The State is shelving some reforms in order to receive the latest European funds

MadridThe countdown to receive the final European anti-pandemic funds, or Next Generation EU funds, in the form of direct transfers has begun. The Spanish government has just approved an amendment to the Recovery Plan—a new addendum—to receive the final €25 billion in grants between now and December 2026. This money is part of the €79.854 billion in transfers linked to the Spanish plan, which, in principle, must be implemented before 2026. After negotiations with the European Commission, the Spanish government will not only be able to slightly extend this timeframe but has also modified the list of milestones and reforms that must be completed to receive these funds. The Ministry of Economy is still finalizing the document with Brussels and expects to have it definitively finalized before the end of the year, probably next week, according to sources at the Ministry. Specifically, 160 measures have been modified, and 230 milestones and reforms remain pending before the final European funds can be received, whether as a direct transfer or a loan.

What does the addendum consist of?

While awaiting the fine print, Economy Minister Carlos Cuerpo anticipated that the addendum represents a "simplification" of the Recovery Plan, specifically its milestones and reforms. "The European Commission itself asked member states to simplify their plans in order to receive all the [European] funds," stated Cuerpo, who maintained that, nevertheless, "the level of ambition" is being upheld. During the two-month negotiation with the European Commission, three sets of milestones or reforms were established to achieve this "simplification." The first set incorporates elements that remain unchanged from what had already been agreed upon with Brussels. This is the case with the equalization of diesel with gasolineThis tax measure, which represents an impact of over €1 billion on public coffers, should be approved by the Spanish government before February 2026. The difficulty here will be the vote in Congress. where the reform has already declinedToday, the Spanish government still lacks guaranteed votes, although sources at the Ministry of Economy remain optimistic and will try again. A second set of milestones and reforms has been outlined; these haven't disappeared, but they have been modified. For example, the Spanish government had committed to the European Commission, within the framework of the Recovery Plan, to pass the land law, but so far it hasn't been able to due to a lack of parliamentary support. Cuerpo explained that the reform has been "transformed" and will be considered valid with other measures, such as the creation of the new state-owned housing company. Finally, there is a third set of milestones and reforms that were previously on the table and will now be shelved because it has been agreed with the European Commission that they will not be considered a "priority." Sources at the Ministry of Economy estimate that around one hundred of the initially agreed-upon goals have now been discarded. Goodbye to 75% of loans

"We don't want to miss out on a single euro of direct transfers," Cuerpo asserted. However, regarding European funds in the form of loans, the Spanish government has decided to forgo a portion of them (it could have received up to €83.16 billion). Finally, the Spanish executive is considering requesting loans worth €22.8 billion, which means discarding 75% of the loans linked to the Spanish Recovery Plan. Of these loans, €6.5 billion will be requested through the addendum approved this Tuesday. This money would be in addition to the nearly €80 billion in grants. The Spanish government intends to request an initial disbursement at the end of January next year and a second and final payment after the summer. In total, the arrival of European funds, taking into account grants and loans, will amount to approximately €103 billion, 7% of Spain's GDP, Cuerpo indicated.