How not to spend it

Ever since the EU began distributing its Next Generation funds in 2021, supposedly to help member states recover from the ruinous effects of lockdown, Spain has been criticised by Brussels for opacity in managing its disbursements. Now Madrid is under fire for not requesting enough of its allocated 163 billion euros: this week, thirteen months before the August 2026 deadline for Next Gen funding requests, it emerged that Spain has only asked for 30% of the amount available to it. Italy, by contrast, has already received 72% of its allocated 194 billion euros.

This post-pandemic booty was hailed in 2021 by Pedro Sánchez as the key to unprecedented prosperity and equality. The spending plan for 2022 was the largest in Spanish history, infused with almost 30 billion of Next Gen funds and described by finance minister María Jesús Montero as “the budget of a fair recovery”. Three-and-a-half years later, the Spanish economy is booming - but not as a result of EU funds. From the beginning, Spain’s deployment of Next Gen cash has been dogged by inadequate technology, lack of transparency and alleged corruption.

In February 2023, Monika Hohlmeier, chairwoman of the EU’s Committee on Budgetary Control, went to Madrid on an investigative mission. “We will go to Spain,” she said, “because the [Spanish] government doesn’t tell us where the [Next Gen] recovery funds are.” Hohlmeier’s request for information wasn’t exactly treated as urgent: two months later, she was still waiting for a response.

Things haven’t improved. Last March, a year after Hohlmeier’s trip to Madrid, Siegfried Muresan, Vice President of the European People’s Party, revealed that “the EU Parliament is very concerned about Spain”, which he said had become a “problem case in Europe”.

This was partly a reference to the alleged misuse of Next Gen funds in the Koldo corruption case, which is now being investigated by the European Public Prosecutor’s Office (EPPO); and partly to the Catalan amnesties, defined by Muresan as an “attack on the rule of law” (although they were recently upheld by Spain’s Constitutional Court). The EPPO is also looking into the possibility that Next Gen money was diverted away from a national quantum computer project in Barcelona.

In August last year, the European Court of Auditors, the bloc’s fiscal watchdog, identified Spain as the most ineffective spender of Brussels’ money and called for it to return misused and unspent funds. Far from fuelling a post-lockdown recovery that “will reach everyone” (Montero again, back in the dreamy days of late 2021), Spain’s Next Gen funds have had very little impact on the economy. Most of them remain parked in Brussels’ bank accounts, while others seem to have disappeared into a black hole - or bottomless pockets.