Looking at the amount of funds requested from the European Commission by Member States as the NGEU milestones are met (most of which has already been disbursed) relative to the total sum of NGEU funds allocated to each country from the Recovery and Resilience Facility,1  including loans, Spain2 has so far requested a lower percentage (30%) than other economies such as France (76%) and Italy (58%). Two factors that can explain this are the fact that, unlike Italy, Spain has not yet applied for any loans3 and the Commission’s most recent disbursement to Spain dates back to February 2023 (they are currently examining Spain’s request for the fourth payment of 10 billion). However, a comparison in absolute terms reveals that Spain is the country that has received the second most funds to date.

However, when it comes to assessing the degree of execution of funds, this estimate is too broad, as it includes projects where funds have been (or will be imminently) made available to the public sector, but in which the final beneficiaries of the associated aid have not yet been confirmed.

If, rather than looking at the projects that have been activated, we focus on the funds that have actually been allocated, we will have a rather more precise idea of the rate at which the investments are reaching the real economy. With this criterion, in relation to the 2023 budget we find that the general government awarded funds amounting to 23.5 billion euros, and that between 2021 and 2023 a total of 66 billion has been awarded, representing 95% of the 69.5 billion that makes up the first phase of the Plan. Although this sum of 66 billion includes around 20 billion euros of calls for grant applications and tenders awarded to private companies and self-employed workers,4 it should be taken into account that a substantial portion of this (over 30 billion) was not allocated to final recipients, but rather directed to autonomous communities,5 local government corporations and public entities and enterprises in order for them, in turn, to launch the corresponding tender processes or calls for grant applications in order to identify the final recipients.

Therefore, delving down one more layer and looking at the amount of funds that has reached the productive economy, this figure will be less than the funds awarded, since there are entities that have not yet designated beneficiaries as well as beneficiaries which have to submit documentation before the payment can be disbursed. If we focus on disbursements by the government to final recipients (i.e. payments to the private sector and payments of direct aid to other public entities excluding those which require a subsequent call for bids in order to award the funds) in relation to the amount budgeted in 2023, we find that up to November the state disbursed some 8.8 billion euros.6 While this amount may seem low, if we consider that there tends to be a surge in expenditure at the end of the year, that payments were also made from funds already awarded but not paid in previous years, and that the autonomous communities also channelled some 2 billion of funds to the productive economy in 2023, we estimate that the total execution7 in 2023 was just over 16 billion euros, compared to 24 billion in the period 2021-2022 as a whole. Thus, the level of execution in this first phase of the Plan has been more than 40 billion, representing 59% of the 69.5 billion available (this figure was 34.5% at the end of 2022). Thus, we can see that the rate of execution is steadily picking up after a somewhat hesitant initial start.

In the third chart, we can distinguish the main calls for bids for NGEU funds awarded by the state between 2021 and 2023. These include railway infrastructure projects, the funding programme for SMEs and self-employed workers through guarantees, the Digital Kit programme to help fund the digitalisation of self-employed workers and SMEs, and programmes in sustainable mobility and urban transformation, as well as in energy with a clear commitment to sustainability (renovation of buildings to improve energy efficiency).

As for the Strategic Projects for Economic Recovery and Transformation (abbreviated in Spanish as «PERTE»), significant progress was achieved in 2023. The calls for bids that have been awarded since the launch of the PERTE projects in 20228 amount to almost 12 billion euros (of which 7 billion correspond to 2023), out of a total amount due to be deployed, including the corresponding funds under the Addendum, of just over 41 billion.

The various PERTE projects vary widely in terms of both their budget and their current degree of execution. Among those allocated the biggest budgets, particularly good progress has been made in the PERTE projects related to electric and connected vehicles (3.67 billion executed) and renewable energies (3.35 billion), while those related to chips and the water cycle, on the other hand, are still in their initial stages.

With regard to the reforms required in order to receive the disbursements, the vast majority of the calendar of reforms agreed with Brussels was met in 2023. In particular, the second part of the pension reform,9 the Housing Act, the Jobs Act and the Universities Act were all adopted. The first three were scheduled for the second half of 2022, but were approved in the first half of 2023 and are now being examined by the Commission with a view to approving the disbursement of 10 billion euros requested by Spain corresponding to the fourth NGEU payment. All that remains to be completed is the reform of unemployment benefit, which was rejected by Spain’s Congress in January. For 2024, two additional disbursements are expected: one of 7.2 billion (6.4 billion in grants and 0.8 billion in loans) corresponding to the milestones that were scheduled for the first half of 2023, including the entry into force of a tax reform which is still pending, and another of 18.4 billion (3.6 billion in grants and 14.8 billion in loans) corresponding to the milestones of the second half of 2023. With good progress being made on the reform agenda, the quantitative milestones related to the execution of the investments will take on a more important role, although some of them – such as the number of homes to be renovated or the number of electric vehicle charging stations to be installed – will be examined later than initially planned (in Q4 2024 and 2025, respectively, i.e. a year later than first intended).

If everything that remained outstanding from the 2023 budget is executed in 2024, then the total execution figure for the year could be around 20 billion, meaning that the NGEU programme’s contribution to GDP growth this year could be as high as 0.4 pps. In short, these funds will continue to be one of the key drivers of growth. Beyond the short term, time is of the essence, as the Commission has reiterated that the deadline for all milestones to be met is 31 August 2026. It will therefore be essential to effectively channel the loans under the Addendum and to select the appropriate associated projects in order to make the most of these funds and ensure they have a structural impact which contributes to our economy’s long-term and sustainable growth.