Spain is moving faster to deploy the Recovery, Transformation and Resilience Plan (PRTR), the EU blueprint designed to revitalize and modernize the Spanish economy through sizable investments. In recent months, calls for tenders and subsidies from the European pool have grown, and the flow of funds is increasing, though the distribution still falls short of beneficiary expectations in many cases.
Public administrations have made 43.2 billion euros available to be spent over the last two years, channeling money from European funds through tenders and grants. By mid-November of the prior year, just under a third of that amount, 13.6 billion euros, had been committed through contracts and subsidies, according to data compiled by the Next Generation EU Funds Observatory EsadeEcPol and EY Insights.
The central government, autonomous communities, and local authorities issued nearly 1,500 competitions. In all, 28.5 billion euros in subsidies had been announced, with 9.3 billion already distributed as aid, particularly in support measures, according to the latest report from the business school study center and consultancy.
Administrations also recorded quotes totaling 14.7 billion euros, which have yielded contracts valued at 4.3 billion euros, as confirmed by Observatory sources. These sources analyze all European-funded programs by automatically collecting information from the National Grants Database and the Public Sector Contracting Platform.
Subsidies Across Public Administrations
Two primary instruments guide the process. The first involves implementing and executing investments funded with European money through contracts in which the winning company or organization supplies goods or services in exchange for payment. The second involves subsidies granted without a required response from recipients.
The latest EsadeEcPol and EY Insights report offers a detailed look at subsidy distribution. Of the 28.5 billion euros in aid calls, 80 percent flows to the central government, 22.9 billion to autonomous communities, 5.1 billion to local authorities, and 430 million to public universities.
Part of this total includes transfers from the central government to other administrations that then carry out European-funded activities. Specifically, of the subsidies called, 10.6 billion euros are transfers to autonomous communities, municipalities, or other public bodies, while 17.9 billion euros are directed to the productive sector and social economy — including 10.7 billion for small and medium-sized enterprises and 3.37 billion for large companies.
For subsidies already granted, the dynamic repeats. Of the 9.3 billion distributed, 5.1 billion would go to autonomous communities and municipalities, while 4.2 billion would go directly to the productive sector and social economy in Spain (or 3.4 billion excluding aid received directly by public universities). In other words, roughly 19 to 23 percent of the about 18 billion in subsidies requested, with no administration benefiting, actually reached the real economy.
“The pace of implementation in recent months has been notably rapid,” notes the Observatory report. “Amounts available for subsidies are high and clearly reflect a commitment by administrations to speed up publication,” especially since last May. It also points out that concessions progress more slowly due to administrative procedures that add complexity and extend completion times.
“Cruise Speed”
Facing criticism from companies about the slow rollout of funds and their delayed entry into the real economy, the central government argues that Spain is among the fastest in distributing funds and that the Recovery Plan is moving forward. The Transformation and Resilience plan has reached a state of “cruise speed” this year, with 2023 expected to be the peak year for EU fund deployment.
The executive has repeatedly turned European funds into a driving force to spur investment and sustain economic growth. This includes the draft General Government Budget (PGE) for next year’s expenditures, tied to a total of 25.156 billion euros from EU funds, including Recovery and Resilience funds and 1.316 billion from the ReactEU program. A new package of European funds has been added to the nearly 53.0 billion already anticipated in the two state budgets managed by the government. Previous years show 26.634 billion projected in 2021 accounts and 26.355 billion in 2022 budgets.
The 25.156 billion euros in European funds included in the PGE project is not funded by the nearly 70.0 billion in non-repayable transfers pledged by the EU in 2020 alone, as cited in earlier budgets.
The new government accounts also include around 9.5 billion euros, corresponding to an annex to the Recovery Plan that is under consideration and soon to be sent to Brussels. This amount covers non-repayable funds added for Spain due to slower-than-expected growth reported by Brussels and the first loan package that the Spanish State will eventually repay to Brussels at favorable rates.