Wednesday, 21 April 2021 03:19

Spain makes plea for EU ‘flexibility’ for recovery plan


Spain is seeking “flexibility” from the European Commission on the sensitive topic of state aid to help companies battered by the COVID-19 pandemic before disclosing details of its recovery plan next week, EURACTIV’s partner EFE reports.

Flexibility from Brussels is being seen as essential in Madrid for the implementation of the recovery plan, Spain’s Economy Minister Nadia Calviño has said.

If Spain accelerates the roll-out of ambitious structural reforms, it could receive the first of two or three tranches of a total of €140 billion from the EU recovery fund by the end of the year. Half of the money, to be paid out over the next three years, will come in the form of grants, with the rest being paid in loans.

The recovery plan, (known as PERTE), is intended to help Spain emerge from the crisis by boosting job creation in the most affected sectors, such as tourism, which accounts for about 15% of the country’s GDP.

Member states press Commission to speed up evaluation of recovery plans

Some EU finance ministers are expected to request the European Commission on Friday (16 April) to shorten the two-month evaluation period of the recovery plans in order to speed up the implementation of the long-awaited European stimulus.

Commission already working on an ‘exemption mechanism’

The European Commission is already working “on an […] exemption mechanism that can cover a large part of the planned investments in Spain,” Calviño told Spanish financial media on Tuesday (20 April). Brussels is “aware that we need to adapt the framework to the deployment of the plan,” she added.

The EU state aid surveillance mechanism, which focuses on public financial support for private companies that is incompatible with the EU internal market, is designed to avoid distortions of competition by preventing a specific company from benefiting from a more attractive framework or potential aid.

Spain to focus COVID-19 recovery funds on ecological transition, digitalisation

Spain plans to invest 68% of its share of the EU’s post-pandemic recovery fund in ecological transition and digitalisation between 2021 and 2023, EURACTIV’s partner EuroEFE reports.

PERTE implementation could face legal hurdles

However, it is precisely such a mechanism that could jeopardise the implementation of Spain’s PERTE scheme, under which the state will rely on large companies to promote different projects and major transformations.

The PERTE mechanism is considered by the country’s socialist-leftist coalition government of PSOE and Unidas Podemos as one of its “flagship projects” to boost recovery and overhaul Spain’s economic reliance on tourism and services, making it more resilient to future shocks.

EU member states have until 30 April to send their recovery plans to Brussels. Spain, currently among the states furthest ahead in preparing its recovery plans for Brussels, is yet to finalise important details such as labour market and tax reform, as well as measures to improve the sustainability of the pension system.