A full nine days remain before the European Commission issues its assessment of whether Spain has met the milestones and targets needed to unlock the 10 billion euro tranche of the Recovery and Resilience Facility. The critical date is March 20, and Madrid is weighing the possibility of a partial payment if there is no timely agreement on reforms to unemployment subsidies, one of more than 60 milestones required for disbursement. At a recent Eurogroup meeting, Economy Minister Carlos Cuerdo acknowledged that both a full payment and a partial payment are plausible outcomes, depending on how negotiations on the subsidy reform unfold.
A formal request for the fourth tranche was submitted on December 20. The European Commission was expected to verify milestone compliance within two months, but the holiday pause extended that window by a month, providing temporary relief to Prime Minister Pedro Sánchez’s government after Podemos rejected the unemployment subsidy reform. That grace period ends in days, making a timely agreement unlikely and increasing the odds of a partial payment being issued.
Regarding the payment, whether partial or full and whether funds arrive immediately or over a subsequent period, Cuerdo framed the issue as a temporary delay in financing whose mid-term impact should be minimal. The important objective, he said, is to continue meeting the milestones and targets, noting substantial progress while downplaying the prospect of receiving less than the 10 billion euro total.
Technical discussions
“This is a moment to press ahead and conduct technical discussions to secure a positive assessment for the milestones associated with the fourth payment, excluding those already being addressed in parallel, such as the unemployment subsidy reform,” the minister stated, emphasizing ongoing dialogue with the Commission to determine the best path forward. European Commissioner Paolo Gentiloni explained that Spain has not requested any extension and described cooperation with Madrid as very good. The Commissioner is due to visit Madrid this week to inaugurate an event on the recovery and resilience mechanism in Spain.
In the end, if the Commission’s verification concludes with no agreement on the unemployment subsidy reform, a portion of the fourth payment could be frozen. The freeze would remain until the reform is approved, granting the government an additional six months to finalize steps. Deputy Prime Minister and Labor Minister Yolanda Díaz, who participated in the Council of Ministers for Employment, asserted that notable progress is being made and expressed confidence that the deadline will be met.