Brussels has presented an alarming assessment: Spain has so far failed to spend 80 percent of the EU funds allocated to it under the NextGenerationEU program. Out of a total of 163 billion euros, only just under 32 billion euros have been drawn down to date, representing less than 20 percent of the total. Time is running out, as Brussels will close the taps as early as 2026.
Spain is the largest recipient of non-repayable funds within the EU, with 80 billion euros, and the second-largest when concessional loans are included, leading to the aforementioned 163 billion euros. In comparison, Italy has already utilized 64.4 billion euros (33 percent) of its 194 billion euros by 2024. France has even spent a significant portion of its 40.3 billion euros (87 percent), putting it well ahead of Spain, despite having significantly fewer funds available.
The Delay in Spending and Fund Inflow
The European Commission has detailed how disbursements to Spain have evolved in recent years: In 2021, it was 2.744 billion euros (0.2% of GDP), rising to 5.774 billion euros in 2022 (0.4% of GDP), 11.131 billion euros in 2023 (0.7% of GDP), and 12.122 billion euros in 2024 (0.8% of GDP). These sums constitute the nearly 32 billion euros that have actually flowed out so far.
However, not only is spending stagnating, but the inflow of money from Brussels is also slow. Of the promised 163 billion euros, Spain has only received 48.3 billion euros, which is just 30 percent of the total. Spain has not received a single euro from these EU funds for almost a year. The reason for this lies in the hesitant implementation of reforms and investments that were agreed upon in the recovery plan with the Commission as prerequisites for disbursements. While Italy has already received 63 percent, France 77 percent, and Portugal 51 percent of their respective funds, Spain lags significantly behind.
In December 2024, the Spanish executive requested the fifth disbursement, whose amount was increased to 25 billion euros due to accumulated delays, in order to frontload some of the money needed later. However, Spain’s current parliamentary instability and persistent investment hurdles have meant that some of the goals associated with this payment could not be met in time.
Since December, the government has already submitted three amendment requests to the plan to facilitate the achievement of targets – the last of which was on May 19, as reported on nachrichten.es, among others, to accelerate the draw-down of loans from Brussels. Neither the government nor the Commission is willing to accept failure, but the hurdles for the Spanish executive are considerable.
Stumbling Block Tax Reform and the Risk of an “Embargo”
A key obstacle is the incomplete tax reform. Brussels classifies this as “incomplete” in its latest country report, as the planned increase in the diesel price has still not been approved. Spain had committed to implementing reforms by 2023, including an increase in diesel tax. The alignment of diesel taxation with that of gasoline is a demand from the European Commission, but it has so far failed in the Spanish parliament, particularly due to resistance from Podemos and PNV.
Non-compliance with reforms or investments can lead to Brussels “seizing” part of the funds for months to give the government time to rectify. However, if the deadline finally passes, the funds will be lost. This already happened with the fourth disbursement, when the Commission withheld 158 million euros due to an unmet milestone in the area of digital investments. Reforms such as tax reform are a top priority for Brussels, and their non-fulfillment poses a significant risk to further fund withdrawals.
