• The Government approves the addendum without giving margin to the next Executive to plan its reforms and investments

The Government has committed to Brussels to carry out another 18 structural reforms – in the field of energy and employment, among others – to be able to access 84,000 million euros in loans on advantageous conditions and another 10,300 million euros of non-repayable transfers, framed in the Recovery Plan.

This has been included in the addendum to the Plan, approved yesterday in the Council of Ministers after "intense negotiations" with the European Commission and when there are only 47 days left for the general elections, from which a new Executive could emerge that is not satisfied with these reforms agreed with Brussels.

According to the regulation of the European funds, Spain had until August 31 to send this extension of the Plan, but the Government has decided to do it today, after approving it yesterday, and not wait for the elections to pass. "The deadline was August and it was unrealistic to think that new work could be started after the elections. We approve this addendum out of responsibility and for not putting a brake on the process underway, "said Nadia Calviño, first vice president, who also insisted that during the consultation process they have heard the proposals of all communities and political parties, including the PP.

Calviño has said publicly that if, if necessary, the Executive that comes out of the polls wants to make modifications during the two months that the Commission has to evaluate the addendum, "it will be able to do so without problem", but during that process weight changes are not usually accepted. According to government sources, it has taken "more than 50 meetings and the exchange of 750 documents" to be able to agree with Brussels on the document approved on Tuesday, which seems to leave little room for modifications in both investments and reforms.

In exchange for these funds, the Executive has promised Brussels that it will undertake 18 new structuralreforms, mainly focused on the energy field (deployment of renewable energies, decarbonization, energy efficiency, improvement of agricultural and livestock farms and promotion of the circular economy), but also with novelties in the labor market, to improve active employment policies, matching job supply and demand and training for employees and the unemployed. Significant measures that the next Executive will have to comply with if it wants to be able to access these funds.


We must make an additional effort in coordination and adjustment of the labor market, because with the pace of job creation we have we must prevent imbalances from affecting employment, "say government sources.

The reforms will also include measures to attract and retain talent, promote access to housing and social protection and improve the efficiency of the public sector and its fiscal responsibility, although details have not been disclosed. According to government sources, "weighty reforms" in fiscal or pension matters are ruled out.

The next Executive that comes out of the polls on 23J will not only have to undertake these measures, but must also complete all those that have been pending from the initial Recovery Plan, among which is, for example, the tax reform, which in Moncloa do not terminate. Compliance with all these reforms is mandatory, since the regulation of the Recovery and Resilience Mechanism contemplates penalties in case countries want to reverse the agreed and approved reforms, such as the pension reform, which was approved in Spain only with the approval of the unions and the opposition of the employers.

In addition to promising new reforms and investments, the Government has taken advantage of the addendum, as other countries have done, to modify the initial Recovery Plan. On the one hand, deadlines have been extended for some investments and reforms that did not have time to have in the time committed and, above all, the allocation of some investments that have fallen short due to the impact of inflation has been extended, raising their budget.

The detail of the loans

The additional 10,300 million euros that Spain will receive in transfers will be used entirely to reinforce the strategic projects, the Perte, which will also be able to access up to 17,900 million euros of loans.

The rest of the credits will be used to provide different State funds - some pre-existing and others new - to channel financing to the private sector on advantageous terms. For example, the sustainable investment fund of the autonomous communities will have 20,000 million; the fund of the Official Credit Institute (ICO) will have 22,500 million; and the tax incentive fund for green investments of families and companies will have a budget of 2,200 million.

Companies will be able to request financing from these organizations and, as they are granted -after intermediation of the European Investment Bank, in some cases-, the Government will present to Brussels the documentation that proves these associated disbursements of investment milestones and the Commission will transfer the corresponding money to Spain. Although the country has 84,000 million euros at its disposal, in practice it could request much less.

The European Commission will obtain these funds from the issuance of debt in the markets, which today trades 30 basis points below the yield of the Spanish ten-year bond, that is, under more advantageous conditions. However, in December that difference was 50 points and as interest rates rise, the difference could be shortened and this type of financing could be less attractive, since the interest rate will be that of the market at any given time. In any case, it will always be better than the one obtained by the Kingdom of Spain.

For the country, it will be cheaper to finance itself with these loans than by issuing public debt, but it must bear in mind that all these loans from Europe will count towards public debt and that, in some cases, the intention is not to replace one source of financing with another but to complement it, which could further fatten the debt-to-GDP ratio.

  • European Commission
  • Pedro Sanchez
  • General Elections
  • Nadia Calviño

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