Else Beekman
Spain is facing delays in accessing its Next Generation EU funds, as the government scrambles to meet the deadlines for the fifth and sixth instalments of the Recovery Plan. With less than three months left in the year, Spain still needs to request both payments, totalling €10.5 billion.
However, the tight timeline means the sixth instalment, originally planned for 2024, will likely be pushed to 2025. The fifth payment request, which amounts to €7 billion, must be submitted before the end of the year. This includes €6.5 billion in grants and €500 million in loans. But with the request coming so late, the European Commission’s evaluation process, which takes several months, means the funds will not be available until 2025. The sixth payment, worth €4 billion in grants and €14 billion in loans, will also be delayed.
Spain’s Minister of Economic Affairs, Carlos Cuerpo, assured during a recent EU meeting in Luxembourg that the fifth payment would be requested on time. However, the delays raise concerns about whether Spain can keep up with the agreed timetable.
Key challenges: Fiscal reforms and labour laws
The government also faces challenges in meeting Brussels’ demands for fiscal reform, which is tied to the fifth payment. The European Commission has pushed for more work on modernising Spain’s tax system, including possible VAT increases and environmental taxes. Disagreements over these reforms could lead to further delays in accessing the funds.
The government’s tight legislative calendar adds to the pressure, with pending measures on labour laws, housing, and regional financing also needing approval by the end of the year.
If these reforms are not completed on time, Spain risks receiving only partial payments and will have six months to fix any shortcomings. The delays have already impacted previous payments, such as the fourth instalment, which was delayed due to political hurdles earlier in the year