Spain | Recovery plan: the assessment does not end here

Summary

The plan is sufficient and ambitious, it contains a proper diagnosis and assigns funds in line with NGEU objectives. It also has omissions and weaknesses. The vagueness about reforms is a particular cause for concern.

Key points

• Key points:
• The plan is sufficient: transfers of almost 70 billion will be made over the next few years, accounting for almost 60% of the drop in nominal GDP between 2019 and 2020 (80% including the recovery seen since the third quarter of last year).
• It is also ambitious in terms of the implementation schedule. In principle, around 70% of the transfers will be distributed toward the end of 2022 and 30% in 2023.
• The plan also contains a proper diagnosis of the main problems affecting the Spanish economy and funds are distributed in line with the digitalization and environmental sustainability targets set out in the NextGenerationEU (NGEU) program.
• However, it also has omissions and weaknesses. These include the lack of an ex ante assessment of what is expected to be achieved, unrealistic implementation targets and the lack of a clear, detailed and easily-accessible schedule setting out the milestones and projects that would give certainty to companies in terms of how the plan should be used.
• The vagueness and uncertainty surrounding the reforms that will have to be carried out over the next few years are the greatest concern.

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