By Chris King •
Updated: 03 Oct 2023 • 14:45
Image of a toll booth on the AP-7 in Girona.
Credit: Philip Lange/Shutterstock.com
THE European Commission approved the addendum to Spain’s recovery plan this Monday, October 2.
With this extension of the original plan, Spain will subsequently be able to access an additional €93.5 billion in European funds, 90 per cent of which will be in the form of loans with favourable conditions.
In exchange, the Spanish government pledged to undertake 18 new reforms and agreed to 52 modifications to the plan. This included a very significant change in the country’s commitment to introduce tolls on Spanish motorways.
As a result, Spanish drivers will not have to pay to use the motorways from next year, as was established in the original plan that was approved in 2021.
The preliminary approval of the addendum, which must be ratified by the EU Council within a maximum period of four weeks, marks the start of the second phase of the recovery plan.
Within the plan, Spain will be able to access €83.2 billion in loans under advantageous conditions. The country will be allowed 30 years in which to pay it back, with the first 10 years only requiring interest payments.
Another €7.7 billion in non-refundable aid and a further 2.6 billion will be released to finance the REPowerEU plan, with which Brussels aims to accelerate the energy disconnection from Russia.
This additional €93.5 billion is in addition to the €69.5 billion in non-refundable transfers already released in the first phase that began in 2021, bringing the total to €163 billion.
Of this total, Spain has so far received €37 billion in three disbursements, or 23 per cent of all funds available until 2026.
The addendum to the plan introduced 18 new reforms and introduced amendments affecting up to 52 measures in total. The new reforms were already known.
Many of them build on legislation that had already been approved but whose parliamentary procedure was interrupted by the elections.
Others however develop general plans and strategies on issues such as desertification, artificial intelligence, and water management.
The modification included in the recovery plan is developed through 52 amendments based on ‘objective circumstances’ that justify the changes, most of which seek to extend the deadlines.
These circumstances include disruptions in supply chains, high inflation, lack of demand for some measures or the emergence of unforeseen legal and administrative difficulties.
Moreover, the amendments do not affect key reforms such as pensions and taxation, as the government had already pointed out when it presented the draft addendum last June.
The European Commission pointed out that in the addendum: ‘Spain does not eliminate or significantly reduce any investments or reforms, but adds additional investments and reforms’.
It added: ‘We understand that almost all member states will have to adjust their plan because priorities are changing, it is not something that worries us. Spain is not an isolated case’, according to EU sources consulted by 20minutos.
After receiving the go-ahead from the European Commission, the modification of the Spanish recovery plan must now be approved by the EU Council, which can take up to four weeks.
If the Council gives the green light, Spain will be able to access a further €1.4 billion in pre-financing for the EUPowerEU. The current government will also be able to request the fourth disbursement of the funds as of Monday, which the Ministry of Economic Affairs expects to happen soon.
In its first component, the original recovery plan approved in 2021 included a commitment to approve a Mobility and Transport Financing Law.
This included: ‘a system of payment for the use of the high-capacity road network’ to cover maintenance costs and negative environmental externalities with a view to implementing it in 2024.
At the request of the Spanish government, that commitment now disappears because it was made before energy prices soared after the Russian invasion of Ukraine. Its implementation had been called into question after sharp increases in road transport costs.
The Commission was aware of the difficulties of implementing this measure in the current context and agreed to replace it with a commitment to promote rail freight. This approach is in line with the recommendations that Brussels made to Spain last May.
Today’s decision by Brussels to accept the abolition of the tolls was heavily influenced by the fact that the EU will also start charging road transport for CO2 emissions from 2027.
From that date, the sector will have to buy CO2 emission allowances in order to be able to pollute, as is already the case for energy-intensive industries, commercial aviation, and electricity and heat generation companies.
Regarding the removal of tolls from the text, the Commission noted that the ambition of the Spanish plan remained unchanged.
It pointed out that the new proposal: ‘contributes to the reduction of greenhouse gas emissions from road transport while addressing country-specific recommendations’.
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Originally from Wales, Chris spent years on the Costa del Sol before moving to the Algarve where he is a web reporter for The Euro Weekly News covering international and Spanish national news.
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