Positive evaluation.
The European Commission has published this Wednesday its in-depth analysis of the recovery and transformation plans of
Spain and Portugal,
giving the green light and thus opening the door for our country to
start accessing almost 70,000 million euros in transfers
, in community funds They do not have to be repaid nor do they count towards the public deficit and the national debt.
The first tranche of
9,000 million euros
, called pre-financing and which serves to pay for reforms and investments made from February 2020 until now, could be released before the summer holidays if all pending procedures are properly fulfilled. For the others, it will be necessary to keep complying with the schedule established and agreed with Brussels, in reforms and milestones. Governments may request up to two disbursements a year, and our country, if it complies, would opt in December of this year (again, if everything goes on time and in due form) to another injection of an additional 10,000 million.
For the first 'check',
48 reforms and two investments
have been taken into account
, many of them environmental and which Brussels considers very important. But the most controversial, such as what affects taxation, the labor market and pensions, no. In the document of Spain there are plans for 2021 and 2022, but also asterisks that affect the negotiation with social agents, still open. Brussels understands and respects this, as it believes that the high consensus among those affected is the best guarantee of implementation. But by the second disbursement, in spring 2022, there are already some crucial milestones affecting the labor market that need to be completed.
To qualify for the money you have to make
reforms and agreed investments
. If the deadline has arrived, Spain would not have complied, for whatever reason, and there are delays, there are two options. The first is not to apply for the money and wait a little time. The second is to submit the request anyway and negotiate with Brussels, which in certain cases may choose to approve a partial disbursement.
There is no fixed table, there is no price in euros for each reform or milestone, and it would be the Commission that would end up deciding which part of the package has been adequately fulfilled and therefore how much money can be chosen at all times.
If a country decides to reverse the reforms later (for example, due to a change of government), it is contemplated in the regulation that a negotiation is reopened, since for each reform that comes out, another more or less equivalent should enter.
In the most extreme cases, if the financial situation of the EU is at risk, a State can be forced to return European funds, but that does not apply only to this money for recovery, nor does it mean that failure to comply with a specific reform is going to produce something like that.
Deadlines
The first 9,000 million are 13% of the total that Spain aspires to, it is pre-financing, and it should not be problematic.
Subsequently, when Spain believes that it has already completed all the milestones scheduled for the end of the third quarter, it will submit the request for 10,000 million more.
The Commission will examine it and hopefully, by the end of the year it will make the disbursement.
The next deadline on the calendar is the milestones and targets for the last quarter.
Likewise, Brussels will give itself a few months to examine that everything is in order, the legislation approved, the reforms implemented, and if it is correct, the third disbursement would arrive at the end of spring.
And for that, concrete advances in labor material are already expected,
The president of the European Commission,
Ursula von der Leyen,
has come in person to Lisbon and Madrid for an official act, but the examination has been commissioned by the technical services, which have been in hand-in-hand negotiations with Madrid for about a year. In the last weeks, and in the last days in particular, the technicians have noticed more than ever before the encouragement of the community vice president,
Josep Borrell.
The former Spanish minister is a senior representative for Foreign Policy, but also the Spanish commissioner, and he has been very interested in evaluating the plan. He has asked for or demanded clarification, has suggested changes and according to community sources, has pushed for changes in language and tone. Or to try to bring the EU estimates closer to those of Moncloa. Nothing strange, nothing that his predecessors have not done or that his colleagues do not do on the other hand on sensitive issues at home. All claim to leave the national flags when swearing in office, but there is not just one who respects it.
The Recovery Fund, the core of NextGenerationEU, will provide up to € 672.5 billion (at current prices) to support investments and reforms across the EU until 2026. Some countries, such as Greece and Italy, have asked for the maximum they were potentially eligible for, but Spain, for now, has limited itself to the 69,500 million euros that could correspond to it for transfers.
At the moment it has not applied for loans, as it prefers to check little by little the absorption capacity of our economy, which historically has been discreetly efficient, but very slow in this work.
Evaluation
To evaluate the Spanish Plan, the Commission has used the criteria established in the official Regulations. The analysis must check if the plan respects the basic criteria, such as that at least 37% of the investment is dedicated to the green transition and 20% to the digital transition. But also that any measure contributes to reinforcing "the potential for growth, job creation and the economic and social resilience of the Member State" or ensuring territorial and social cohesion, in addition to institutional resilience. The Commission's evaluation concludes that
Spain's plan dedicates 40% of its allocation
to measures that support climate goals and 28% to digitization, so everything is in order.
The problem has never been in the plan itself, but in whether the country will comply with what was designed and within the expected deadlines.
In the Spanish plan there are
30 components, 211 measures
(109 reforms and 109 investments) and 416 objectives and milestones set, with which to qualify for those 69,500 million between now and 2026. The European Commission estimates that the investment package can trigger GDP 2.5%, and in the medium term, it may represent a jump of up to 10 points if the necessary structural reforms are carried out.
Their impact evaluations, however, do not yet contemplate the impact of those reforms, as some are still up in the air.
Green
measures
are those that affect urban sustainability,
energy efficiency of buildings, decarbonize industry and reduce energy dependence
, as well as implement new technologies for green hydrogen and renewable energies.
In digital, things like the renewal of public administration, industry and companies, including a specific program for the digitization of SMEs.
The ball is now in the hands of the Council, the finance ministers, who
have a month to evaluate the Commission's analyzes.
Not the plans of each country per se, but to pronounce on whether they believe that Brussels has been too lax (it is a recurring accusation on the part of the most orthodox countries) and has approved with too much joy. Governments do not have a veto power exactly, but they do have this emergency brake with which to pressure their partners, because ultimately it can take the issue to the European Council and delay everything for weeks or months. If there were no problems, the Commission hopes that Ecofin will approve the plans of Spain and Portugal, but also Greece or Denmark, at its meeting on July 13. And after some additional papers bilaterally, for legal and procedural reasons, the capitals would receive the money. The first issuance to cover these funds was held precisely this Tuesday,and the Commission managed to raise 20,000 million euros. Another 80,000 more will arrive throughout the year.
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