Recovery Fund

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Economía Asks The Autonomous Communities For Plans To Invest The Extra 22 Billion From The Recovery Plan

Spain is finally eligible to receive just over 161.5 billion euros from the European Recovery Mechanism for the Covid crisis, some 22 billion more than the 140 billion initially planned from the sum of transfers and loans from the Next Generation EU fund. The increase comes about because the country’s poor economic performance means adding 7.724 billion in direct aid to the 69.510 billion originally allocated and because the distribution…

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Spain Has Executed Less Than A Third Of The European Recovery Funds, Some 6.5 Bn Euros, According To FEDEA.

FEDEA (Fundación de Estudios de Economía Aplicada) analyses existing information on the implementation and execution of investment projects and aid programmes included in the Recovery Plan (RP) and financed by the EU’s Recovery and Resilience Mechanism (RRM). So far, programmes and projects representing about one third of the planned expenditure have been launched, but with significant differences between headings. Of the 24 billion of RRM funds budgeted for 2021, 20…

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Spain Receives The First Tranche Of The EU’s 10 Billion Euro Recovery Fund

The European Union has disbursed the first tranche of the €10 billion recovery fund to Spain on Monday, European Commission President Ursula von der Leyen and Spanish Prime Minister Pedro Sánchez have confirmed.“The first Next Generation EU payment, €10 billion for Spain, is on its way! Congratulations to Spain,” the German announced on her Twitter profile. “I hope to have more good news for other EU countries very soon”, she…

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Brussels Backs Spanish Plan For Investment In Electric And Connected Cars With 3 Billion Euros

Last week, the European Commission gave the go-ahead for the first 10 billion euros of the recovery fund to reach Spain, pending approval from the other Member States. Today, Brussels has given the green light to the first of the six “Strategic Projects for Economic Recovery and Transformation” (PERTE) which Spain has presented, dedicated to the development of electric and connected vehicles. “This €3 billion Spanish plan will help to…

Just Sanchez

European Funds Get Bogged Down in Bureaucracy

According to El Periódico, “the excessive expectations that had been created about a rapid arrival of European money to the Spanish economy are colliding with bureaucracy and the lack of communication between administrations and companies”. The Ministry of Finance claims that 60.9% of the funds planned for this year have already been authorised – through the Council of Ministers and the different sectoral conferences – and that 25.5% of the…

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The Mirage Of The Recovery Plan

Juan Pedro Marín Arrese | The European plan is still sleeping the sleep of the just. The first consignments are expected after the summer if there are no setbacks and delays. A common occurrence, judging by experience. This delay contrasts with the huge injections of spending on the other side of the Atlantic. Jerome Powell’s tussle with the markets illustrates the extent to which activity has regained its pulse. Once…

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Italy And Spain, The Countries To Benefit Most From The Recovery Fund: €172.8 Bn And €140 Bn, Respectively, Between Transfers And Loans

The Recovery Fund exceeds the Merkel/Macron proposals with an amount of €750 billion euros (equivalent to 5.4% of the EU27’s annual GDP). Italy and Spain would be the countries to most benefit. This was something that was quickly reflected in the performance of peripheral credit on Wednesday, especially in the financial sector, with improvements on average of about 10bp in the CDS of banks in both countries. For its part, France and Germany will receive transfers of 39 Bn and 29 Bn, respectively.


A Game Changer For The Euro Awaits

Olivia Álvarez (Monex Europe) | If the European Commission can get the EU-27 members on board with a project resembling the German-French initiative, markets could move significantly. Peripheral spreads can narrow notably from currently high levels and European stocks could deliver some rare outperformance. The euro could certainly recover from its depressed levels against the US dollar and other safe heaven currencies as the Swiss franc and the Japanese yen. This is particularly true given the notably bearish sentiment the single currency has recently attracted in futures markets.

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Euro Area: Finally A Step In The Right Direction

BofA Global Research | The Franco-German recovery fund initiative is a small positive surprise: EUR 500bn, joint EU issuance, allocated as grants. Caveats: it is too small in size to fix all problems, its exact design in allocation, repayment and timeline will be crucial. The political symbol could be strong, though, if the EU 27 can agree. The ECB may feel temporarily relieved now.