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Tension in Spain over use of EU recovery funds

MADRID (AFP) – The Spanish government is increasingly under fire over its use of the European Union’s (EU) massive economic recovery funds, with critics blasting the distribution of aid as too slow and arbitrary.

Spain is due to receive EUR140 billion from the fund by 2026, half of it in grants, making it the programme’s second-biggest beneficiary after Italy.

The landmark EUR800-billion recovery plan was approved by Brussels in July 2020 to help the bloc rebound from the impact of the Covid-19 pandemic, and make its economy greener and more digitalised.

“We are talking about extraordinary amounts,” Socialist Prime Minister Pedro Sanchez said earlier this month, calling the funds “a historic opportunity for Spain”.

Spain and Portugal were the first nations to receive money, with Madrid collecting EUR19 billion during the second half of 2021.

Spanish Prime Minister Pedro Sanchez. PHOTO: AFP

The funds are at the heart of the economic and political strategy of Sanchez’s government after the economy contracted by a whopping 10.8 per cent in 2020 under its watch as the pandemic hit.

The government faces elections by the end of 2023.

But some business leaders and opposition parties have complained about a lack of coordination between the central government and Spain’s powerful regions over the deployment of the money.

Although Spain was the first to receive aid, the money was “not injected” as fast as expected in the “real economy”, the CEOE employers’ association said in a report in early January.

By the end of the year, only 38 per cent of the funds allocated to Spain for 2021 had been used, official figures show.

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