What do we know about the pandemic rescue fund splashed with corruption?

MadridThe covid-19 pandemic blew up part of the economic postulates that had prevailed in Europe since the financial crisis. Thus, for example, member states agreed to approve European funds Next Generation, that just end this August; but there was also consensus on suspending fiscal rules. To both of these was added an element: the European Commission's relaxation of EU rules on state aid. Thanks to this, the Spanish government was able to create in July 2020 the Fund for the Support of the Solvency of Strategic Companies (FASEE, in its Spanish acronym), conceived as a kind of rescue fund and managed by the State Industrial Participations Society (SEPI), an entity dependent on the Ministry of Finance. Six years later, what was the most desired pandemic measure for some companies is experiencing a reputational headache: the shadow of corruption pursues it.

The FASEE is in the spotlight of judges who are presiding over some of the cases that have put Pedro Sánchez's executive in a tight spot. Specifically, some of the operations, that is, the rescues that were carried out on different companies, are in the spotlight. The most controversial is the rescue of the airline Plus Ultra, which has led to the judicial case involving former Spanish president José Luis Rodríguez Zapatero. Added to this is the rescue of Air Europa and also the rescue of Tubos Reunidos, which in turn connects with the Leire Díez case.

The controversy, however, has not always pursued this instrument, which was born with the aim of being a public lifeline for many companies in difficulty due to the economic shock of covid-19, especially in the tourism and services sector.

Rescue or loans?

The European Commission gave the green light to the fund with a budget of 10,000 million euros. It was not European funds, but their approval was necessary because its regime was approved under the temporary framework relating to State aid. The Community executive not only endorsed the Spanish fund. Germany, France, the United Kingdom, and Italy approved similar mechanisms. The German one, in fact, multiplied the Spanish budget by five, a difference in the ability to grant State aid that generated reservations among some member states.

Although reference is made to a "bailout" of companies, loans were granted from the fund that had to be repaid later. Thus, for example, the so-called "bailout" of Plus Ultra for 53 million euros was, in reality, a loan. The largest loan was granted to Air Europa (475 million euros), while Tubos Reunidos received 112.8 million.

These were not the only companies that received part of the money from this fund. SEPI received a total of 74 applications from companies to access this temporary financial support. The total amount was 5,393 million euros, 53% of the 10,000 million with which the fund had been endowed. Finally, a total of thirty operations were approved for an amount of 3,256 million euros, that is, 32.5% of the fund's endowment. Two companies, however, Cesa and Blue Sea, did not end up executing the loan, and the final financing was 2,681 million euros, according to data from SEPI accessed by ARA. Today, 1,745 million euros have been recovered, 65% of the total public financing, and the interest collected exceeds 340 million euros. Companies have until the year 2029 to repay the loan, according to the financing agreements signed between SEPI and the firms that benefited from it. On the part of the Spanish government, it has been highlighted that "62,000 jobs" were saved, indicated sources from the Ministry of Finance this week.

The list of firms also includes names such as Técnicas Reunidas, Duro Felguera, Airtificial, Air Nostrum, Volotea, or Vincci Hotels. The Court of Auditors, the body that later oversaw the FASEE, highlighted that they were, above all, medium-sized companies. "Large companies have not availed themselves of it," it stated in a report on the fund published in 2024. Companies that required much less capital (between 2.5 million and 25 million) to overcome the shock of covid-19, turned to Cofides' fund.

A transparent procedure?

These, however, were not normal loans, mainly because the money with which they were sustained was public. "The [aid] regime guarantees that the State receives adequate remuneration for the risk assumed by the taxpayer," assured the Executive Vice-President of the European Commission, Margrethe Vestager, at the time, when Brussels approved the fund. Thus, the support was conditional. For example, the company receiving the loan could not distribute dividends or pay bonuses, nor could it carry out an "aggressive" business expansion or make "corporate" operations. The same Community executive set thirteen "eligibility" criteria.

The Court of Auditors, in its audit report of the fund, endorsed its operation – from compliance with requirements to the concession procedure – and the IGAE, as an audit of the management carried out, also did. Furthermore, the Court of Justice of the European Union dismissed an appeal by Ryanair questioning the principle of non-discrimination.

However, the first body did detect some shortcomings. In the 2024 audit report, the Court of Auditors recommended "that regulations be approved to clearly regulate the decisions to be made by FASEE in monitoring financing operations and that SEPI develop a procedure that allows for the allocation of costs to FASEE based on technical and objective criteria." It also highlighted that the resolution period was "very long," despite the urgency of the moment, and that the main cause was the review of the viability plans of the companies requesting the aid.

In an article prepared by the technicians of the Ministry of Economy, Marisa Álvarez, Javier Domínguez, and Pedro Garrosa, it was also highlighted among the conclusions that "in decisions of such magnitude and which can determine the dynamics of the [European] internal market, it would have been key to guarantee to the greatest extent possible some mechanisms for consultation, participation, and transparency in order to favor the adoption of measures that adjust to the need and are vested with legitimacy."