This article is brought to you in association with the European Commission.
The European Commission has today disbursed €9 billion to Spain in pre-financing, equivalent to 13% of the country’s financial allocation under the Recovery and Resilience Facility (RRF). The pre-financing payment will help to kick-start the implementation of the crucial investment and reform measures outlined in Spain’s recovery and resilience plan.
The Commission will authorise further disbursements based on the implementation of the investments and reforms outlined in Spain’s recovery and resilience plan. The country is set to receive €69.5 billion in total, fully consisting of grants, over the lifetime of its plan.
Today’s disbursement follows the recent successful implementation of the first borrowing operations under NextGenerationEU. By the end of the year, the Commission intends to raise up to a total of €80 billion in long-term funding, to be complemented by short-term EU-Bills, to fund the first planned disbursements to Member States under NextGenerationEU.
Part of NextGenerationEU, the RRF will provide €723.8 billion (in current prices) to support investments and reforms across Member States. The Spanish plan is part of the unprecedented EU response to emerge stronger from the COVID-19 crisis, fostering the green and digital transitions and strengthening resilience and cohesion in our societies.
Supporting transformative investments and reform projects
The RRF in Spain finances investments and reforms that are expected to have a deeply transformative effect on Spain’s economy and society. Here are some of these projects:
- Securing the green transition: The plan includes an ambitious law on climate change and energy transition, enshrining the renewable targets for 2030 and climate neutrality by 2050, including a 100% renewable electricity system. The plan will also support innovative renewable energy sources with €3.9 billion and includes €3.4 billion to support more than half a million energy efficiency renovations in residential buildings.
- Supporting the digital transition: The plan contributes to the digitalisation of SMEs and the self-employed with €3 billion. Measures worth €3.6 billion will improve the level of digital skills of the population and the digital transformation of education. €3.2 billion will be invested in the digitalisation of the public administration.
- Reinforcing economic and social resilience: The plan will invest €2.4 billion in reducing the use of temporary contracts in the labour market, improving individual support to jobseekers, as well as training opportunities and better hiring incentives. Nearly €2.8 billion will be invested in reducing youth unemployment and improving vocational training by creating at least 135,000 new places in vocational education. Additional measures will strengthen the effectiveness of public policies and modernise the tax system.
Members of the College said:
President Ursula von der Leyen said: “Today’s disbursement is a decisive moment for Spain and its people, kicking off the implementation of the recovery and resilience plan. This plan was ‘made in Spain’ to emerge stronger from the crisis and invest in a sustainable and more digital recovery. I am convinced that Spain’s ambitious plan will provide a crucial push for the European Green Deal to become a reality, it will further digitalise the economy and it will make Spain more resilient than ever. We stand ready to support you in each step of the way.”
Johannes Hahn, Commissioner for Budget and Administration, said: “After three very successful bond issuances under NextGenerationEU over the past few weeks, and the first payments for other NGEU programmes, I am glad that we have now also reached the disbursement stage for the RRF. Intense cooperation with Spain and solid preparation within the Commission allowed us to pay out the funds in record time. This shows that with the resources raised, we will be able to swiftly deliver on the pre-financing needs of all Member States, thus giving them the initial boost in implementing the numerous green and digital projects included in their national plans.”
Paolo Gentiloni, Commissioner for Economy, said: “The pre-financing disbursed today will help Spain emerge stronger from the crisis. The plan will give a strong boost to Spain’s green transition, supporting renewable energy projects, energy efficiency renovations, and low or zero pollution mobility measures to protect the climate and people’s health. The education and training measures in the plan will enable many people in Spain to acquire the skills they need to benefit from the digital transition. The plan will also support the digitalisation of the public administration and businesses, especially SMEs. This will improve the efficiency of the public sector while making the Spanish economy more resilient and dynamic.”
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To fund it, the European Commission will raise debt in the capital markets. To help finance the post-coronavirus recovery, the European Union is raising large amounts to pass on to its members. Borrow 70% of the purchase price in a Spanish bank with an attractive fixed-rate mortgage. Europeans often get loans approved.