Spanish government denies using EU funds to pay pensions

Vice President Carlos Cuerpo defended budget modifications in the Senate and insisted European funds went exclusively to the Recovery Plan.

Spain’s government on Tuesday denied using European funds to pay pensions, following accusations from the Popular Party based on a Court of Auditors report. The document indicated that in 2024 some 2,389.4 million euros of EU surpluses covered passive-class pensions and minimum supplements.

Economy Minister Carlos Cuerpo told the Senate that budget reprogramming is an ordinary and transparent tool. This year authorities have already adjusted 32,000 million euros, including 7,300 million for storm damage and 10,300 million for the Spain Crece fund.

The government noted that the European Commission releases funds upon milestones, regardless of actual spending, and that such treasury operations do not harm EU financial interests. In Germany, outlets such as Bild called the case “absolutely unacceptable” and demanded stricter oversight.

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Courtroom illustration of Mariano Moreno testifying in the Koldo case trial at Spain's Supreme Court, denying cash payment irregularities.
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PSOE ex-manager denies 500-euro 'txistorras' bills and unmonitored cash in Koldo case trial session

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In a session of the Koldo masks case trial at Spain's Supreme Court, former PSOE manager Mariano Moreno Pavón denied distributing high-denomination 500-euro bills ('txistorras') or unmonitored cash to José Luis Ábalos and Koldo García from the party's Ferraz cash box. García's lawyer showed undated expense sheets, but the court curbed hypotheticals. Other witnesses, including Celia Rodríguez, Pedro Saura, and Carlos Moreno, clarified reimbursements and denied irregularities.

PP and PSOE voted against a Podemos amendment to remove reduction coefficients for early retirees with over 40 years of contributions. The measure would have affected nearly 900,000 pensioners and cost more than 3.3 billion euros.

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Salvador Illa's government has submitted a budget project to parliament with record spending of 49.162 million euros for 2026, plus 893 million euros extra from agreements with ERC and the Comuns.

The Consejo Gremial stated that the transfer of $5 trillion from AFPs to Colpensiones within six days is unnecessary to cover pensions for those who switched via the opportunity window.

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The State Council suspended the transfer of 5 trillion pesos from pension fund administrators to Colpensiones. The government expressed deep concern over the impact on pension payments. President Gustavo Petro criticized the decision and announced legal action.

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