The European Commission has announced the freezing of one billion euros from Spain’s fifth package of Next Generation EU funds due to the country’s failure to meet two key objectives: diesel tax reform and the digitalisation of regional and local entities. As a result, Spain will receive approximately twenty-three billion euros instead of the anticipated amount. Minister of Economy, Carlos Cuerpo, stated that partial payments are a common occurrence in the EU and are not unique to Spain, emphasising the importance of continued economic growth.

The fifth funding package amounts to over twenty-four billion euros gross, with around twenty-three billion euros net. Included in this are nearly seven billion euros allocated for transfers and approximately sixteen billion euros in loans, marking the largest disbursement approved by the European Commission to date. Cuerpo highlighted the necessity to ensure that no euros from these transfer funds go unutilised, promoting access to eighty-four billion euros in loans for businesses at advantageous conditions.

According to the European Commission, Spain has completed eighty-two out of eighty-four required reforms and objectives associated with the current disbursement. While the fiscal reform proposal lacked parliamentary backing, Brussels confirmed that more time would be granted for the country to implement the necessary reforms, aligning with the Recovery and Resilience Mechanism regulations.

The ongoing implementation of Spain’s Recovery and Resilience Plan has already included numerous reforms and investments aimed at bolstering the economy. The European Commission has verified progress in the crucial areas of business digitalisation and support for small and medium-sized enterprises, further demonstrating Spain’s commitment to fulfilling its obligations under the EU funding framework.