The European Commission today gave the green light to the review of Spain’s Recovery and Resilience Plan, a decision that will allow Spain to access almost 94 billion euros in additional European funds from the macro anti-crisis program adopted by the Union to respond to the economic crisis caused by the pandemic.
The collection of aid is conditional on the implementation of economic reforms and specific commitments negotiated in 2021, but member states had the possibility of reviewing some of these measures as long as they could justify it due to “objective circumstances.” Brussels has agreed to review 52 measures in the case of Spain. Thus, the new version of the Spanish plan replaces the obligation to implement a toll system on State-dependent highways with different commitments to support the transport of goods by rail, as La Vanguardia reported on September 21.
The increase in energy costs derived from the war in Ukraine and the implementation of upcoming measures at European level to internalize the costs of using certain emissions have convinced the European Commission that the request was justified and its services have concluded that the measures proposed as an alternative to tolls keep the level of ambition intact. The approval of the addendum to the Recovery Plan, which must now be formalized by Ecofin within four weeks, opens the door for the Government of Spain to now request Brussels for the fourth tranche of non-refundable aid (about 7.7 billion of euros, an amount resulting from the upward review of Spain’s financial needs as a result of the impact of covid) as well as another part from the RePower EU initiative (about 2.6 billion).
Furthermore, as a result of today’s decision, Spain plans to request the delivery of soft loans worth 83,500 million euros, practically the entire amount assigned by the EU (84,000 million). The execution period of the Next Generation EU funds, for all member states, expires in August 2026: what has not been spent on that date will be lost, which is why the community executive has asked Spain to strengthen its administrative capacity to manage funds.
Brussels hopes that the Spanish Government will soon submit the request for the fourth tranche of aid, without waiting for Ecofin to confirm the review of the plan adopted today by the Commission. Among the measures that the Government had to approve in order to access these funds, the pension reform that was approved last March stands out in particular. Although Brussels has not yet formally evaluated whether these introduced changes are sufficient to meet the sustainability requirements demanded by the EU, Minister José Luis Escrivá’s team negotiated their content in close contact with the Economy Department of the community executive and is confident that the reform will pass the test.
“The modified plan places emphasis on the green transition, allocating 40% of available funds to measures that support climate objectives,” the European Commission explained in a statement. Specifically, it contains 30 new measures in this area, in addition to seven new investment commitments to meet the objectives of the RePower EU plan, launched to reduce dependence on fossil fuels. “The digital ambition of the Spanish plan has also increased thanks to 18 new measures that will help encourage the development of advanced technologies, support start-ups and invest in R&D,” celebrates the community executive, who recalls that the total funds allocated to Spain, in the form of direct aid and loans, amounts to a total of 163 billion euros, the second largest amount of all the plans designed, only behind Italy.
Spain is the only country of the Twenty-seven that has requested three tranches of aid and has received the corresponding reimbursements for all three requests. In total, Spain has so far received 37 billion euros from the EU Recovery and Resilience Plan, 28 billion euros corresponding to three first non-refundable disbursements and 9 billion that were delivered without conditions with the launch of the program. Until now, however, it had not requested loans, as on the contrary Italy has done so as not to see its economic policy conditioned. Although the request to review the measures contained in the initial version of the plan, as other countries have done, has slowed down the deployment of funds at the European level, Brussels is confident that in the coming months it will return to cruising speed.
