The European Commission has temporarily withheld over €1.1 billion in recovery funding earmarked for Spain, citing delays in delivering key economic and administrative reforms linked to the EU’s NextGenerationEU programme.
The decision, made public this morning, affects the fourth payment from the EU’s pandemic recovery mechanism, which had been due to arrive this month. The frozen amount — €1.126 billion — is part of a broader tranche worth €10 billion requested by Madrid in December.
According to Commission officials, Spain has yet to fulfil a series of agreed structural commitments. These include the implementation of a diesel tax, reforms to environmental and green taxation, a reduction in public-sector hiring, and the digital transformation of small and medium-sized municipalities.
While Spain has complied with most of the 61 milestones required for this payment, Brussels has flagged six specific measures as either delayed or inadequately executed. A Commission source stated that “the delay relates more to structural complexity than political resistance,” but also stressed the need for timely follow-through.
To resolve the issue, the European Commission has granted the Spanish Government an extension of six months to meet the outstanding requirements. If Spain fulfils these conditions within the extended window, the payment will be authorised without penalties.
In Madrid, the Ministry for Economic Affairs expressed confidence that the reforms would be implemented “within the revised timeframe,” and described the delay as a “technical adjustment rather than a political disagreement.”
The withheld funds are part of the EU’s massive €750 billion NextGenerationEU fund, intended to revitalise post-pandemic economies with a focus on green transition and digital transformation. Spain, one of the largest beneficiaries, is set to receive over €140 billion in total, split between grants and low-interest loans.
While the impact on the national budget is expected to be limited in the short term, opposition parties have criticised the government’s handling of the process, accusing it of “over-promising and under-delivering” on EU-backed reforms.
Economists say the delay is unlikely to affect Spain’s economic growth forecasts for 2025, though it may influence investor confidence if deadlines continue to be missed.
No Comment! Be the first one.