Recommendation for a COUNCIL RECOMMENDATION on the 2022 National Reform Programme of Spain and delivering a Council opinion on the 2022 Stability Programme of Spain
Date: 2022-05-23
Institutions: European Commission, Secretariat-General
Subjects: Spain, digital transformation, economic policy, economic recovery, economic reform, energy policy, fiscal policy, stability pact, stability programme, waste management

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   EUROPEAN COMMISSION  Brussels, 23.5.2022  COM(2022) 610 final  Recommendation for a COUNCIL RECOMMENDATION on the 2022 National Reform Programme of Spain and delivering a Council opinion on the 2022 Stability Programme of Spain {SWD(2022) 610 final} - {SWD(2022) 640 final}  
 
Recommendation for a 

COUNCIL RECOMMENDATION 

on the 2022 National Reform Programme of Spain and delivering a Council opinion on 
the 2022 Stability Programme of Spain 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Articles 121(2) and 148(4) thereof, 

Having regard to Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of 
the  surveillance  of  budgetary  positions  and  the  surveillance  and  coordination  of  economic 
policies1, and in particular Article 5(2) thereof, 

Having  regard  to  Regulation  (EU)  No  1176/2011  of  the  European  Parliament  and  of  the 
Council  of  16  November  2011  on  the  prevention  and  correction  of  macroeconomic 
imbalances2, and in particular Article 6(1) thereof, 

Having regard to the recommendation of the European Commission, 

Having regard to the resolutions of the European Parliament, 

Having regard to the conclusions of the European Council, 

Having regard to the opinion of the Employment Committee, 

Having regard to the opinion of the Economic and Financial Committee, 

Having regard to the opinion of the Social Protection Committee, 

Having regard to the opinion of the Economic Policy Committee, 

Whereas: 

(1) 

Regulation  (EU)  2021/241  of  the  European  Parliament  and  of  the  Council3,  which 
established  the  Recovery  and  Resilience  Facility,  entered  into  force  on  19  February 
2021.  The  Recovery  and  Resilience  Facility  provides  financial  support  for  the 
implementation of reforms and investment, entailing a fiscal impulse financed by the 
Union.  It  contributes  to  the  economic  recovery  and  to  the  implementation  of 
sustainable and growth-enhancing reforms and investment, in particular to promote the 
green and digital transition, while strengthening the resilience and potential growth of 
the Member States’ economies. It also helps strengthen sustainable public finances and 
boost growth and job creation in the medium and long term. The maximum financial 
contribution  per  Member  State  under  the  Recovery  and  Resilience  Facility  [was] 
updated on [XX] June 2022, in line with Article 11(2) of Regulation (EU) 2021/241.  

(2) 

On  24  November  2021,  the  Commission  adopted  the  Annual  Sustainable  Growth 
Survey,  marking  the  start  of  the  2022  European  Semester  for  economic  policy 

1 
2 
3 

OJ L 209, 2.8.1997, p. 1. 
OJ L 306, 23.11.2011, p. 25. 
Regulation  (EU)  2021/241  of  the  European  Parliament  and  of  the  Council  of  12  February  2021 
establishing the Recovery and Resilience Facility (OJ L 57, 18.2.2021, p. 17). 

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coordination.  It  took  due  account  of  the  reaffirmed  joint  commitment  of  the  Porto 
Social Summit of May 2021 to further implement the European Pillar of Social Rights 
proclaimed  by  the  European  Parliament,  the  Council  and  the  Commission  on  17 
November  2017.  The  European  Council  endorsed  the  priorities  of  the  2022  Annual 
Sustainable Growth Survey on 25 March 2022. On 24 November 2021, on the basis of 
Regulation  (EU)  No  1176/2011,  the  Commission  also  adopted  the  Alert  Mechanism 
Report, in which it identified Spain as one of the Member States for which an in-depth 
review4  would  be  needed.  On  the  same  date,  the  Commission  also  adopted  a 
recommendation  for  a  Council  recommendation  on  the  economic  policy  of  the  euro 
area, which was adopted on 5 April 2022 by the Council, as well as the proposal for 
the 2022 Joint Employment Report analysing the implementation of the Employment 
Guidelines  and  the  principles  of  the  European  Pillar  of  Social  Rights,  which  was 
adopted by the Council on 14 March 2022. 

Russia’s  invasion  of  Ukraine,  in  the  wake  of  the  global  pandemic,  has  significantly 
altered the geopolitical and economic context. The impact of the invasion on Member 
States’ economies has been felt for example through higher energy and food prices and 
weaker  growth  prospects.  The  higher  energy  prices  weigh  particularly  on  the  most 
vulnerable households experiencing or at risk of energy poverty. The EU is also seeing 
an unprecedented inflow of people fleeing Ukraine. In this context, on 4 March 2022, 
the  Temporary  Protection  Directive  was  triggered5  for  the  first  time,  granting 
displaced persons from Ukraine the right to legally stay in the EU, as well as access to 
education and training, labour market, healthcare, housing and social welfare. 

Taking  account  of  the  rapidly  changing  economic  and  geopolitical  situation,  the 
European Semester resumes its broad economic and employment policy coordination 
in 2022, while evolving in line with the implementation requirements of the Recovery 
and  Resilience  Facility,  as  outlined  in  the  2022  Annual  Sustainable  Growth  Survey. 
The  implementation  of  the  adopted  recovery  and  resilience  plans  is  essential  for  the 
delivery of the policy priorities under the European Semester, as the plans address all 
or a significant subset of the relevant country-specific recommendations issued in the 
2019  and  2020  Semester  cycles.  The  2019  and  2020  country-specific 
recommendations  remain  equally  relevant  also  for  recovery  and  resilience  plans 
revised, updated or amended in accordance with Articles 14, 18 and 21 of Regulation 
(EU) 2021/241, in addition to any country-specific recommendations issued up to the 
date of submission of the modified plan.  
The General Escape Clause has been active since March 20206. In its Communication 
of  3  March  20217,  the  Commission  set  out  its  view  that  the  decision  on  the 
deactivation or continued application of the general escape clause should be taken as 
an overall assessment of the state of the economy, with the level of economic activity 
in the EU or euro area compared to pre-crisis levels (end-2019) as a key quantitative 

Regulation (EU) No 1176/2011 of the European Parliament and of the Council of 16 November 2011 
on the prevention and correction of macroeconomic imbalances, OJ L 306, 23.11.2011, p. 25. 
Council Implementing Decision (EU) 2022/382  of 4 March 2022 establishing the existence of a  mass 
influx of displaced persons from Ukraine within the meaning of Article 5 of Directive 2001/55/EC, and 
having the effect of introducing temporary protection, OJ L 71, 4.3.2022, p. 1. 
Communication from the Commission to the Council on the activation of the general escape clause of 
the Stability and Growth Pact, Brussels, 20.3.2020, COM(2020) 123 final. 

Communication  from  the  Commission  to  the  Council  on  one  year  since  the  outbreak  of  COVID-19: 
fiscal policy response, Brussels, 3.3.2021, COM(2021) 105 final. 

(3) 

(4) 

(5) 

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(6) 

(7) 

criterion. Heightened uncertainty and strong downside risks to  the economic outlook 
in  the  context  of  war  in  Europe,  unprecedented  energy  price  hikes  and  continued 
supply  chain  disturbances  warrant  the  extension  of  the  general  escape  clause  of  the 
Stability and Growth Pact through 2023. 

Following the approach in the Council opinion of 18 June 2021 on the 2021 Stability 
Programme,  the  fiscal  stance  is  currently  best  measured  as  the  change  in  primary 
expenditure  (net  of  discretionary  revenue  measures),  excluding  COVID-19  crisis-
related  temporary  emergency  measures  but  including  expenditure  financed  by  non-
repayable  support  (grants)  from  the  Recovery  and  Resilience  Facility  and  other  EU 
funds,  relative  to  medium-term  potential  growth8.  Going  beyond  the  overall  fiscal 
stance, in order to assess whether national fiscal policy is prudent and its composition 
is conducive to a sustainable recovery consistent with the green and digital transitions, 
attention  is  also  paid  to  the  evolution  of  nationally  financed9  primary  current 
expenditure  (net  of  discretionary  revenue  measures  and  excluding  COVID-19  crisis-
related temporary emergency measures) and investment. 

On  2  March  2022,  the  Commission  adopted  a  Communication  providing  broad 
guidance  for  fiscal  policy  in  2023,  aiming  at  supporting  the  preparation  of  Member 
States’  Stability  and  Convergence  Programmes  and  thereby  strengthening  policy 
coordination10. The Commission noted that, based on the macroeconomic outlook of 
the  2022  winter  forecast,  transitioning  from  an  aggregate  supportive  fiscal  stance  in 
2020-2022  to  a  broadly  neutral  aggregate  fiscal  stance  would  appear  appropriate  in 
2023,  while  standing  ready  to  react  to  the  evolving  economic  situation.  The 
Commission announced that the fiscal recommendations for 2023 should continue to 
differentiate  across  Member  States  and  take  into  account  possible  cross-country 
spillovers. The Commission invited the Member States to reflect the guidance in their 
Stability  and  Convergence  Programmes.  The  Commission  committed  to  closely 
monitor  the  economic  developments  and  adjust  its  policy  guidance  as  needed  and  at 
the latest in its Semester spring package of late May 2022. 

(8)  With  respect  to  the  fiscal  guidance  provided  on  2  March  2022,  the  fiscal 
recommendations  for  2023  take  into  account  the  worsened  economic  outlook,  the 
heightened uncertainty and further downside risks, and the higher inflation compared 
to the winter forecast. Against these considerations, the fiscal response has to expand 
public investment for the green and digital transition and energy security, and sustain 
the purchasing power of the most vulnerable households so as to cushion the impact of 
the energy price hike and help limit inflationary pressures from second round effects 
via targeted and temporary measures; fiscal policy has to remain agile so as to adjust 
to the rapidly evolving circumstances, and be differentiated across countries depending 
on their fiscal and economic situation, including as regards the exposure to the crisis 
and the inflow of displaced persons from Ukraine. 

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10 

The  estimates  on  the  fiscal  stance  and  its  components  in  this  recommendation  are  Commission 
estimates  based  on  the  assumptions  underlying  the  Commission  2022  spring  forecast.  The 
Commission’s estimates of medium-term potential growth do not include the positive impact of reforms 
that are part of the Recovery and Resilience Plan and that can boost potential growth.  

Not financed by grants from the Recovery and Resilience Facility and other EU funds. 

Communication  from  the  Commission  to  the  Council:  Fiscal  policy  guidance  for  2023,  Brussels, 
2.3.2022, COM(2022) 85 final. 

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(9) 

On  30  April  2021,  Spain  submitted  its  national  recovery  and  resilience  plan  to  the 
Commission, in accordance with Article 18(1) of Regulation (EU) 2021/241. Pursuant 
to  Article  19  of  Regulation  (EU)  2021/241,  the  Commission  assessed  the  relevance, 
effectiveness,  efficiency  and  coherence  of  the  recovery  and  resilience  plan,  in 
accordance with the assessment guidelines of Annex V to that Regulation. On 13 July 
2021,  the  Council  adopted  its  Decision  on  the  approval  of  the  assessment  of  the 
recovery and resilience plan for Spain11. The release of instalments is conditional on a 
decision  by  the  Commission,  taken  in  accordance  with  Article  24(5)  of  Regulation 
(EU)  2021/241,  that  Spain  has  satisfactorily  fulfilled  the  relevant  milestones  and 
targets  set  out  in  the  Council  Implementing  Decision.  Satisfactory  fulfilment 
presupposes  that  the  achievement  of  preceding  milestones  and  targets  has  not  been 
reversed. 

(10)  On 30 April 2022, Spain submitted its 2022 National Reform Programme and, on  29 
April  2022,  its  2022  Stability  Programme,  in  line  with  the  deadline  established  in 
Article 4 of Regulation  (EC) No 1466/97. To take account of their interlinkages, the 
two  programmes  have  been  assessed  together.  In  accordance  with  Article  27  of 
Regulation  (EU)  2021/241,  the  2022  National  Reform  Programme  also  reflects 
Spain’s  bi-annual  reporting  on  the  progress  made  in  achieving  its  recovery  and 
resilience plan.  

in 

the 

relevant 

progress 

(11)  The  Commission  published  the  2022  country  report  for  Spain12  on  23  May  2022.  It 
assessed  Spain’s 
country-specific 
addressing 
recommendations adopted by the Council in 2019, 2020 and 2021,  and took stock of 
Spain’s implementation of the recovery and resilience plan, building on the Recovery 
and Resilience Scoreboard. Based on this analysis, the country report identified gaps 
with respect to those challenges that are not addressed or only partially addressed by 
the  recovery  and  resilience  plan,  as  well  as  new  and  emerging  challenges,  including 
those  emerging  from  Russia’s  invasion  of  Ukraine.  It  also  assessed  Spain’s  progress 
on  implementing  the  European  Pillar  of  Social  Rights  and  on  achieving  the  EU 
headline  targets  on  employment,  skills  and  poverty  reduction,  as  well  as  progress  in 
achieving the UN’s Sustainable Development Goals.  

(12)  The  Commission  carried  out  an  in-depth  review  under  Article  5  of  Regulation  (EU) 
No 1176/2011 for Spain and published its results on 23 May 202213. The Commission 
concluded that Spain is experiencing imbalances. In particular, vulnerabilities relate to 
high external,  government  and private debt,  in  a context  of high unemployment, and 
have cross-border relevance. 

(13)  On  23  May  2022,  the  Commission  issued  a  report  under  Article  126(3)  TFEU.  This 
report discussed the budgetary situation of Spain, as its general government deficit in 
2021 exceeded the 3% of GDP Treaty reference value. The report concluded that the 
deficit  criterion  was  not  fulfilled.  In  line  with  the  Communication  of  2  March  2022, 
the  Commission  did  not  propose  to  open  new  excessive  deficit  procedures  in  spring 
2022  and  it  will  reassess  the  relevance  of  proposing  to  open  excessive  deficit 
procedures in autumn 2022. 

11 

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13 

Council Implementing Decision of 13 July 2021 on the approval of the assessment of the recovery and 
resilience plan for Spain (ST 10150 2021 INIT and ST 10150 2021 ADD 1 REV 2). 
SWD(2022)610 final. 
SWD(2022)631 final. 

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the  economy  and  support 

(14)  On  20  July  2020,  the  Council  recommended  Spain  to  take  in  2020  and  2021  all 
necessary measures, in line with the general escape clause, to  effectively address the 
pandemic,  sustain 
the  ensuing  recovery.  It  also 
recommended Spain to pursue, when economic conditions allow, fiscal policies aimed 
at  achieving  prudent  medium-term  fiscal  positions  and  ensuring  debt  sustainability, 
while  enhancing  investment.  In  2021,  based  on  data  validated  by  Eurostat,  Spain’s 
general  government  deficit  fell  from  10.3%  of  GDP  in  2020  to  6.9%  in  2021.  The 
fiscal  policy  response  by  Spain  supported  the  economic  recovery  in  2021,  while 
temporary emergency support measures declined from 3.9% of GDP in 2020 to 2.8% 
in  2021.  The  measures  taken  by  Spain  in  2021  have  been  in  line  with  the  Council 
Recommendation of 20 July 2020. The discretionary budgetary measures adopted by 
the  government  in  2020  and  2021  were  mostly  temporary  or  matched  by  offsetting 
measures.  At  the  same  time,  some  of  the  discretionary  measures  adopted  by  the 
government  over the period  2020-2021 were not  temporary or matched by  offsetting 
measures,  mainly  consisting  of  current  transfers  to  regions  to  cover  new  healthcare 
needs. Based on data validated by Eurostat, general government debt stood at 118.4 % 
of GDP in 2021. 

(15)  The  macroeconomic  scenario  underpinning  the  budgetary  projections  in  the  2022 
Stability Programme is realistic. The government projects real GDP to grow by 4.3% 
in  2022  and  3.5%  in  2023.  By  comparison,  the  Commission’s  2022  spring  forecast 
projects  a  lower  real  GDP  growth  of  4.0%  in  2022  and  3.4%  in  2023.  In  its  2022 
Stability Programme, the government expects that the headline deficit will decrease to 
5.0% of GDP in 2022 and to 3.9% in 2023. The decrease in 2022 mainly reflects the 
strong  growth  in  economic  activity,  the  tax  revenue  increase  and  the  unwinding  of 
most  emergency  measures.  According  to  the  Programme,  the  general  government 
debt-to-GDP ratio is expected to decrease to 115.2% in 2022, and to decline to 112.4% 
in  2023.  Based  on  policy  measures  known  at  the  cut-off  date  of  the  forecast,  the 
Commission 2022 spring forecast projects a government deficit for 2022 and 2023 of 
4.9%  of  GDP  and  4.4% respectively.  This  is  in  line  with  the  deficit  projected  in  the 
2022  Stability  Programme.  The  Commission  2022  spring  forecast  projects  a  similar 
general government debt-to-GDP ratio, of 115.1 % in 2022 and 113.7 % in 2023. The 
difference is partly due to the higher primary deficit projected for 2023.  

(16) 

Based  on  the  Commission  spring  2022  forecast,  the  medium-term  (10-year  average) 
potential output growth is estimated at 0.8%. However, this estimate does not include 
the  impact  of  the  reforms  that  are  part  of  the  Recovery  and  Resilience  Plan  and  can 
boost Spain’s potential growth. 

In 2022, the government phased out the majority of measures taken in response to the 
COVID-19 crisis, such that the temporary emergency support measures are projected 
to  decline  from  2.8%  of  GDP  in  2021  to  0.4%  in  2022.  The  government  deficit  is 
impacted  by  the  measures  adopted  to  counter  the  economic  and  social  impact  of  the 
increase in energy prices, which in the Commission spring 2022 forecast are estimated 
at 0.4% of GDP in 2022 and 0.0% of GDP in 2023.14  These measures mainly consist 
of  social  transfers  to  households,  cuts  to  indirect  taxes  on  energy  consumption, 
subsidies  to  energy  production  and  transfers  to  affected  industries.  These  measures 
have  been  announced  as  temporary.  However,  in  case  energy  prices  remain  elevated 
also in 2023 some of these measures could be continued. Some of these measures are 

14 

The figures represent the level of annual budgetary costs of those measures taken since autumn 2021, 
including current revenue and expenditure as well as – where relevant – capital expenditure measures. 

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not targeted, notably the suspension of the tax on energy production or the reduction 
of the special tax on electricity. The government deficit is also impacted by the costs 
to  offer  temporary  protection  to  displaced  persons  from  Ukraine,  which  in  the 
Commission 2022 spring forecast are projected at 0.1% of GDP in 2022 and 0.1% in 
2023.15 

(17)  On  18  June  2021,  the  Council  recommended  that  in  2022  Spain16  should  use  the 
Recovery  and  Resilience  Facility  to  finance  additional  investment  in  support  of  the 
recovery  while  pursuing  a  prudent  fiscal  policy.  Moreover,  it  should  preserve 
nationally-financed investment.  It also recommended Spain to pursue, when economic 
conditions  allow,  a  fiscal  policy  aimed  at  achieving  prudent  medium-term  fiscal 
positions and ensuring fiscal sustainability in the medium term, and at the same time, 
to enhance investment to boost growth potential. 

(18) 

In  2022,  based  on  the  Commission’s  2022  spring  forecast  and  including  the 
information incorporated in its 2022 Stability Programme, the fiscal stance is projected 
to  be supportive at  -2.2% of GDP.17  Spain  plans to  provide continued support to  the 
recovery by making use of the Recovery and Resilience Facility to finance additional 
investment  as  recommended  by  the  Council.  The  positive  contribution  to  economic 
activity of expenditure financed by Recovery and Resilience Facility grants and other 
EU funds is projected to increase by 0.9 percentage points of GDP compared to 2021. 
Nationally financed investment is projected to provide an expansionary contribution to 
the fiscal stance of 0.4 percentage points in 2022.18 Therefore, Spain plans to preserve 
nationally financed investment, as recommended by the Council. At the same time, the 
growth  in  nationally-financed  primary  current  expenditure  (net  of  new  revenue 
measures)  in  2022  is  projected  to  provide  an  expansionary  contribution  of  1.2 
percentage  points  to  the  overall  fiscal  stance.  This  significant  expansionary 
contribution  includes  the  additional  impact  of  the  measures  to  address  the  economic 
and social impact of the increase in energy prices (0.3% of GDP) as well as the costs 
to offer temporary protection to displaced persons from Ukraine (0.1% of GDP), while 
the higher increase in  consumer prices compared to  the GDP deflator is  projected to 
the  expansionary  contribution  of  nationally  financed  primary  current 
affect 
expenditure in 2022 by increasing spending on government consumption of goods and 
services.  Based  on  the  Commission’s  forecast,  these  measures  are  not  fully  matched 
by offsetting measures. 

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16 

17 

18 

The total number of displaced persons from Ukraine to the EU is assumed to gradually reach 6 million 
by  the  end  of  2022,  and  their  geographical  distribution  is  estimated  based  on  the  size  of  the  existing 
diaspora, the relative population of the receiving Member State, and the actual distribution of displaced 
persons from Ukraine across the EU as of March 2022. For budgetary costs per person, estimates are 
based on the Euromod microsimulation model of the Commission’s Joint Research Centre, taking into 
account both cash transfers people may be eligible for as well as in-kind benefits such as education and 
healthcare. 
Council  Recommendation  of  18  June  2021  delivering  a  Council  opinion  on  the  2021  Stability 
Programme of Spain, OJ C 304, 29.07.2021, p. 40.  
A negative (positive) sign of the indicator corresponds to an excess (shortfall) of primary expenditure 
growth  compared  with  medium-term  economic  growth,  indicating  an  expansionary  (contractionary) 
fiscal policy. 
Other  nationally-financed  capital  expenditure  is  projected  to  provide  a  contractionary  contribution  of 
0.3 percentage points of GDP, due to the gradual return to the pre-pandemic levels.  

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(19) 

(20) 

(21) 

In 2023, the fiscal stance is projected in the Commission 2022 spring forecast at 0.0% 
of GDP on a no-policy change assumption.19 Spain is projected to continue using the 
grants  from  the  Recovery  and  Resilience  Facility  in  2023  to  finance  additional 
investment in support of the recovery. The positive contribution  to economic activity 
of  expenditure  financed  by  Recovery  and  Resilience  Facility  grants  and  other  EU 
funds  is  projected  to  remain  stable  in  2023  compared  to  2022.  Nationally-financed 
investment is projected to provide a contractionary contribution to the fiscal stance of 
0.1  percentage  point  in  2023.20  At  the  same  time,  the  growth  in  nationally  financed 
primary  current  expenditure  (net  of  new  revenue  measures)  in  2023  is  projected  to 
provide  a  broadly  neutral  contribution  of  +0.1  percentage  point  to  the  overall  fiscal 
stance. This includes the impact from the phasing out of the measures addressing the 
increased energy prices (0.4% of GDP). 

In  the  2022  Stability  Programme,  the  general  government  deficit  is  expected  to 
gradually decline to 3.3% of GDP in 2024 and to 2.9% by 2025. Therefore, the general 
government  deficit  is  planned  to  go  below  3%  of  GDP  by  2025.  According  to  the 
Programme,  the  general  government  debt-to-GDP  ratio  is  expected  to  decrease  by 
2025, specifically with a decrease to 110.8% in 2024 and a further decline to 109.7% 
in  2025.  Based  on  the  Commission’s  analysis,  debt  sustainability  risks  appear  high 
over the medium term.  

In accordance with Article 19(3), point (b) of Regulation (EU) 2021/241, and Annex 
V, criterion 2.2, the recovery and resilience plan includes an extensive set of mutually 
reinforcing reforms and investments to be implemented by 2026. These help address 
all  or  a  significant  subset  of  the  economic  and  social  challenges  outlined  in  the 
country-specific recommendations addressed to Spain by the Council in the European 
Semester  in  2019  and  2020,  in  addition  to  any  country-specific  recommendations 
issued up to  the date of adoption of a plan.  In particular, the recovery and resilience 
plan  is  expected  to  contribute  substantially  to  addressing  the  country-specific 
recommendations on promoting public and private investment to help the recovery. In 
doing so, it is expected address the country-specific recommendations on investment 
in innovation and the digital and green transition of the country. The plan also includes 
measures  to  reduce  the  high  share  of  temporary  contracts  in  the  private  and  public 
sectors  and  to  reinforce  active  labour  market  policies.  The  plan  is  expected  to  help 
address  the  existing  fragmentation  of  unemployment  assistance,  which  resulted  in 
gaps. It is also expected to contribute to the provision of labour market-relevant skills 
and qualifications that are expected to accompany Spain’s green and digital transition. 
Access to digital learning can be significantly boosted by the plan through investment 
in  devices  and  skills,  but  also  by  developing  online  courses.  Educational  outcomes 
may also improve as a result of investments at various stages of the education cycle. 
Measures  in  the  plan  also  have  the  potential  to  help  address  country-specific 
recommendations asking Spain to improve the coverage and adequacy of its minimum 
income  schemes  and  family  support.  The  plan  is  also  expected  to  strengthen  public 
procurement  frameworks and contribute to  a better business  environment.  Moreover, 

19 

20 

A negative (positive) sign of the indicator corresponds to an excess (shortfall) of primary expenditure 
growth  compared  with  medium-term  economic  growth,  indicating  an  expansionary  (contractionary) 
fiscal policy. 

Other  nationally-financed  capital  expenditure  is  projected  to  provide  an  expansionary  contribution  of 
0.2 percentage points of GDP. 

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measures  in  the  plan  seeking  a  more  effective  public  spending  and  tax  system  may 
contribute to fiscal sustainability. 

(22)  The  implementation  of  the  recovery  and  resilience  plan  of  Spain  is  expected  to 
contribute  to  making  further  progress  on  the  green  and  digital  transition.  Measures 
supporting  the  climate  objectives  in  Spain  account  for  40%  of  the  plan’s  total 
allocation, while measures supporting digital objectives account for 28% of the plan’s 
total allocation. The fully-fledged implementation of the recovery and resilience plan, 
in line with the relevant  milestones and targets,  will help Spain swiftly recover from 
the fallout of the COVID-19 crisis, while strengthening its resilience. The systematic 
involvement of social partners and other  relevant  stakeholders  remains important  for 
the  successful  implementation  of  the  recovery  and  resilience  plan,  as  well  as  other 
economic and employment policies going beyond the plan, to ensure broad ownership 
of the overall policy agenda. 

(23)  Spain  has  not  yet  formally  submitted  the  Partnership  Agreement  and  the  other 
cohesion  policy  programming  documents21.  In  line  with  Regulation  (EU)  2021/1060 
of the European Parliament and of the Council of 24 June 2021, Spain shall take into 
account  the  relevant  country-specific  recommendations  in  the  programming  of  the 
2021-2027  cohesion  policy  funds.  This  is  a  prerequisite  for  improving  the 
effectiveness and maximising the added value of the financial support to be received 
from  cohesion  policy  funds,  while  promoting  the  coordination,  complementarity  and 
coherence between these funds and other Union instruments and funds. The successful 
implementation  of  the  Recovery  and  Resilience  Facility  and  cohesion  policy 
programmes also depends on the removal of bottlenecks to investment to support the 
green and digital transition and balanced territorial development.  

(24)  Beyond the economic and social challenges addressed by the recovery and resilience 
plan, Spain  faces a number of  additional challenges related to  accelerating  the  green 
transition, energy interconnections, social and affordable energy-efficient housing and 
the  circular  economy.  Policies  to  increase  recycling  rates  and  promote  the  circular 
economy  can  help  limit  the  import  of  goods,  contributing  to  improve  external 
imbalances.  In  the  medium  and  long  run,  meeting  renewable  and  energy-efficiency 
targets  and  increasing  energy  interconnections  can  also  be  conducive  to  reducing 
dependence on fossil fuels and the high external debt. 

(25)  Spain  would  benefit  from  further  decoupling  economic  growth  from  resource  use  to 
meet more ambitious EU targets, including the Fit-for-55 package. In this regard, the 
country’s recycling rate for municipal waste and circular material use rate fall below 
the EU average, while the share of waste being landfilled is well above it. Sustained 
coordination across different levels of government and additional investment can help 
Spain meet separate collection and recycling obligations. Achieving recycling targets 
has been cascaded downwards to lower levels of government. However, instruments to 
enforce  them  may  not  be  sufficiently  effective.  Hence,  additional  reforms  could 
reinforce  coordination  between  the  different  levels  of  government,  including  for  a 
common interpretation of provisions and for the planning and use of waste treatment 

21 

Regulation  (EU)  2021/1060  of  the  European  Parliament  and  of  the  Council  of  24  June  2021  laying 
down  common  provisions  on  the  European  Regional  Development  Fund,  the  European  Social  Fund 
Plus,  the  Cohesion  Fund,  the  Just  Transition  Fund  and  the  European  Maritime,  Fisheries  and 
Aquaculture Fund and financial rules for those and for the Asylum, Migration and Integration Fund, the 
Internal  Security  Fund  and  the  Instrument  for  Financial  Support  for  Border  Management  and  Visa 
Policy. OJ L 231, 30.6.2021, p. 159. 

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infrastructure. Further support from the Technical Support Instrument can help spread 
best practice. Additional investments to strengthen Spain’s recycling capacity may be 
warranted,  including  to  promote  the  circular  economy  in  specific  sectors.  Moreover, 
innovation and investment to promote the circular economy are key to ensuring higher 
resource  efficiency.  Spain  also  suffers  from  water  scarcity  and  needs  to  develop 
further the potential of water reuse, including from a circular economy perspective. 

(26) 

In  response  to  the  mandate  by  the  EU  Heads  of  State  or  Government  set  out  in  the 
Versailles Declaration, the REPowerEU plan aims to phase out the European Union’s 
dependence on fossil fuel imports from Russia as soon as possible. For this purpose, 
the most suitable projects, investments and reforms at national, regional and EU level 
are being identified in dialogue with the Member States. These measures aim to reduce 
overall reliance on fossil fuels and shift fossil fuel imports away from Russia. 

(27)  According to 2020 data, Spain’s dependence on Russia is at  2% for oil and 10% for 
gas,  well  below  EU  averages  (26%  and  44%,  respectively).  Spain’s  dependence  on 
Russian coal is similar to the rest of the EU (55%), but in a context where the share of 
solid  fossil  fuels  in  the  energy  mix  (2.8%)  is  much  lower  than  the  EU  average22. 
Although  it  has  limited  exposure  to  Russian  oil  and  gas,  the  current  geopolitical 
situation and high energy  prices increase the urgency  for Spain  to  further step up its 
efforts  to  meet  the  renewables  targets  laid  down  in  its  National  Energy  and  Climate 
Plan.  Building  on  the  Plan,  additional  measures  to  support  renewable  deployment 
(with a focus on decentralised installations and self-consumption, including by further 
streamlining  permitting  procedures  and 
the  grid)  and 
complementary  investment  (in  storage,  network  infrastructure,  electrification  of 
buildings  and  transport,  and  renewable  hydrogen)  can  help  further  decarbonise  the 
economy, including industry, transport and housing, and reduce both reliance on fossil 
fuels and exposure to international prices. The effective integration of Spain into the 
single  energy  market  requires  increasing  its  energy  interconnections.  In  particular, 
further electricity interconnections with  neighbouring countries  could support greater 
integration of renewable capacity of the Iberian Peninsula in the single energy market. 
Additional  cross-border  hydrogen-ready  gas  infrastructure  may  further  contribute  to 
diversify gas supply in the internal market and help tap into the long-term potential for 
renewable  hydrogen.  New  infrastructure  and  network  investments  related  to  gas  are 
recommended to be future-proof where possible, in order to facilitate their long-term 
sustainability through future repurposing for sustainable fuels. 

improving  access 

to 

(28)  Further progress in decentralised renewable energy production and deep renovations in 
both residential and non-residential buildings, particularly in mid-size cities, could be 
achieved by putting in place appropriate financing schemes, upskilling and training of 
workers  in  the  construction  sector,  awareness  raising  campaigns  and  technical 
assistance to support the use of grants and financial instruments for renovations. Also, 
deploying  additional  energy  efficient  social  and  affordable  housing,  notably  in  areas 
with  pronounced  shortages  and  stressed  markets,  could  be  helpful  for  containing 
energy  consumption,  more  decisively  addressing  the  green  transition  and  supporting 
vulnerable  households.  Further  increase  in  ambition  for  reducing  greenhouse  gas 
emissions and increasing renewable  energy  and energy efficiency will be  needed  for 
Spain to be in line with the ‘Fit for 55’ objectives. 

22 

Eurostat (2020) share of Russian imports over total imports of crude oil, natural gas, and hard coal. For 
the EU27 average, the total imports are based on extra-EU27 imports. For Spain, total imports include 
intra-EU trade. Crude oil does not include refined oil products. 

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(29)  While  the  acceleration  of  the  transition  towards  climate  neutrality  and  away  from 
fossil  fuels  will  create  significant  restructuring  costs  in  several  sectors,  Spain  can 
make  use  of  the  Just  Transition  Mechanism  in  the  context  of  cohesion  policy  to 
alleviate the socio-economic impact of the transition on the most affected regions. In 
addition,  Spain  can  make  use  of  the  European  Social  Fund  Plus  to  improve 
employment opportunities and strengthen social cohesion. 

(30) 

(31) 

(32) 

In  the  light  of  the  Commission’s  assessment,  the  Council  has  examined  the  2022 
Stability Programme and its opinion23 is reflected in recommendation (1) below.  

In view of the close interlinkages between the economies of euro area Member States 
and  their  collective  contribution  to  the  functioning  of  the  Economic  and  Monetary 
Union,  the  Council  recommended  that  the  euro  area  Member  States  take  action, 
the 
including 
recommendation on the economic policy of the euro area. For Spain, this is reflected 
in particular in recommendations (1) and (2) below.  

resilience  plans, 

recovery  and 

implement 

through 

their 

to 

In the light of the Commission’s in-depth review and this assessment, the Council has 
examined  the  2022  National  Reform  Programme  and  the  2022  Stability  Programme. 
Its recommendations under Article 6 of Regulation (EU) No 1176/2011  are reflected 
in  recommendations  (1),  (2),  and  (4)  below.  The  recommendations  (1)  and  (2)  also 
contribute  to  the  implementation  of  the  Recommendation  for  the  euro  area,  in 
particular the first and fourth euro area recommendations. Fiscal policies referred to in 
recommendation  (1)  help  inter  alia  address  imbalances  linked  to  high  government 
debt.  Policies  referred  to  in  recommendation  (2)  help  inter  alia  the  reduction  of 
government, private, and external debt as the full implementation of the recovery and 
resilience plan will support growth while strengthening the resilience of the economy. 
Policies referred to in recommendation (4) help inter alia address vulnerabilities linked 
to high external debt in the longer term, in a context of high unemployment. 

HEREBY RECOMMENDS that Spain take action in 2022 and 2023 to:  

1. 

2. 

3. 

In  2023,  ensure  prudent  fiscal  policy,  in  particular  by  limiting  the  growth  of 
nationally-financed current expenditure below medium-term potential output growth, 
taking  into  account  continued  temporary  and  targeted  support  to  households  and 
firms  most  vulnerable  to  energy  price  hikes  and  to  people  fleeing  Ukraine.  Stand 
ready to adjust current spending to the evolving situation. Expand public investment 
for the green and digital transition and for energy security, including by making use 
of the RRF, RePowerEU and other EU funds. For the period beyond 2023, pursue a 
fiscal policy aimed at achieving prudent medium-term fiscal positions and ensuring 
credible  and  gradual  debt  reduction  and  fiscal  sustainability  in  the  medium  term 
through gradual consolidation, investment and reforms.  

Proceed with the implementation of its recovery and resilience plan, in line with the 
milestones  and  targets  included  in  the  Council  Implementing  Decision  of  13  July 
2021. Submit the 2021-2027 cohesion policy programming documents with a view to 
finalising  their  negotiations  with  the  Commission  and  subsequently  starting  their 
implementation.  

Increase  recycling  rates  to  meet  EU  targets  and  promote  the  circular  economy  by 
enhancing  coordination  among  all  levels  of  government  and  undertaking  further 

23 

Under Article 5(2) of Council Regulation (EC) No 1466/97 

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4. 

investment to meet separate collection of waste and recycling obligations, as well as 
to enhance water reuse. 

Reduce  overall  reliance  on  fossil  fuels.  Accelerate  the  deployment  of  renewable 
energy,  with  a  focus  on  decentralised  installations  and  self-consumption,  including 
by  further  streamlining  permitting  procedures  and  improving  access  to  the  grid. 
Support complementary investment in storage, network infrastructure, electrification 
of buildings and transport, and renewable hydrogen. Expand energy interconnection 
capacity.  Increase  the availability of energy-efficient social and affordable housing, 
including through renovation. 

Done at Brussels, 

For the Council 
The President 

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