Spain will be the first EU country to benefit from aid out of the bloc’s pandemic recovery fund launched to combat the economic consequences of COVID-19 after the European Commission gave the green light to payout the country’s first instalment of €10 billion.
“Spain has made sufficient progress in the implementation of its national plan for #NextGenerationEU. Therefore, it will be the first EU country to receive a payment, worth €10 billion, once the other Member States authorise it,” tweeted Ursula von der Leyen, European Commission president.
“I congratulate Spain for successfully meeting the first 52 milestones and objectives set out in its recovery plan,” added Commission Vice President Valdis Dombrovskis.
These 52 milestones include a series of measures and reforms that Madrid has adopted in order to receive the funds. They are mainly related to taxation, labour legislation, the decarbonisation of the economy and the digitisation of public administration.
Spain is set to be the second-largest beneficiary of the EU recovery fund after Italy. In total, Madrid is expected to receive €70 billion from the recovery plan in direct aid.
But to receive the next tranche, more reforms are expected, including reforms to the pension and tax systems.
No plan submitted
The Netherlands is the only Member State that has failed to submit its so-called Recovery and resilience plan.
In order to receive the near €6 billion to which it aspires, it must present its economic reforms plan, as the other 26 EU countries did.
Ironically, the Netherlands insisted on this condition during pandemic recovery funds negotiations, in order to force the Southern European countries into undertaking structural reforms.
But now, with the Dutch caretaker government, unable to approve its own national plan, may have fallen into its own trap, as the European Commission is asking for a series of fiscal reforms that include the removal of a series of tax exemptions on mortgages and the self-employed.
Approval pending
Hungary, Poland, Bulgaria and Sweden are still all waiting for their Recovery and Resilience plans to be approved.
In the case of Bulgaria, the changes in government have been the main cause for the delay: the government of former Prime Minister Boyko Borissov had previously started working on the plan.
But it was only submitted by the caretaker government on 15 October, reportedly over difficulties in agreeing on dates for the phasing-out of coal.
Bulgarian lawmakers have recently convened for the first session of parliament since a newly formed anti-graft party emerged as the surprise winner of the elections, but the new government that is set to discuss its plan with Brussels is still not in place.
In the cases of Poland and Hungary, officially negotiations are going on “to respond to the criteria” and the “dialogue is constant”, according to the European Commission, but many suspect that the problems related to respect for the rule of law are the cause of the delays.
The approval must come from the European Commission, but the EU executive body is under pressure from the European Parliament.
Each political group within the Parliament, except for the Identity and Democracy Group (ID) and the European Conservatives & Reformists Group (ECR) – of which the Polish government is a member – are calling for approval of the Polish recovery plan to be withheld.
“A government that denies the primacy of EU law and violates the principles of the Rule of Law cannot be deemed trustworthy of fulfilling the commitments and obligations under our legal instruments, and this includes the relevant criteria for the assessment of national recovery and resilience plans”, the groups wrote in a letter addressed to von der Leyen.
In the meantime, the EU’s highest court has imposed a €1 million daily fine on Warsaw for not implementing its summer orders to abolish the judicial disciplinary chamber that according to critics threatens the independence of the judiciary.
Hungary on the other hand has requested €7.2 billion in grants under the EU’s recovery fund, with dialogue over approval still underway.
In this case, the European Commission is asking for more efforts to fight corruption and would like to see a monitoring system against “conflicts of interest, corruption and fraud and to avoid double funding.” There is also pressure on the Hungarian government over recently approved legislation that is seen as discriminating against sexual minorities.
Agreed to by the European Council in July last year, the total amount of the NextGenerationEU fund is worth €750 billion and will operate from 2021-2023.
