The two sides of European funds: Spain has committed 94% of the money, but only 46% has reached the real economy

The implementation of European recovery funds in Spain has presented both positive and negative aspects. On the positive side, the government has committed 94% of the allocated direct aid for 2021, amounting to 66,296 million euros. However, the execution of these funds, i.e., the allocation to specific projects that have begun, is less optimistic, with only 46% of the original allocation being executed. This delay in execution is particularly noticeable in the regional administration, where information is scarce.

These findings are from a recent report by the consulting firm Llorente & Cuenca (LLYC), which analyzed the execution of the Spanish recovery plan. The report examined published calls and tenders as well as estimated data from autonomous communities. The report highlights the need for an enormous effort to execute all funds within the remaining two and a half years, as any projects not launched by August 2026 will lose funding.

To meet this goal, public administrations must allocate 37,769 million euros to specific projects, more than half of the original direct aid granted by the European Commission. In addition, the Spanish administration must mobilize another 9.5 billion euros in non-refundable transfers and 83.2 billion euros in loans included in the recovery plan’s addendum.

The main bottleneck in the execution is observed in the regional administration, where the figures are unknown. While the state has awarded 79% of resolved calls (23,977 million euros), the autonomous communities have only awarded around 8.6 billion euros. The LLYC study emphasizes the challenges faced by the autonomous communities, including complex bureaucracy, limited resources, and a lack of interest in certain projects. This has led to complaints that the central government did not include them in the decision-making process.

In terms of distribution, Andalusia, Catalonia, Madrid, and the Valencian Community share half of the aid, with a total of 24,191 million euros. However, the per capita distribution varies significantly, with less populated territories receiving more resources per inhabitant. The report also highlights that 17% of the tendered funds have not been awarded due to lack of demand, which amounts to 11,762 million euros.