The Spanish government publishes every week a short report that summarizes the latest progress of the national recovery and resilience plan, as well as the sums committed. In total, nearly 19 billion euros were released between the beginning of 2022 and mid-September via this program. This represents an increase of one third compared to the same period last year.
In total, the funds allocated for the year 2022 should amount to 28 billion, compared to 22.1 billion in 2021. There is therefore a buildup in momentum, that will continue in 2023. To recall, the Spanish recovery plan will deploy 70 billion euros in investment between 2021 and 2026 and it is divided into three main axes – green transformation, digital transformation, as well as social and territorial cohesion.
Since these sums are coming mainly from the Next Generation EU funds, they have increased in line with these. Spain has already received 31 billion euros in direct subsidies from the EU, which is more than 40% of the total sum allocated by 2026.
Spain is indeed the country which has received, to date, the most subsidies via this European mechanism, significant more than Italy for example. Nadia Calvino, Minister of the Economy and First Vice-President of the Government, will soon formalize Spain's request to the European Commission to obtain a new tranche of EUR 6 billion, which should thus be paid at the end of the year.
At the same time, the government has finalised its strategy, by disclosing in May the last two components of the PERTE program, which is at the heart of the recovery plan, this program aims to invest massively in 11 sectors considered as strategic and able to raise medium and long-term growth – This includes in particular significant investments to foster the development of the semiconductors industry, electrical vehicles industry, or even hydrogen energy.
Despite a clearly established roadmap, the hardest part remains to be done. In particular, problems in the use of these funds emerge regularly. The project to build a battery giga factory in the Valencia region is a case in point: it is currently somewhat on hold, as the government has so far failed to raise the funding expected when it signed the agreement in last May.
So far, the effects of this plan on aggregate investment are not visible yet. Although the volume of gross fixed capital formation has risen this year so far, it is still significantly below its pre-Covid level. While these investments can indeed play a counter-cyclical role in the face of the current economic shock, they have not yet triggered a real upturn in investment. The increase in funds in 2023 will provide a better indication on the impact of this program on the ground
