The ambition was to have the necessary technical architecture ready by January 1, 2021. But Brussels is already clear as of October 21 that it will not start issuing the 750,000 million debt to finance the recovery and resilience fund before the summer, according to Community sources have confirmed this Wednesday. In other words, the money will begin to arrive from then on, although a few weeks ago the Eureope Commission
Brexit, a fund of 140,000 million euros and how to get out of the crisis: what Spain is at stake in the EU
Part of the money that can come from the next few weeks is that allocated to temporary employment programs, such as ERTE and aid for the self-employed. The European Union has granted € 21.3 billion to Spain in SURE preferential loans, the total amount of which is € 100 billion. Brussels, with a triple A rating in international agencies, issued 17,000 million in social bonds on Tuesday, with extraordinary market demand – 233,000 million, up to 14 times more – and aims to issue up to 30,000 before the end of the year . That is, Spain could soon receive around 7,000 million to finance one of the main social policies of the Government to appease the effects of the crisis: the ERTEs.
“With this operation, the European Commission has taken a first step to enter the main league of the global debt capital markets”, said the Budget Commissioner, Johannes Han: “It is the highest amount ever loaned in history of the EU. Strong investor interest and the favorable conditions under which the bond was placed are further evidence of the new interest in EU bonds. The character of social bonus of the issue has helped attract investors who want to help EU Member States support employment in these difficult times. It is a vote of confidence in the European Union as issuer and borrower. ”
Despite this appetite that the markets seem to have in the issues of the European Commission, they will have to wait longer than expected for issues of the recovery fund.
The leaders agreed in July a pact with three legs: the budget for 2021-2027 – 1,074 billion -, a recovery plan – 750,000 million, of which 672,000 are managed directly by the States through recovery funds. ; and a plan of own resources – new taxes for the repayment of the debt issued by the European Commission to obtain the 750,000 million in the financial markets.
These three legs are in the process of negotiation with the European Parliament, which has an interest in exercising its role as co-legislator, and which is being pressured by governments to ask for the fewest possible changes and thus speed up the processing.
And to see the first resources of the recovery fund, as community sources advance, we will have to wait for the second half of 2021, since the European Commission foresees the first bond issue for next summer. In the case of Spain, the first advance of 10% that would come thereafter would be 7,200 million in grants and 6,800 in loans, although Spain for the moment has communicated that it does not want to resort to loans – which would mean accessing the 72,000 million in transfers and not the 68,000 in loans.
Causes of delays
In addition to the ongoing negotiations between the European Parliament, the European Council and the European Commission, further ratification in the 27 national parliaments is necessary to increase the spending ceiling and issue the 750,000 million debt and the approval of own resources –New taxes– for the repayment of this debt. As ratification is essential in the 27, with only one that does not do so, it puts the whole mechanism in check.
Hungary is threatening this possibility because it wants to veto the clause of respect for the rule of law, which, precisely, is watered down enough to seduce Budapest and Warsaw. Which, at the moment, is not happening. But what is happening is the so-called frugal, led by the Netherlands, and the groups of the European Parliament, always more ambitious than the governments when it comes to censorship of Hungary and Poland.
Once these obstacles are solved, the evaluation phase of the projects will begin, which could be presented from this October 15, although no country has yet presented any, and until next April.
The problem is that the processing can take up to three months, if one takes into account that the evaluation of the European Commission can take eight weeks and another four that of the Council of the EU. The Commission has promised to run and talks are already underway with the countries to advance work, but the delay is evident.
“Spain works internally and with the European Commission to have the reform plan as soon as possible,” explain government sources.
In any case, the money will never be able to arrive before the debt issuance by the European Commission has been carried out to capture the 750,000 million of the fund, with which the horizon is placed in the second half of 2021.