The government is once again positioning European funds as a central lever to stimulate investment and accelerate economic growth. The executive is included in the General Government Budgets (PGE) plan for the upcoming year’s expenditures. EU funds totaling 25,156 million euros are allocated, with 23,840 million from the Recovery and Resilience Mechanism and 1,316 million from the React EU program.
The fresh package of European funds adds to the roughly 53,000 million accumulated in the two state budgets managed by the Government in recent years: 26,634 million in 2021 and 26,355 million in 2022.
In response to criticism from opposition parties and businesses over slow rollout and delayed real economy impact, the Government argues that the Recovery, Transformation and Resilience Plan is a key instrument. Funds are being allocated at what officials describe as cruise pace, and 2023 is expected to be the year when the maximum use of EU funds occurs.
“The year 2023 will be the moment when reforms and investments reach their widest reach. This will happen while ongoing investment measures align with the REPowerEU strategy and other measures agreed under the updated framework for the maximum financial contribution,” states the presentation of the PGE project.
Data from the Ministry of Finance shows that from 2021 to 2022, the implementation of the Recovery Plan resulted in 43,686 million in funds authorized, 37,213 million committed, and 32,989 million recognized as liabilities. Reports from the State Administration of General Intervention indicate that payments of 11,003 million in 2021 rose to 5,618 million by the end of the previous August. However, this does not guarantee that the funds have reached the beneficiary, as transfers to other administrations or to the railway infrastructure manager Adif are included.
Impact on GDP
The Government projects that the investments and reforms under the Recovery Plan will significantly boost economic growth. Projections from the Ministry of Economy show that EU funds and structural reforms could contribute an average of 2.6 percentage points per year to national GDP between 2021 and 2031. For the current year, growth support is estimated at 1.9 points, with a contribution of 2.8 points anticipated for the following year.
“This agenda, backed by Next Generation EU funds, is accompanied by investments essential for enduring structural change with substantial macroeconomic effects,” the Government notes. “Visible results will grow more tangible throughout the year as numerous processes unfold at both the national and regional levels.”
Investments 2023
The 25,156 million euros in European funds included in the PGE project feed into roughly 70,000 million euros in non-reimbursable EU transfers already committed since 2020, mirroring the pattern seen in previous budgets.
New government accounts also show near 9,500 million to be allocated to an Annex of the Improvement Plan prepared by the government and soon sent to Brussels. This amount covers both additional non-reimbursable funds approved by Brussels in response to slower-than-expected growth and the first loan package that the Spanish state will eventually repay to Brussels at a low interest rate.
Among the standout investments for 2023, funded by the Recovery Plan, is the Spanish 2030 industrial policy with 4,556 million devoted to industry and digitization. The residential rehabilitation plan focuses on 3,005 million, supporting housing access and building refurbishment and energy efficiency initiatives. Digital connectivity, cybersecurity promotion, and 5G deployment account for 2,624 million, a sizeable increase of 69.3 percent for 2023. The modernization and digitization of public administrations, including education, will receive 2,161 million, while the shock plan for care economy and enhanced inclusion policies will concentrate 1,346 million, a 12.2 percent rise.