New delay of the recovery plan: Sanchez postpones its approval "a few more days"

The government says its complexity means it cannot receive the green light this Tuesday as planned

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The president of the Spanish government, Pedro Sánchez, during the inauguration this Monday of the conference 'Wake up, Spain', in Madrid.

MadridThe Spanish government had repeated it on different occasions: "The recovery plan will be presented before the end of the first quarter". But March ended and the Spanish government still had not finished the plan and had not sent it to Brussels. Last week the president of the executive, Pedro Sánchez, announced that this Tuesday the council of ministers would approve the document that has to allow a €140bn injection of European aid into the Spanish economy over the next six years, but this Monday it has revealed that it will still take "a few days" to submit it to the council of ministers. A new postponement that further delays the arrival of the money.

Tomorrow the members of the central government will jointly analyse the plan but until next week or the week after that it will not be approved. In any case, it will be before April 30, if there are no further postponements. Sánchez has assured that before this date he will send the plan to the European Commission and has confirmed that on Wednesday he will explain the general lines of the document in the plenary session in the Spanish Parliament. The initial forecast was that in this second quarter it would initiate tenders and calls for grants, but right now it has not even launched the website through which interested companies should apply for aid or participate in tenders.

Despite the urgency of injecting money into the economy to start the recovery as soon as possible, the Spanish government seems to be in no hurry. The Moncloa attributes the delay to the complexity of the plan and the need not to "rush" when presenting it to the European Commission, who has to give the necessary approval for the money to reach Spain. Sánchez has advanced that the plan includes 212 measures, of which 110 are investments and 102 reforms that will serve to "boost economic recovery in the short term and reconvert and transform the Spanish economy to make it more competitive and sustainable" in the longer term.

Downward revision of economic forecasts

The delay in approving the plan, coupled with a bad start to the year for the economy due to the impact - greater than expected - of the third wave of covid-19, have led both the Spanish government and the Bank of Spain and the Independent Authority for Fiscal Responsibility (Airef) to reduce Spanish GDP growth forecasts for 2021. Pedro Sánchez's executive admits that the delay in the recovery plan is one of the main factors that will postpone European funds' positive impact on GDP by one quarter. Until 2022 the effects will not be felt, also warns Airef.

With an economy badly affected by the pandemic, with a 2020 in which GDP plunged by a historic 11%, the delay in the arrival of European funds will further lengthen the economic crisis. Sanchez has recalled this Monday that the key to return to positive GDP growth is vaccination. "At what pace will the recovery take place? At the pace of vaccination. The faster the vaccination, the faster the recovery will be," he said in a speech during the economic conference focused on the recovery plan - "Wake Up, Spain" - which began this Monday in Madrid.