February 27, 2021

The EU asks Spain for more details about its reform plans


CORRESPONDENT IN BRUSSELS

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The European Commission believes that the reform plan drawn up by the Government of Pedro Sánchez and that the minister presented yesterday at the Eurogroup Nadia calviño “It is going in the right direction” but requires “more clarification” about its content and the objectives in which Spain could invest the large aid that the EU is going to make available. “We are asking for a strong commitment to reform and more details on objectives and goals. I believe that we are in the right direction with Spain, but of course we still have to work together for a few more days and weeks, ”said the Economy Commissioner, Paolo Gentiloni, yesterday after the telematic meeting of the Eurogroup in which, precisely, He had asked Calviño to explain what those plans are.

If the reforms are approved and put into practice, Spain could receive up to 80,000 million euros in direct transfers for economic recovery, some 10,000 million more than originally planned, as confirmed by the minister before participating in the meeting. What might seem like good news is not so good, since this increase is precisely due to the fact that the consequences of the pandemic in the Spanish economy are being worse than was feared.

The way for that money to reach the Spanish economy is still very complicated. Although the package of 750,000 million of euros was definitively approved at the end of last year together with the EU’s multi-annual budget, many procedures need to be completed before that money is effective, starting with the ratification by all countries of the decision that authorizes the Community Executive to issue debt with which it will finance this fund.

Spain is the second most benefited country after Italy and initially it was foreseen that in total it could benefit up to 140,000 million, between direct subsidies and credits.

Regardless, the process is still in its early stages. He European Parliament the regulation that sets the conditions for receiving the funds has yet to be approved, which is currently being negotiated. Furthermore, all countries have to send their reform plans that are in accordance with the Eurogroup’s recommendations for evaluation and approval by the Commission and the Council of Economy Ministers (Ecofin). In the case of Spain, the commissioner has said that there are still things to be specified, especially on essential issues such as pension and labor market reforms.

The essential element to receive that money is establish before a series of reform projects and for the renewal of the economy that align with European recommendations, that is, there are no European funds without the reforms. Yesterday was the day in which Calviño had to explain the details of those reform plans to his continental peers and he did so in a generic way and in a “brilliant” way, as Gentiloni himself recognized it, although still without sufficient detail.

It should be noted that the central element of the reforms is managed directly by Moncloa and the disbursement will be in the hands of the Ministry of Finance, which works for its part to establish the appropriate administrative mechanisms for this.

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