Spain has presented this Friday in Brussels the plan with 212 measures (102 reforms and 110 investments) that will mark the destination of the European funds assigned to it by the recovery plan; the powerful post-pandemic reconstruction tool that grants the country 69,528 million (20.6% of the total) in direct aid and between 71,000 and 84,660 million more in low-interest loans. The project, which has been negotiating with the European Commission for months, and whose formal presentation in Brussels had initially been planned for March, arrives on time. After this step was taken by Portugal, Germany, Greece, France, Slovakia. “Flexible term” in any case because more than half of the Twenty-seven will skip the limit of this April 30 and will deliver their measures in the next two weeks, although the Community Executive has hinted tomorrow that this margin could be more elastic. Spain intends to mobilize direct transfers first and from 2022 it will also make use of soft loans.
The Commission has confirmed through a statement the step taken by Spain, together with Denmark, Latvia and Luxembourg. “These plans establish the reforms and public investment projects that each Member State plans to implement with the support of the Recovery and Resilience Mechanism,” the note states. President Ursula von der Leyen highlighted via Twitter that the Next Generation EU “will help finance the country’s recovery through projects related to the ecological and digital transition, cohesion and gender equality.”
In the plan it has presented, Spain has requested a total of 69,500 million euros in grants under the RRF. It is structured around four pillars: green transformation; digital transformation; social and territorial cohesion; and gender equality. It includes measures in sustainable mobility, energy efficiency in buildings, clean energy, digital skills, digital connectivity, support for the industrial sector and SMEs, and social housing. The projects of the plan are mainly focused on the period 2021-2023. The plan proposes projects in the seven emblematic European areas.
The procedure that starts from this moment gives the European Commission two months to evaluate the different national plans that it has on the table. His ‘ok’ will not be, in any case, final. The Ministers of Economic Affairs of the Twenty-seven in a meeting of the Council of the EU (in this case the Ecofín) will have to put the final stamp of validation. If that schedule is met, the first payment would be feasible in July. It represents around 13% of each of the assignments, in the form of an advance. In the case of Spain, more than 9,000 million euros.
All the plans, apart from the specific reforms that each country would have to undertake and which Brussels has been proposing with little success for years as ‘recommendations’, direct their investments to very specific areas: green transition, digitization, improvement of competitiveness and productivity. , social and territorial cohesion, and so on. In the case of Spain, the unique duties required of it are linked to its labor market (greater stability, less temporality, simplification of contracts, on-the-job training); the sustainability of its pension system; and a tax regime that narrows the space between your income and your expenses. The labor reform would have to be defined this year; the other two, next.
Logically, for the money to start flowing, the Community Executive first had to get it. In June it should have already carried out the first bond issue in the capital markets; the formula that will be used to nurture the 750,000 million euros of the recovery plan (390,000 million in transfers and 360,000 in loans).
The financing rate proposed by Brussels, between 150,000 and 200,000 million euros per year until 2027. And the debt should be paid before December 31, 2058. For this to be possible it is necessary that the 27 national parliaments of the EU authorize the indebtedness of the Commission. Surpassed to the relief of all the German obstacle, that step was still pending this week in Austria, the Netherlands, Poland, Ireland, Estonia, Lithuania, Romania, Bulgaria and Finland.
After the first payment to the member states, the subsequent ones will be made every six months depending on the fulfillment of milestones or objectives that are included in their respective plans. For example, there is already a project on tax or pension reform in the case of Spain (well approved, in formal process, or even supported by an expert report that gives it full credibility).
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