On January 10 of this year, Spain successfully overturned the unemployment benefit reform in Congress, which was a part of the National Recovery Plan aimed at qualifying the country for the fourth disbursement of European funds. However, this decision made three months ago is now causing a setback in Spain’s economic strategy as the delay in disbursement has been due to early elections disrupting the legislative calendar and preventing certain regulations from passing.
The negotiations for Spain’s National Recovery Plan have faced new challenges as countries recalculated funds and added more commitments and investments. Spain requested additional credits but found itself in a difficult position with the EU regarding the approval of the reform. The EU has granted some flexibility in the process by allowing a two-month extension to try and get the reform approved again. However, it seems unlikely that Spain will meet this deadline, leading to a potential partial disbursement instead of the full amount.
The Spanish government is working closely with the EU Commission to address this issue and hopes to complete the reform within time. The Minister of Economy emphasized its importance for both Spain’s economy and credibility. While Spain is still among advanced countries in this process, this setback may raise concerns and criticisms in political debates.
The delay in disbursement is not just a financial issue but also an issue of political credibility and confidence. The weak coalition government may face further obstacles in future, and non-approval of this reform could be one of many challenges ahead. Despite being among advanced countries, Spain’s political landscape may be impacted by this setback in Europe’s funds disbursement process.
