Spain initially led the European Union in accessing the first disbursements from the Next Generation EU funds due to its timely achievement of stipulated milestones and objectives.

However, recent political developments, including electoral calls and subsequent fragmentation within parliament, have hindered the country from maintaining the same pace of funding allocation.

Further complicating the situation have been failures to meet specific milestones, which led to a partial payment in the fourth tranche and ongoing requests for modifications to the recovery plan, thereby delaying the fifth payment.

In light of these challenges, Spanish administrations have had to pre-allocate commitments from EU funds that exceed the actual amounts received from Brussels.

This temporary discrepancy occurred in July 2024 but was addressed with the arrival of the fourth partial payment.

A similar situation re-emerged by late December 2024, where awarded grants and contracts surpassed the €47.960 billion received from four payments and two pre-financing operations.

As of January 31, 2025, data from the ELISA tool indicated that total allocations by various administrations amounted to €48.633 billion, which exceeded the funds received by €693 million.

This imbalance should have been resolved in the early months of 2025 if Spain had met the milestones required for requesting the extended fifth payment of €22.1 billion.

However, negotiations with Brussels continue to drag on, and the gap is anticipated to widen upon the release of more recent data.

Manuel Hidalgo, an economics professor at Pablo de Olavide University and a senior fellow at EsadeEcPol, noted that this situation does not necessarily imply the Treasury is advancing funds, as the allocations made do not directly correlate with actual payment obligations incurred.

He remarked that actual disbursements by the administrations are likely to be lower than the €47.940 billion received from Brussels, due in part to instances of forfeited funds.

However, comprehensive budget execution data for the Recovery and Resilience Mechanism across all administrations is not available for further validation.

In recent months, Spain has submitted several modifications to its Recovery Plan, contributing to payment delays.

The fourth tranche was anticipated in the early months of 2024 following a request made in December 2023, but it only materialized in July, arriving with a deduction of €100 million due to unmet targets set under the 'Kit Consulting' program aimed at supporting the digitalization of at least 15,000 small and medium-sized enterprises.

This adjustment remains unresolved, although the government has been attempting to address the shortfall through a redesign of the program.

The fifth payment was requested in December 2024, encompassing funds that also accounted for the sixth tranche (amounting to €25 billion) as it included milestones from both this and the seventh disbursement.

Approval was expected to be granted by now, yet a modification request put forward by the government on March 21, 2025, has postponed the disbursement as it undergoes evaluation by the European Commission.

Government sources attribute the modification request to technical matters, but prolonged negotiations have raised concerns, especially since one of the milestones included an unapproved diesel tax due to a lack of parliamentary support.

With the fifth payment altering the structure of requests by including milestones from other payments, estimating the number of outstanding requests remains challenging; however, Spain must request an additional €31.894 billion by December 31, 2026, to meet the total allocated amount of €79.854 billion in grants.

A study from Esade indicates that the current pace is slightly slower than required.

Their monitoring tool, akin to that of the government, reports that administrations have resolved host grants amounting to €49.115 billion as of January of this year.

Both ELISA and Esade data reveal a marked deceleration in grant allocations throughout 2024 and early 2025 compared to 2023. January 2023 saw €1.345 billion allocated, whereas January 2025 registered only €442 million.

The current rate of grants has sparked questions about the system’s ability to absorb the total resources available within the stipulated timeframe.

Factors contributing to this slowdown have been identified as both situational, including political and administrative uncertainties, as well as challenges related to the absorptive capacity of the productive sector.

One theory posits that the ‘paths of least resistance’ have already been navigated during the initial wave of funding, leaving the more complex operations systematically unaddressed.

This complexity is often attributed to the administrative challenges associated with managing aid directed towards private beneficiaries, unlike the more straightforward transfers between administrations.

Approximately 90% of the funds are awarded to private entities; however, an increase in allocations to public companies and local entities has also been noted in recent periods.

The distribution of funds strongly concentrates on traditional economic sectors, highlighting a reinforcement of existing economic structures more than instigating a genuine transformation of the productive framework.

Wholesale trade and specialized construction activities comprise the leading recipients, followed by building construction and civil engineering.

This concentration reflects significant infrastructure improvement projects and public transportation modernization initiatives, along with digitalization programs aimed at traditional commerce enterprises.