At the same time, the EU was planning to increase direct aid to Spain by 11,000M euros in view of the depth of the impact of the crisis, as can be seen in one of the annexes to the regulations on the Facility for Recovery and Resilience, which is awaiting final ratification.
The new calculation of the European Commission is basically based on the data on unemployment and GDP update for 2019, as well as the recent worsening of the Brussels forecasts on the impact of the crisis, as established at the time when the distribution of European funds was configured
For Bankinter’s analysis team, if this additional aid is finally approved, Spain would receive a total of more than 82,000M euros in direct aid, that is, funds that it will not have to reimburse.
“This direct aid would exceed 6.6% of GDP (vs. 5.8% previously) and is good news in terms of boosting economic recovery”.
The analysis’ firm maintains its estimates of GDP recovery at +6.5% in 2021 and +5.2% in 2022, after contracting -11.3% in 2020 (central scenario).
On the other hand, in the presentation of projections for 2021, S&P has shown its doubts that Spain will be able to absorb European funds. According to the rating agency, the country used 8 billion in European funds between 2014 and 2020, which is only 40.1% of the total compared to 47.4% in France, 60% in Portugal or 68.4% in Greece. The use of these funds depends on the ability to submit projects that have European approval.