The European Commission is already preparing its first mangrove to European economies. Brussels plans to issue € 80 billion in long-term bonds until December to finance the investment and reform plans of the 27 EU partners. Of these, 19,000 million will go to Spain, which will receive almost 25% of the money from the European recovery fund in 2021, according to diplomatic sources. These resources may begin to arrive in Madrid before the summer, which will be one of the first capitals to receive the green light for its reform and investment roadmap to get out of the crisis.
Spain will already this year be one of the countries in which Brussels will prevail in the distribution of funds. The president of the European Commission, Ursula von der Leyen, will travel to Lisbon and Madrid this week to launch the European fund, endowed with 800,000 million euros. With the choice of these capitals, Von der Leyen wants to send the message that Brussels supports the economies of southern Europe, the most affected by the crisis, and reward two of the plans that have been working the longest on their national plans for recovery and resilience.
According to diplomatic sources, Brussels has transferred to Madrid that this year it will be able to count on 19,000 million euros. Of this figure, 9,000 million euros correspond to the advances to which countries are entitled after receiving the green light from Brussels. The other 10 billion will arrive in December with the first ordinary disbursement. This payment covers all the milestones and objectives included in the recovery program that Spain has already achieved since February 2020 until the day the plan is approved, since the Commission finances investments and reforms carried out since that date. Obtaining these funds means that Brussels not only supports the investments and reforms planned by the Pedro Sánchez Government, but also endorses the actions it has carried out so far.
The Executive had budgeted 27,000 million euros for this year. That is, 8,000 million more than what it will receive from Brussels. This is because Spain has chosen to anticipate the money that it will obtain from the Commission in order to comply with the roadmap that has been set and absorbing the funds. In this way, Spain will cover the money budgeted in the successive disbursements that it receives from the Community Executive. Diplomatic sources explained that Spain has also wanted to send a message to Brussels and the rest of its partners after having complied with all the actions it put on the table for the first section of the plan. Not surprisingly, the conservative wing of the European Parliament or some hawks maintained reservations about Spain’s ability to carry out reforms and absorb all the funds to which it aspires, up to 140,000 million euros if it also requests all the credits to which it is entitled . And Spain will need the endorsement of the Council of the EU during the next month to tie those funds.
Seven months of negotiation
Spain and Portugal, the first two countries to which Von der Leyen will travel this week to launch the community fund, have been negotiating with Brussels their national plans since last October, which they will deploy until 2026. That means that they submitted their final plans later seven months of negotiations. Madrid came to commit to executing more than a thousand milestones and objectives, although the Commission made it lower them to 390 in order to control them more effectively.
From now on, the Commission’s technicians will monitor compliance with the program. Successive disbursements depend on the achievement of all the programmed objectives. Despite the fact that the parties have focused on labor or pension reform, Brussels has paid special attention to the green and digital agenda. One of the risks of the Spanish plan is that more than 50% of the goals set depend on the autonomous communities. Brussels is confident, however, that Spain can establish the coordination mechanisms necessary for the plan to go ahead.