Brussels rejects funding Spanish pensions with EU funds. The European Commission has officially stated that pension expenses cannot be covered by European funds. Spanish authorities face criticism following a report on possible misuse of resources.
The European Commission has publicly confirmed: pension payments cannot be financed using funds from the Recovery and Resilience Facility (RRF). The clarification came after a heated debate over a report by the Court of Auditors, which noted the possible use of budget loans allocated for Recovery Plan projects to cover pension expenses in Spain. In response to requests from the European Parliament, three key European Commissioners sent an official letter emphasizing that such expenditures do not comply with the rules for allocating European funds.
The letter, signed by European Commission Vice President and Commissioner for Reforms and Cohesion Raffaele Fitto, Commissioner for Economy and Productivity Valdis Dombrovskis, and Commissioner for Public Administration, Anti-Fraud, and Budget Piotr Serafin, specifically notes: none of the stages of the Recovery Plan agreed with Spain provide for the use of EU funds to finance pensions. The Commission assured that all transfers from Brussels underwent thorough scrutiny and payments were made only after the achievement of agreed objectives and targets was confirmed.
The scandal over redirecting budgetary loans from the so-called 'Service 50'—the item where funds for projects and investments under the Recovery Plan are accumulated—to pension payments in 2024 quickly moved beyond being merely an accounting matter. The issue took on a political dimension and resonated at the European level, especially after the situation received wide coverage in the German media. The European Commission acknowledged that there are certain gaps in transparency in the management of the funds and promised that, in the next financial cycle, EU countries will be required to publish information about beneficiaries, contractors, and subcontractors on a single portal for oversight by budget authorities.
Questions were also addressed to the European Commission by Members of the European Parliament. Greek environmental MP Daniel Freund, who received clarifications, stated that he considers all doubts regarding possible misuse of European funds in Spain to be resolved and suggested closing the matter. It is important to note that, as with other budget disputes, the situation concerning the allocation of EU funds in Spain has become part of a broader discussion on transparency and control over the spending of European funds. Previously, the country's authorities had already faced criticism regarding the distribution of budget initiatives, which was thoroughly examined in the material on the launch of 179 new legislative measures— details on the sweeping changes in Spain's budget policy.
For reference: The Recovery and Resilience Facility is the largest support instrument for EU countries after the pandemic, aimed at reforms and investments in the economy, digitalization, and the environment. In Spain, RRF funds are allocated to projects agreed upon with the European Commission, and their use is monitored at both the national and European levels. Any attempts to misuse these resources can result in blocked payments and additional inspections.
