With the advancement of the general elections to July 23, the Government has stepped on the accelerator to send to Brussels the addendum to the Recovery, Transformation and Resilience Plan and to be able to mobilize the 90,000 million euros to which Spain can still opt for the Next Generation (84,000 million in loans and 7,700 million in additional transfers), as well as the 2,600 million of the REpowerEU mechanism, approved to accelerate the energy transition. In reality, the Executive, which has been working on this document for months on various fronts with autonomies, social agents and parliamentary groups, had until August 31 to carry out this procedure.
However, the new political map emerged from the regional and municipal and the possibility of the formation of a new European. “Spain should guarantee an administrative capacity to ensure that the plan is applied on time,” explain sources from the Community Executive consulted by La Information, and also call on the country to maintain the momentum in the application of the entire package of reforms.
In the first draft of the text, which the first vice president, Nadia Calviño, presented at the end of last year, Spain promised to dedicate more than 26.3 billion euros of additional public resources to reinforce strategic projects. Calviño herself has confirmed that the final version of the addendum is probably a program of 22,500 million ICO financing for the modernization of Spanish companies, especially designed for SMEs (which concentrate more than 90% of the national productive fabric), as well as a fund of 20,000 million for sustainable investments in autonomous communities, in whose management the EIB will collaborate.
At the same time, a fund of 1,000 million for the “modernization and sustainability” of the tourism sector is incorporated into the text, the ‘digital kit’ for SMEs with more than 49 employees is expanded and another 2,200 million euros are contemplated in tax incentives for green investments from the private sector, both households and companies. There will also be a special provision for housing. With the addendum, Spain intends to opt for financing in good conditions for all these reforms until the year 2026.
Cheaper financing with high interest rates
In a situation in which the European Central Bank has had to support its monetary policy and raise rates to control inflation, the country will obtain financing at lower interest rates than that obtained by the Public Treasury and with long repayment terms. We must not lose sight of the fact that Spain will have to continue with the fiscal consolidation process, given that from January next year the safeguard clause of the Stability and Growth Pact will no longer be in force.
Therefore, the fiscal rules are recovered and with them the obligatory nature of the countries to stick to deficit and debt objectives. They will enter into force as they existed until the reform proposal prepared by the European Commission is approved. Spain and the Netherlands are confident that the European partners will reach an agreement on said reform by the end of the year, once the European Commission has already made public the details of its proposal.
It will happen, in all probability, during the Spanish presidency of the European Council, during the second semester. An appointment that has also been affected by the last-minute turn in the electoral calendar, while the macroeconomic figures seem unrelated to so much fluctuations. The fact that the call at the polls is so close to the imminence of the general elections makes it unlikely that the economy will be negatively affected by the greater uncertainty, according to the experts consulted.
In the medium term, everything came from the speed of forming a government and the ambition of the measures that can be taken to speed up budgetary processes or to advance in far-reaching reforms to face the challenges that Spain faces (a debt that closed the year passed at 113.2% of GDP, a deficit that dismissed at 4.8% or an unemployment rate that remains well above the European average, among others).