Brussels deliberately withholds Corona recovery fund money

by Lorraine Williamson
European recovery fund

BRUSSELS – The European Commission is deliberately concealing how much fund money Spain will lose if the government does not implement the promised reforms. This measure is being taken for all countries that do not meet the milestones promised within the Next Generation programme. 

The corona recovery fund, called Next Generation EU, is for member states to help combat the economic and social consequences of the corona crisis from 2022. The total fund comprises €750 billion, of which more than €140 billion is expected to be reserved for Spain. 

What did Spain promise to the European Commission? 

Each country was required to submit plans that would help the country recover from the blows the pandemic has dealt. For every milestone a country reaches, the Commission will pay out money. The Spanish government promised to adopt a labour sector reform, and the second part of pension reforms by December 31. 

Brussels deliberately withholds amounts involved

However, if a country implements only partial measures, it is not known whether Brussels will pay part of the amount. And if so, how much that will be. According to the Spanish news site, Voz Populí, the European Parliament deliberately chooses not to attach a specific amount. This is because the Parliament wants to give countries extra incentives to achieve the promised goals. 

Realistic scenario Spain does not fully meet promised targets 

In Spain, for example, this is a very realistic scenario as only part of the pension reforms were approved. Also, this was when it was fairly easy to reach an agreement between the trade unions and political parties. However, the second part will probably be a lot more difficult. The last thing Brussels wants is for governments to calculate how many euros they lose by failing to achieve a target or losing votes in the next election when difficult choices have to be made. 

The text of the Next Generation Program Regulation reads: “If it is decided that a country has not taken the necessary measures to meet the milestone, resulting in the inability to authorise payout, propose to the European Commission to suspend payments in whole or in part.” 

You may also like