Incognito cleared. The reform and investment plan of Spain obtains the “positive assessment” from the European Commission. Thus, it surpasses the first barrier to access the 69,500 million euros in direct subsidies (the part of the soft loans until completing the 140,000 million that correspond to the recovery fund, have not yet been required). The next step for the money to arrive will have to be taken by the Finance Ministers of the Twenty-seven at an Ecofin meeting to be convened for July. Their green light (they have a term of up to four weeks) would allow a first installment in the form of a 13% advance in the coming weeks, around 9,000 million euros.
«The Spanish plan will help to effectively address the challenges identified in the context of the Semester; contain measures that effectively support the green and digital transitions; and contribute to strengthening the potential for growth, job creation and economic and social resilience ”, is highlighted in the announcement that Brussels has launched, and that has been simultaneously with the arrival of Ursula von der Leyen to Madrid before stopping in Lisbon in the morning to confirm to the Portuguese Government also a positive evaluation of its recovery plan.
In the report prepared by the technicians of the Community Executive since the Spanish project arrived in Brussels, on April 30, it is highlighted that the dedication of “40% of its total allocation to measures that support climate objectives”, thanks to measures to promote urban development, sustainable mobility, increase the energy efficiency of buildings, decarbonise industry and reduce energy dependence, as well as the deployment of new technologies for green hydrogen and renewable energies.
At this point it is emphasized that this package of initiatives and other additional will help mitigate the adverse effects of climate change “Preserving coastal spaces, ecosystems and biodiversity”, in addition to “promoting the circular economy by improving water and waste management.”
The digital transition, the other major objective that European plans have to be subject to in order to access aid, involves a dedication of funds of 28%. And it includes the digitization of public administration (4,600 million). It also includes the same investment (4,600 million) to promote the digitization of industry and SMEs, investments in artificial intelligence, digitization of tourism; 4 billion to support fixed and 5G connectivity. And the disbursements for the improvement of educational equipment and for training in digital skills (3,600 million euros) stand out.
One of the key measures aimed at strengthening the resilience of the Spanish economy is the transformation of its tourism sector by increasing its digitization and sustainability with a disbursement of 3,400 million. Which brings us to the other major reforms that the country will have to undertake (in its labor market, pension system or taxation) to continue receiving the economic coverage of the EU in the following sections until 2026. They will be adjusted, according to the Community Executive , to the biannual Brussels recommendations. “It includes a broad set of reforms and investments that will help to effectively address all or a significant part of the economic and social challenges outlined in the country-specific recommendations” specifically those of 2019 and 2020.
Labor reform and pensions
This affects measures in the field of employment “to reduce labor market segmentation and improve labor market policies.” The Commission emphasizes that it includes a ‘stabilization and flexibility’ mechanism that it would allow companies “to deal with adjustments in the event of economic disturbances, based on the existing short-time work scheme.” Also actions to reduce temporary contracts in the public and private sectors. The final design of various labor market reforms, it is specified at this point, “is subject to the outcome of the social dialogue process.”
The Commission highlights several items that Spain undertakes to assign. At this point he refers to the 2.4 billion euros to address the segmentation of the labor market and the modernization of active policies (reduction of the use of temporary contracts and better support for job seekers through the digitization of public employment services, training and hiring incentives). It also highlights the 765 million from the action plan against youth unemployment or 2,000 million for vocational training (retraining and improvement of the workforce through the creation of 135,000 new places).
In Regarding pensions, a reform of the system is considered good, not yet agreed, “with the aim of preserving its adequacy and sustainability in the medium and long term and supporting longer working lives.” And the plan would also address the recommendations of the Semester in the field of public finances “including the reforms of the spending review system and the tax system. Also included are “measures to improve the business climate, with important actions to improve regulation, reduce delinquencies and reform the bankruptcy framework.”
The Commission’s technical team ultimately considers that the Spanish project also “contributes to social and territorial cohesion, with measures in health, education, professional skills and social policy.”
“An ambitious plan”
“We have supported this plan because it is ambitious, forward-looking and will help build a better future for the Spanish people,” stressed Ursula von der Leyen. Its vice-president Valdis Dombrovskis has influenced the ambition of the Spanish roadmap while welcoming the focus’ on job creation and on the next generation, with measures to tackle youth unemployment, improve the provision of relevant skills for work, improvement of the business environment and public administration ”.
The Commissioner for the Economy Paolo Gentiloni described the positive evaluation of the Spanish plan “after such a difficult period” as “an important milestone for Spain”. The Italian stressed that “this is a unique opportunity not only to strengthen the country’s recovery from the pandemic, but to build an economy that is socially fairer, more sustainable and more dynamic.”