The European Commission (EC) today gave its approval for Spain to receive a second tranche of 12,000 million euros from the European recovery fund after verifying that the conditions agreed for this disbursement are met, such as labor and pension reforms.
"We believe that Spain has made sufficient progress in the implementation of its national recovery plan to receive a second payment from the Next Generation EU (...). Spain is showing a continued reformist drive in key policy areas, such as the labor market and the sustainability of public finances", the president of the Commission, Ursula von der Leyen, commented in a statement.
To make the payment effective, it is necessary that within a period of four weeks all the Member States show their agreement. This is the largest disbursement of the recovery plan planned for the Spanish State, which would be added to the advance of 9,000 million and the first ordinary payment of 10,000 million that the country received last year.
With this, Spain would have already obtained 31,000 million, almost half of the total of 69,500 million euros in transfers that correspond to it from the Next Generation fund. Likewise, the Government is preparing to apply for the loans to which it is also entitled in the second half of the year.
In order to unfreeze this new tranche of aid, requested on April 30, Spain had to meet 40 milestones and objectives. One of them was the reform of the labor market, which incorporates innovations such as the simplification of contracts, the mechanism to make ERTEs permanent and changes in collective bargaining. Another of the agreed reforms was that of pensions, which includes measures such as increasing the effective retirement age or linking inflation to benefits. In this sense, the Spanish Executive calculates that indexation to the cost of living will increase public spending on pensions by around 2.7 points of GDP by 2050, a percentage that contrasts with savings, between 1.1% and 1.6%, which is expected to be generated by prolonging the working life of the population.
These measures, which must be completed by the end of this year, are linked to the third and fourth disbursements, scheduled for the second half of 2022 and the first half of 2023, respectively, so it will not be until then when Brussels rules on the sustainability of reform.
