The Spanish government has negotiated major changes to its recovery plan with Brussels to unlock nearly 25 billion euros in pending subsidies. The Council of Ministers will approve the addendum on Tuesday, simplifying milestones and scaling back ambitious legislative reforms. This seventh revision aims to maximize funds before the 2026 deadline, while renouncing 75% of planned loans.
The recovery plan, approved over five years ago to cushion the economic blow of the covid-19 pandemic, ties EU funds to reforms and investment milestones. Spain, a top beneficiary alongside Italy, has received about 55 billion euros in subsidies out of 79.854 billion assigned, or 69%. For loans, from 83.160 billion, it has obtained 16 billion but will forgo the remaining 75%.
The 2021 initial program set ambitious targets that, seven months before the August 2026 deadline, prove impossible amid the government's parliamentary fragility. Key reforms like pensions and labor are already approved, enabling most disbursements. Pending measures such as diesel taxation or the Industry Law are being dropped to ease pressure.
"It has been a very tough negotiation," says a source familiar with the process with the European Commission. This seventh revision for Spain eliminates intermediate investment milestones and shifts some legal reforms to executive regulations, bypassing Congress. Brussels has shown flexibility, though constrained by Fund regulations and oversight from the European Court of Auditors.
Other countries like Italy, France, and Portugal submitted similar addendums in recent weeks, following Commission criteria updates in June. Spain's last disbursement request was in December 2024, with one or two more pending. The plan's emphasis on renewables and digitalization has driven better performance than in other states, but political deadlock and strict controls by the Finance Ministry have slowed recent progress.
Projects like the Stellantis gigafactory in Figueruelas or Fertiberia's ammonia production in Puertollano will count as completed upon fund transfer, allowing continuity beyond 2026. Some local administrations have abandoned initiatives due to the tight deadline.