European Commission President von der Leyen and Spain's PM Sanchez pose before their meeting in Madrid

European Commission President Ursula von der Leyen and Spain's Prime Minister Pedro Sanchez pose before their meeting in Madrid.

17-06-2021POOL

Spain's plan for recovery after the COVID-19 pandemic and transformation into a greener and more digitalised economy got European Commission approval on Wednesday, the second such green light in the 27-nation EU after Portugal.

As one of the main beneficiaries of a 750 billion euro ($908 billion) European Union recovery scheme, Spain will get 69.5 billion euros in grants until 2026 to help revive its tourism-dependent economy, which has been hit hard by the crisis.

Madrid will get the first 9 billion euros in pre-financing once EU finance ministers sign off on the plan in July.

"This is a historic day for Spain... it means a new understanding of Europe," Prime Minister Pedro Sanchez told reporters, standing next to Commission President Ursula von der Leyen, who called the plan "ambitious and far-sighted".

"The plan was designed here in Spain and will promote growth here in Spain," she said.
A 10 billion euro tranche should be released by December once Spain meets milestones such as progress on reforms, followed by a further 12 billion euros in June 2022.

Partly boosted by the plan, which has suffered delays, the government in Madrid expects Spanish growth to reach 6.5% this year, after a record 10.8% slump last year.

Envisaging a total of 110 large investment projects, the plan also involves important reforms, notably of the pension system and labour market.

Spain's plan devotes 40% of its total to fight climate change, including the promotion of urban and long-distance sustainable transport, better energy efficiency of buildings, decarbonisation of industry and new technologies for green hydrogen and renewables.

Europe's second-largest car producer hopes to use part of the money to start making electric car batteries in partnership with private investors and boost electric vehicle output.

Another 28% of the funding is earmarked for digitalising public administration, industry and business and investments in digital equipment for education and training.

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