The European Commission gave preliminary approval on Monday for the disbursement of the second package of European funds. Next generation for Spain, those developed in 2020 to help the European Union emerge from the coronavirus crisis. After this positive assessment by the Commission, the Council of the EU must give an opinion within a maximum of four weeks, after which the Commission will again make a final decision on this payment, and the money can reach Spain.

Then the country will receive 12 billion euros, which will be added to the already received 19 billion. When this decision is ratified, the Commission will already authorize the allocation of 31,000,000,000,000,000 euros, almost half of all funds in the planned package (44.5% of the 70,000,000,000,000,000 that make up the total amount).

Commission concerned about Spain’s financial stability

While the Commission has not yet begun assessing the fiscal sustainability of the reforms approved in Spain, which it will do at the end of the year, Commission sources say it is concerned about the stability of the system. First of all, as a result of the pension reform linking these benefits to the consumer price index, which will lead to a significant increase in spending in the next few years due to the retirement of the generation baby boom.

The Spanish government believes that indexing with the CPI will increase spending by 2.7 points of GDP more than under the previous regime, but other measures will reduce that spending to at least 1.6 points of GDP, such as those they seek to promote. delay retirement and “punish” early retirement. “We think these are plausible estimates, but maybe a bit optimistic. Slightly lower estimates would be more realistic,” they said.

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