Spain leads the EU pandemic funding race, but obstacles remain World news

MADRID (Reuters) – Spain, the first European Union country to receive the first tranche of funds to rebuild the pandemic, was also the first to receive European Commission approval for a second tranche of 12 billion euros ($ 12.7 billion) on Monday.

The EU’s executive, the European Commission, has so far approved Spain’s goals and reforms, but said pension funding, estimated at the end of 2022, could significantly increase public spending.

“The risk of a significant fiscal gap arising from the measures taken should be addressed to ensure that the milestones are met satisfactorily,” they wrote.

In Spain, companies complained that funding was slowly running out due to the many layers of approval needed, even when the overall targets were quickly met.

To qualify for the second round of funding, Spain had to meet 31 milestones and nine targets, including the reform of public pensions, which were again linked to inflation so that pensioners would not lose their purchasing power.

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In total, Spain is expected to receive at least € 70 billion from the € 750 billion package of the European Union.

The second tranche will disburse 45% of the total plan for Spain, including € 9 billion received as pre-financing in August 2021.

To receive all the remaining funds, Madrid needs Brussels to approve its final pension reform proposal.

A spokesman for the Spanish Ministry of Social Security said any discrepancies were only technical.

(Reporting by Belén Carreño, editing by Andrei Khalip and Barbara Lewis)

Copyright 2022 Thomson Reuters.

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