in 2006 as there is no money to finish it – but it costs the taxpayer 100,000 euros a year to keep the half-built structure maintained so that it does not fall into ruin and become dangerous.

And most of the cash spent on infrastructure in Spain is destined for maintenance and depreciation of existing roads, buildings and facilities – in fact, this costs 147 per cent of the annual figures budgeted for investment.

Just to replenish funds used on maintenance, investment would have to increase by 47 per cent.

Bruegel says this lack of investment is ‘harmful’ to Spain’s economy and reduces its productivity and competitiveness, whilst supposing a very high cost in terms of loss of employment.

Spain needs to put pressure on Europe to relax its demands over paying back its debts to allow it to spend money on growth and repairing society, the think-tank stresses.

This is especially the case now that, for the last 14 months, Spain has gone from being a net recipient to a net contributor to the EU pot.

Bruegel says public funding cuts always translate to higher unemployment and, in the case of Spain, the Plan E investments created 420,000 positions and left construction engineers with zero jobless figures – yet now 10 per cent of those in this profession are on the dole.

And with 20,000 scientists having lost their jobs in Spain, the ‘brain drain’ as a result of mass migration by qualified investigators means the country is at risk of ‘serious social consequences’ if it fails to keep up with technology and medical research.

Experts at the top end of the scientific professions say the situation for medical and technology progress and development in Spain has reached a ‘critical’ stage thanks to lack of funding, putting ‘a major part of the country’s development and innovation’ at risk.

A high-level science professor says Spain needs to increase its tax income by creating jobs first, which means investing more in I+D (investigation and development) to help private-sector companies move with the times and both these and public services to continue to improve and keep up with – or even get ahead of – the rest of the world.

Otherwise, the professor says, Spain risks becoming ‘a second-division country’.

He says Europe and Spain in particular should use public investment to stabilise a flailing economy and stimulate growth in periods of financial crisis, rather than simply cutting back, and that the EU should encourage spending by the European Bank of Investment (BEI) and countries with a budget surplus in other member States which are struggling.

 

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