Spain Receives The First €9 Billion From Europe

spain savings rate

Yesterday, the European Commission transferred to Spain the first €9 billion euros of the €69.5 billion it has been allocated from the funds of the Recovery and Resilience Mechanism, within the framework of the Next Generation programme. This amount represents 13% of the total. It is a long-awaited injection, second only to the amount received by Italy, which comes almost a year and a half after the declaration of the pandemic.

It is, in any case, the end of a road that also serves as a beginning, because the payments will be periodic until 2026 and because they will be subject to the approval of such crucial reforms as those of the labour market or the pension system, which are under negotiation, opening an era of regulatory changes.

The plan for the funds hinges on three axes: ensuring a green transition – with 40% of the funds and the objective of neutral emissions by 2050 -, supporting the digital transition – with 28% of the funds including €3,000 million to digitalise SMEs and €3,200 million for the Administration, among others – and reinforcing economic and social resilience, with special attention to reducing temporary employment (with an investment of €2,400 million) and high youth unemployment (€2,800 million).

Meeting the targets is crucial to receiving the rest of the funds as Brussels will be reviewing compliance with the 212 major investments and reforms included in the Spanish plan, which was given the final go-ahead on 13 July. The Spanish plan includes the digitalization of one million SMEs, the rehabilitation of a million homes, the training of 2.6 million people in digital skills, a fleet of 250,000 electric cars by 2023, the promotion of the Mediterranean and Atlantic corridors, €2.8 billion to reduce youth unemployment… According to the payment schedule, a further €10 billion will be received by the end of the year, which is taken for granted as it is money for projects or measures that have already been completed. By mid-2022, a further €12 billion would be paid out, pending the labour reform. Thus, there will be at least €31 billion in one year, which will force all administrations to mobilize. Of the €69.5 billion, €7.25 billion have already been allocated to the autonomous regions so that they can focus on ecological transition, housing, education and health, in an attempt to ensure maximum implementation on the ground.

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.