Brussels approves $171B in EU funds for Spain, 40% for climate projects

OVIEDO, Spain

The European Commission on Monday approved Spain’s request for an additional €93.5 billion ($98.3 billion) in recovery and resilience funds, bringing the country’s total package to €163 billion.

Acting Prime Minister Pedro Sanchez said the money will help drive Spain’s green and digital transformations forward.

“We are embarking on a new phase of this extraordinary project to reindustrialize and modernize our country’s economy,” Sanchez posted on the social media platform X.

Around half of the money is set to be given to Spain in the form of loans, while the other half will be in grants.

Spain had requested changes to the original plan, including an additional €83 billion in loans to take on 59 new or expanded measures.

The European Commission said 40% of the funds will be directed toward climate objectives, including improving the sustainability of Spain’s agriculture system, countering desertification, and promoting the circular economy.

In a win for the acting Spanish government, Brussels agreed to replace the controversial measure in the 2021 proposal, which would have installed toll booths on highways across Spain. Instead, Veerle Nuyts of the European Commission said Spain will reduce carbon emissions by promoting more train travel for people and merchandise.

The European Council now has four weeks to endorse the commission’s assessment, which would begin to gradually unlock funds. However, if Spain wants to receive the full amount, it will have to meet the milestones laid out in its plan.

Already, Spain’s acting left-wing government is threatening to pull EU funds from cities that received grants but are backtracking on climate pledges.

These cities, which came under conservative governance after local elections this spring, have painted over bike lanes that received funding or announced significant delays or cutbacks in low-emission traffic zones.

At the same time, Spain’s national government is on shaky ground after elections this summer resulted in a hung parliament. Last week, the country’s conservative candidate failed in his bid to become prime minister.

This week, Sanchez’s Socialist Party is busy negotiating with his left-wing allies and separatist groups to muster up the needed majority in parliament. If he fails to gain enough support, Spain could face repeat elections in the months to come.