COMMISSION STAFF WORKING DOCUMENT 2024 Country Report – Spain Accompanying the document Recommendation for a COUNCIL RECOMMENDATION on the economic, social, employment, structural and budgetary policies of Spain
Date: 2024-06-19
Institutions: European Commission, Secretariat-General
Subjects: Spain, budget policy, climate change policy, economic policy, economic recovery, economic reform, employment policy, social policy, stability pact, water management

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 19.6.2024  SWD(2024) 609 final  COMMISSION STAFF WORKING DOCUMENT 2024 Country Report – Spain Accompanying the document Recommendation for a COUNCIL RECOMMENDATION on the economic, social, employment, structural and budgetary policies of Spain         {COM(2024) 609 final}  
 
 
 
 
 
 
 
 
 
 
 
ECONOMIC AND EMPLOYMENT SNAPSHOT 

Spain’s economy remained 
resilient despite a more 
demanding environment 

economy  weathered 

The 
external 
headwinds relatively well in 2023 (1). Real 
GDP  expanded  by  2.5%  overall  last  year 
against the uncertain geopolitical environment 
and  the  impact  of  tightened  monetary  policy. 
The strong growth outturn was underpinned by 
the  positive 
labour  market  developments 
sustaining  consumer  spending,  and  by  the 
positive  contribution  from  net  exports  and 
government  spending  (see  Graph  1.1.  and 
Annex  20).  In  turn,  overall  investment  growth 
remained  relatively  subdued  despite  support 
from  EU  funds  and  the  negative  gap  in  the 
to  GDP  further  widened 
country’s 
compared to the EU (see Graph 1.2.). Against a 
background  of  higher 
interest  rates  and 
contraction  in  lending  activity,  the  banking 
sector  remained  resilient  and  non-performing 
loans  ratios  continued  to  decline  (see  Annex 
18). 

ratio 

The  labour  market  extended  its  strong 
performance  in  2023.  Employment  growth 
increased  in  the  first  half  of  the  year,  before 
moderating  in  the  second  half.  In  annual 
terms,  employment  expanded  by  3.1%,  and 
the unemployment rate fell to 12.2%. Despite 
positive  developments  in  recent  years,  the 
employment  rate  remains  below  the  EU 
average and the 2030 national target, and the 
unemployment  rate  is  still  double  the  EU 
average  (see  Annex  14),  while  high  regional 
disparities persist (see Annex 17). The share of 
temporary  employees  in  the  private  sector 
stabilised  after  declining  by  10  percentage 

points  following  the  2021  labour  market 
reform  (to  reach  14.0%  on  average  in  2023), 
while the rate remained at very high levels for 
the public sector (30.6%). 

Headline  HICP  consumer  price  inflation 
decreased to 3.4% in 2023 driven by the 
drop  in  energy  prices,  while  real  wages 
caught up with some of the earlier losses. 
Underlying  price  pressures  remained  high  in 
services  and  processed  food,  easing  only 
gradually  throughout  the  year.  In  2023,  the 
nominal  growth  in  the  average  hourly  wage 
increased  to  4.5% (2),  slightly  above  the 
reference  in  the  multi-year  agreement  signed 
by social partners, when also taking account of 
the  8%  raise  in  the  minimum  wage.  The  gain 
in  purchasing  power  for  workers  last  year 
followed  a  7%  decline  in  real  wages  over 
2021  and  2022.  Total  labour  costs  increased 
at  a  higher  rate  than  wages  due  to  the 
increase  in  social  contributions  related  to  the 
pension reform. 

position 

investment 

Higher  net  exports  of  services  and  the 
lower  energy  bill  fuelled  the  increase  in 
the  trade  surplus  in  2023.  Spain’s  net 
international 
(NIIP) 
continued its long-standing trend of improving 
supported by strong nominal GDP growth, and 
by  the  higher  surplus  in  the  current  account 
balance, which increased to 2.5% of GDP, back 
to  pre-pandemic  levels  having  stayed  below 
1%  since  2020.  Developments  in the  external 
sector  remained  positive  in  2023  despite  the 
weaker  economic  outlook  for  main  trading 
partners  and  the  significant  increase  of  unit 
labour costs. 

The  fiscal  deficit  continued  to  decline  in 
2023,  driven  by  direct  tax  revenues. 
Revenues from personal and corporate income 

(1)  The cut-off date for the data used to prepare the 27 

(2)  The Harmonised Labour Cost Index (ICLA) covers 

Country Reports was 15 May 2024. 

sections B to S of the NACE classification. 

2 

 
 
 
 
 
the  recent  past,  as  nominal  GDP  growth  is 
expected  to  be  less  supportive.  However,  the 
evolution of the public debt ratio is subject to 
risks in the longer-term, given its high starting 
level  and  the  still  high  structural  deficits 
posted in recent years. 

Graph 1.1: Real GDP growth, contributions by 
demand component in percentage points. 

tax  grew  strongly,  reflecting  the  continued 
positive  developments  in  the  labour  market 
and  increased  firm  profits  (see  Annex  19).  At 
the  same  time,  the  size  of  government 
measures  in  place  until  the  end  of  2023  to 
mitigate the impact of the energy price shock 
following  Russia’s 
invasion  of  Ukraine 
remained  substantial  (0.9%  of  GDP),  even 
though  they  declined  from  2022,  due  to,  for 
example,  the  extension  of  VAT  cuts  for  basic 
food  products  and  direct  support  to  the  road 
and  maritime  transport  sectors.  Overall,  the 
general government deficit decreased to 3.6% 
in  2023,  while  the  debt  ratio  declined  to 
107.7%  mainly  supported  by  strong  nominal 
GDP growth. 

to 

and 

rebound  of 

in  2024.  According 

Real GDP growth is forecast to moderate 
to  2.1% 
the 
Commission’s  Spring  Forecast,  domestic 
demand  is  set  to  be  the  key  driver  upholding 
growth  this  year.  This 
is  thanks  to  the 
contribution  from  consumer  spending  and  the 
investment,  driven 
gradual 
labour  market 
respectively  by  supportive 
developments 
continued 
implementation of the recovery and resilience 
plan  (RRP)  and  other  EU  funds.  Headline HICP 
consumer price  inflation is  forecast  to decline 
moderately this year to 3.1%, assuming most 
government  measures  to  mitigate  the  impact 
of  high  energy  prices  are  phased  out. 
Underlying inflation is expected to converge to 
headline  figures  given  the  trend  of  service 
inflation, particularly certain categories related 
to accommodation and holiday package prices, 
subject to a more gradual moderation. 

the 

There  continues  to  be  a  big  reduction  in 
the  number  of  vulnerabilities  associated 
with  Spain’s  high  private  and  external 
debt  stocks,  with  government  debt  also 
having receded in recent years (3). Further 
reductions  in  the  external  debt  ratio  will  be 
underpinned  by  continued  current  account 
surpluses,  while  the  adjustment  of  domestic 
debt ratios is also expected to continue in the 
upcoming years, albeit more gradually than in 

(3)  European Commission (2024), In-Depth Review for 

Spain, Commission staff working document 
(SWD(2024) 80 final). 

3 

Source: Ameco 

Graph 1.2: Gross fixed capital formation by 
institutional sector, in percentage of nominal 
GDP. 

(1) EU-27 2023 annual data are an aggregate of Q4-22 
to Q3-23 
Source: Eurostat 

-12-10-8-6-4-202468141516171819202122232425ppsConsumer spendingGovernment spendingGFCFInventoriesNet exportsReal GDP (y-o-y%)Forecast Lineforecast05101520252014201520162017201820192020202120222023ppsGeneral GovernmentHH & NPISHFinancial Corp.Non-Financial Corp.EU27 GFCF to GDP 
 
     
 
     
Spain faces multi-faceted 
competitiveness challenges 

Productivity  continues  to  lag  behind  the 
EU  average.  Labour  productivity  per  hour 
worked  continues  to  be  below  pre-pandemic 
levels, and the gap relative to the EU average 
has widened significantly over the last decade 
(see  Annex  12),  while  regional  disparities  are 
still  substantial  (see  Annex  17).  The  main 
factors hampering productivity growth include: 
(i) low  levels  of  business  investment  (see 
Graph  1.2.) 
research  and 
innovation (see Annex 11); (ii) weak knowledge 
transfer from the scientific sector to business; 
(iii) fragmentation  of  the  domestic  market; 
(iv) skills shortages; (v) barriers to firm growth, 
regulation  and 
including 
obstacles  for  SMEs  to  access  equity  funding 
(see  Annex  18);  and 
in 
judicial efficiency (see Annex 13). 

(vi) shortcomings 

size-dependent 

including 

in 

There are substantial needs for reskilling 
ahead. Large investments to meet the targets 
for the Digital Decade (see Annex 10) and the 
national energy and climate plan (see Annex 6) 
will require skills needed for the twin transition 
to  be  continuously  provided.  RRP  measures 
and  cohesion  policy  will  help  address  existing 
and anticipated skills gaps (see Annex 14). RRP 
measures  to  strengthen  and  improve  the 
effectiveness of active labour market policies, 
i.e.  policy  measures  to help  vulnerable  groups 
find or stay in work, are expected to play a key 
role  in  reskilling,  and  to  a  larger  extent  if 
combined with adequate private investment in 
improving workers’ skills. 

Further  action  is  needed  to  consolidate 
progress made in the green transition. The 
includes  new  measures  to 
modified  RRP 
support  increased  use  of  renewable  energies 
under  the  REPowerEU  chapter,  as  well  as  to 
boost  circularity  to  close  the  existing  gaps  in 
key sectors. This action will be complemented 
by investments planned  under cohesion policy 
funds.  However,  the  national  targets  for 
energy efficiency in the updated draft national 
energy  and  climate  plan  could  show  more 
ambition,  while  the  transport  sector  continues 
to  rely  heavily  on  fossil  fuels  and  receive 

environmentally  harmful  subsidies (see  Annex 
7).  Spain  also  experiences  water  stress  and 
scarcity  due  to  climate  change,  which  is  also 
expected  to 
increase  the  frequency  and 
severity  of  droughts  and  floods,  having  a 
severe 
impact  on  people,  nature,  public 
finances,  and  business  activity.  The  RRP 
includes  reforms  on  the  use  of  water  in 
agriculture,  but  its  sustainable  management 
continues  to  be  a  major  environmental  issue 
(see Annex 6). 

to 

are 

required 

Upward social convergence and territorial 
cohesion 
ensure 
sustainable  competitiveness  across  the 
whole  country.  There  continue 
to  be 
significant  socio-economic  and  regional  gaps 
in  educational  and  labour  market  outcomes 
(see  Annex  17),  while  young  people  are 
disproportionately  affected  by  unemployment 
and  the  proportion  of  early  school  leavers 
remains high compared to the EU average, as 
highlighted by the social scoreboard under the 
European  Pillar  of  Social  Rights  (see  Annex 
14).  Vulnerable  groups  and  non-urban  areas 
struggle  with  underserved  public  services, 
particularly  for  compulsory  education  and 
primary  care  (see  Annex  16).  A  significant 
share  of  the  country  is  further  stressed  by 
substantial 
climate 
challenges.  Dealing  with  these  will  require  a 
to  new  competitiveness 
fair  adaptation 
conditions. 
vulnerable 
recent 
households  have  been  further  challenged  by 
lower  housing  affordability  and  increasing 
energy  poverty  (see  Annex  8)  against  the 
background of the persistent limited impact of 
social  transfers  to  reduce 
inequality  and 
poverty,  which  remain  high  and  particularly 
(see  Annex  14).  Spain’s 
affect  children 
significant  policy  efforts  are  expected  to  help 
address  some  of  these  challenges  if  they  are 
fully 
implemented  and  well-coordinated 
between national and regional administrations. 
When  it  comes  to  EU  funds,  it  will  be  key  to 
ensure  an  effective  and  adequate  absorption 
capacity  in  view  of  the  significant  increase  in 
available 
funding  and  complementarities 
across funds (see Annex 4). 

demographic 

years, 

and 

In 

A credible fiscal path will need to provide 
both  consolidation  and  growth  support 
measures.  Public  finances  continue  to  be 

4 

 
 
the 

levels, 

mainly  challenged  by  high  risks  for  debt 
sustainability  in  the  medium  term  (see  Annex 
21).  Adoption  and  implementing  an  adequate 
consolidation  strategy  remains  a  priority  to 
achieve a prudent fiscal position and a decline 
expected 
given 
of 
debt 
demography-led 
in  expenditures 
increase 
related  to  healthcare,  long-term  care  and 
pensions.  Deficit  reduction  measures  to  lower 
government  debt  will  now  be  framed  by  the 
new  EU  economic  governance  rules,  which 
combine the adoption of a more gradual fiscal 
path  with  investments  and  reforms  boosting 
growth  and  supporting  the  digital  and  green 
transition. The adoption of RRP measures that 
will  have  a  fiscal  impact  is  expected  to 
contribute to this outcome. These include: (i) a 
reform of the taxation and benefit systems; (ii) 
steps 
to  achieve  more  efficient  public 
expenditure;  (iii) measures  to  increase  labour 
participation  as  part  of  the  reform  of  the 
pension 
to 
strengthen  tax  declaration  and  collection,  and 
revenue 
the 
administration. 

system;  and 

(iv) measures 

effectiveness 

the 

of 

5 

 
Box 1: 

Spain’s competitiveness in brief 

Spain's  overall  competitiveness  has  remained  relatively  stable  in  recent  years,  exceling  in 
exporting  commercial  services  and  robust  infrastructure,  and  with  energy  from  renewable 
sources accounting  for  a  relatively  high  share  of  the  energy  mix.  The  RRP  and  other  EU  funds 
comprehensively support further competitiveness gains through the structural transformation of 
the economy, particularly in relation to: (i) the digital and green transition; (ii) the modernisation 
of the labour market; and (iii) the public administration, and investment in strategic sectors. 

However, competitiveness challenges remain: 

•  a declining trend in business investment that could further hamper low productivity 

growth if proven to have a structural nature; 

•  a business environment  that could  be further improved to support firm growth and 

investment, helping increase productivity; 

•  a low level of spending in research and innovation, which remains far below the 

EU average and the national targets; 

• 

reskilling  needs  to  address,  so  workers  have  sufficient  skills  to  support  large 
investments for the digital and green transition. 

Box 2: 

UN Sustainable Development Goals (SDGs) 

Spain  is  making  progress  in  all  SDGs  related  to  competitiveness  and  productivity 
(SDGs 4,  8,  9).  However,  it  needs  to  step  up  efforts  to  close  the  gap  with  the  EU 
average on some of them. SDG 9 related to innovation, industry and resilient infrastructure is 
further  behind  the  EU  average,  mostly  due  to  low  levels  of  R&D  expenditure,  a  low  share  of 
sustainable  infrastructure  for  freight  transport  and  a  high  level  of  air  pollution  from  industry. 
Sustainable  economic  growth  and  employment  indicators  (SDG  8)  are  below  the  EU  average 
even  after  quickly  catching  up  over  recent  years,  while  the  employment  rate  is  below  the  EU 
average despite increased labour market tightness (see Annex 1). 

Out  of  the  17  indicators,  10  SDGs  remain  below  the  EU  average.  Besides  those 
highlighted  above,  these  relate  to  environmental  stability  (SDGs 2,  6,  9,  13,  14,  15),  fairness 
(SDGs 1, 8 and 10) and macroeconomic stability (SDG 16). 

6 

 
 
 
 
 
IMPLEMENTATION OF KEY REFORMS AND 
INVESTMENTS USING EU INSTRUMENTS 

Funding from the Recovery and Resilience 
Facility  (RRF)  and  cohesion  policy  is 
mutually  reinforcing  Spain's  efforts  to 
boost 
its  competitiveness  and  foster 
sustainable  growth.  In  addition  to  the  EUR 
163 billion of RRF funding described in Annex 
3, cohesion policy funding provides Spain with 
EUR  35.6  billion  for  the  2021-2027  period. 
Combined support from these two instruments 
represents  around  13.58%  of  the  country’s 
GDP in 2023, compared  to the EU  average of 
5.38% of GDP (see Annex 4). 

launched 

Under  its  recovery  and  resilience  plan 
(RRP),  Spain  has 
important 
policy  reforms  that  are  expected  to 
improve the country’s competitiveness. In 
particular, the RRP envisages major reforms in 
the  labour  market,  the  pension  and  the  tax 
systems,  vocational  and  educational  training 
(VET), 
science, 
technology  and  innovation,  healthcare,  and 
waste  management.  Spain  also  made 
substantial  investments  in  renewable  energy 
sources,  and  in  providing  support  for  R&D, 
digitalisation and SMEs. 

telecommunications 

and 

three 

the  plan,  and  challenges 

The  implementation  of  Spain’s  RRP  is 
underway,  however  timely  completion 
increased  efforts.  Spain  has 
requires 
requests, 
payment 
completed 
corresponding  to  121  milestones  and  targets 
in  the  plan  and  resulting 
in  an  overall 
disbursement  of  EUR  28  billion  on  31  March 
2023  (see  Annex  3).  The  size  and  complexity 
of 
to 
absorption  capacity,  call  for  accelerating 
investments  and  addressing  emerging  delays 
while  strengthening  administrative  capacities 
to  ensure  that  reforms  and  investments  can 
be  completed  on 
in 
particular, are highly concentrated towards the 
end  of  the  RRP  implementation  and  merit 
special attention. There is scope to strengthen 
the coordination among different levels of the 

Investments, 

linked 

time. 

in 

of 

of 

measures 

stakeholders 

administration  and  to  promote  a  more  active 
participation 
the 
implementation 
while 
streamlined  procedures  would  accelerate  the 
reception of funds by final beneficiaries. These 
elements are particularly relevant to overcome 
challenges  for  the  absorption  of  the  sizeable 
amount  of  funds  managed  by  the  financial 
instruments set in the modified RRP. With the 
aim  of  improving  data  dissemination  and 
providing  adequate  monitoring 
the 
government launched in April  2024 the portal 
ELISA  providing  data  on  calls  for  tenders  and 
grants, as well as their resolution, of the funds 
managed  by  all  public  administrations, 
including  information  on  the  type  of  final 
beneficiary and policy areas. 

tools, 

and 

territorial 

Cohesion  policy  funding  helps  Spain 
tackle  its  growth  and  competitiveness 
challenges  and  aims  to  reduce  the 
country’s 
social 
disparities.  Under  the  2014-2020  cohesion 
programming  period,  support  was  focused  on 
areas  such  as  (i) increasing  the  number  of 
people  working  or  seeking  work,  and  their 
productivity;  (ii) education,  training  and  social 
inclusion;  and  (iii) competitiveness  of  SMEs. 
Support  was  also  provided  through  financial 
instruments,  business  innovation  and  efficient 
use  of  natural  resources.  For  the  current 
2021-2027  programming  period,  support  is 
focused  on  accelerating  Spain’s  green 
transition, 
and 
digitisation,  increasing  the  employment  rate 
and improving local social services. 

innovation 

financing 

Supporting the green transition 

Spain  is  deploying  new  frameworks  to 
accelerate  the  roll-out  of  green  energy. 
Together  with  the  support  of  cohesion  policy 
solar, 
funds 

renewables 

(mostly 

for 

7 

 
 
 
in 

the 

the 

and 

(i.e., 

electricity 

hydrogen), 

to  support 

RRP 
geothermal 
investments  and  reforms  are  paving  the  way 
for  the  energy  transition 
in  Spain.  New 
national  roadmaps  aim  to  promote  self-
people 
consumption 
producing and consuming their own electricity) 
and  to  support  the  development  of  offshore 
wind  and  other  marine  energy.  Calls  were 
integration  of 
launched 
renewable  energy  facilities  into  buildings  and 
use  of 
in  production 
processes.  Spain  also  awarded  support  to 
energy communities, which aimed to boost the 
public’s  contribution  to  the  energy  transition. 
The  REPowerEU  measures  newly  included  in 
the  RRP  will  strengthen  Spain’s  efforts  to 
develop  renewable  energy  sources  through: 
(i) a 
permitting 
procedures; (ii) a scheme to support renewable 
hydrogen;  and  (iii) an  investment  to  deploy 
new electricity transmission infrastructure. 

renewable  energy 

streamline 

reform 

to 

solutions 

to  promote 

Spain  adopted  a  comprehensive  mobility 
strategy  under  the  RRP.  This  strategy 
provides 
to  problems  people 
encounter  with  transport  and  by  ensuring  an 
efficient,  resilient  and  sustainable  transport 
and  logistics  system.  Spain  also  adopted  a 
strategy 
the  development, 
maintenance  and  renewal  of  the  railway 
infrastructure  to meet  future  transport  needs, 
improve  the  sustainability  of  the  railway 
system  and  help  create  a  single  European 
railway  area.  The  shift  towards  sustainable 
transport  has  been  stepped  up  by  large 
railway 
investments 
corridors,  as  well  as in  projects  improving the 
efficiency  of  the  transport  system  through 
digitisation  and  new 
technologies  being 
introduced in the sector. Moreover, the revised 
plan contains a strategy to improve the energy 
efficiency  of  the  national  highways  network. 
Lastly,  Spain  is  working  towards  the  approval 
of  a  Sustainable  Mobility  Law.  The  Law  will 
provide  the  tools  to  continue  the  process  of 
decarbonisation  and  digitalisation  of 
the 
transportation system, contributing to reducing 
emissions and improving air quality. 

core  European 

in 

The  RRF  and  cohesion  policy  funds 
supported  measures  that  aim  to  boost 
the  energy  efficiency  of  buildings.  Spain 
extended  the  coverage  of  one-stop  shops  for 

8 

renovation,  put  in  place  aid  programmes  for 
energy-efficiency renovations and adopted the 
regulatory framework to build at least 20 000 
energy-efficient  dwellings  for  social  rental  or 
at affordable prices. Spain also implemented a 
reform  that  facilitates  decision-making  and 
access 
for  energy-efficiency 
renovations  by  ‘communities  of  owners’.  The 
modified  RRP  scaled  up  the  existing  tax 
incentive  for  energy-efficiency  renovations 
and  established  a  social  housing  fund  for 
renovating  and  constructing  energy-efficiency 
social housing. 

finance 

to 

legislative 

Spain  has  taken  steps towards  achieving 
a  circular  economy.  On  the  reform  side, 
Spain  approved  the  Spanish  Strategy  on 
Circular  Economy,  a 
circular 
economy  package and the Law on Waste and 
Contaminated  Soil.  Cohesion  policy  funds  in 
the 2014-2020 programming period have also 
been  key  to  supporting  waste  recycling.  The 
modified RRP introduced a second package of 
regulatory  acts  to  coordinate  management  of 
municipal  waste  recycling  throughout  the 
regions  and  the  implementation  of  extended 
producer 
It  also 
responsibility  schemes. 
includes  investments  to  improve  municipal 
separate 
the 
collection  waste, 
establishment  of  a  working  group  within  the 
waste  coordination  committee  to  monitor 
legislation.  The 
compliance  with  waste 
Strategic  Project  for  Economic  Recovery  and 
Transformation  (PERTE)  on  Circular  Economy 
will invest in improving the circular economy in 
industrial  sectors  and  in  three  key  sectors: 
plastics,  textile  and  equipment  for  renewable 
energy. 

and 

Progress  made  in  water  management 
through  RRF  reforms  was  complemented 
by  cohesion  policy  investments.  Under  the 
RRF,  Spain  passed  a  reform  amending  the 
Hydrological  Planning  Regulation  restored  at 
least  200  kilometres  of 
riverbanks  and 
protected  40  000  inhabitants  against  flood 
risk.  This  was  complemented  by  cohesion 
policy  funds  in  the  2014-2020  programming 
period  that  improved  water  supply  for  more 
than  a  million  inhabitants.  The  revised  plan 
increased the financing to water management 
resources  through  the  following:  (i) increasing 
the  efforts  to  improve  the  energy  and  water 

 
efficiency in  the urban  water  cycle;  (ii) setting 
up a PERTE for the digitalisation of water uses; 
and  (iii) recovering  aquifers  with  alternative 
water  resources.  In  addition,  the  revised  RRP 
includes  a  new  national  strategy  to  combat 
desertification and a new investment to supply 
renewable 
to 
desalination plants. 

(photovoltaic) 

energy 

Stimulating competitiveness 

the 

levels  of 
coordination  between  different 
government.  It  is  expected  to  have  a  positive 
impact  on 
implementation  of  EU 
programmes  in  the  field  of  research  and 
innovation, in particular the European Regional 
Development Fund (ERDF) and Horizon Europe, 
by  simplifying  procedures  for  granting  aid. 
R&D  measures  and  innovation  in  strategic 
projects  were  strengthened  in  the  modified 
RRP, including further support to the aerospace 
industry and the health sector. 

to 

facilitate 

preventive 

into  force 

Spain  approved  reforms  to  improve  the 
business  environment.  A  new  insolvency 
in  2022, 
framework  entered 
intended 
debt 
restructuring and debt relief for legal persons. 
The  substantial  relative  increase  in  the  filings 
that followed its approval needs to be put into 
context due to the very low starting level  and 
the  fact  that  the  number  of  filings  already 
started  to  moderate  over  the  course  of  last 
year.  Other  enacted  reforms  in  the  RRP  that 
help  improve  resource  allocation  include  the 
approval  of  the  law  on  business  creation  and 
growth, which simplified procedures for setting 
up a business, promoted the diversification of 
financing  sources  for  business  growth,  and 
provided measures to reduce late payments in 
commercial transactions. The law also created 
a  new  sectoral  conference  for  regulatory 
improvement  and  the  business  climate  in 
order to strengthen coordination of the various 
administrations  to  reduce  domestic  market 
fragmentation.  The  set  of  reforms  in  the  RRP 
to  improve  the  business  environment  also 
include  the  entry  into  force  of  the  start-ups 
law,  which  provides  a  favourable  framework 
for  innovative  firms  and  to  attract  foreign 
investors and entrepreneurs, while the revised 
plan  added  a  new  reform  amending  the 
Securities  Markets  and  Investment  Services 
Law to improve access to finance, in particular 
for  SMEs.  All 
these  measures  will  be 
complemented  by  the  planned  investments 
under cohesion policy funds. 

The 

National 

(ii) facilitate 

Spain  approved  measures  to  improve 
digitalisation. 
Digital 
Competences  Plan,  adopted  in  2021,  aims  to: 
(i) improve  the  digital  skills  of  the  overall 
digital 
the 
population; 
transformation  of 
the  education  system; 
(iii) boost  employability;  and  (iv) attract  ICT 
specialists.  SMEs  and  self-employed  people 
are  benefitting  from  investments  under  the 
Digital  Toolkit  Programme,  which  aims  to 
accelerate 
their 
businesses.  Other  measures  supported  by  EU 
instruments  help  digitalise 
the  Spanish 
economy,  such  as  the  strengthening  of  the 
capacity  of  the  cybersecurity  helpline,  the 
adoption  of  the  law  on  5G  cybersecurity 
included  in  the  RRP,  as  well  as  the  focus  of 
ERDF  funds  throughout  the  2021-2027  cycle 
on  supporting  ICT  solutions  and  e-services  in 
public administration. 

digitalisation 

the 

of 

the 

and 

This 

package 

in 
digitalise 

Spain approved reforms to transform the 
public  administration.  A  package  of 
late  2023  to 
measures  was  adopted 
public 
modernise 
administration. 
included 
measures  to  boost  the  State  administration’s 
ability  to  attract  and  retain  talent,  step  up 
cooperation  and  coordination  among  different 
levels of government, and promote the digital 
deployment  of  local  public  services.  It  also 
contained  important  measures  on  the  digital 
and  procedural  efficiency  of 
justice 
system,  which  aim  to  help  reduce  economic 
distortions 
business 
improve 
environment. 

and 

the 

the 

Spain  adopted  measures  to  support 
innovation.  Amendments  to  the  science, 
technology and innovation law aim to improve 
the  performance  and  governance  of  the 
research and innovation system, as well as the 

The  modified  RRP  strengthens  measures 
supporting  the  structural  transformation 
of 
Financial 
instruments  funded  through  RRF  loans  are 

the  Spanish  economy. 

9 

 
 
funding 

expected  to  have  a  long-lasting  impact  by 
supporting  financing  and  developing  capital 
markets  to  stimulate  private 
investments. 
They  will  manage  sizeable  resources  to 
support  the  green  and  digital  transition,  and 
to  strategic 
will  provide  more 
industrial  projects.  The  PERTEs  aim 
to 
transform and strengthen the competitiveness 
of firms in value chains, including by providing 
support  to  SMEs.  Spain  approved  amongst 
others  such  strategic  projects  for:  (i) the 
transformation of the value chain of the agri-
(ii) electric  and 
food  and  health  sectors; 
(iii) the  naval  and 
connected 
(iv) microelectronics 
aeronautics 
and 
(v) the 
decarbonisation of manufacturing activities. 

vehicles; 
industries; 
semiconductors; 

and 

Strengthening economic and social  
resilience 

reforms 
in 

to  address 
Spain  adopted 
structural  challenges 
labour 
the 
market.  The  labour  market  reform  approved 
in  December  2021  streamlined  the  range  of 
contracts, including by setting stricter rules for 
fixed-term contracts and increasing the use of 
the  open-ended  contract  for  seasonal  and 
other  discontinuous  work  activities  (contrato 
fijo  discontinuo).  Since  the  entry  into  force  of 
the 2021 reform, the share of employees with 
temporary  contracts  has  decreased  by  10 
the  private  sector, 
in 
percentage  points 
reaching  14%  on  average 
in  2023  and 
bringing  it  closer  to  the  EU  average.  This 
decrease  has  been  particularly  noticeable  for 
economic activities where fixed-term contracts 
were  more  prevalent,  including  agriculture, 
construction, 
and 
transportation.  Other  prominent  measures  in 
the RRP that are helping transform the labour 
market  include  the  adoption  in  2023  of  the 
new Employment Law that aims to review the 
governance  system  to  improve  the  cohesion 
and efficiency of employment policies, as well 
as reforms to active labour market policies to 
improve job-matching efficiency. 

hospitality 

services 

Spain  approved  reforms  to  provide  the 
skills required for the labour market. The 
the 
new  VET  system  aims 

increase 

to 

attractiveness  of  VET  programmes,  promote 
the dual nature of education and training, and 
better  adapt  VET  programmes  to  the  future 
needs  of 
the  economy.  Accompanying 
investments  in  the  RRP  and  the  European 
Social  Fund  Plus  (ESF+)  are  helping  increase 
the number of new VET places with a focus on 
skills  relevant  to  the  labour  market,  which 
have  been  coupled  with  significant  growth  in 
demand  for  enrolment  in  recent  years,  far 
exceeding  other  educational  levels  for  similar 
age  groups.  As  part  of  the  other  measures 
addressing  skills  shortages,  the  modified  RRP 
includes  the  adoption  of  an  action  plan  to 
develop  micro-credentials  in  the  university 
system  and  a  pilot  project  providing  at  least 
60  000  units  with  support  under  a  Technical 
Support  Instrument  to  implement  a  higher 
education skills intelligence strategy. 

its  full  potential, 

Spain  adopted  measures  to  strengthen 
social  and  territorial  cohesion.  In  2020,  a 
national  minimum  income  scheme  (Ingreso 
to  support 
Mínimo  Vital)  was  created 
vulnerable  families  and 
its  coverage  has 
progressively broadened in recent years. When 
operating  at 
it  could 
significantly  help  Spain  reduce  poverty  and 
make  progress  towards  the  2030  national 
targets.  This  will  be  complemented  by  socio-
economic integration pathways included in the 
RRP  to  increase  the  effectiveness  of  the 
scheme,  as  well  as  by  cohesion  policy  funds 
supporting  social  inclusion.  In  the  2014-2020 
programming period, the European Social Fund 
(ESF+)  allowed  almost  1.5  million  people  to 
benefit from social inclusion, anti-poverty  and 
anti-discrimination  measures,  under 
the 
national  programme  of  social  inclusion  and 
social  economy.  These  measures  targeted 
vulnerable  groups,  such  as  people  with  a 
disability,  migrants,  and  people  at  risk  of 
exclusion.  The  Just  Transition  Fund  is  also 
helping  create  jobs  in  the  areas  affected  by 
the  closure  of  coal  mines  and  power  plants, 
supporting  reskilling  and  upskilling  initiatives. 
This  is  being  strengthened  by  the  RRP,  which 
includes  investments  in  the  reskilling  and 
upskilling  of  workers  in  these  areas  and  in 
supporting  environmental,  digital  and  social 
infrastructure  projects.  As  part  of  the  RRP, 
Spain passed the new housing law, which aims 
to increase the supply of affordable and social 
housing,  including  by  providing  higher  tax 

10 

 
 
for 

used  to  commit  tax  fraud  (such  as  ‘dual-use 
software’),  and  introducing  a  reference  value 
for  the  tax  base  in  property  taxation.  Also, 
Spain  updated  its  list  of  non-cooperative 
tax  purposes.  The  Tax 
jurisdictions 
Administration  Agency  increased  its  staff  and 
the  number  of  tax  investigations,  and  it 
improved 
the 
submission  of  personal  and  corporate  tax 
declarations.  The  agency  also  took  measures 
to  better  use  taxpayer  data  received  from 
abroad  and  to  increase  transparency  among 
large  corporate  taxpayers.  Spain  has  carried 
out an interim assessment of the Law Against 
Tax Evasion and Fraud. 

that  facilitate 

IT  systems 

for 

tax 

reforms  are 
Preparations 
underway.  As  part  of  the  measures  to 
improve  the  tax  system,  Spain  established  a 
Committee  of  Experts  to  examine  the  current 
tax system and to make recommendations on 
how  to  modernise  and  adapt  it  in  a  coherent 
manner. 
In  March  2022,  the  Committee 
published  its  report  and  recommendations, 
which  the  government  will  use  to  implement 
the tax reforms. 

the 

quality 

Spain  introduced  measures  to  improve 
the  efficiency  of  government  spending 
following  recommendations  by  the  the 
Spanish  fiscal  council  (AIReF).  The  latest 
monitoring report from the Ministry of Finance 
showed  that  Spain  had  implemented  203  of 
the  357  recommendations  made  by  AIReF  to 
increase 
government 
expenditure  as  well  as  budgetary  savings  to 
increase  fiscal  consolidation.  As  part  of  the 
RRP,  Spain  also  approved  the  new  public 
spending  review  cycle  for  2022-2026,  which 
gives continuity to the first exercise carried out 
by  AIReF.  Furthermore,  Spain  has  set  up  a 
framework  and  developed  a  methodology  to 
identify  and  monitor  expenditure  included  in 
the  central  government  budget  that  would 
help achieve environmental objectives. 

of 

incentives  and  increasing  the  minimum  share 
of protected housing in new developments. 

regional 

Spain  approved  measures  to  strengthen 
the healthcare system across the country. 
The  government  adopted  an  investment  plan 
to  renew  obsolete  hospital  equipment  with 
including 
new  high-tech  medical  devices, 
in 
redressing 
infrastructure.  This  was  complemented  by 
investments  under  the  REACT-EU  programme 
in  health  equipment  and  infrastructure.  The 
government  also  adopted  an  action  plan  for 
improving  primary  care  and  the  public  health 
strategy,  requiring  targeted  investments  in 
staff and infrastructure for its implementation. 

imbalances 

Supporting fiscal sustainability 

to 

the 

In  2023,  Spain  approved  the  final  set  of 
reforms for the pension system that were 
included in the RRP. The computation period 
for  calculating  the  retirement  pension  was 
extended 
system’s 
improve 
progressivity  and  adapt  the  regulation  to 
discontinuous  careers  and  other  forms  of 
atypical  work.  The  sustainability  factor  that 
links pensions to life expectancy was replaced 
a  mechanism 
guarantee 
with 
intergenerational 
budgetary 
equity 
sustainability  by  adjusting  to  demographic 
changes.  The  maximum  contribution  base  of 
increased  and 
the  pension  system  was 
maximum  pensions  were  adjusted  to  widen 
the  contribution  base,  as  well  as  increase  the 
progressivity  and  overall  revenue  of  the 
pension system. 

to 
and 

Spain  stepped  up  its  fight  against  tax 
fraud and evasion. Under the RRP, Spain set 
stricter  rules  for  cash  payments,  lowering  the 
threshold  for  publishing  the  names  of  people 
with tax arrears, banning software that can be 

11 

 
 
Box 3: 

Combined action for more impactful EU funds 

To boost economic growth and maximise the impact of EU funding, Spain’s RRP includes reforms 
that  support  investments  under  other  EU  instruments,  creating  significant  synergies  and 
complementarities  between  the  various  funds.  For  example,  to  develop  renewable  hydrogen  in 
Spain, the Spanish RRP includes a roadmap for hydrogen, including a reform which provides the 
regulatory mechanism to  verify the renewable origin of hydrogen. This measure is expected to 
facilitate investments in renewable hydrogen planned under both the RRP and the ERDF, which 
will complement each other by focusing on different stages of the hydrogen value chain. 

12 

 
 
FURTHER PRIORITIES AHEAD 

Spain faces additional challenges related 
to  the  sustainability  of  government 
finances,  water  management 
and 
lagging  productivity  and 
transport, 
broad-based 
investment  needs,  and 
income  equality  and  poverty.  Tackling 
these  challenges  will  help  increase  Spain’s 
long-term  competitiveness  and  ensure  the 
resilience  of  its  economy.  It  will  also  help  the 
country make further progress in achieving the 
SDGs. 

is 

important  that  the 

identified 
It 
challenges  are  addressed  both  at 
national  and  regional  level.  This  will  help 
reduce  regional  disparities  and  improve  the 
administrative  and  investment  capacity  in  a 
balanced way across the country. 

Ensuring the sustainability of 
government finances 

A credible consolidation path is critical to 
ensure  fiscal  sustainability  and  anchor 
expectations. Spain’s fiscal situation remains 
challenging  with  high  levels  of  public  deficit 
and debt. The buoyant growth of tax revenues 
over recent years has proved to be temporary 
to a certain extent. Without measures that aim 
to ensure budgetary consolidation, the ongoing 
moderation of tax revenues will make it harder 
to reduce the deficit in the future. Moreover, in 
2024,  the  government  partially  extended  VAT 
cuts for basic food products and direct support 
to  the  road  and  maritime  transport  sectors 
that  could  deteriorate  the  country’s  fiscal 
position  in  the  short  term  (see  Annex  19). 
Within  the  EU’s  new  economic  governance 
rules,  Spain  will  need  to  develop  a  medium-
term  fiscal  structural  plan  for  reducing  the 
deficit  and  lowering  government  debt.  This 
plan  could  combine  the  adoption  of  revenue 
and  expenditure  measures  with  investments 

13 

and  reforms  to  promote  more  robust  and 
sustainable  economic  growth.  In  its  national 
fiscal framework, the government sets targets 
for regions in terms of structural balance, the 
debt-to-GDP ratio as well as in relation to the 
maximum growth rate of nominal expenditure 
(expenditure  rule).  To  ensure  that  the  new  EU 
economic governance rules are complied with, 
the national fiscal framework may need to be 
updated. 

increase 

population. 

Fiscal 
sustainability  measures  have 
become  more  urgent  given  the  country’s 
Demographic 
ageing 
developments  are  expected  to  lead  to  a 
significant 
in  public  expenditure 
related  to  healthcare,  long-term  care  and 
pensions.  On  pensions,  fiscal  sustainability 
gaps  over  the  medium  and  long  term  can  be 
addressed  through  the  full  implementation  of 
the  pension  reforms  (see  Annex  21).  The 
measures 
recovery  and 
in 
resilience  plan  (RRP)  need  to  be  closely 
monitored  to  ensure  that  they  help  mitigate 
medium-  and  long-term  risks.  In  this  respect, 
special  attention  needs 
to 
implementing  the  ‘closure  clause’  introduced 
by  the  2023  reform,  which  entails  potential 
measures  to  ensure  the  sustainability  of  the 
pension system as of 2025. 

to  be  paid 

included 

the 

Tax  reforms  should  be  a  central  part  of 
the  fiscal  consolidation  strategy.  In  this 
regard,  reforms  included  in  the  RRP,  building 
on recommendations from experts provided in 
the  meantime,  aim  to:  (i)  make  the  taxation 
system more effective and modern, and adapt 
(ii) support  the  green 
it  to  new  trends; 
transition;  and 
revenue  and 
(iii) increase 
promote fairness. Possible further action could 
include  the  increase  of  consumption  taxes, 
while  protecting  vulnerable  individuals  with 
targeted  compensatory  measures.  Also,  Spain 
collect  more 
would 
environment-related  tax  revenues  (1.5%  of 
GDP  in  2022  against  2.0%  on  EU  aggregate) 

scope 

have 

to 

 
 
 
including  by  strengthening  the  application  of 
the ‘polluter pays’ principle (see Annex 19). 

independent  fiscal 

The  implementation  of  recommendations 
institution 
by  the 
(AIReF)  remains  key  to 
improve  the 
quality  and  efficiency  of  government 
spending.  This  is  particularly  relevant  for 
healthcare,  to  improve  cost-effectiveness  and 
address regional access and quality disparities, 
as well as the significant investment needs in 
primary care. 

Promoting the green transition for      
sustainable competitiveness 

in 

abstraction 

the 
restoration.  Water 
agricultural  sector  poses  particular  challenges 
to water management and efficiency. In 2019, 
Spain  had  the  fifth  largest  irrigated  area  in 
Europe,  accounting  for  13.2%  of  total  utilised 
agricultural  area,  and  water  abstraction  for 
agricultural  purposes  accounted  for  68.4%  of 
the  total  volume  of  water  abstracted  (see 
Annex  6).  The  high  level  of  water  abstraction 
leads 
to  salinisation,  which  deteriorates 
drinking  and  irrigation  water  and  adds  to 
further salinisation of drylands. To address the 
the 
challenge  of  water  abstraction 
agricultural  sector,  Spain  still  has  potential  to 
further  extend  the  use  of  climate  resilient 
crops  and  promote  infrastructure  investments 
for a more efficient use of water. 

in 

Sustainable water management is needed 
to  tackle  the  increasing  challenges  of 
water  scarcity  and  usage.  The  country 
suffers  severely  from  water  scarcity  and 
stress  due  to  climate  change,  with  severe 
impacts on people, biodiversity, public finances 
and  competitiveness  likely.  Water  reserves  in 
Spain have followed a downward trend in the 
last decade, particularly  for some regions. For 
example, in 2024, an active emergency status 
for  drought  has  been  activated  in  Catalonia, 
Andalusia  and  Murcia,  as their  water  reserves 
fell  below  20%  of  their  total  capacity  (see 
Annex 6). Spain has adopted several measures 
related  to  irrigation  under  the  RRP  such  as 
investments to improve the efficiency of water 
consumption  and  energy  use  in  irrigation 
systems  and  the  creation  of  a  national 
irrigation board. However, there continue to be 
challenges  beyond  those  tackled  by  the  RRP 
and other EU funds, especially in the areas of 
water governance and management. Potential 
solutions  include  a  strong(er)  framework  for: 
(i) better 
and 
and 
administration 
(ii) implementing  and  enforcing  approved 
programmes  and 
In 
addition,  several  existing  measures  have  the 
potential  to  be  scaled  up.  These  include 
investments 
treating 
wastewater,  water  reuse,  reducing  leaks  in 
networks  and  the  general  water  supply, 
improving  monitoring,  and  promoting  nature-
based  solutions,  flood  prevention  and  river 

government 
levels; 

collecting  and 

coordinating 

legislation 

in  force. 

all 

at 

in 

especially 

congestion, 

There  continue  to  be  opportunities  to 
build  on  RRP  measures  and  cohesion 
investments  that  support  the 
policy 
transition  towards  sustainable  modes  of 
transport  and  reduce  emissions.  The 
transport  sector  continues  to  rely  heavily  on 
fossil fuels and even increased its final energy 
consumption in 2022 by 12.3% (see Annex 7). 
The  transport  sector  remains  a  key  source  of 
greenhouse  gas  emissions,  air  pollution  and 
traffic 
in  major 
metropolitan  areas  (see  Annex  6).  Battery 
electric vehicles made up only 0.4% of Spain’s 
in  2023,  93%  of  freight  was 
car  fleet 
transported by road, and passenger cars were 
used for 86% of distances travelled. Measures 
included in the revised RRP and in the adopted 
programmes  under  the  European  Regional 
Development Fund for 2021-2027 are helping 
develop  and  upgrade  rail  infrastructure  for 
short- 
the 
long-distance 
development  of  urban  public  transport,  the 
creation of low-emission zones in urban areas 
charging 
and 
roll-out  of  electric 
infrastructure.  Nevertheless, 
the 
magnitude of the challenge, there is scope for 
further measures to support the shift towards 
sustainable modes of personal transport. 

travel, 

given 

and 

the 

Continued  efforts  to 
improve  energy 
efficiency are needed to reduce emissions 
and tackle energy poverty. The share of the 
population in Spain affected by energy poverty 
increased substantially, from 7.5% in 2019 to 
17.1% in 2022, almost double the EU average 

14 

 
include  measures 

(9.3%),  and  increasing  further  to  20.8%  in 
2023  (Annex  8).  While  the  modified  RRP  and 
ERDF  programmes 
to 
improve  energy  efficiency  in  housing,  existing 
and  new  measures  could be  more  specifically 
towards  energy-poor  households 
targeted 
while  helping  Spain  achieve 
targets  on 
reducing emissions from buildings. 

Addressing structural challenges 
to improve competitiveness 

concentrated 

level,  further  widening 

Lagging 
investment  and  productivity 
means  that  continuous  policy  support  is 
needed.  Overall 
investment  has  steadily 
declined  since  2020  and  remains  below  the 
pre-pandemic 
the 
negative gap of the ratio to GDP compared to 
the  EU  average.  These  developments  have 
been 
the  non-financial 
in 
corporate  sector  and  could  further  hamper 
low  productivity  growth,  which 
already 
continues  to  lag  behind  the  EU  average  (see 
Annex 12).  To build upon the measures in the 
RRP,  continuous  policy  action  is  warranted  to 
investments  and  firm 
facilitate  business 
growth. 
Council 
2016 
Following 
Recommendation,  this  year  the  government 
plans  to  establish  a  National  Productivity 
Board,  which  would  contribute  to  policies 
supporting  productivity  growth.  Strengthening 
the enforcement of single market tools is also 
essential for achieving greater integration and 
boosting Spain’s competitiveness within the EU 
single market. 

the 

There  is  scope  for  further  improving  the 
business  environment.  Business  dynamics 
are characterised by low firm birth and death 
rates  that  reveal  obstacles  to  reallocating 
resources,  while  the  average  size  of  firms 
remains  well  below  the  EU  average,  being 
detrimental for overall productivity. In line with 
past  OECD  and  IMF  recommendations,  the 
(i.e. 
review  of  size-dependent 
regulation  requirements  that  are  different  for 
large  firms  than  for  small  firms)  in  the  fields 
of labour, auditing and taxation would improve 
efficiency  in  capital  and  labour  allocation, 
supporting  investment  and  contributing  to 
increased  productivity.  Addressing  existing 

regulation 

shortfalls  in  legislation  quality  and  judicial 
efficiency  would  also 
reduce  economic 
distortions.  The  time  to  resolve  civil  and 
commercial  cases  remains 
long  and  the 
prolonged  non-renewal  of  the  Council  of  the 
Judiciary  causes  bottlenecks  for  nominating 
top judges (see Annex 13). As part of the RRP, 
the law on business creation and growth aims 
to  reduce  the  fragmentation  of  the  domestic 
market  and  provides  for  the  setting  up  of  ‘a 
regulatory 
new  sectoral 
conference 
improvement  and  business 
to 
strengthen  coordination  of  administrations. 
Spain  has  also  adopted  measures  to  combat 
late  payments  in  commercial  transactions, 
which  will  take  some time  to deploy  their  full 
effects  and  whose  enforcement  could  be 
further  strengthened  benefiting  from  the 
future  obligations 
for  electronic  billing 
introduced by the law on business creation and 
growth. 

climate’ 

for 

Increasing  R&D  investment  and  stronger 
links  with  the  scientific  ecosystem  can 
boost the productivity of firms. At 1.4% of 
GDP  in  2022,  Spain’s  R&D  intensity  has 
remained  stagnant  as  compared  to  2021  and 
remains  well  below  the  EU  average  of  2.2% 
(see  Annex  11).  This  is  mainly  due  to  low 
private  R&D  expenditure 
(0.8%  of  GDP 
compared to 1.5% for the EU average). At the 
same  time,  the  Spanish  scientific  system  has 
shown  encouraging  signs  when  it  comes  to 
scientific  skills  and  career  paths  resulting  in 
increased scientific publications. The measures 
in  the  revised  RRP  and  the  adopted  ERDF 
programmes  aim  to  support  private  R&D 
spending  and  knowledge  transfer  between 
private 
bodies. 
Nevertheless,  further  efforts  seem  warranted 
to exploit the full potential of business-science 
linkages,  knowledge  valorisation  and 
the 
overall  governance  of  R&I  policies.  This 
includes  making  public  research  organisations 
more  performance-based  and  professional, 
and improving the coordination of the science, 
technology and innovation system in designing 
and  implementing  research  and  innovation 
(R&I)  policies  across  different 
levels  of 
government. 

research 

public 

and 

Reskilling policies and firm investment in 
human  capital  appear  necessary  to 

15 

 
 
skills 

further  advance  the  reshaping  of  the 
labour  market.  Measures  in  the  RRP  and 
cohesion  policy  are  expected  to  improve  the 
effectiveness  of  active  labour  market  policies 
shortages, 
(ALMPs),  and  address 
although  significant  challenges  remain.  The 
new  Employment  Law  and  the  modernisation 
of public employment services aim to improve 
employability and reduce distortions for better 
job  matching.  Adequate  resources  and  tools 
for  targeted  ALMPs  have  the  potential  to 
reduce  the  unemployment  rate  in  a  relatively 
short period of time. Comprehensive education 
and  VET  reforms  in  the  RRP  together  with 
investments supported by other EU funds aim 
to provide a better link between education and 
skills  in  demand,  to  reduce  mismatches  (see 
Annex  14).  These  measures  will  need  to  be 
complemented by broad reskilling actions and 
higher  investment  in  workers'  skills  in  the 
private sector. Although it is still below the EU 
average,  the  share  of  companies  reporting 
labour  shortages  as  a 
limiting 
production  is  at  a  historical  high  in  both 
industrial  activities  (8%)  and  services  (23%). 
Challenges  are  particularly  acute  for  SMEs, 
which  struggle  to  attract  and  retain  talent. 
There  continue  to  be  noticeable  shortages  of 
specialists in information and communications 
technology  (ICT),  as  well  as  graduates  in 
science, 
and 
technological, 
mathematics (STEM) (see Annex 15). 

engineering 

factor 

Tackling social and regional cohesion 
challenges 

educational 

Despite  improvements,  relevant  labour 
market  and 
challenges 
persist.  While  the  enacted  labour  market 
reforms  in  the  RRP  are  starting  to  show 
positive  effects,  unemployment  rates  remain 
relatively high compared to the EU, particularly 
for young people, migrants and older workers. 
The  share  of  temporary  employees  in  the 
public  sector  and  involuntary  part-time  work 
also  remain  high,  most  prominently  affecting 
young  people,  women  and  the  education  and 
health  sectors  (see  Annex  14).  The  successful 
engagement  of  young  people  in  the  labour 
the 
market 
remains 
low 
underachievement 

in  basic  skills,  a 

challenged 

by 

16 

proportion  of  top-performing  students  and 
persistent  socio-economic gaps  in  educational 
outcomes  as  shown  by  the  latest  Programme 
for  International  Student  Assessment  (PISA 
2022) results and the high rate of early school 
leaving  (the  second  highest  in  the  EU)  (see 
Annex  15).  Beyond  measures  in  the  RRP 
increasing  the  labour  market  relevance  of 
education  and  the  support  from  cohesion 
policy,  a  reform  of  the  teaching  profession 
could 
future 
boost 
further  help 
employability of young people. 

the 

Income 
inequality  and  poverty  rates 
remain  relatively  high.  According  to  the 
scoreboard under the European Pillar of Social 
Rights  (see  Annex  14),  the  share  of  people  in 
Spain  at  risk  of  poverty  or  social  exclusion 
ranked among the highest in the EU. This has 
affected 
in  particular  non-EU  nationals, 
persons  with  disabilities,  single  parents  and 
low-skilled individuals, while income inequality 
and  child  poverty  remain high.  RRP measures, 
such  as  the  minimum  vital  income  and  the 
reform  of  child  benefits,  are  underway.  But 
there  remains  the  need  for  more  effective 
social policy action to achieve Spain’s national 
poverty  and  social  exclusion  target  by  2030 
and  to  improve  the  limited  impact  of  social 
transfers  on  poverty  and  inequality  reduction. 
Access  to  affordable  housing  also  remains  a 
significant challenge, particularly for the most 
vulnerable,  due  to  the  low  share  of  social-
rental  dwellings  (a  third  compared  to  the  EU 
average).  Continued  support  to  increase  the 
availability  of  affordable  and  social  housing 
seems warranted, building on measures in the 
RRP and cohesion policy. 

Regional  disparities  continue  to  be  wide 
in several areas. There are large differences 
at  regional  level  in,  for  example,  innovation, 
educational  outcomes,  unemployment  rates 
and  access  and  coverage  of  social  services 
and benefits (see Annex 17). Non-urban areas 
and outermost  regions particularly struggle to 
build up capacities in competitiveness, while a 
significant  share  of  the  country  is  further 
stressed  by  demographic  and 
climate 
challenges.  Measures  under  the  RRP  and 
cohesion policy are expected to further soften 
the  strain  in  providing  essential  services  like 
compulsory  education  and  primary  care  (see 
Annex 16), which stems from staff ageing and 

 
Box 4: 

The mid-term review of cohesion policy funds for Spain 

The mid-term review of the cohesion policy funds is an opportunity to assess cohesion 
policy programmes and to tackle emerging needs and challenges in EU Member States 
and their regions. Member States are reviewing each programme taking into account,  among 
other things, the challenges identified in the European Semester, including in the 2024  country-
specific recommendations. This review forms the basis for a proposal by the Member State for 
the definitive allocation of 15% of EU funding included in each programme. 

Spain has made progress in implementing cohesion policy programmes and the European Pillar 
of Social Rights, but challenges remain as outlined in this report, including in Annexes 14 and 17. 
In  particular,  Spain  continues  to  register  slow  GDP  growth  in  several  regions,  including  the 
Balearic  Islands  and  Canary  Islands  and  GDP  per  capita  remains  below  75%  of  EU  average  in 
eight  regions,  with  only  three  regions  ranking  higher  than  the  EU  average.  Against  this 
background,  it  is  still  important  to  continue  implementing  planned  priorities,  paying  particular 
attention  to:  (i) the  capacity  of  businesses  to  innovate  and  invest  in  R&D,  particularly  in  the 
investments, 
industries 
particularly  in  water  management,  the  circular  economy,  and  measures  to  help  mitigate  and 
adapt to climate change in those regions most affected by it (i.e. the Canary Islands and coastal 
areas in the east and south of Spain), in line with the  national energy and climate plan; (iii) the 
attractiveness  and  competitiveness  of  areas  facing  demographic  decline;  (iv) stepping  up  the 
labour  market 
long-term  unemployed  people  and  older  workers; 
(v) strengthening career guidance to address skills mismatches; (vi) implementing the European 
Child  Guarantee;  and  (vii) administrative  capacity  all  at  levels to  meet  the  conditions  for  more 
effective and efficient public investments. 

identified  by  regional  smart  specialisation  strategies;  (ii) green 

(re-)integration  of 

Spain  could  also  benefit  from  the  opportunities  provided  by  the  Strategic  Technologies  for 
Europe  Platform  (STEP) (5)  initiative  to  help  transform  industry,  particularly  by  investing  in  the 
development  and  manufacturing  of  strategic  technologies  and  their  respective  value  chains, 
especially  in  the  areas  of  deep  tech  innovation,  clean  energy  and  resource  efficiency,  and 
agriculture and health-related biotechnologies. 

shortages, the high share of fixed-term public 
employees,  and 
that 
particularly  affect  underserved  population 
groups and geographical areas. 

investment  gaps 

Ensuring the absorption of all EU funds is 
critical  to  ensure  progress  on  social  and 
territorial  cohesion.  Due  to  the  significant 
increase in available EU funding (see Annex 4), 
further efforts seem warranted  to: (i) build up 
adequate  administrative  capacity  at  all 
the 
government 
coordination 
administrations; 
public 
(iii) streamline  procedures  to  accelerate  the 
reception  of  funds  by  final  beneficiaries; 
in 
(iv) increase 
implementing  measures;  and 
(v) provide 
appropriate tools for monitoring the impact of 
funds. 

stakeholder  participation 

levels; 
of 

(ii) improve 

features  of  the  Social  Convergence 
Framework. The analysis points to challenges 
related to the transition from education to the 
labour  market  as  well  as  to  child  and  energy 
poverty and the impact of social transfers but 
does  not  point  to  major  social  convergence 
challenges  for  Spain  overall,  in  light  of  the 
positive  developments  recorded,  especially  in 
the labour market (4). 

(4)  European Commission, SWD(2024)132. The analysis 
relies on all the available quantitative and qualitative 
evidence and analysing the policy response undertaken 
and planned. 

These  findings  are  consistent  with  the 
second-stage  analysis  in  line  with  the 

(5)  Regulation (EU) 2024/795.  

17 

 
 
 
KEY FINDINGS 

With its wide policy scope and substantial 
financial  envelope,  Spain’s  recovery  and 
resilience  plan  (RRP)  includes  measures 
to  address  a  series  of  structural 
challenges,  in  synergy  with  other  EU 
funds, including cohesion policy funds, by: 

•  Fostering the green and digital transition; 

•  Supporting 

the 

structural 

transformation of the Spanish economy; 

•  Reducing  temporary  jobs  and  structural 

unemployment; 

•  Strengthening  social  and 

territorial 

cohesion; 

•  Supporting fiscal sustainability; and 

•  Improving  educational  outcomes  and 

overall skills. 

The  implementation  of  Spain’s  recovery 
and  resilience  plan  is  facing  increasing 
challenges.  Renewed  efforts  are  key  for  a 
successful implementation of all the measures 
of  Spain’s  recovery  and  resilience  plan  by 
August 2026. 

Beyond  the  reforms  and  investments  in 
the RRP and cohesion policy programmes, 
Spain would benefit from: 

•  Ensuring 

to 

fiscal  sustainability  and 
the 
anchoring  expectations  due 
expected  age-related  increase  of  pension 
and  healthcare 
including  by: 
(i) reviewing and simplifying the tax system 
to 
and 
economic 
employment,  cohesion  and 
the  green 
transition;  and  (ii) improving  the  quality, 
efficiency and equity of public spending; 

support 

growth 

costs, 

•  Ensuring  that  the  national  fiscal 
framework  is  adapted  as  needed  to 
support the effective implementation of the 
EU fiscal governance framework; 

reviewing  of 

•  Improving competitiveness by: (i) further 
strengthening  the  business  environment, 
e.g.  by 
size-dependent 
regulation and increasing judicial efficiency; 
(ii) boosting  R&D  investment,  innovation 
and  knowledge  transfer;  and  (iii) providing 
adequate 
in 
coordination with the business sector; 

resources 

reskilling 

for 

•  Further  reducing  the  gap  between 
regions  by  building  up  competitiveness 
capacities  across  the  country  with  the 
support  of  EU  funds,  to,  for  example, 
address 
climate 
challenges; 

demographic 

and 

•  Ensuring  the  effective  implementation 
of  all  EU-funded  programmes  by: 
(i) building  up  adequate  administrative 
capacity  and  coordination  at  all  levels  of 
government:  (ii) streamlining  procedures  to 
accelerate  the  reception  of  funds  by  final 
(iii) ensuring  a  more 
beneficiaries;  and 
active participation of stakeholders in these 
programmes; 

income 

inequality 

•  To support upward social convergence, 
reducing 
and 
poverty by (i) addressing persistent labour 
market and educational gaps; (ii) improving 
for 
the  capacity  of  social 
redistribution,  in  particular  for  reducing 
child 
(iii) continuously 
and 
supporting  the  availability  of  social  and 
affordable housing as well as the adequacy 
of social assistance; 

transfers 

poverty; 

•  Improving  the  quality  of  jobs  in  the 
public  sector  by  reducing  the  high  share 
of  fixed-term  contracts,  particularly  in  the 
areas of health and education; 

18 

 
 
•  Addressing  water  scarcity  and  stress 
by:  (i) improving  coordination  among  all 
levels  of  government  and  administration; 
(ii) scaling  up 
solutions  on 
existing 
sustainable  water  management,  including 
in  agriculture;  and 
the 
development  of  nature-based  solutions; 
and 

(iii) supporting 

•  Accelerating  the  green  transition  by: 
(i)  supporting the shift towards sustainable 
modes  of  personal  transport  to  further 
reduce  emissions;  and  (ii) fighting  energy 
poverty  by  better  targeting  measures  to 
improve energy efficiency. 

19 

 
ANNEXES 

 
 
 
 
LIST OF ANNEXES 

Cross-cutting indicators 

A1.  Sustainable Development Goals 

A2.  Progress in the implementation of country-specific recommendations 

A3.  Recovery and resilience plan – implementation 

A4.  Other EU instruments for recovery and growth 

A5.  Resilience 

Environmental sustainability 

A6.  European Green Deal 

A7.  Energy transition and competitiveness 

A8.  Fair transition to climate neutrality 

Productivity 

A9.  Resource productivity, efficiency and circularity 

A10.  Digital transformation 

A11.  Innovation 

A12.  Industry and single market 

A13.  Public administration 

Fairness 

A14.  Employment, skills and social policy challenges in light of the European Pillar of Social Rights 

A15.  Education and training 

A16.  Health and health systems 

A17.  Economic and social performance at regional level 

Macroeconomic stability 

A18.  Key financial sector developments 

A19.  Taxation 

A20.  Table with economic and financial indicators 

A21.  Debt sustainability analysis 

LIST OF TABLES 

A2.1. 
A3.1. 

Summary table on 2019-2023 CSRs 
Key facts of the Spanish RRP 

23 

25 

25 

27 

30 

32 

35 

37 

37 

42 

48 

51 

51 

53 

56 

58 

62 

64 

64 

67 

69 

71 

75 

75 

77 

80 

81 

28 
30 

 
 
 
Support from EU instruments in Spain 
EU / euro area loans under the 2010-2018 financial assistance programmes 
Resilience indices across dimensions for Spain and the EU-27 
Indicators tracking progress on the European Green Deal from a macroeconomic perspective 
Key Energy Indicators 
Key indicators for a fair transition in Spain 
Circularity indicators 

A3.2.  Measures in Spain's RRP 
A4.1. 
A4.2. 
A5.1. 
A6.1. 
A7.1. 
A8.1. 
A9.1. 
A10.1.  Key Digital Decade targets monitored by the Digital Economy and Society Index indicators 
A11.1.  Key innovation indicators 
A12.1. 
Industry and the Single Market 
A13.1.  Public administration indicators 
A14.1.  Social Scoreboard for Spain 
A14.2.  Situation of Spain on 2030 employment, skills and poverty reduction targets 
A15.1.  EU-level targets and other contextual indicators under the European Education Area strategic framework 
A16.1.  Key health indicators 
A17.1.  Selected indicators at regional level in Spain 
A18.1.  Financial soundness indicators 
A19.1.  Taxation indicators 
A20.1.  Key economic and financial indicators 
A21.1.  Debt sustainability analysis - Spain 
A21.2.  Heat map of fiscal sustainability risks - Spain 

LIST OF GRAPHS 

Progress towards the SDGs in Spain 
Spain’s progress on the 2019-2023 CSRs (2024 European Semester) 
Total grants disbursed under the RRF 
Total loans disbursed under the RRF 
Distribution of cohesion policy funding across policy objectives in Spain 
Distribution of RRF funding by pillar in Spain 
Greenhouse gas emissions from the effort sharing sectors in Mt CO2eq, 2005-2022 
Livestock density and organic farming evolution 
Environmental investment gap, annual average 
Spain´s energy retail prices for households and industry & service 
Trends in electricity prices for non-household consumers (EU and foreign partners) 
Spain's installed renewable capacity (left) and electricity generation mix (right) 
Fair transition challenges in Spain 
Job vacancy rate in transforming sectors and mining and quarrying 
ETS emissions by sector since 2013 
Treatment of municipal waste 

A1.1. 
A2.1. 
A3.1. 
A3.2. 
A4.1. 
A4.2. 
A6.1. 
A6.2. 
A6.3. 
A7.1. 
A7.2. 
A7.3. 
A8.1. 
A8.2. 
A9.1. 
A9.2. 
A11.1.  R&D Intensity (GERD as % of GDP) 
A12.1.  Labour productivity per hour worked 
A12.2.  Labour productivity and unit labour costs at industry level 
A12.3.  Regulatory obstacles, 5-year average 
A13.1.  Government effectiveness 
A15.1.  Underachievement rates by field, PISA 2012, 2018 and 2022 
A16.1.  Life expectancy at birth, years 
A16.2.  Projected increase in public expenditure on healthcare over 2024-2070 
A18.1.  Evolution of credit activity 
A19.1.  Tax wedge for single and second earners as a % of total labour costs, 2023 
A19.2.  Tax revenues from different tax types, % of total revenue 

LIST OF MAPS 

A17.1.  GDP per capita (2022) in Spain, by NUTS2 region 

24 

31 
34 
34 
35 
41 
47 
49 
52 
55 
57 
61 
63 
64 
66 
68 
70 
72 
76 
79 
80 
83 
83 

25 
27 
31 
31 
33 
33 
37 
40 
40 
42 
43 
43 
48 
49 
51 
52 
56 
58 
58 
59 
62 
67 
69 
69 
75 
77 
78 

71 

 
 
 
CROSS-CUTTING INDICATORS 
ANNEX 1: SUSTAINABLE DEVELOPMENT GOALS 

r
b
a

of 

four 

dimensions 

This Annex assesses  Spain’s  progress on  the 
Sustainable Development Goals (SDGs) along 
the 
competitive 
sustainability.  The  17  SDGs  and  their  related 
indicators  provide  a  policy  framework  under  the 
UN’s  2030  Agenda  for  Sustainable  Development. 
The  aim  is  to  end  all  forms  of  poverty,  fight 
inequalities  and  tackle  climate  change  and  the 
environmental crisis, while ensuring that no one is 
left  behind.  The  EU  and  its  Member  States  are 
committed  to  this  historic  global  framework 
agreement  and  to  playing  an  active  role  in 
maximising  progress  on  the  SDGs.  The  graph 
below  is  based  on  the  EU  SDG  indicator  set 
developed  to monitor progress  on  the  SDGs  in  an 
EU context. 

to  environmental 

Spain  is  making  progress  in  most  indicators 
sustainability 
related 
(SDGs 2, 7, 9, 12,  13,  14)  but is  also moving 
away  from  its  targets  on  some  of  them 
(SDGs  6,  11,  15).  It  also  needs  to  catch  up 
with  the  EU  average  on  many  of  these 

Graph A1.1: Progress towards the SDGs in Spain 

(SDGs 2,  6,  9,  13,  14,  15).    Spain  has  made 
some  progress  on  energy indicators, including  the 
share  of  renewable  energy  in  gross  final  energy 
consumption (SDG 7; from 17% in 2016 to 22.1% 
in  2022,  close  to  the  EU  average  of  23%).  On 
SDG 6  (Clean  water  and  sanitation),  Spain  is 
moving away from the goal and needs to catch up 
with  the  EU  average,  whose  water  exploitation 
index  is  half  of  Spain’s.  Water  stress  and  scarcity 
also contribute to a deteriorating SDG 15 (Life on 
land)  where  Spain  is  moving  away  from  the 
targets  and  needs  to  catch  up  with  the  EU 
average.  The  drought 
impact  on  ecosystems 
increased  by  60%  between  2017  and  2022  and 
the share of the area at risk of severe soil erosion 
by  water  is  70%  larger  than  the  EU  average. 
Spain’s recovery and resilience plan (RRP) includes 
measures  to  address  some  of  the  water  related 
such  as  hydrological  planning, 
challenges, 
complemented by Cohesion Funds improving water 
supply.   

While  Spain 

is 

improving  on  all  SDG 

For detailed datasets on the various SDGs, see the annual Eurostat report ‘Sustainable development in the European Union’; for 
details on extensive country-specific data on the short-term progress of Member States: Key findings – Sustainable development 
indicators - Eurostat (europa.eu). A high status does not mean that a country is close to reaching a specific SDG, but signals that it 
is doing better than the EU on average. The progress score is an absolute measure based on the indicator trends over the past 5 
years. The calculation does not take into account any target values as most EU policy targets are only valid for the aggregate EU 
level. Depending on data availability for each goal, not all 17 SDGs are shown for each country. 
Source: Eurostat, latest update of 25 April 2024. Data refer mainly to the period 2017-2022 or 2018-2023. Data on SDGs may 
vary across the report and its annexes due to different cut-off dates. 

25 

 
 
 
 
 
 
 
indicators related to fairness (SDGs 1, 4, 5, 7, 
8,  10),  it  still  needs  to  catch  up  with the  EU 
average  on  some  of  them  (SDGs 1,  8,  10). 
Spain  has  improved  on  several  fairness-related 
indicators  such  as  people  at  risk  of  poverty  or 
social exclusion (SDG 1; 26% in 2022 vs 27.5% in 
2017),  the in-work  at-risk-of-poverty  rate  (SDG 1; 
11.7% in 2022 vs 13.1% in 2017), the long-term 
unemployment rate (SDG 8; 4.2% in 2023 vs 6.4% 
in  2018),  and  early  leavers  from  education  and 
training  (SDG 4;  13.9%  in  2022,  vs  18.3%  in 
2017).  However,  it  is  still  performing  worse  than 
the  EU  average  on  all  these  indicators,  and 
challenges  persist  on  poverty  reduction,  social 
exclusion,  long-term  unemployment  and  early 
school  leaving.  The  Spanish  RRP  and  Cohesion 
Funds  include  measures  to  address  challenges  in 
all these areas. On the negative side, the share of 
the Spanish population unable to keep their homes 
adequately  warm  increased  from  8%  in  2017  to 
17.1%  in  2022  and  is  twice  as  high  as  the  EU 
average  of  9.3%.  The  severe  housing  deprivation 
rate  (SDG 1)  increased,  from  1.5%  in  2015  to 
3.4% 
living 
conditions.  This  adds  to  more  acute  housing 
affordability  challenges  for  the  most  vulnerable, 
including  young  people,  low-income  households 
and  families  with  children.  The  Spanish  RRP 
contains  investments  and  reforms  to  increase 
social  and  affordable  energy-efficient  housing; 
these  are  complemented  by  Cohesion  Fund 
investments. 

in  2020,  which 

indicates  poorer 

is 

Spain 
improving  on  all  SDGs  on 
productivity  (SDGs 4,  8,  9)  but  still  needs  to 
catch  up  with  the  EU  average  in  some  of 
them  (SDGs  8  and  9).  It  has  a  high  share  of 
households  with  a  high-speed  internet  connection 
(SDG 9; 93.3% of households in 2022; EU average: 
73.4%). In addition, the percentage of adults with 
at least basic digital skills (SDG 4; 66.2% in 2023) 
is  above  the  EU  average  of  55.5%.  Despite  some 
improvements in the productivity indicators, Spain 
ranks below the EU average on most of them. On 
SDG 8  (Decent  work  and  economic  growth),  the 
percentage  of  young  people  not  in  employment, 
education  or  training  aged  15-29  remains  high 
(12.2%  in  2023)  and  is  above  the  EU  average 
(11.2% in 2023). In addition, the Spanish research 
and 
from 
system 
underinvestment,  as  shown  by  gross  domestic 
expenditure  on  R&D  (SDG 9;  1.44%  of  GDP  in 
2022  against  an  EU  average  of  2.23%)  and  R&D 
personnel (1.14% of the active population in 2022; 
EU  average:  1.53%,  see  Annexes  8  and  11).  The 

innovation 

suffers 

Spanish  RRP  includes  significant  reforms  and 
investments  to  boost  innovation  and  digital  skills; 
these  are  complemented  by  Cohesion  Fund 
investments. 

is 

(SDG 8;  EUR 24 890 

indicator 8 
improving  on  SDG 
Spain 
(Decent  work  and  economic  growth)  related 
to  macroeconomic  stability.  However,  it  still 
needs to catch up with the EU and is moving 
away  from  its  targets  on  SDG  16  (Peace, 
justice  and  strong  institutions).  Spain’s  real 
GDP  per  capita  has  been  recovering  after  the 
in  2018  vs 
pandemic 
EUR 25 210  in  2023)  but  remains  below  the  EU 
average  of  EUR 28 940.  Spain  has  a 
lower 
investment  share  of  GDP  (SDG 8)  than  the  EU 
average  (20.1%  of  GDP  vs  22.9%  for  the  EU  in 
2022). Spain faces challenges in particular on the 
sustainability  of  public  finances.  The  Spanish  RRP 
includes  several  measures  on  taxation  and  the 
effectiveness  of  public  spending.  These  are 
expected  to  improve  the  sustainability  of  public 
finances  and  support  substantial  additional 
investments,  which  will  increase  the  investment 
share  of  GDP.  On  SDG 16,  in  2023  34%  of  the 
Spanish population perceived the independence of 
the justice system as ‘very good’ and ‘fairly good’, 
compared  to  39% in  2018  and  an  EU  average  of 
53% in 2023. 

As the SDGs form an overarching framework, any 
links  to  relevant  SDGs  are  either  explained  or 
depicted with icons in the other annexes. 

26 

 
 
ANNEX 2: PROGRESS IN THE IMPLEMENTATION OF COUNTRY-SPECIFIC 
RECOMMENDATIONS 

Graph A2.1: Spain’s progress on the 2019-2023 
CSRs (2024 European Semester) 

Source: European Commission. 

The Commission has assessed the 2019-2023 
country-specific  recommendations  (CSRs) (6) 
addressed  to  Spain  as  part  of  the  European 
Semester. These recommendations concern a wide 
range of policy areas that are related to 14 of the 
17  Sustainable  Development  Goals  (SDGs)  (see 
Annexes  1  and  3). The  assessment  considers  the 
policy  action  taken  by  Spain  to  date (7)  and  the 
commitments  in  its  recovery  and  resilience  plan 
(RRP) (8).  At  this  stage  of  RRP  implementation, 
86%  of  the  CSRs  focusing  on  structural  issues 
from  2019-2023  have  recorded  at  least  ‘some 
progress’,  while  12%  recorded  ‘limited  progress’ 
and 2% ‘no progress’ (see Graph A2.1). As the RRP 
is  implemented  further,  considerable  progress  in 
addressing  structural  CSRs  is  expected  in  the 
coming years. 

(6)  2023 CSRs: EUR-Lex - 32023H0901(09) - EN - EUR-Lex 

(europa.eu) 

2022 CSRs: EUR-Lex - 32022H0901(09) - EN - EUR-Lex 
(europa.eu) 

      2021 CSRs: EUR-Lex - 32021H0729(09) - EN - EUR-Lex 

(europa.eu) 

      2020 CSRs: EUR-Lex - 32020H0826(09) - EN - EUR-Lex 

(europa.eu) 
2019 CSRs: EUR-Lex - 32019H0905(09) - EN - EUR-Lex 
(europa.eu) 

(7)  Including policy action reported in the Recovery and 

Resilience Facility (RRF) reporting (twice a year reporting on 
progress in implementing milestones and targets and 
resulting from the payment requests assessment). 

(8)  Member States were asked to effectively address in their 
RRPs all or a significant subset of the relevant country-
specific recommendations issued by the Council. The CSR 
assessment presented here considers the degree of 
implementation of the measures included in the RRP and of 
those carried out outside of the RRP at the time of 
assessment. Measures laid down in the Annex of the 
adopted Council Implementing Decision on approving the 
assessment of the RRP, which have not yet been adopted or 
implemented but considered credibly announced, in line with 
the CSR assessment methodology, warrant ‘limited progress’. 
Once implemented, these measures can lead to 
‘some/substantial progress or full implementation’, 
depending on their relevance. 

27 

No progress2%Limited progress12%Some progress63%Substantial progress17%Fully implemented6% 
 
 
 
 
 
 
          
 
 
 
Table A2.1:  Summary table on 2019-2023 CSRs 

(Continued on the next page) 

28 

SpainAssessment in May 2024*RRP coverage of CSRs until 2026**Revelant SDGs2019 CSR 1Some progressEnsure that the nominal growth rate of net primary government expenditure does not exceed 0.9 % in 2020, corresponding to an annual structural adjustment of 0.65 % of GDP.Not relevant anymoreNot applicableSDG 8, 16Take measures to strengthen the fiscal [framework]Some ProgressRelevant RRP measures being implemented as of 2021SDG 8, 16and public procurement frameworks at all levels of government.Limited ProgressRelevant RRP measures being implemented as of 2022SDG 9Preserve the sustainability of the pension system.Substantial ProgressRelevant RRP measures being implemented as of 2022SDG 8Usewindfallgainstoacceleratethereductionofthegeneralgovernment debt ratio.Not Assessed / No Input to AddNot applicableSDG 8, 162019 CSR 2Some progressEnsure that employment services have the capacity to provide effective supportSome ProgressRelevant RRP measures being implemented as of 2022SDG 8andensurethatsocialserviceshavethecapacitytoprovideeffective support.Some ProgressRelevant RRP measures being implemented as of 2022SDG 1, 2, 10Foster transitions towards open-ended contracts,Substantial ProgressRelevant RRP measures being implemented as of 2022SDG 8including by simplifying the system of hiring incentives.Some ProgressRelevant RRP measures being implemented as of 2023SDG 8Improve support for families,Some ProgressRelevant RRP measures being implemented as of 2021SDG 1, 2, 10reduce fragmentation of national unemployment assistanceSubstantial ProgressRelevant RRP measures being implemented as of 2024SDG 1, 2, 10and address coverage gaps in regional minimum income schemes.Substantial ProgressRelevant RRP measures being implemented as of 2021SDG 1, 2, 10Reduce early school leavingSome ProgressRelevant RRP measures being implemented as of 2021SDG 4and improve educational outcomes, taking into account regional disparities.Some ProgressRelevant RRP measures being implemented as of 2021SDG 4, 10, 11Increasecooperationbetweeneducationandbusinesseswithaviewtoimprovingtheprovisionoflabourmarketrelevantskillsandqualifications,Some ProgressRelevant RRP measures being implemented as of 2021SDG 4, 8, 9in particular for information and communication technologies.Some ProgressRelevant RRP measures being implemented as of 2021SDG 4, 92019 CSR 3Some progressFocus investment-related economic policy on fostering innovation,Some ProgressRelevant RRP measures being implemented as of 2021SDG 9, 10, 11resource efficiencySome ProgressRelevant RRP measures being implemented as of 2021SDG 6, 10, 11, 12, 15and energy efficiency,Some ProgressRelevant RRP measures being implemented as of 2021SDG 7, 10, 11upgrading rail freight infrastructureSome ProgressRelevant RRP measures being implemented as of 2022SDG 10, 11and extending electricity interconnections with the rest of the Union, taking into account regional disparities.Limited ProgressNot applicableSDG 7, 9, 10, 11, 13Enhancetheeffectivenessofpoliciessupportingresearchandinnovation.Some ProgressRelevant RRP measures being implemented as of 2021SDG 92019 CSR 4Some progressFurthertheimplementationoftheLawonMarketUnitybyensuringthat,atalllevelsofgovernment,rulesgoverningaccesstoandexerciseofeconomicactivities,inparticularforservices,areinlinewith the principles of that LawSome ProgressRelevant RRP measures being implemented as of 2022SDG 9and by improving cooperation between administrations.Some ProgressRelevant RRP measures being implemented as of 2021SDG 92020 CSR 1Some progressTakeallnecessarymeasures,inlinewiththegeneralescapeclauseoftheStabilityandGrowthPact,toeffectivelyaddresstheCOVID-19pandemic,sustaintheeconomyandsupporttheensuingrecovery.Wheneconomicconditionsallow,pursuefiscalpoliciesaimedatachievingprudentmedium-termfiscalpositionsandensuring debt sustainability, while enhancing investment. Not relevant anymoreNot applicableSDG 8, 16Strengthenthehealthsystem’sresilienceandcapacity,asregardshealth workers, critical medical products and infrastructure. Some ProgressRelevant RRP measures being implemented as of 2021SDG 32020 CSR 2Some progressSupport employment through arrangements to preserve jobs, Substantial ProgressRelevant RRP measures being implemented as of 2021SDG 8effective hiring incentives and Some ProgressRelevant RRP measures being implemented as of 2023SDG 8skills development. Some ProgressRelevant RRP measures being implemented as of 2021SDG 4Reinforce unemployment protection, in particular for atypical workers.Some ProgressRelevant RRP measures being implemented as of 2022SDG 1, 2, 10Improve coverage and adequacy of minimum income schemes and Some ProgressRelevant RRP measures being implemented as of 2021SDG 1, 2, 10family support, as well as Some ProgressRelevant RRP measures being implemented as of 2021SDG 1, 2, 10access to digital learning. Some ProgressRelevant RRP measures being implemented as of 2021SDG 42020 CSR 3Some progressEnsuretheeffectiveimplementationofmeasurestoprovideliquidityto SMEs and the selfemployed, including by avoiding late payments. Substantial ProgressRelevant RRP measures being implemented as of 2021SDG 8, 9Front-load mature public investment projects and Some ProgressRelevant RRP measures being implemented as of 2021SDG 8, 16promote private investment to foster the economic recovery. Some ProgressRelevant RRP measures being implemented as of 2021SDG 8, 9Focus investment on the green and digital transition, in particular on fostering research and innovation, Some ProgressRelevant RRP measures being implemented as of 2021SDG 9cleanandefficientproductionanduseofenergy,energyinfrastructure, Some ProgressRelevant RRP measures being implemented as of 2021SDG 7, 9, 13water and waste management and Some ProgressRelevant RRP measures being implemented as of 2021SDG 6, 12, 15sustainable transport.Some ProgressRelevant RRP measures being implemented as of 2021SDG 11 
 
 
 
  
 
Table (continued) 

Note: 
* See footnote (8)  
** RRP measures included in this table contribute to the implementation of CSRs. Nevertheless, additional measures outside the 
RRP may be necessary to fully implement CSRs and address their underlying challenges. Measures indicated as ‘being 
implemented’ are only those included in the RRF payment requests submitted and positively assessed by the European 
Commission. 
Source: European Commission. 

29 

2020 CSR 4Limited progressImprove coordination between different levels of government and Limited ProgressRelevant RRP measures being implemented as of 2021SDG 16strengthen the public procurement framework to support recovery in an efficient manner.Limited ProgressRelevant RRP measures being implemented as of 2022SDG 92021 CSR 1Not relevant anymoreIn2022,usetheRecoveryandResilienceFacilitytofinanceadditionalinvestmentinsupportoftherecoverywhilepursuingaprudent fiscal policy. Preserve nationally financed investment. Not relevant anymoreNot applicableSDG 8, 16Wheneconomicconditionsallow,pursueafiscalpolicyaimedatachievingprudentmedium-termfiscalpositionsandensuringfiscalsustainability in the medium term. Not relevant anymoreNot applicableSDG 8, 16Atthesametime,enhanceinvestmenttoboostgrowthpotential.Payparticularattentiontothecompositionofpublicfinances,onboththerevenueandexpendituresidesofthebudget,andtothequalityofbudgetarymeasuresinordertoensureasustainableandinclusiverecovery.Prioritisesustainableandgrowth-enhancinginvestment,inparticularinvestmentsupportingthegreenanddigitaltransition. Not relevant anymoreNot applicableSDG 8, 16Giveprioritytofiscalstructuralreformsthatwillhelpprovidefinancingforpublicpolicyprioritiesandcontributetothelong-termsustainabilityofpublicfinances,including,whererelevant,bystrengtheningthecoverage,adequacyandsustainabilityofhealthand social protection systems for all.Not relevant anymoreNot applicableSDG 8, 162022 CSR 1Substantial ProgressIn2023,ensureprudentfiscalpolicy,inparticularbylimitingthegrowthofnationallyfinancedprimarycurrentexpenditurebelowmedium-termpotentialoutputgrowth,takingintoaccountcontinuedtemporaryandtargetedsupporttohouseholdsandfirmsmostvulnerabletoenergypricehikesandtopeoplefleeingUkraine.Stand ready to adjust current spending to the evolving situation.Substantial ProgressNot applicableSDG 8, 16Expandpublicinvestmentforthegreenanddigitaltransitions,andforenergysecuritytakingintoaccounttheREPowerEUinitiative,includingbymakinguseoftheRecoveryandResilienceFacilityandother Union funds.Full ImplementationNot applicableSDG 8, 16Fortheperiodbeyond2023,pursueafiscalpolicyaimedatachievingprudentmedium-termfiscalpositionsandensuringcredibleandgradualdebtreductionandfiscalsustainabilityinthemediumtermthroughgradualconsolidation,investmentandreforms.Full ImplementationNot applicableSDG 8, 162022 CSR 2Proceedwiththeimplementationofitsrecoveryandresilienceplan,inlinewiththemilestonesandtargetsincludedintheCouncilImplementing Decision of 13 July 2021.Submitthe2021-2027cohesionpolicyprogrammingdocumentswithaviewtofinalisingthenegotiationswiththeCommissionandsubsequently starting their implementation.2022 CSR 3Some ProgressIncreaserecyclingratestomeetUniontargetsandpromotethecirculareconomybyenhancingcoordinationamongalllevelsofgovernmentandundertakingfurtherinvestmenttomeetseparatecollection of waste and recycling obligations,Some ProgressRelevant RRP measures being implemented as of 2022SDG 6, 10, 11, 12, 15as well as to enhance water reuse.Some ProgressRelevant RRP measures being implemented as of 2021SDG 6, 12, 152022 CSR 4Some ProgressReduce overall reliance on fossil fuels.Some ProgressRelevant RRP measures being implemented as of 2021SDG 7, 9, 13Acceleratethedeploymentofrenewableenergy,withafocusondecentralisedinstallationsandself-consumption,includingbyfurtherstreamlining permitting procedures and improving access to the grid.Substantial ProgressRelevant RRP measures being implemented as of 2021SDG 7, 8, 9, 13Supportcomplementaryinvestmentinstorage,networkinfrastructure,Some ProgressRelevant RRP measures being implemented as of 2021SDG 7, 9, 13electrification of buildingsLimited ProgressRelevant RRP measures planned as of 2023SDG 7and transport,Some ProgressRelevant RRP measures being implemented as of 2021SDG 11and renewable hydrogen.Substantial ProgressRelevant RRP measures being implemented as of 2022SDG 7, 9, 13Expand energy interconnection capacity.Limited ProgressRelevant RRP measures being implemented as of 2021SDG 7, 9, 13Increase the availability of energy-efficient social and affordable housing, including through renovation.Some ProgressRelevant RRP measures being implemented as of 2023SDG 1, 2, 7, 102023 CSR 1Some progressWind down the emergency energy support measures in force, using the related savings to reduce the government deficit, as soon as possible in 2023 and 2024. Should renewed energy price increases necessitate new or continued support measures, ensure that such support measures are targeted at protecting vulnerable households and firms, are fiscally affordable and preserve incentives for energy savings.Substantial ProgressNot applicableSDG 8, 16 Ensureprudentfiscalpolicy,inparticularbylimitingthenominalincreaseinnationallyfinancednetprimaryexpenditurein2024tonot more than 2,6 %.No ProgressNot applicableSDG 8, 16Preserve nationally financed public investment and ensure the effective absorption of grants under the Facility and of other Union funds, in particular to foster the green and digital transitions.Full ImplementationNot applicableSDG 8, 16 Fortheperiodbeyond2024,continuetopursueamedium-termfiscalstrategyofgradualandsustainableconsolidation,combinedwithinvestmentsandreformsconducivetohighersustainablegrowth, in order to achieve a prudent medium-term fiscal position.Full ImplementationNot applicableSDG 8, 162023 CSR 2Maintainthemomentuminthesteadyimplementationofitsrecoveryandresilienceplanand,followingtherecentsubmissionoftheaddendum,includingtheREPowerEUchapterandtheadditionalloanrequest,rapidlystarttheimplementationoftherelatedmeasures.Ensurecontinuedsufficientadministrativecapacityinviewoftheplannedincreaseinthesizeoftherecoveryandresilienceplan.Proceedwiththespeedyimplementationofcohesionpolicyprogrammes,inclosecomplementarityandsynergywiththerecovery and resilience plan.2023 CSR 3Some progressReduce reliance on fossil fuels.Some ProgressRelevant RRP measures being implemented as of 2021SDG 7, 9, 13Accelerate 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.Substantial ProgressRelevant RRP measures being implemented as of 2021SDG 7, 8, 9, 13investinginenergystorage,electricitytransmissionanddistribution,andSome ProgressRelevant RRP measures being implemented as of 2021SDG 7, 9, 13cross-border electricity interconnections.Limited progressRelevant RRP measures being implemented as of 2021SDG 7, 9, 13Increasetheavailabilityofsocialandaffordableenergy-efficienthousing, including through renovation,Some ProgressRelevant RRP measures being implemented as of 2023SDG 1 ,2, 7, 10accelerate the electrification of buildings andLimited progressRelevant RRP measures planned as of 2023SDG 7the penetration of electromobility.Some ProgressRelevant RRP measures being implemented as of 2021SDG 11Step up policy efforts aimed at the provision and acquisition of the skills needed for the green transition.Some ProgressRelevant RRP measures planned as of 2023SDG 4RRP implementation is monitored by assessing RRP payment requests and analysing reports published twice a year on the achievement of the milestones and targets. These are to be reflected in the country reports. Progress on the cohesion policy programming documents is monitored under the EU cohesion policy.RRP implementation is monitored through the assessment of RRP payment requests and analysis of the bi-annual reporting on the achievement of the milestones and targets, to be reflected in the country reports. Progress with the cohesion policy is monitored in the context of the Cohesion Policy of the European Union. 
 
  
 
ANNEX 3: RECOVERY AND RESILIENCE PLAN – IMPLEMENTATION 

This  Annex  provides  a  snapshot  of  Spain’s 
implementation of its recovery and resilience 
plan  (RRP),  past  the  mid-way  point  of  the 
Recovery  and  Resilience  Facility’s 
(RRF) 
lifetime.  The  RRF  has  proven  central  to  the  EU’s 
recovery  from  the  COVID-19  pandemic,  helping 
speed  up  the  twin  green  and  digital  transition, 
while  adapting  to  geopolitical  and  economic 
resilience 
developments, 
against  future  shocks.  The  RRF  is  also  helping 
implement the UN Sustainable Development Goals 
and 
country-specific 
recommendations (see Annex 2).    

strengthening 

address 

and 

the 

The  RRP  paves  the  way  for  disbursing  up  to 
EUR  79.85  billion  in  grants  and  EUR  83.2 
billion in loans under the RRF over the 2021-
2026  period,  representing  11.2%  of  Spain’s 
GDP (9). As of mid-May 2024, EUR 38.4 billion has 
been disbursed to Spain under the RRF, comprising 
EUR  38.1  billion  in  grants  and  EUR  340  million in 
loans.  

Spain still has EUR 124.6 billion available in 
grants  and  loans  from  the  RRF.  This  will  be 
disbursed  after  the  assessment  of  the  future 
fulfilment  of  the  remaining  474  milestones  and 
targets (10)  included  in  the  Council  Implementing 
Decision (11)  (CID),  ahead  of  the  2026  deadline 
established for the Facility.   

Spain’s  progress  in  implementing  its  plan  is 
recorded  in  the  Recovery  and  Resilience 
Scoreboard (12).  The 
scoreboard  gives  an 
overview  of  the  progress  made  in  implementing 
the  RRF  as  a  whole.  Graphs  A3.1  and  A3.2  show 
the  current  state  of  play  as  reflected  in  the 
scoreboard.  

Spain’s RRP includes a REPowerEU chapter to 
phase  out  its  dependency  on  Russian  fossil 

(9)  GDP information is based on 2023 data. Source: 

https://ec.europa.eu/economy_finance/recovery-and-
resilience-scoreboard/index.html?lang=en   

(10)  A milestone or target is satisfactorily fulfilled once a Member 
State has provided evidence to the Commission that it has 
reached the milestone or target and the Commission has 
assessed it positively in an implementing decision. 

(11)  https://data.consilium.europa.eu/doc/document/ST-10150-

2021-ADD-1-REV-2/en/pdf   

fuels,  diversify 
its  energy  supplies  and 
produce  more  clean  energy  in  the  coming 
years.  To  kick-start  the  REPowerEU  chapter’s 
implementation,  EUR  1  billion  was  disbursed  as 
pre-financing  on  1  February  2024.  This  helped 
like 
reforms 
launch 
streamlining 
permitting  procedures 
renewable  energy 
for 
projects. 

relevant 

The  plan  has  a  strong  focus  on  the  green 
transition, dedicating 39.9% of the available 
funds  to  measures  that  support  climate 
objectives  and  25.9%  of  its  total  allocation 
to support the digital transition. It also retains 
a  strong  social  dimension  with  social  protection 
measures,  especially  related  to  upskill  and  reskill 
workers. 

Table A3.1:  Key facts of the Spanish RRP 

Source: RRF Scoreboard 

timely 

its  RRP 

implementation  of 

With  three  payment  requests  completed, 
is 
Spain’s 
underway.  However, 
completion 
requires  increased  efforts.  The  Commission 
gave  a  positive  assessment  of  Spain’s  first  and 
second payment requests, taking into account the 
opinion of the Economic and Financial Committee. 
This  led  to  EUR  10  billion  being  disbursed  in 
financial  support  on  27  December  2021  and  EUR 
12  billion  on  29  July  2022 (13).  The  related  92 
milestones  and  targets  covered  reforms  and 
investments  such  as  reforms  of  tax  measures 
contributing to the ecological transition, and others 

(12)  https://ec.europa.eu/economy_finance/recovery-and-

resilience-scoreboard/country_overview.html 

(13)  When requested payments are disbursed, the pre-financing 
is cleared proportionally. The net amounts are quoted here.  

30 

Initial plan CID adoption date13 July 2021Scope Revised plan with REPowerEU chapterLast major revision17 October 2023Total allocation EUR 79.9 billion in grants and EUR 83.2 billion in loans (11.5% of 2023 GDP)Investments and reforms 142 investments and 111 reforms Total number of milestones and targets595Fulfilled milestones and targets121 (20.3% of total) 
 
 
 
   
 
 
 
the  areas  of  digitalisation,  healthcare, 
and 

labour  market, 

taxation, 

in 
education, 
sustainability.  

The most recent payment request, which the 
Commission  assessed  positively  on  17 
February  2023,  has  led  to  the  disbursement 
of  EUR  6  billion  on  31  March  2023.  The 
disbursement reflected the positive assessment of 
29  milestones  and  targets  covering  the  electric 
charging  infrastructure,  the  vocational  training 
system, renewable energy production, law against 
tax evasion and fraud, among others. 

Graph A3.1: Total grants disbursed under the RRF 

As  of  15  May  2024,  the  Commission  is 
assessing  Spain’s  fourth  payment  request. 
Table  A3.2  highlights  some  relevant  measures 
achieved  so 
that  will  be 
far,  and  some 
implemented before 2026 to keep making Spain’s 
economy  greener,  more  digital,  inclusive,  and 
resilient.  

Table A3.2:  Measures in Spain's RRP 

Source: FENIX 

Note:  This graph displays the amount of grants, including 
pre-financing, disbursed so far under the RRF. Grants are non-
repayable financial contributions. The total amount of grants 
given to each Member State is determined by an allocation 
key and the total estimated cost of the respective RRP. 
Source: RRF Scoreboard 

Graph A3.2: Total loans disbursed under the RRF 

Source: RRF Scoreboard 

31 

EUR 38.08billion (47.7%)Total allocation: EUR 79.854billionEUR 0.34billion (0.4%)Total allocation: EUR 83.16billionReforms and investments implemented• New education law• Simplification of employment contracts and modernisation of active labour market policies• Roll-out plan for recharging and boosting electric vehicle infrastructureUpcoming reforms and investments• Improvement of water and wastewater treatment infrastructures• Short-distance railway station improvement• Restoration of degraded coastal areas and ecosystems 
   
 
   
 
 
 
 
 
   
 
ANNEX 4: OTHER EU INSTRUMENTS FOR RECOVERY AND GROWTH 

to 

States. 

addition 

EU funding instruments provide considerable 
resources for recovery and growth to the EU 
Member 
the 
In 
EUR 163.0 billion  of  Recovery  and  Resilience 
Facility  (RRF)  funding  described  in  Annex  3,  EU 
cohesion  policy  funds (14)  provide  EUR 35.6 billion 
to  Spain  for  the  2021-2027  period (15).  Support 
from  these  two  instruments  combined  represents 
around  13.58%  of  the  country’s  2023  GDP, 
compared to an EU average of 5.38% of GDP (16). 
Cohesion  policy  supports  regional  development, 
economic,  social  and  territorial  convergence  and 
competitiveness  through  long-term  investment  in 
line  with  EU  priorities  and  with  national  and 
regional strategies. 

During  the  2014-2020  programming  period, 
cohesion  policy 
funds  boosted  Spain’s 
competitiveness, with  tangible achievements 
notably  in  research  and  innovation,  circular 
economy,  energy  efficiency  and  social 
inclusion.  By  the  end  of  the  eligibility  period  in 
December  2023,  2014-2020  cohesion  policy 
funds (17)  had  made  EUR 44.9 billion  available  to 
Spain (18),  of  which  EUR 25.3 billion  has  been 
disbursed  since  March  2020,  when  the  COVID-19 
pandemic  began (19).  The  achievements  of 
cohesion  policy  funds  over  the  programming 
period include support to about 90 0000 SMEs and 
mid-caps  so  far,  investments  in  research  and 
development, and action to promote big advances 
in  the  digitisation  of  both  businesses  and  public 
bodies.  Cohesion  policy  programmes  have  been 
key 
in  supporting  ambitious  waste  recycling 
objectives  and  in  improving  water  supply  already 

(14)  In 2021-2027, cohesion policy funds include the European 
Regional Development Fund, the European Social Fund Plus 
and the Just Transition Fund. 

(15)  European territorial cooperation (ETC) programmes are 
excluded from the figure. In 2021-2027, the total 
investment, including national financing, amounts to 
EUR  52.6 billion.  

(16)  RRF funding includes both grants and loans, where 

applicable. The EU average is calculated for cohesion policy 
funds excluding ETC programmes. GDP figures are based on 
Eurostat data for 2022. 

(17)  In 2014-2020, cohesion policy funds included the European 
Regional Development Fund, the European Social Fund and 
the Youth Employment Initiative. REACT-EU allocations are 
included but ETC programmes are excluded. 

(18)  In 2014-2020, the total investment, including national 

financing, amounted to EUR 57.3 billion. 

(19) Cut-off date: 14 May 2024. 

32 

the  country’s 

recovery  from 

for  more  almost  600  000 
inhabitants.  The 
programmes  have  also  helped  reduce  energy 
consumption 
in  public  and  private  buildings. 
Measures  under  REACT-EU  have  been  key  in 
supporting 
the 
COVID-19  pandemic  by  investing  (from  2020 
onwards)  in  health  equipment  and  infrastructure, 
vaccines,  education  infrastructure  and  equipment, 
digitalisation,  green  and  energy  projects,  and 
SMEs.  During  the  same  period,  almost  1.5  million 
people  benefited  from  social 
inclusion,  anti-
poverty  and  anti-discrimination  measures  under 
the  European  Social  Fund's  national  programme 
for  social  inclusion  and  social  economy.  These 
measures  targeted  vulnerable  groups,  such  as 
people with disabilities, migrants, or people at risk 
of exclusion. 

energy 

sources 

renewable 

In  the  current  programming  period  (2021-
2027),  cohesion  policy will  provide a  further 
boost  to  Spain’s  competitiveness,  to  the 
green  transition  and  to  social  cohesion, 
improving  the  living  and  working  conditions 
of  Spain’s  people.  In  2021-2027,  the  European 
Regional  Development  Fund  (ERDF)  will  boost  the 
digitalisation  of  the  economy,  with  a  particular 
focus  on  public  administration,  by  supporting  ICT 
solutions  and  e-services  with  thriving  innovative 
tools.  Additionally,  it  will  help  almost  3 000 
companies  cooperate  with  research  organisations, 
and  about  55 000  companies  will  receive  support 
to  improve  their  competitiveness.  A  significant 
amount of funding (EUR 3.2 billion) is dedicated to 
deploying 
and 
increasing  their  use,  with  a  particular  focus  on 
renewable  geothermal  and  solar  energy.  The  aim 
is  to  increase  their  use  by  3%  by  2030.  Around 
260 000  pupils  will  have  the  chance  to  learn  in 
new  or  renovated  school  buildings  thanks  to 
cohesion  policy  funding.  The  Just  Transition  Fund 
(JTF)  will 
economic 
foster 
diversification  and  job  creation  in  the  territories 
affected  by  the  closure  of  coal  mines  and  power 
plants, with a direct impact on an estimated 4 000 
jobs.  The  JTF  will  significantly  support  upskilling 
and reskilling initiatives and the social economy in 
these  areas.  The  European  Social  Fund  Plus  will 
dedicate  around  EUR 1.1 billion  to  developing 
formal  vocational  education  and  training  (VET), 
more  specifically  increasing  participation  in  dual 
VET  and  provision  of  guidance  in  VET  centres.  An 
additional  EUR 1.5 billion  will  be  allocated  to 
non-formal  vocational  training  for  employment. 
With  this  work,  cohesion  policy  substantially 
contributes  to  achieving  the  UN  Sustainable 

further 

help 

 
 
 
 
 
Development  Goals  (SDGs)  in  Spain,  in  particular 
SDG 9 (Industry, innovation, infrastructure), SDG 8 
(Decent  work  and  economic  growth)  and  SDG  7 
(Affordable and clean energy). 

Graph A4.1: Distribution of cohesion policy funding 
across policy objectives in Spain 

Graph A4.2: Distribution of RRF funding by pillar in 
Spain 

(1) Each RRP measure helps achieve the aims of two of the 
six policy pillars of the RRF. The primary contribution is shown 
in the outer circle while the secondary contribution is shown in 
the inner circle. Each contribution represents 100% of the RRF 
funds. Therefore, the total contribution to all pillars displayed 
on this chart amounts to 200% of the RRF funds allocated to 
Spain. 
Source: European Commission 

in  Spain  to  design  and 

The Technical Support Instrument (TSI) helps 
Spain  invest  in  its  public  administration  and 
create a better enabling environment for EU 
and  national  investment.  The  TSI  has  funded 
projects 
implement 
growth-enhancing 
reforms  since  2018.  The 
support provided in 2023 included action to design 
skills 
implement  a  higher  education 
and 
intelligence strategy, including support to design a 
microcredential  course  offering  based  on  labour-
market  needs;  develop  a  tailored  strategy  and 
centralised  IT  platform  for  the  integration  of 
non-EU  nationals  on  the  labour  market;  and 
develop  a  new  country-wide  catalogue  of 
e-government  services  at local  level.  The  TSI  also 
helps Spain to fulfil its communication obligations 
in  relation  to  the  RRP,  and  to  improve  the 
coordination among RRP implementing authorities, 
as well as the guidance provided to them. 

Spain  also  receives  funding  from  several 
other  EU  instruments,  including  those  listed 
in Table A4.1. For a more complete view of loans, 
see  Table  4.2  on  EU  funded  loans  along  with 
complementary  bilateral  Member  States-funded 
loans  given  to  Spain  in  the  context  of  its  past 
their 
financial  assistance  programme  and 
outstanding amounts. 

Source: European Commission 

Through combined action, cohesion policy and 
the recovery and resilience plan (RRP) have a 
mutually  reinforcing  impact  in  Spain.  For 
instance,  the  reform  of  the  Science  Law  included 
in the RRP is expected to have a positive impact on 
the implementation of EU programmes supporting 
research  and  innovation,  notably  the  ERDF  and 
Horizon Europe ones, by simplifying procedures for 
granting  aid.  In  terms  of  infrastructure,  both  the 
RRP  and  the  ERDF  envisage  investments  in  the 
roll-out  of  ultra-fast  broadband  access.  This  will 
be done in a staggered and coordinated way: ERDF 
co-financed  investments  will  follow  RRP  ones,  to 
achieve maximum coverage. In the field of energy 
efficiency renovations, the reforms included in the 
RRP  –  such  as  the  introduction  of  a  system  of 
renovation  offices  –  will  facilitate  investments 
financed  under  both  instruments,  which  have  a 
different  focus:  residential  housing  for  the  RRP 
and  infrastructure  and  public  buildings  for  the 
ERDF.  Investments  in  hydrogen  through  the  ERDF 
focus  on  the  experimentation  phase  and  the 
development  of  pilot  and  demonstration  projects. 
These  will  be  complementary  to  investments 
carried  out  under  the  RRP,  in  line  with  the 
hydrogen roadmap included in the RRP. Finally, the 
green  infrastructure,  connectivity  and  restoration 
strategy  included  in  the  RRP  sets  the  ground  for 
green  infrastructure  investments  supported  by 
both  the  RRP  and  the  ERDF.  The  contribution  of 
cohesion  policy  and  RRP  funding  by  policy 
objective is illustrated by Graphs A4.1 and A4.2. 

33 

PO1 Smarter EuropePO2 Greener EuropePO3 Connected EuropePO4 Social EuropePO5 Europe closer to citizensPO8 JTF specific objectiveGreen transitionDigital transformationSmart, sustainable andinclusive growthSocial & territorial cohesionHealth & resilienceNext generation 
   
   
 
Table A4.1:  Support from EU instruments in Spain 

(1) RRF implementation period is 2021-2026. 
(2) The public sector loan facility’s programming period is 2021-2025 and the amount reflects the national share in its grant 
component reserved until the end of the period.   
(3) Common agricultural policy programming periods are 2014-2022 and 2023-2027.   
(4) EMFF – European Maritime and Fisheries Fund, EMFAF – European Maritime, Fisheries and Aquaculture Fund. 
(5) Data on the Connecting Europe Facility covers transport and energy and has a cut-off date of 15 May 2024. 
(6) Data on Horizon Europe (2021-2027) has a cut-off date of 13 May 2024. 
(7) 2021-2027 data on the LIFE programme has a cut-off date of 15 May 2024. 
(8) The amount of the EU guarantee signed under the EFSI Infrastructure and Innovation Window was derived based on the 
signed amount of the operations and the average internal multiplier, as reported by the EIB (cut-off date is 31 December 2023). 
(9) The amount of the EU guarantee and of the volume of operations signed under InvestEU includes the EU compartment as well 
as the Member State compartments (cut-off date is 31 December 2023).   
(10) SURE - European instrument for temporary support to mitigate unemployment risks in an emergency. 
Source: European Commission 

Table A4.2:  EU / euro area loans under the 2010-2018 financial assistance programmes 

Data include upfront retained amounts (prepaid margin, service fee). The cut-off date is 15 May 2024. 
Source: European Commission 

34 

Amount 2021-2027 (EUR million)Cohesion policy35 561.9RRF grants (1)79 854.2Public sector loan facility (grant component) (2)65.9Common agricultural policy (3)31 509.0EMFF/EMFAF (4)1 120.4Connecting Europe Facility (5) 414.3Horizon 2020 / Horizon Europe (6)3 427.6LIFE programme (7) 210.9Volume of operations (EUR million)European Fund for Strategic Investment 2015-2020 (8)10 944.1InvestEU 2021-2027 (9)2 561.1PeriodTotal amount available (EUR million)Disbursed amount (EUR million)SURE (10)2020-202221 324.821 324.8RRF 2021-202683 160 340.059 900.03 964.4 656.5EU loans1 057.11 087.96 384.6 354.3EU guaranteesEU Guarantee (EUR million)EU grantsAmount 2014-2020 (EUR million)44 858.9--PeriodTotal amount disbursed (EUR billion)Outstanding amount (EUR billion)European Stability Mechanism2012-201341.316.4 
 
 
  
 
 
  
 
ANNEX 5: RESILIENCE 

Table A5.1:  Resilience indices across dimensions for Spain and the EU-27 

(1) The synthetic indices aggregate the relative resilience situation of countries across all considered indicators. For an indicator, 
each country’s relative situation in the latest available year is compared with the collection of values of that indicator for all 
Member States and all years in the reference period. 
Source: Resilience Dashboards - version spring 2024, data up to 2022 

(RDB) (20) 
resilience 

This  Annex  uses  the  Commission’s  resilience 
to  show  Spain’s 
dashboards 
relative 
and 
vulnerabilities (21)  that  may  be  of  relevance  for 
green 
societal, 
transformations,  and  for  dealing  with  future 
shocks and geopolitical challenges. (22) 

capacities 

economic, 

digital 

and 

According  to  the  set  of  resilience  indicators, 
Spain  has  a  medium  overall  vulnerability 
profile,  with  its  overall  resilience  capacities 
also  categorised  as  medium,  slightly  below 
the  EU  average.  Analysis  of  the  vulnerability 
indicators  shows  that  40%  of  them  are  medium-
low  or  low.  Conversely,  approximately  40%  of 
Spain’s capacity indicators are medium-high. 

(20)  Https://ec.europa.eu/info/strategy/strategic-

planning/strategic-foresight/2020-strategic-foresight-
report/resilience-dashboards_en. Resilience is defined as the 
ability not only to withstand and cope with challenges but 
also to undergo transitions, in a sustainable, fair, and 
democratic manner. 2020 Strategic Foresight Report: 
Charting the course towards a more resilient Europe 
(COM(2020) 493). 

(21)  Vulnerabilities describe features that can exacerbate the 

negative impact of crises and transitions, or obstacles that 
may hinder the achievement of long-term strategic goals, 
while capacities refer to enablers or abilities to cope with 
crises and structural changes and to manage transitions. 

(22)  This Annex is linked to Annex 1 on SDGs, Annex 6 on the 
green deal, Annex 8 on the fair transition to climate 
neutrality, Annex 9 on resource productivity, efficiency and 
circularity, Annex 10 on the digital transition and Annex 14 
on the European pillar of social rights. 

The 2023 RDB shows that Spain’s social and 
economic  vulnerability  and  capacity  metrics 
have  remained  stable,  at  medium-high  and 
medium,  respectively,  both  below  the  EU 
average.  Areas  that  give  cause  for  concern  are 
Spain’s  widening  gender  employment  gap,  the 
slightly  reduced  but  wide  academic  performance 
gap, explained by students' socio-economic status, 
and  an  old-age  dependency  ratio  projected  to  be 
high.  There have also been improvements though, 
such  as 
the  non-financial 
corporation  debt  to  GDP  ratio.  Among  Spain’s 
capacity  indicators,  the  impact  of  social  transfers 
on  poverty  reduction,  the  proportion  of  adults 
participating  in  learning  over  the  last  12  months, 
and  the  proportion  of  innovative  businesses,  all 
remain low. 

the  decrease 

in 

The 

the 

green 

dimension, 
increased  and 
stable. 

In 
Spain’s 
vulnerabilities  have 
its 
green 
remained 
capacities 
vulnerability  index  has  increased  from  medium-
low  to  medium.  The  main  reasons  for  this  are 
in  road  transport,  the 
higher  CO2  emissions 
increased  consumption  footprint  per  capita  and 
the  challenges  related  to  water  scarcity  and 
sustainable  water  management 
that  Spain 
continues to face, also attested by the high water 
exploitation  index.  Spain  remains  one  of  the 
countries  with  the  highest  number  of  fatalities 
from extreme climate events. 

In the digital dimension, Spain vulnerabilities 
are medium-low  and  its  capacities  high.  That 
said, Spain would do well to increase its relatively 

35 

ESESEU-272023 RDB2024 RDB2024 RDBHighMedium-highMediumMedium-lowLowHighMedium-highMediumMedium-lowLowCapacitiesGeopoliticalVulnerabilities0.590.680.41Capacities0.460.470.65DigitalVulnerabilities0.600.600.52Capacities0.830.820.65GreenVulnerabilities0.620.520.44Capacities0.620.610.70Social and economicVulnerabilities0.360.350.47Capacities0.600.520.67DimensionDistribution of indicators by vulnerabilities and capacitiesOverall resilienceVulnerabilities0.580.520.50Capacities0.590.580.67Vulnerabilities0%20%40%60%80%100%Vulnerabilities(60 indicators)Capacities(64 indicators) 
 
 
 
   
 
 
low  gross  value  added 
information  and 
communication  technology  (ICT),  and  to  further 
increase its number of Master’s ICT graduates. 

in 

Improvements  have  taken  place 
in  the 
geopolitical  dimension,  with  vulnerabilities 
going  from  medium  to  medium-low,  and 
capacities, at medium level, remaining stable. 
The  main  reasons  for  this  are  a  lower  net 
international 
investment  position  and  higher 
military  expenditures.  On  the  capacity  front, there 
has  been  an  increase  extra-EU  trade  openness 
ratio. 

36 

 
ENVIRONMENTAL SUSTAINABILITY 
ANNEX 6: EUROPEAN GREEN DEAL 

Spain  has  made  progress 
in  the  green 
transition,  but  more  action  is  needed  in 
several areas, for example to increase its target on 
improve 
energy  efficiency  for  2030  and  to 
sustainable  water  management.  This  Annex 
provides  a  snapshot  of  climate,  energy,  and 
environmental  aspects  of 
in 
Spain (23). 

transition 

the 

Spain’s  draft  updated  national  energy  and 
climate  plan  (NECP)  provides  a  wealth  of 
information  on  the  investment  needs  and 
funding  sources  to  achieve  its  2030  climate 
and  energy  targets.  It  includes  information  on 
the investment needs for the planned policies and 
measures  for  the  different  dimensions  of  the 
Energy  Union.  From  the  total  investment  needed, 
around 85 % of the investments would come from 
the  private  sector,  and  about  a  tenth  from  EU 
funding,  notably  the  Recovery  and  Resilience 
Facility.  However,  the  plan  lacks  sufficient  detail 
on  how  to  mobilise  the  private  funding  needed, 
particularly  for  the  measures  to  support  citizens 
and small businesses (24). 

Spain  is  projected  to  reach  its  2030  effort 
sharing  target  if  it  adopts  and  implements 
the  planned  additional  measures (25).  Spain’s 
2022  greenhouse  gas  emissions  from  these 
sectors  are  expected  to  come  in  at  19.7%  below 
2005 levels. Additional  policies planned in Spain’s 
draft updated NECP are projected to reduce these 
emissions  by  44.7%  by  2030  from  2005  levels. 
This  results  in  reductions  of  7  percentage  points 
beyond  Spain’s  effort  sharing  target  to  reduce  by 
37.7%. Current policies are projected to reduce its 

(23)  This Annex is complemented by Annex 7 on energy transition 

and competitiveness, Annex 8 on the fair transition to 
climate neutrality, Annex 9 on resource efficiency, circularity, 
and productivity, and relevant topics in other annexes to this 
country report. 

(24)  See the Commission’s (2023) assessment of the draft 

national energy and climate plan of Spain. 

(25)  The national greenhouse gas emission reduction target is 
laid down in Regulation (EU) 2023/857 (the Effort Sharing 
Regulation). The aim is to align action in the sectors 
concerned with the objective to reach the EU-level economy-
wide target of greenhouse gas reductions of at least 55% 
compared to 1990 levels. The target also applies to the 
sectors outside the current EU Emissions Trading System, 
notably buildings (heating and cooling), road transport, 
agriculture, waste, and small industry (known as the effort 
sharing sectors). 

emissions from the effort sharing sectors by 29% 
from 2005 levels by 2030 (26).  This highlights the 
importance  of  implementing  the  full  range  of 
policies and measures in the draft updated NECP. 

Graph A6.1: Greenhouse gas emissions from the 
effort sharing sectors in Mt CO2eq, 2005-2022 

Source: European Environment Agency 

The  ambition  of  Spain’s  target  for  energy 
efficiency  in  its  draft  updated  NECP is  less 
ambitious  than  required  under  the  Energy 
Efficiency  Directive (27).  Its  energy  efficiency 
contribution  of  96.7  Mtoe  in  primary  energy 
in  final  energy 
consumption  and  70.2  Mtoe 
consumption  for  2030  set  in  the  draft  updated 
NECP  are  significantly  less  ambitious  than  the 
contribution  required  under  the  Energy  Efficiency 
Directive  (EED),  by  18.2%  and  7.4%  respectively. 
Spain’s  renewable  energy  contribution  set  in  its 

(26)  The effort sharing emissions for 2022 are based on 
approximated inventory data. The final data will be 
established in 2027 after a comprehensive review. Spain’s 
draft updated NECP does not provide emissions projections 
for the effort sharing sectors with existing policies (WEM). 
That information is based on the latest data that had to be 
reported by 15 March 2023 under Article 18 of Regulation 
2018/1999 (the Governance Regulation). Projections on the 
impact of additional policies (‘with additional measures’, 
WAM) as planned in Spain’s draft updated NECP. 

(27)  The EU target set out in the revised Renewable Energy 

Directive is to have 42.5% of gross final energy consumption 
coming from renewable energy sources by 2030, with the 
aspiration to reach 45%. The formula in Annex I to Directive 
(EU) 2023/1791 sets the indicative national contribution for 
Spain at 81.8 Mtoe for primary energy consumption. The 
Commission communicated a corrected national contribution 
of 66.28 Mtoe in final energy consumption for 2030 in 
accordance with Article 4(5) of the Energy Efficiency 
Directive to increase the contribution towards the Union’s 
binding energy efficiency target. See the Commission 
Recommendation of 18 December 2023 to Spain.  

37 

05010015020025020052022MtCO2eWasteSmall industryAgricultureBuildings (under ESR)Domestic transport (excl. aviation) 
 
 
 
     
 
 
 
draft updated NECP is 47.9% by 2030, above the 
required contribution of 43%. 

Sustainable  transport  has  yet  to  take  off  in 
Spain (28).  Passenger  cars  are  used  for  86%  of 
distances travelled in Spain, and 93% of freight is 
transported by road. Rail provides only for 4% (EU: 
16%). Only 0.4% of Spain’s car fleet were battery 
electric  vehicles  in  2023,  and  Spain  has  about 
29 200  publicly  accessible  charging  points,  or  1 
for  every  8  e-vehicles  (above  the  EU  average  of 
1:10). Spain’s recovery and resilience plan aims to 
improve  rail  infrastructure,  create  low-emission 
zones  in  urban  areas,  fund  green  public  buses, 
install electric charging stations and develop urban 
public  transport.  Personal  transport  exacerbates 
problems with air quality and traffic congestion in 
the  major  metropolitan  areas  in  Spain,  leading  to 
health and economic costs. 

land  use, 

Spain’s  efforts  to  increase  carbon  removals 
from  the  atmosphere  fall  short  of  the  level 
of  ambition  needed  to  meet  its  2030  target 
for 
land-use  change  and  forestry 
(LULUCF).  Spain’s  land-use  sector  has  provided 
constant net carbon removals in recent years, with 
forests  playing  a  major  role.  To  meet  its  2030 
LULUCF  target,  additional  carbon  removals  of 
5 309 kt CO2eq  are  needed (29).  According  to  the 
latest projections for 2030, the volume of carbon 
removals is likely to fall short of the target (30). 

Spain  is  taking  action  to  build  resilience  to 
climate 
impacts,  with  major  challenges 
remaining  on  water  management  (see  further 
below).  Spain  is  one  of  the  EU  countries  most 
affected  by  droughts,  and  it  is  also  vulnerable  to 
wildfires and heatwaves. Power generation will be 
increasingly  affected  by  changes  to  rainfall 
patterns,  lower  flow  rates,  higher  frequency  and 
intensity 
higher  water 
of 
temperatures.  

droughts 

and 

The agricultural sector is not yet sufficiently 
prepared  for  the  impacts  of  climate  change. 
Unsustainable  levels  of  groundwater  abstraction 

coastal 

change-related 

have led to the salinification of groundwater in the 
south  of  Spain,  for  example  in  Almeria.  Critical 
infrastructure  in  coastal  areas  is  exposed  to 
climate 
phenomena. 
Spain's  natural  carbon  sinks  are  subject  to  many 
intensifying  climate-related  risks,  including  fast 
changes  to  ecosystem  conditions  that  may  have 
an  impact  on  their  capacity  to  remove  and  store 
carbon (see below). Spain has a relatively low level 
of  exposure  to  uninsured  economic  losses  caused 
by weather-related extreme events, with the public 
sector playing a role in national insurance and for 
including 
addressing 
through  the  Conscorcio  de  Compensación  de 
Seguros  initiative (31).  It  has  made  progress  in 
improving its capacity for adaptation, both on the 
legal  framework  and  implementation.  In  2021, 
Spain  published  its  climate  adaptation  plan  for 
2021-30 and incorporated adaptation elements in 
its draft updated NECP (32). 

climate-related 

losses 

Despite the progress that Spain has made in 
recent years, sustainable water management 
remains  a  major  environmental 
issue. 
Significant  challenges  remain  in  the  water  sector, 
especially  in  terms  of  water  governance,  water 
body  rehabilitation  and  water  efficiency.  Further 
infrastructure 
improve 
in  wastewater 
water  management,  such  as 
collection  and  treatment,  in  reducing  leaks  in  the 
networks and the general water supply, improving 
monitoring (quality and quantity), and investing in 
nature-based solutions, flood prevention and river 
restoration.  Spain  also  has  further  potential  in 
water reuse. These measures would also to better 
manage water scarcity and droughts. 

investment  would  help 

Water  efficiency  and  the  environmental 
status  of  water  bodies  can  be  improved. 
Large  areas  of  Spain  are  subject  to  water  stress. 
The water exploitation index plus (WEI+) was 8.1% 
in  2019  (above  the  EU  average,  3.6%)  and  the 
worst  seasonal  water  scarcity  conditions  were 
recorded at 47.2% in Q3 of 2019 (33). On average, 
between  2000  and  2020,  4.7%  of  land  in  Spain 
was affected by drought, rising to 9.3% in 2022. In 

(28)  Unless otherwise indicated, data in this section refer to 
2021. See European Commission, 2023, EU transport in 
figures, transport.ec.europa.eu. 

(31)  On the Consorcio de Compensación de Seguros, see 
informe_cc_activ_aseguradora_tcm30-517392.pdf. 

(32)  Also see the Commission’s 2023 assessment and 

(29)  National LULUCF targets of the Member States in line with 

recommendation on Spain’s progress on climate adaptation. 

Regulation (EU) 2023/839 

(30)  Projections submitted in Spain’s draft updated national 

energy and climate plan, 2023. 

(33)  WEI+ values above 20% are generally an index of water 

scarcity and values above 40% indicate that stress is severe 
and freshwater use unsuitable. 

38 

 
 
 
boasts a very rich biodiversity and contributes the 
largest  land  area  to  the  EU's  Natura  2000 
network,  covering  27.3%  of  its  land  (against  the 
EU average of 18.5%). Some designations are still 
pending for marine areas. The main challenge is to 
put  in  place  the  measures  needed  to  protect  and 
manage  the  Natura  2000  network  and to  provide 
sufficient 
financial 
resources.  Only  9%  of  habitats  and  19%  of 
species are in a good conservation status (38). The 
common  farmland  bird  index  increased  between 
2014 and 2017 to reach 77, but this is a 23-point 
decrease  since  the  reference  year  in  2000  (100). 
Biodiversity hubs in the south of Spain such as the 
wetlands in Doñana, Mar Menor and Las Tablas de 
Daimiel natural parks remained threatened. 

technical, 

human 

and 

Despite  positive  trends,  Spain  still  has 
potential  to  accelerate  the  transition  of  the 
agri-food  system  to  sustainable  practices. 
The  annual  output  of  Spain's  agricultural  sector 
was EUR 45.2 billion (39) in 2023. The country has 
the second-largest area of agricultural land in the 
EU  under  organic  farming,  reaching  10.8%  of 
utilised  agricultural  land  (UAA)  in  2021.  Further 
action would help  reach the goal  of at least 25% 
of the EU’s agricultural land under organic farming 
by  2030.  The  uptake  of  organic  products  is 
increasing  but  patterns  of  food  consumption  are 
not  yet  sustainable.  Organic  retail  sales  reached 
EUR 2.5 billion in 2021, a 35% increase in market 
share since 2016.  

Food waste is less of an issue in Spain than 
elsewhere in the EU, with 90 kg/person wasted a 
year, less than the EU average of 131 kg/person in 
2020.  The  composting  and  digestion  rate  of 
municipal  waste  was  83  kg/person  in  2021,  less 
than  the  EU-27  average  of  95  kg/person  but  an 
increase from 72 kg/person in 2016. 

2023,  droughts  exacerbated  again,  especially  in 
some  regions  such  as  Cataluña  and  Andalucía. 
Spain had the fifth largest irrigated area in Europe, 
accounting  for  13.2%  of  total  utilised  agricultural 
area,  and  water  abstraction  for  agricultural 
purposes accounted for 68.4% of the total volume 
of water abstracted in 2019. Increasing innovation 
in  this  domain,  for  example  by  crop  resilient 
harvesting, would help increase water efficiency. In 
2016, the efficient use of water resources can be 
measured  by  the  water  productivity  rate (34).  In 
2020,  Spain’s  economy  generated  EUR 45  per 
cubic  meter  of  water  abstracted,  among  the 
lowest water productivity rates in the EU. Based on 
the  second  River  Basin 
the 
reporting 
(RBMPs) (35),  57%  of  all 
Management  Plans 
surface  water  bodies  reached  good  ecological 
status and 88% achieved a good chemical status, 
among 
top-performing  countries.  Spain's 
marine  waters  have  not  yet  achieved  a  good 
environmental status as tracked by the descriptors 
used in the Marine Strategy Framework Directive. 

the 

in 

There  is  scope  to  improve  coordination  and 
cooperation  among  the  different  authorities 
working in the water sector. It is also essential 
to  ensure  that  the  current  water  legislation  is 
implemented and enforced properly. 

Improving  soil  health  would  help  ensure 
water  resilience.  Based  on  the  best  available 
information on soil health issues at Member State 
level  used  in  the  impact  assessment  for  the  Soil 
Monitoring Law (36),  36%  of  Spanish  soil  could be 
considered  as  unhealthy (37),  mainly  due  to  the 
loss  of  organic  carbon,  affecting  20%  of  land. 
Conservation  tillage  practices,  which  increase  soil 
organic  carbon,  covered  18%  of  tillable  area  in 
2016  in  Spain.  Healthier  soils  would  help  water 
retention and help Spain combat droughts. 

There  is  scope  to  improve  biodiversity  and 
nature  protection  and  restoration.  Spain 

(34)  Measured as GDP over total fresh surface water abstracted 

in cubic meters. 

(35)  Data from the 3rd RBMP is not available. 

(36)  SWD 417 final of 5.7.2023 - impact assessment for the 

Directive of the European Parliament and of the Council on 
Soil Monitoring and Resilience (Soil Monitoring Law), (see p. 
10, pp. 189-190, pp. 835-845). 

(37)  However, not all soil degradation processes could be 

quantified for all land uses. This number simply indicates an 
order of magnitude. 

(38)  Against the EU average of 15% and 28%. 

(39)  Production value at basic price (2015=100). 

39 

 
 
 
surface  water  monitoring  sites  were  reported  to 
the  Water 
have  pesticide 
Framework Directive’s thresholds. 

levels  exceeding 

the  main 

Spain  would  benefit  from  investing  more  in 
environmental 
addressing 
challenges.  Over  the  2014-2020  period,  the 
environmental  investment  gap  was  estimated  at 
EUR 11.5 billion per year, or 1% of GDP. According 
to  the  latest  estimates,  the  overall  environmental 
investment  needs  for  2021-2027  reach,  at  least 
EUR  27.1  billion  annually  while  the  financing 
baseline stands at EUR 15.3 billion, leaving a wider 
gap  compared  to  the  previous  financing  period, 
equivalent  to  EUR  11.7  billion.  The  annual 
investment  gap  for  pollution  prevention  and 
control increased to EUR 4.5 billion, while the one 
for sustainable water management now stands at 
EUR 2.2 billion. On the other hand, the annual gaps 
for  biodiversity  and  ecosystems,  and  circular 
economy  and  waste  decreased  to,  respectively, 
EUR 2.7 billion and EUR 2.2 billion. 

Graph A6.3: Environmental investment gap, annual 
average 

The numbers are computed by the European Commission 
based on the latest internal reports, Eurostat, EIB and national 
data sources. 
Source: European Commission 

Graph A6.2: Livestock density and organic farming 
evolution 

Livestock unit (LSU)/ha of UAA: it measures the stock of 
animals (cattle, sheep, goats, equidae, pigs, poultry and 
rabbits) converted in LSUs per hectare of UAA. 
Source: Eurostat 

livestock  density 

Spain’s livestock farming sector is becoming 
more  intensive.  The 
index 
increased  from  0.61%  to  0.70%  between  2010 
and 2020. In 2022, Spain had the highest livestock 
population  in  the  EU,  having  increased  between 
2010  and  2020.  At  the  same  time,  the  share  of 
extensive animal farming (40) over the total utilised 
agricultural  area  fell  from  36.2%  in  2013  to 
29.5% in 2016, above the EU average of 23.8%.  

Intensive  poultry  and  pig  farming  were  the 
sectors  that  put  the  highest  burden  on  the 
environment in terms of ammonia emissions into 
the air. The agricultural sector was responsible for 
generating  95.6%  of  all  ammonia  emissions, 
against the EU average of 90.7%.  

Intensive  agriculture  is  also  increasing  the 
risk  of  nitrate  pollution.  The  gross  nitrogen 
balance  on  agricultural  land  in  Spain  recorded  an 
average  surplus  of  49.3  kg/ha  per  year  in  2017 
and  has  been  increasing.  The  nitrate  content  in 
groundwater  greatly  exceeds  the  EU  average  at 
40.7  against  the  average  of  20.5  mg  nitrates/l. 
Between  2016-2019,  23%  of  groundwater 
monitoring  stations  reported  nitrate  levels  above 
the  maximum  of  50  mg/l.  The  gross  phosphorus 
balance  also  increased  to  8.3  kg/ha  in  2017.  The 
chemical  status  of  waterbodies  is  highly  affected 
by  pesticide  contamination.  In  2021,  17.9%  of 

(40)   Share of utilised agricultural area with livestock 
density below 1 livestock unit per hectare. 

40 

01202468101220162020% LSU per hectare% of total utilised agricultural areaLivestock density index Spain (% LSU per ha)Livestock density index EU-27 (% LSU per ha)Organic farming Spain (% of total utilised agricultural area)Organic farming EU-27 (% of total utilised agricultural area)3,1651,3002,2954,6063,8592,3312,2563,22201,0002,0003,0004,0005,000Pollution prevention &controlWater managementCircular economy andwasteBiodiversity andecosystemsmillion EUR2014-20202021-2027 
        
 
        
Table A6.1:  Indicators tracking progress on the European Green Deal from a macroeconomic perspective 

Sources:  (1)  Member  States’  emission  data  for  2019  and  2020  are  in  global  warming  potential  (GWP)  values  from  the  4th 
Assessment Report (AR4) of the Intergovernmental Panel on Climate Change (IPCC). Member States’ 2005 base year emissions 
under  Regulation  (EU)  2018/842,  emissions  data  for  2021  and  2022,  and  2030  projections  are  in  GWP  values  from  the  5th 
Assessment Report (AR5) of the IPCC. 2021 data are based on the final inventory reports, 2022 data are based on approximated 
inventory reports and European Environmental Agency’s calculation of effort sharing emissions. The final data for 2021 and 2022 
will  be  established  after  a  comprehensive  review  in  2027.  The  2030  target  is  in  percentage  change  of  the  2005  base  year 
emissions. Distance to target is the gap between the 2030 target and projected effort sharing emissions with existing measures 
(WEM) and with additional measures (WAM), in percentage change from the 2005 base year emissions. The measures included 
for  the  2030  emission  projections  reflect  the  state  of  play  as  reported  in  Member  States'  draft  updated  national  energy  and 
climate plans or, if unavailable, as reported by 15 March 2023 as per Regulation 2018/1999. (2) Net removals are expressed in 
negative figures, net emissions in positive figures. Reported data are from the 2024 greenhouse gas inventory submission. 2030 
value  of  net  greenhouse  gas  removals  as  in  Regulation  (EU)  2023/839  –  Annex  IIa.  (3)  The  2030  national  objectives  for 
renewable  energy  and  energy  efficiency  are  indicative  national  contributions,  in  line  with  Regulation  (EU)  2018/1999  (the 
Governance  Regulation),  the  EU-level  2030  renewable  energy  target  set  out  in  Directive  EU/2018/2001  amended  by  Directive 
EU/2023/2413 (the revised Renewable Energy Directive) – 42.5% of gross final energy consumption with the aspiration to reach 
45% –, and the formula in Annex I to Directive (EU) 2023/1791 (the Energy Efficiency Directive). (4) Passenger battery electric 
vehicles (BEV) and fuel cell electric vehicles (FCEV). (5) The climate protection gap refers to the share of non-insured economic 
losses caused by climate-related disasters, based on modelling of the risk from floods, wildfires, windstorms, and the insurance 
penetration rate. Scale: 0 (no protection gap) –4 (very high gap) (European Insurance and Occupational Pensions Authority, 2022). 
(6) Total water consumption in renewable freshwater resources available for a territory and period. (7) Material extractions for 
consumption and investment. (8) Years of potential life lost through premature death due to exposure to particulate matter with a 
diameter  of  less  than  2.5  micrometres.  (9)  Share  of  habitats  in  good  conservation  status  according  to  the  records  submitted 
under  Art.  17  of  the  Habitats  Directive  (Directive  92/43/EEC)  for  2013-2018.  (10)  Multi-species  index  measuring  changes  in 
population abundances of farmland bird species. (11) Source: annex 12 of the Commission’s proposal for a soil monitoring law, 
SWD (2023) 417 final. (12) Estimates of organic carbon content in arable land. 

41 

Target200520192020202120222030WEMWAMProgress to climate and energy policy targetsGreenhouse gas emission reductions in effort sharing sectors (1)Mt CO2eq, %, pp241,979.2-14%-22%-19%-20%-38%-87Net greenhouse gas removals from LULUCF (2)Kt CO2eq-46 020-46 988-46 475-47 516-47 417 -43,635n/an/aShare of energy from renewable sources (1) (3)%8%18%21%21%22%43%--Energy efficiency: primary energy consumption (3)Mtoe136.0120.6105.0111.5113.281.8Energy efficiency: final energy consumption (3)Mtoe98.186.573.880.381.266.3Projected20182019202020212022202120222030Green transition: mobility         Greenhouse gas emissions: road transportMt CO2e---83.386.2769.0786.654.4Share of zero-emission vehicles in new registrations (4)% 0.50.83.13.13.9912.1n/aNumber of publicly accessible AC/DC charging points --6030889422472299178446956n/aShare of electrified railways%63.7%64.0%64.6%64.1%-56.1%-n/aGreen transition: buildings         Greenhouse gas emissions: buildingsMt CO2e---38.836.1537.0486.725.1Final energy consumption in buildings2015=100102.8%100.0%97.3%100.2%98.3%104.0%104.0% Climate adaptation         Climate protection gap (5)score 1-4--0.91.21.11.51.5n/a20182019202020212022202020212022State of the environmentWater | Water exploitation index (WEI+) (1) (6)% of renewable freshwater6.78.1---3.6--Circular economy | Material footprint (7)tonnes per person10.89.89.79.89.314.214.814.9Pollution | Years of life lost due to air pollution by PM2.5 (8)per 100.000 inhabitants368369364340-545584-Biodiversity | Habitats in good conservation status (9)%8.914.7                       Common farmland bird index (10)2000=100-----78--Green transition: agri-food sectorOrganic farming% of total utilised agricultural area9.289.669.9810.79-9.1--Nitrates in groundwatermg NO3/litre-----20.42--Food waste per capitaKg per capita90--130131-Share of soil in poor health (11)%3641Soil organic matter in agricultural land (12)Mt per ha757----7,904--DistanceEU-27 
 
 
       
 
ANNEX 7: ENERGY TRANSITION AND COMPETITIVENESS 

This Annex (41) sets out Spain’s progress and 
in  accelerating  the  net-zero 
challenges 
energy  transition  while  bolstering  the  EU’s 
competitiveness 
energy 
sector (42). It considers measures and targets put 
forward in the draft updated National Energy and 
Climate Plans for 2030 (43). 

clean 

the 

in 

it 

result, 

has  markedly  accelerated 

the 
Spain 
installation  of  renewable  energy  capacity, 
particularly  solar  PV.  As  a 
is 
low  wholesale  electricity 
consistently  setting 
the 
capacity 
the 
prices,  with 
competitiveness  of  its  economy,  if  authorities 
manage  to  keep  developing  the  transmission  and 
distribution  grids  in  parallel.  With  the  support  of 
in 
recovery  and  resilience  funds 
energy  efficiency  have  accelerated,  but  similar 
rates of deployment are yet to come. 

investments 

to  boost 

Average household electricity and gas prices 
in  Spain  have  closely  tracked  wholesale 
market  prices,  due  to  specific  contractual 
arrangements.  Households  have  experienced 
marked increases and falls in their average energy 
prices  compared  to  the  average  EU,  also  with  a 
different timing, due to the close relationship with 
wholesale  market  prices  present  in  contractual 
arrangements.  For  instance,  average  household 
electricity price peak was 14% higher than the EU 
peak.  This  fell  18.0%  below  the  EU  in  the  second 
half  of  2023.  In  turn,  the  average  gas  household 
price peak was 33% higher than the EU peak, but 
was 10% lower than the EU average in the second 
half  of  2023.  The  strong  response  of  retail  to 
wholesale  market  prices  motivated  authorities  to 
adopt a number of policies. 

Spanish  authorities  have  applied  short  and 
medium term measures to protect consumers 
from highly volatile household energy prices. 

(41)  Complemented by Annex 6, as the European Green Deal 

focuses on the clean energy transition and by Annex 8 on the 
action taken to protect the most vulnerable groups, 
complementing ongoing efforts under the European Green 
Deal, REPowerEU and European Green Deal Industrial Plan. 

(42)  In line with the Green Deal Industrial Plan and the Net-Zero 

Industry Act 

(43)  Spain submitted its draft updated NECP in June 2023. The 
Commission issued an assessment and country-specific 
recommendations on 18 December 2023. Commission 
Recommendation, Assessment (SWD) and Factsheet of the 
draft updated National Energy and Climate Plan of Spain - 
European Commission (europa.eu) 

42 

Including the Iberian Mechanism, these resulted in 
a 40.5% year-on-year reduction in the energy bill 
of a typical consumer in 2023, compared to 2022. 
Also,  some  8.5  million  domestic  consumers 
(approximately a third of the total) are subscribed 
to  the  Voluntary  Price  for  the  Small  Consumer 
(PVPC)  scheme.  This  has  been  reformed  with  a 
long-term  price 
new  formula  to 
incorporate 
signals.  Vulnerable 
further 
targeted by additional retail price interventions.  

customers  were 

Graph A7.1: Spain´s energy retail prices for 
households and industry & service 

(1) For industry, consumption bands are I3 for gas and IC for 
electricity, which refer to medium-sized consumers and 
provide an insight into affordability 
(2) For households, the consumption bands are D2 for gas 
and DC for electricity 
(3) Industry prices are shown without VAT and other 
recoverable taxes/levies/fees as non-household consumers 
are usually able to recover VAT and some other taxes 
Source: Eurostat 

Consumers  with  a  PVPC  rate  are  able  to 
benefit  from  a  social  bonus.  In  2023,  this 
offered  discounts  of  up  to  40%  to  low-income 
households, 65% to vulnerable consumers, 80% to 
severely  vulnerable  consumers,  and  reaching 
100% to severely vulnerable consumers at risk of 
social  exclusion.  These  discounts  have  been 
extended  until  30  June  2024.  Similarly,  there  is 
the  thermal  social  bonus,  in  the  form  of  an 
economic transfer aimed at covering heating costs. 

have 

consumers 

In  relative  terms,  electricity  prices  for  non-
household 
increased 
significantly  compared  to  the  US  and  Japan 
up  until  the  second  half  of  2022.  However, 
they  have  since  registered  a  sharp  decline,  nearly 
equaling  the  levels  seen  in  the  US  and  Japan  by 
the  first  half  of  2023.  This  shift  indicates  a 

0.000.050.100.150.200.250.300.350.40€/KWhGas (industry & service) - ESGas (industry & service) - EUGas (households) - ESGas (households) - EUElectricity (industry & service) - ESElectricity (industry & service) - EUElectricity (households) - ESElectricity (households) - EU 
 
 
 
     
 
rebound 

potential 
international 
in 
competitiveness  of  energy-intensive  industries  in 
Spain. 

the 

Graph A7.2: Trends in electricity prices for non-
household consumers (EU and foreign partners) 

(1) For Eurostat data (EU and ES), the band consumption is ID 
referring to large-sized consumers with an annual 
consumption of between 2 000 MWh and 20 000 MWh, such 
as in electricity intensive manufacturing sectors, and gives an 
insight into international competitiveness 
(2) JP = Japan 
Source: Eurostat, IEA 

Fossil fuels continue to occupy a central role 
in  Spain’s  energy  system.  Net 
imports 
represented  70.1%  of  Spain’s  gross  available 
in  2021.  Spain  aims  to  reduce  this 
energy 
dependence ratio to 51% in 2030, as expressed in 
its  updated  draft  NECP,  notably  by  increasing 
renewable production and reducing demand. 

Spain  has  a  diversified  gas  supply  portfolio 
and  gas 
is  mostly  used  for  electricity 
production  and  industry.  Spain  has  the  largest 
regasification  capacity  in  Europe,  amounting  to 
61.9  bcm/year.  Also,  its  storage  capacity  (34.1 
TWh)  was  filled  to  87.2%  in  mid-January  2024. 
Regarding  diversification,  until  2021  Algeria  was 
Spain’s main gas supplier (43% share of total gas 
imports).  Now  it  sends  about  8bcm  via  LNG  and 
Medgaz.  Other  LNG  gas  imports  mostly  originate 
from  Nigeria,  the  US,  Russia  and  Qatar.  Spain 
operates four underground storage facilities with a 
total capacity of about 3.2 bcm, representing close 
to 10% of its total yearly demand.  Spain fulfilled 
its  gas  storage  obligations  last  winter,  reaching 
100.4%  by  1  November  2023,  and  ended  the 
winter season with a storage filled at 77.71% by 1 
April 2024. 

not exposed to gas shortages due to disruptions in 
Russian  flows.  In  addition,  Spain  managed  to  cut 
its  gas  demand  between  August  2022  and 
December 2023 by 12% compared to the average 
in  the  previous  five  years.  The  government  also 
approved an Energy Security Plan. 

Spain  is  in  line  to  reach  its  high  level  of 
ambition for renewable electricity generation 
by  2030  (81%  share).  Generation  for  clean 
energy  (i.e.  renewables  plus  nuclear)  already 
reached 75.1% of the total for 2023 (44) . The mix 
is expected to further change by fully phasing out 
coal,  reducing  nuclear  generation,  increasing  wind 
and solar power generation, backing them up with 
gas  during  the  transition  and  aiming  at  higher 
storage (22 GW) and self consumption (19 GW).  

No adequacy issues were recorded in summer 
2023,  according 
to  ENTSO-E.  Demand 
decreased  5%  in  July  2023  and  2%  in  August 
2023  (compared  to  the  same  months  in  2022), 
due 
to  consumption-reduction  measures  and 
increased  self-consumption.  No  adequacy  issues 
are  expected  either  for  winter  2023/24.  Hydro 
reserves were 11% higher in October 2023 than in 
October 2022.  

Installed renewable energy capacity in Spain 
surged by 8.5% in 2023, driven by a significant 
increase  in  solar  photovoltaics.  Total  renewable 
energy  capacity  in  Spain  stood  at  80.1  GW  in 
2023 (45).  

Graph A7.3: Spain's installed renewable capacity 
(left) and electricity generation mix (right) 

(1) "Other" includes solid biofuels, renewable municipal waste, 
liquid biofuels, biogas marine energy and solar thermal 
energy 
Source: IRENA, Ember 

Spain  has  limited  exposure  to  Russian  gas 
shortages. Having a diversified infrastructure and 
low dependence on Russian gas meant Spain was 

(44)  IRENA report 2023. 

(45)  IRENA report 2023. 

43 

050100150200250300Index ( 2018 S2 = 100)JPUKUSESEU 
  
 
 
The total wind capacity in Spain in 2023 was 
31.0  GW  (an  increase  of  3%),  virtually  all 
onshore  wind (46).  As  regards  solar  deployment, 
total  installed  capacity  in  2023  was  31.0  GW,  an 
increase  of  21.1% (47).  Finally,  with  regards  to 
offshore  and  marine  energy,  Spain  plans  to 
develop  3  GW  of  offshore  wind  by  2030 (48)  and 
40-60 MW of marine energy. This is above its non-
binding  agreement  pledged  in  the  2023  EU  Sea 
Basins agreements. 

at  distribution  level  (retail,  energy  communities 
and  large  self-consumers)  faces  challenges  to 
evacuate  production  and  further  cooperation 
between the  different levels  of  government  could 
help.  Spain’s  electricity  interconnection  ratio  was 
4.4%  of  installed  generation  capacity  in  2023. 
Work  on  new 
interconnections  with  Portugal 
(ongoing,  3  GW)  and  France  (both  ongoing  and 
planned,  8  GW)  is  expected  to  further  increase 
interconnection capacity. 

Spain  has  made  a  number  of  reforms  in  the 
context  of  REPowerEU  to  accelerate  the 
deployment  of  renewables.  In  2022,  Spain 
enacted  reforms  to  support  the  deployment  of 
self-consumption. In its draft updated NECP, Spain 
has committed to introducing single contact points 
to  assist  applicants 
the  whole  process, 
in 
increasing  the  qualifications  of  staff  in  charge  of 
granting  permits  and  developing  a  framework  to 
identify areas for renewable energy projects. Spain 
made  the  pipeline  for 
its  renewable  energy 
projects visible in 2020 by publishing a long-term 
schedule for auctions until 2025 (however, details 
concerning 
eligible 
technologies,  expected  capacity  and  budget  are 
not clear). 

frequency, 

timing, 

the 

Spain  has  doubled  its  biogas  production 
ambition  in  its  updated  National  Energy  and 
Climate  Plan  to  align  it  with  the  REPowerEU 
Plan (from 10.4 to 20 TWh/y). However, Spain has 
high  additional  potential  and  details  regarding 
biomethane  production  are  missing.  Reaching  4.1 
bcm/year  of  biomethane  production  by  2030 
would  allow  Spain  to  replace  approximately  13% 
of its current natural gas consumption. 

Spain  needs  to  invest  in  the  modernisation 
and  strengthening  of  its  electricity  grid,  to 
further 
integrate  renewable  energy  and 
contribute  to  security  of  supply.  Spain  has 
made strides to improve transmission grid access 
at  the  wholesale  level.  As  a  result,  if  approved, 
transmission  grid  permits  would  already  allow 
Spain  to  reach  its  2030  targets.  However,  access 

(46)  IRENA report 2023. 

(47)  IRENA report Renewable Energy Statistics 2023. The data 
might differ from the Eurostat data because a different 
methodology is used to calculate the capacity in AC and DC. 

Consumer  choice  is  actively  exercised  in  the 
electricity and gas markets. Switching rates for 
electricity  increased  by  approximately  3  pp  from 
2020 to 2022, to represent the highest in the EU 
in  2022  at  above  20%.  Regarding  Spain’s  efforts 
to  develop  an  enabling  framework  for  renewable 
energy  communities,  ACER-CEER  reports  average 
progress.  As  regards  comparison  tools,  electricity 
consumers  have  access  to  flexible  and  dynamic 
price contracts through smart meters. 

There is a growing number of prosumers and 
energy  communities.  The  favourable  regulatory 
framework and high and volatile wholesale energy 
prices,  helped  bring  total  installed  small-scale 
solar PV capacity to 5.7 GW in 2022 (49). According 
to  Spain,  as  of  31  December  2019  more  than 
99.6%  of  all  meters  with  power  of  up  to  15  kW 
had been replaced by smart meters.  

EU 

has 

transposed 

provisions 
Spain 
prosumers, 
the  2-km 
but 
supporting 
restriction 
limits  wider  energy  sharing, 
especially  in  an  energy  community  context. 
Significant  delays  and  administrative  complexity 
for  grid  access  and  connection  permitting  for 
installations above 15 kW are also reported.  

to  support 

A  framework  for  citizen  energy  communities 
is still progressing. With the transposition of the 
EU  provisions 
renewable  energy 
communities,  there  is  an  increasing  number  of 
energy communities currently operational in Spain. 
An advanced and elaborate support programme is 
set  out  under  its  national  recovery  and  resilience 
plan. 

Energy  efficiency  gains  slowed  in  Spain, 
although  there  is  still  untapped  potential  in 
energy efficiency. In 2022, Spain had a primary 

(48)  See the Commission’s assessment of the draft updated 

(49)  According to the Spanish Association of Photovoltaic Energy 

NECP. 

(UNEF). 

44 

 
 
 
to  2012. 

energy  consumption  of  113.2  Mtoe,  a  1.6% 
increase compared to 2021 and an 8.0% decrease 
compared 
It  had  a  final  energy 
consumption  of  81.2  Mtoe,  a  1.1%  increase 
compared to 2021 and a 2.8% decrease compared 
to 2012. By sectors, in 2022 the best results came 
from the industry sector which decreased its final 
energy consumption by 11.0% and the worst from 
the  transport  sector  which  increased  its  final 
energy consumption by 12.3%. 

Spain  has  implemented  energy  efficiency 
measures  with  the  support  of  several  EU 
funds.  Spain  is  gradually  increasing  its  still-low 
share  of  renewables  in  heating  and  cooling  (20% 
in  2022)  to  reach  its  2030  target  of  35%. 
However,  schemes  to  reduce  energy  consumption 
addressed  at  buildings,  industry  and  businesses, 
transport  and  agriculture  are  mostly  grant-based, 
with  high  aid  rates,  and  limited  use  of  financial 
instruments  and  combined  schemes.  The  decision 
to  set  up  a  financial  instruments  framework  in 
Spain’s  recovery  and  resilience  plan  (RRP),  with 
EUR  76  bn  earmarked  to  support  the  climate, 
energy, digital and social transitions, is expected to 
contribute 
towards  Spain’s  energy  efficiency 
objectives,  together  with  further  support  from  
ERDF funds. 

Spain needs to step up its efforts to achieve 
meaningful  contribution  to  its  Long-Term 
Renovation  Strategy.  Spain  expects  14%  of 
savings  in  building  energy  consumption  in  2030 
compared  to  2020.  However,  between  2020  and 
2022  final  energy  consumption  in  residential 
buildings rose by 3.1% (50). 

Spain  is  promoting  the  development  of  a 
Green  Energy  Corridor  connecting  Portugal, 
Spain  and  France  with  the  EU’s  renewable 
energy  network.  The  new  list  of  Projects  of 
Common  Interest  (PCI)  and  Projects  of  Mutual 
Interest  adopted  in  November  2023  includes  10 
PCIs  in  Spain  or  connecting  to  Spain  in  the 
hydrogen sector: three hydrogen network projects, 
five  electrolysers  and  two  hydrogen  storage 
facility.  The  RRP  may  result  in  up  to  1.4  GW  of 
authorised electrolyser capacity. 

(50)  Final energy consumption in households from Eurostat (data-
tables for December 2023), climate-corrected by the Joint 
Research Centre with reference period 2005-2022 (FEC 
climate-corrected = FEC/ (HDD/HDD reference period). 

45 

is  allocating 

Spain 
considerable  RRP 
resources to support clean energy technology 
value chains. It is deploying EUR 1bn to support 
the  net  zero  industry.  It  is  also  supporting  –  with 
more  than  EUR  3.5bn  –  the  renewable  hydrogen 
knowledge and value chain, including as part of EU 
value chains; its production and uptake; and its use 
to  decarbonise 
industry.  Cohesion  policy  will 
further build on RRP investment in R&I and large-
scale  investment,  to  scale  up  demonstration  and 
pioneer projects and accelerate the introduction of 
renewable  hydrogen.  Support  for  more  mature 
energy  sources  will  focus  on  increasing  the  share 
of  renewables  in  heating  and  cooling,  promoting 
self-  and  shared  consumption  and  increasing 
participation in energy communities. 

Spain  has  a  significant  presence  in  the wind 
supply  chain  and 
is  showing  positive 
developments  in  the  manufacturing  of  solar 
modules,  batteries and electrolysers.  Spain  is 
one of the few net exporters of wind components 
in  the  EU,  hosting  manufacturing  facilities  across 
the  entire  value  chain  and  spread  across  its 
territory  with,  for  example,  an  estimated  overall 
capacity of at least 500 offshore towers per year.  

units 

least 
have 

Regarding solar PV, Spain imports most of its 
three  module 
panels.  However,  at 
manufacturing 
estimated 
an 
manufacturing  capacity  of  nearly  500  MW  per 
year.  Additionally,  another  500  MW-module 
manufacturing  plant  is  nearing  completion,  with 
several  others  underway.  Spain  is  the  leading 
producer  of  inverters  in  the  EU,  with  several 
manufacturing  plants,  one  boasting  an  annual 
output 
capacity  of  30  GW.  On  battery 
manufacturing,  Spain  is  currently  engaged  in 
several projects to establish large-scale production 
plants  for  lithium-ion  batteries,  with  maximum 
capacities  ranging  from  10  to  40  GWh,  all  set  to 
be  fully  operational  between  2025  and  2030.  In 
2024,  a  500  MW  electrolyser  assembly  line  also 
came  online.  This  is  scalable  to  more  than  1  GW 
per year. 

Spain  has  increased  investment  in  research 
and  innovation  to  support  Energy  Union 
priorities. It is a moderate innovator, according to 
the  European  Innovation  Scoreboard  2023 (51). 
However,  its  overall  performance  gap  to  the  EU 

(51)  ec_rtd_eis-country-profile-es.pdf (europa.eu). 

 
 
 
average  has  shrunk  over  the  last  7  years  (see 
Annex  11).  Focusing  on  public  R&I  spending  for 
Energy  Union  priorities (52),  in  2021  this  reached 
EUR 617m. Half of it went to renewable fuels and 
bioenergy.  Other  relevant  areas  were  nuclear 
safety,  integrated  &  flexible  energy  system  and 
renewable  energy  technologies.  Private  R&I  in 
energy spending was EUR 298m in 2020, covering 
a  variety  of  areas.  Venture  capital  investment  in 
clean  energy  technology  start-ups  and  scale-ups 
are  showing  a  strong  increase  over  recent  years, 
soaring  sixfold  from  2019  to  2023,  to  reach  EUR 
567m.  Most  of  this  went  to  renewables.  The 
number  of  patent  families  filed  for  clean 
technologies  was  164 (53)  in  2019,  with  45% 
related  to  renewables,  one  fifth  each  to  efficient 
systems  and  sustainable  transport  and  14%  to 
represent  3.5  patent 
smart  systems.  These 
families  per  million 
inhabitants,  showing  a 
continuous drop over the past 10 years. 

(52)  Source: JRC SETIS (2023), 

https://setis.ec.europa.eu/publications/setis-research-and-
innovation-data_en. The figures do not include EU funding 

(53)  Ibidem 

46 

 
 
Table A7.1:  Key Energy Indicators 

(1) The ranking of the main suppliers is based on the latest available figures (for 2022) 
(2) Venture Capital investment includes Venture Capital deals (all stages), Small M&A deals and Private Equity (PE) growth deals 
(for companies that have previously been part of the portfolio of a VC investment firm or have received Angel or Seed funding) 
Source: Eurostat, Gas Infrastructure Europe, JRC elaboration based on PitchBook data (03/2024), JRC SETIS (2024) 

47 

20192020202120222019202020212022Import Dependency [%] 75.0%67.9%69.5%74.3%60.5%57.5%55.5%62.5%of Solid fossil fuels 89.5%54.8%105.7%144.8%43.3%35.8%37.3%45.8%of Oil and petroleum products 101.8%99.4%95.6%101.0%96.7%96.8%91.7%97.7%of Natural Gas 101.5%97.5%100.1%103.2%89.7%83.6%83.6%97.6%Dependency from Russian Fossil Fuels [%]of Natural Gas 8.5%10.4%8.7%12.6%39.7%41.3%41.1%21.0%of Crude Oil4.8%5.9%9.3%2.0%28.8%26.7%26.4%19.5%of Hard Coal32.6%55.0%29.6%16.1%43.5%49.1%47.4%21.5%2016201720182019202020212022Gas Consumption (in bcm)28.8                 31.1                 31.0                 35.4               31.9                 33.8               32.6               Gas Consumption year-on-year change [%]2.0%8.2%-0.6%14.4%-9.9%5.8%-3.4%Gas Imports - by type (in bcm)32.4                 34.6                 34.8                 37.2               32.5                 37.0               39.7               Gas imports - pipeline18.8                 18.3                 20.0                 15.8               12.1                 16.8               11.3               Gas imports - LNG13.616.414.921.420.420.228.4               Gas Imports - by main source supplier (in bcm) (1)United States0.1                   0.8                   0.3                   4.1                 5.1                   5.4                 11.5               Nigeria4.7                   4.4                   4.1                   4.3                 3.9                   4.2                 5.7                 Algeria18.4                 16.7                 17.9                 12.3               9.4                   15.8               9.4                 Russia-                   -                   0.9                   3.2                 3.4                   3.2                 5.0                 20192020202120222023LNG Terminals - storage capacity m3 LNGNumber of LNG Terminals6                      6                      6                      7                    7                   LNG Storage capacity (m3 LNG)3,308,670       3,308,670       3,316,500       3,316,500     3,177,000    Underground StorageNumber of storage facilities4                      4                      4                      4                    4                   Technical Capacity (bcm)2.9                   3.0                   3.1                   3.1                 3.2                   20162017201820192020202120222023Gross Electricity Production (GWh) (2)274,772          275,726          274,452          273,257        263,373          274,312        292,454        -              Combustible Fuels113,618       133,002       118,149       117,125     93,778         95,443       112,950     -              Nuclear58,633         58,039         55,766         58,349       58,299         56,564       58,590       -              Hydro39,865         21,070         36,803         26,874       33,998         32,847       22,102       -              Wind48,905         49,127         50,896         55,647       56,444         62,061       62,784       -              Solar13,643         14,397         12,744         15,103       20,667         27,098       35,723       Geothermal0000000-              Other Sources108               91                 94                 159             187               299             305             -              Gross Electricity Production [%]Combustible Fuels41.3%48.2%43.0%42.9%35.6%34.8%38.6%-              Nuclear21.3%21.0%20.3%21.4%22.1%20.6%20.0%-              Hydro14.5%7.6%13.4%9.8%12.9%12.0%7.6%-              Wind17.8%17.8%18.5%20.4%21.4%22.6%21.5%-              Solar5.0%5.2%4.6%5.5%7.8%9.9%12.2%-              Geothermal0.0%0.0%0.0%0.0%0.0%0.0%0.0%-              Other Sources0.0%0.0%0.0%0.1%0.1%0.1%0.1%-              Net Imports of Electricity (GWh)7,667               9,169               11,102            6,862             3,280               852                19,802-          -              As a % of electricity available for final consumption 3.2%3.7%4.5%2.8%1.4%0.4%-8.5%-              Electricity Interconnection [%]9.4%7.9%8.1%8.5%5.1%5.6%5.0%Share of renewable energy consumption - by sector [%]Electricity36.7%36.5%35.2%37.1%42.9%46.0%50.9%-              Heating/cooling15.9%16.2%16.1%17.2%18.0%17.4%20.0%-              Transport5.2%5.8%6.9%7.6%9.5%9.2%9.7%-              Overall17.0%17.1%17.0%17.9%21.2%20.7%22.1%-                 20192020202120222023VC investments in climate tech start-ups and scale-ups (EUR Mln)92.52           163.70         183.73         354.84          566.81            as a % of total VC investment (3) in Spain start-ups and scale-ups6.3%7.1%4.3%10.3%21.6%Research & Innovation spending in Energy Union R&i prioritesPublic R&I (EUR mln)98.9             316.1           617.4           -              -               Public R&I (% GDP)0.01%0.03%0.05%-              -               Private R&I (EUR mln)271.0           298.0           -               -              -               Private R&I (% GDP)0.02%0.03%-                   -                 -                   ELECTRICITY/ENERGYCLEAN ENERGYSpainEUENERGY DEPENDNCEDIVERSIFICATION OF GAS SUPPLIES 
 
   
 
ANNEX 8: FAIR TRANSITION TO CLIMATE NEUTRALITY 

This  Annex  monitors  Spain’s  progress  in 
ensuring  a  fair  transition  towards  climate 
neutrality  and  environmental  sustainability, 
particularly  for  workers  and  households  in 
vulnerable situations. Spain’s green economy is 
expanding. Between 2015 and 2021, total  jobs in 
the environmental goods and services sector grew 
by  40.9%  (to  around  505 000  jobs)  (EU:  18.2%), 
reaching  2.5%  of  total  employment  (EU:  2.7%). 
Between  2015  and  2022,  the  greenhouse  gas 
emission intensity of Spain’s workforce (see Graph 
A8.1  and  Table  A8.1)  declined  from  15.3  to  11.5 
tonnes  per  worker,  below  the  EU  average  of 
14.3 (54),  indicating  a  positive  trend  in  the  green 
transition.  Necessary  upskilling  and  reskilling  of 
workers in declining and transforming sectors has 
increased  to  some  extent,  contributing  to  a  fair 
green 
the  Council 
Recommendation  on  ensuring  a  fair  transition 
towards  climate  neutrality (55).  Under  Spain’s 
modified  recovery  and  resilience  plan  (RRP),  40% 
of funds (EUR 65 billion) are allocated to support a 
fair  green  transition,  of  which  EUR  380  million  is 
earmarked  for  measures  related  to  the  labour 
market  and  vocational  education  and  training 
(VET).  These  measures  complement  the  territorial 
just transition plans and actions supported by the 
European  Social  Fund  Plus  (ESF+)  the  European 
Regional Development Fund (ERDF), and the 2021-
2027 Just Transition Fund programmes. 

line  with 

transition 

in 

Employment in Spain’s sectors that are most 
affected  by  the  green  transition  remains 
stable  overall.  In  2023,  employment  in  Spain’s 
energy-intensive  industries  comprised  2.8%  of 
total  employment  (EU:  3.5%).  Employment  in 
mining  and  quarrying  has  fallen  by  7.1%  since 
2015 (to around 31 200 workers in 2023). This is 
happening  while  coal  and 
is 
declining,  especially  in  the  regions  of  Asturias, 
Aragón,  Castilla  y  León  and  Andalucía.  The  job 
vacancy  rate  in  construction  (see  Graph  A8.2),  a 
key sector for the green transition, is significantly 
lower  than  the  EU  average  (0.7%  vs  3.6%  in 
2023).  Nevertheless,  83%  of  small  and  medium-

lignite  mining 

(54)  Workforce-related calculations are based on the EU Labour 
Force Survey. Note, in the 2023 country report for Spain, 
such indicators were calculated based on the employment 
statistics in the national accounts. This may result in limited 
comparability across the two reports. 

(55)  The Council Recommendation of June 2022 (2022/C 

243/04) covers employment, skills, tax-benefit and social 
protection systems, essential services and housing. 

48 

that 

(ELA) (57), 

sized  enterprises  (SMEs)  in  the  sector  reported 
that  skills  shortages  are  holding  them  back  in 
general  business  activities (56).  According  to  the 
European  Labour  Authority 
labour 
shortages were reported in 2023 for a number of 
required  specific  skills  or 
occupations 
knowledge  for  the  green  transition (58),  including 
electrical line installers and repairers, and systems 
analysts.  More  than  EUR  32  million  of  Spain’s 
is  earmarked  to  promote  social 
ESF+  funds 
economy 
(e.g. 
entrepreneurship 
cooperatives and worker-owned companies), partly 
in the green economy. 

projects 

Graph A8.1: Fair transition challenges in Spain 

Source: Eurostat, EMPL-JRC GD-AMEDI/AMEDI+ and DISCO(H) 
projects (see Table AX.1). 

industries,  workers’  participation 

Upskilling  and  reskilling  in  declining  and 
transforming  sectors  increased.  In  energy-
intensive 
in 
education  and  training  increased  from  9.1%  in 
2015  to  12.8%  in  2023  (EU:  10.9%).  In  Spain, 
46% of the SMEs think that the skills required for 
greening  business  activities  are  becoming  more 
important  (EU:  42%) (56).  If  Spain  matches  its 
projected contribution to the EU’s 2030 renewable 
energy  target,    between  7 200  and  12  900 
additional  skilled  workers  will  be  needed  for  the 
deployment  of  wind  and  solar  energy,  which  may 
require  an  investment  in  skills  of  EUR  44.2-55.3 
million (59).  Under  the  RRP,  by  the  end  of  2025, 

(56)  Eurobarometer on skills shortages, recruitment, and retention 

strategies in small and medium-sized enterprises. 

(57)  Based on the European Labour Authority 2024 EURES Report 
on labour shortages and surpluses 2023, i.e., data submitted 
by the EURES National Coordination Offices.  

(58)  Skills and knowledge requirements are based on the 

European Skills Competences and Occupations (ESCO) 
taxonomy on skills for the green transition. 

(59)  EMPL-JRC AMEDI+ project. 

0.00.51.01.52.0Greenhouse gasemissions per workerEmployment inEnergy-IntensiveIndustriesEducation & trainingin Energy-IntensiveIndsutriesEnergy povertyTransport poverty(proxy)Carbon inequalityES Latest vs EU LatestEU LatestES 2015 vs EU Latest 
 
 
  
 
 
Table A8.1:  Key indicators for a fair transition in Spain 

Source: Eurostat (env_ac_ainah_r2, lfsa_egan2d, ilc_mdes01), EU Labour Force Survey (break in time series in 2021), EMPL-JRC 
GD-AMEDI/AMEDI+ and DISCO(H) projects. 

Spain will train more than 25 000 VET teachers to 
provide  skills for the digital,  green and productive 
transformation  to  825 000  people.  In  addition, 
EUR 35  million  of  Spain’s  ESF+  resources  will 
support 
training  for  young  people, 
prioritising the green and circular sectors. 

targeted 

Graph A8.2: Job vacancy rate in transforming 
sectors and mining and quarrying 

30.1% of the population at risk of poverty (AROP) 
and 19.3% of lower middle-income households in 
deciles 4-5 (vs EU averages of 20.1% and 11.6%, 
respectively). On the other hand, in January 2023, 
34.4%  (vs  37.1% 
in  the  EU)  of  the  AROP 
population spent a considerable proportion of their 
budget  (more  than  6%)  on  private  transport 
fuels  (61). The RRP and ERDF include measures to 
promote  the  renovation  of  residential  dwellings, 
achieve  significant  energy  savings,  generate 
employment, and support low-income households. 

B - Mining and quarrying 
C - Manufacturing 
D - Electricity, gas, steam and air conditioning supply 
E - Water supply; sewerage, waste management and 
remediation activities 
F - Construction 
H - Transportation and storage 
Source: Eurostat jvs_a_rate_r2. 

Energy  poverty  indicators  have  worsened 
significantly  in  Spain  in  recent  years.  The 
share  of  the  population  unable  to  keep  their 
homes  adequately  warm  increased  substantially 
recently,  from  7.5%  in  2019  to  17.1%  in  2022, 
almost  double  the  EU  average 
(9.3%)  and 
increasing  further  to  20.8%  in  2023 (60).  The 
indicator 
increased  by  2.9  percentage  points 
between  2021  and  2022  on  the  back  of  energy 
price  increases  due  to  supply  constraints  caused 
by  the  COVID-19  pandemic  and  Russia’s  war  of 
aggression against Ukraine, despite the emergency 
measures  implemented  in  Spain.  This  affected 

(60)  Energy poverty is a multi-dimensional concept. The indicator 
used focuses on an outcome of energy poverty. Further 
indicators are available at the Energy Poverty Advisory Hub. 

issue 

leading 

Consumption  footprint  inequality  remains  a 
critical 
to  environmental 
inequalities in Spain. . In 2021, the consumption 
footprint  for  20%  of  the  population  with  the 
highest  income  was  1.9  times  higher  than  the 
footprint of the poorest 20% (vs 1.8 in the EU) (62). 
For  both  groups,  the  consumption  footprint  is 
highest  for  food  and  mobility.  Although  the  2021 
average levels of air pollution in Spain were below 
the EU average (9.5 vs 11.4 µg/m3 PM2.5), 50% of 
the  population  were  living  in  regions  exposed  to 
critical levels of air pollution (63). This has led to a 
significant  impact  on  health,  affecting  vulnerable 
groups in particular, and around 14 100 premature 
deaths annually (64). 

Spain  has  implemented  a  comprehensive 
approach  towards  ensuring  a  fair  green 

(61)  Affordability of private transport fuels is one key dimension 

of transport poverty. The indicator has been developed in the 
context of the EMPL-JRC GD-AMEDI/AMEDI+ projects. 
Methodology explained in Economic and distributional effects 
of higher energy prices on households in the EU. 

(62)  Developed in the context of the EMPL-JRC DISCO(H) project. 
Methodology explained in Joint Research Centre, 2024. 
Carbon and environmental footprint inequality of household 
consumption in the EU. JRC137520. The EU average refers to 
EU27 without Italy (household income data not available for 
IT in the HBS) 

(63)  Two times higher than the recommendations in the WHO Air 

Quality Guidelines (annual exposure of 5µg/m3). 

(64)  EEA- Air Quality Health Risk Assessment 

49 

0.0%0.5%1.0%1.5%2.0%2.5%3.0%3.5%4.0%BCDEFHEU 2023ES 2023ES 2015IndicatorDescriptionES 2015ESEUGHG per workerGreenhouse gas emissions per worker – CO2 equivalent tonnes15.311.5 (2022)14.3 (2022)Employment EIIEmployment share in energy-intensive industries, including mining and quarrying (NACE B), chemicals (C20), minerals (C23), metals (C24) and automotive (C29)3.0%2.8% (2023)3.5% (2023)Education & training EIIAdult participation in education and training (last 4 weeks) in energy-intensive industries9.1%12.8% (2023)10.9% (2023)Energy povertyShare of the total population living in a household unable to keep its home adequately warm10.6%17.1% (2022)9.3% (2022)Transport poverty (proxy)Estimated share of the AROP population that spends over 6% of expenditure on fuels for personal transport29.6%34.4% (2023)37.1% (2023)Carbon inequalityRatio between the consumption footprint of the top 20% vs bottom 20% of the income distribution1.91.9 (2021)2.7 (2021) 
      
 
 
 
  
 
instrumented  by 

transition  in  certain  sectors  and  regions  in 
the  context  of  the  Council  Recommendation 
of June 2022, but challenges remain. Spain is 
implementing  a  national  Just  Transition  strategy, 
with  a  multilevel  and  participatory  governance 
framework 
Just 
Transition  Agreements.  The  Organic  Law  3/2022 
on  vocational  training 
in 
addressing  skills  shortages  as  there  is  a  rising 
demand for qualified jobs for the green transition. 
There  is  further  scope  to  complement  this  by 
means of active labour market policies, especially 
in those sectors most affected by climate change, 
such as tourism, agriculture and fisheries (65). 

is  a  positive  step 

regional 

(65)  Based on the monitoring review of the Council 

Recommendation of June 2022, which took place in October 
2023. 

50 

 
 
PRODUCTIVITY 
ANNEX 9: RESOURCE PRODUCTIVITY, EFFICIENCY AND CIRCULARITY 

The green transition of industry and the built 
environment,  in  particular  decarbonisation, 
resource  efficiency  and 
is 
essential to boost Spain’s competitiveness. In 
this 
regard,  priorities  for  Spain  are  waste 
management  and  the  use  of  circular  materials  in 
industry and construction (66). 

circularity, 

is 

The  pace  of  Spain’s  circular  economy 
transition 
insufficient  to  achieve  the 
Circular  Economy  Action  Plan  goals.  Spain’s 
material  footprint  decreased  from  11  tonnes  in 
2018  to  9.8  tonnes  per  capita  in  2022,  which  is 
below  the  EU  average.  However,  total  waste 
generation  increased  between  2014  and  2018 
before dropping to 2.2 tonnes per capita in 2020. 
In  2020,  Spain  adopted  a  comprehensive  circular 
economy  strategy,  España  Circular  2030,  which 
puts  forward  a  long-term  vision,  and  will  be 
implemented  through  successive  3-year  action 
plans for a complete transition by 2030. However, 
results  have  yet 
to  materialise,  and  more 
measures  might  be  necessary.  Spanish  regions 
have  been  active  in  pushing  forward  circular 
economy policies through regional plans, for which 
the  Basque  Country  set  a  successful  example. 
There  is  still  room  to  make  a  better  use  of  the 
circular  economy  transition’s  potential  and  drive 
the spanish economy’s decarbonisation. 

Graph A9.1: ETS emissions by sector since 2013 

Source: European Commission 

In  2023,  the  sectors  covered  by  the  EU 
Emissions  Trading  System  (ETS)  in  Spain (67) 
emitted  26%  less  greenhouse  gases  than  in 
2019.  In  2023,  about  39%  of  greenhouse  gases 

(66)  See also Annexes 6, 7 and 12. 

(67)  This analysis excludes air travel. For more details and the 
data sources, see Weitzel, M; van der Vorst, C. (2024), 
Uneven progress in reducing emissions in the EU ETS, JRC 
Science for policy brief, JRC138215, Joint Research Centre. 

emitted  by  Spain’s  ETS  installations  came  from 
power generation, less than the EU average (57%).  
Of  the  total  emissions  from  all  industry  sectors, 
28% came from cement and lime production, 26% 
from refineries, 13% from metals processing, 11% 
from  the  chemical  industry,  and  22%  from  other 
sectors (68).  Since  2019,  the  power  sector  has 
registered  a  higher  emissions  reduction (34%) (69) 
than  the  industry  sectors  (20%).  Since  2013, 
greenhouse  gas  emissions  have  declined  by  50% 
in  power  generation  and  by  18%  in  the  industry 
sectors.  Nearly  all  this  decline  in  the  industry 
sectors has occurred since 2019.  

industry 

is  progressing 

in 
The  Spanish 
making more efficient use of resources, even 
though  it  remains  exposed  to  supply  chain 
risks.  Since  2016,  household  goods  and 
appliances’  footprint  for  minerals,  metals  and 
fossil  resources’  consumption  decreased.  The 
circular material use rate increased between 2016 
and 2020, still below the EU average, but dropped 
in 2021. The material import dependence is stable 
since  2016.  In  2022,  42.8%  of  materials  used 
were  imported  (almost  double  the  EU  average  of 
22.4%).  By  contrast,  resource  productivity  has 
reaching  3.37  purchasing  power 
increased, 
standards  per  kilogram  in  2022,  versus  3.01  in 
2016.  On  the  2021  Eco-Innovation  Scoreboard, 
Spain  ranked  8th  among  EU  Member  States.  In 
2023,  the  country  totalled  364  EU  Ecolabel 
licences  and  13 729  EU  Ecolabel  products,  which 
makes it the fourth and second Member State for 
EU  Ecolabel  licences  and  products,  respectively. 
The  number  of  Ecolabels  has  steadily  grown,  but 
there  is  a  decreasing  trend  in  labelled  products. 
The  impact  of  particulate  matter  emissions  from 
industry  on  air  quality  is  higher  than  the  EU 
average.  The  PM10  grams  emitted  per  economic 
output 
from 
0.13 grams/EUR’10 in 2017 to 0.15 grams/EUR’10 
in  2021  (EU  average:  0.09 grams/EUR’10).  The 

(EUR’10) (70) 

increased 

(68)  Greenhouse gas emissions classified as coming from the 

‘other’ group came from many smaller installations. In 2022, 
no single installation was responsible for more than 3% of 
this group’s emissions. Most installations emitting more than 
0.1 Mt CO2eq in 2022 in this group belong to glass and 
ceramics, paper, or processed food manufacturing. 

(69)  This includes a steep decrease of 21% year-on-year in 2020, 

and a large rebound in 2022. 

(70)  In 2010 prices. 

51 

00.20.40.60.8102040608010012014020132014201520162017201820192020202120222023Emissions relative to 2013Mt CO2eCement & LimeChemicalsMetalsRefineriesPower generationOtherSpain (both axes) 
 
 
  
 
 
 
Table A9.1:  Circularity indicators 

Source: Eurostat, European Environment Agency 

Spanish National Energy and Climate Plan includes 
references to the circular economy. 

Graph A9.2: Treatment of municipal waste 

Source: Eurostat 

Spain’s  waste  generation  and  management 
shows  clear  room  for  improvement.  With  a 
municipal  waste  recycling rate  of  36.7%  in  2021, 
Spain missed the 2020 EU recycling target of 50% 
and  is  at  high  risk  of  missing  the  2025  EU 
municipal waste  recycling target  of 55%. Spain is 
still  far  from  reaching  the  2035  landfill  reduction 
target.  The  recycling  rate  of  plastic  packaging  is 
above  the  EU  average,  51.4%  versus  37.6%,  but 
the  overall  packaging  waste 
rate 
decreased  between  2016  and  2020,  from  70.3% 
to  68.3%.  Similarly,  less  electronic  waste  was 
recycled  in  2020  than  in  2016,  with  a  decrease 
from  87.8%  to  85.8%.  After  a  peak  in  2016,  the 

recycling 

number  of  patents  on  waste  and  recycling 
decreased  from  30  to  17  in  2019.  Spain  would 
benefit from stepping up its action to meet the EU 
recycling targets. Spain has approved Law 7/2022 
on  waste  and  contaminated  soils  for  a  circular 
economy.  However, 
the  2016-2022  national 
framework  plan  for  waste  management  (PEMAR) 
and  the  national  prevention  programme  have  yet 
to  be  adopted,  and  many 
regional  waste 
management plans have not been revised yet. 

The  built  environment  system  continues  to 
exacerbate  the  depletion  of  resources, 
despite recent improvements. In 2023, Spain’s 
building permits index stood at 235.8, showing an 
increase  in  construction  activities  compared  to 
2015 (71). In Spain, the non-residential floor area is 
growing  slower  than  the  EU  average.  In  2020,  it 
was  half  of  the  EU  average,  7.7 m2  versus 
15.3 m2  per  capita.  Efficiency  levels  in  public 
drinking water distribution systems raise concerns 
as  Spain  shows  leakages  accounting  for  30%  of 
total drinking water distributed. Spain is at risk of 
not  achieving 
the  8th  Environment  Action 
Programme objective of reaching no net land take 
by  2050.  Although  the  country’s  sealed  area  is 
the  EU  average,  soil  sealing 
smaller 
progressed  faster  than  the  EU  average  between 
2015 and 2018. There is also room for improving 
construction  and  demolition  waste  management. 
Waste generation per capita from construction and 
demolition  activities  was  half  the  EU  average  in 
2020, but the proportion of backfilling increased to 
60% between 2018 and 2022. 

than 

(71)  2015=100. 

52 

475472449467467010020030040050060020182019202020212022Kg per capita Waste treatment to be determinedLandfill/disposalTotal incineration (including energy recovery)Composting and digestionMaterial recyclingEU-27201820192020202120222023EU-27Latest yearIndustryResource productivity (purchasing power standard (PPS) per kilogram)2.93.12.72.93.4-2.52022Circular material use rate (%)8.99.09.26.97.1-11.52022Eco-innovation index (2013=100)107.7106.6108.6112.9116.4-121.52022Recycling of plastic packaging (%)50.751.551.456.4--40.72021Cost of air emissions from industry (EUR bn)36.426.023.421.3--352.72021Built environmentRecovery rate from construction and demolition waste (%)75.0-73.072.1--89.02020Soil sealing index (base year = 2006)104.9-----103.42018Non-residential floor area (m2 per capita)14.214.214.3---18.02020Waste backfilled (%)3.1-1.0-1.7-9.92020 
        
 
 
        
 
ANNEX 10: DIGITAL TRANSFORMATION 

Digital  transformation  is  key  to  ensuring  a 
resilient and competitive economy. In line with 
the  Digital  Decade  policy  programme,  particularly 
with its targets for digital transformation by 2030, 
this  Annex  describes  Spain’s  performance  on 
digital skills, digital infrastructure/connectivity and 
the digitalisation of businesses and public services. 
Where 
to  progress  on 
implementing Spain's recovery and resilience plan 
(RRP).  Spain  allocates  26%  of  its  total  Recovery 
and  Resilience  Facility  (RRF)  budget  to  digital 
(EUR 40.4 billion) (72). Under the cohesion policy, an 
additional  EUR 5.7 billion  (16%  of  the  country’s 
total  cohesion  policy  funding)  is  allocated  to  the 
country’s digital transformation (73). 

relevant, 

refers 

it 

The  Digital  Decade  policy  programme  sets 
out a pathway for the EU’s successful digital 
transformation  by  2030.  Spain's  national 
roadmap outlines the actions it intends to take to 
reach  the  objectives  and  targets  at  the  national 
level.  The  first  report  on  the  state  of  the  Digital 
Decade  highlighted  the  need  to  accelerate  and 
deepen the collective efforts to reach the EU-wide 
targets and objectives (74). Through this, a digitally 
skilled  population  increases  the  development  and 
adoption  of  digital 
to 
productivity  gains  and  new  business  models.  It 
also  leads  to  higher  inclusion  and  participation  in 
an  environment  increasingly  shaped  by  digital 
transformation (75). 
technologies, 
infrastructure  and  tools  play  an  important  role  in 
addressing 
the  current  structural  challenges, 
including  strategic  dependence  in  various  areas, 
such as cybersecurity and climate change. 

technologies 

leading 

Digital 

(72)  The share of financial allocations that contribute to digital 
objectives has been calculated using Annex VII to the 
Recovery and Resilience Facility Regulation. 

(73)  This amount includes all investment specifically aimed at or 
substantially contributing to digital transformation in the 
2021-2027 cohesion policy programming period. The source 
funds are the European Regional Development Fund, the 
Cohesion Fund, the European Social Fund Plus, and the Just 
Transition Fund. 

(74)  European Commission (2023): Report on the state of the 

Digital Decade 2023, 2023 Report on the state of the Digital 
Decade | Shaping Europe’s digital future (europa.eu). 

(75)  See for example OECD (2019): OECD Economic Outlook, 

Digitalisation and productivity: A story of complementarities, 
OECD Economic Outlook, Volume 2019 Issue 1 | OECD 
iLibrary (oecd-ilibrary.org) and OECD (2019): Going Digital: 
Shaping Policies, Improving Lives – Summary, 
https://www.oecd.org/digital/going-digital-synthesis-
summary.pdf. 

53 

Spain  still  has  room  for  improvement  in 
terms  of  fully  developing  ICT  employment 
because,  although  progressing, the  share  of  ICT 
specialists  in  total  employment  is  still  below  the 
EU average (4.4% vs 4.8%), with the proportion of 
female  ICT  specialists  (19.5%)  slightly  above  the 
EU average (19.4%). However, Spain performs well 
in the share of population (aged 16-74) having at 
least  basic  digital  skills  (66%  versus  56%  at  EU 
level). The same applies for advanced digital skills 
(39%  vs  27%).  The  country  has  already 
implemented  some  RRP  measures  focusing  on 
improving  digital  skills  for  citizens  and  SMEs  and 
increasing  the  number  of  ICT  specialists  (e.g.  the 
National  Digital  Competences  Plan).  Digital 
education  is  progressing  with  EU-supported  (RRF 
and  cohesion  funds)  programmes  aimed  at 
improving  teachers’  digital  skills  and  equipping 
schools  with  digital  devices  and  tools.  However, 
these measures have to be in place for some time 
until they reflect the expected effects. In any case, 
there  is  still  room  for  additional,  complementary 
to 
measures 
ICT 
specialists, 
incentive 
in  particular,  designing 
schemes to attract and retain them, and increasing 
the  visibility  and  readability  of  training  and 
reskilling options.  

the  number  of 

increase 

its 

Spain  is  one  of  the  EU’s  best  performers  in 
terms  of  digital  connectivity.  The  country 
performs  particularly  well  on  fixed  very  high 
capacity  network  and  fibre  to  the  premises 
coverage.  In  2023  as  part  of  its  RRP,  Spain 
improved 
capabilities  by 
cybersecurity 
increasing the capacity of its cybersecurity helpline 
and equipping it with more capacity to assist SMEs 
and  citizens  with  cybersecurity  incidents.  It  also 
deployed  several  actions 
field  of 
cybersecurity as part of the National Cybersecurity 
Industry  Support  programme  and  the  Global 
Security Innovation programme. 

the 

in 

of 

of 

The  moderate 
advanced 
level 
digitalisation  of  SMEs  also  poses  a  major 
challenge  for  Spain.  The  rate  of  SMEs  with  at 
least  a  basic  level  of  digital  intensity  is  slightly 
above  the  EU  average  (61%  versus  58%).  The 
artificial 
enterprises 
percentage 
intelligence,  cloud  or  data  analytics  is  slightly 
below  the  EU  average  (50%  versus  55%).  The 
investments  included  in  the  RRP  are  expected  to 
increase  the  share  of  firms  with  a  basic  level  of 
digital 
intensity  and  boost  the  adoption  of 
advanced digital  technologies. An example  of RRP 
measures already implemented is the adoption of 

using 

 
 
 
 
 
the  National  Artificial  Intelligence  Strategy.  The 
Digitalisation  of  SMEs  2021-2025  plan  provides 
voucher  programmes  (e.g.  Digital  Kit  programme) 
to  help  digitalise  SMEs  and  set  up  Digital 
Innovation Hubs. However, there is still a low level 
of  R&D  intensity  in  the  ICT  sector  in  Spain,  with 
R&D  expenditure  by  enterprises  far  below  the  EU 
average  (76). In 2022, 3.7% of enterprises in Spain 
reported  ICT  service  outages  due  to  cyberattacks 
(e.g. 
ransomware  attacks,  denial  of  service 
attacks). Over the same year, 18.7% of enterprises 
developed  or  reviewed  their  ICT  security  policy 
within the previous 12 months. 

to  update 

satisfactorily  on 

individual  needs.  Spain  has 

Spain  performs 
the 
digitalisation of public services. The country is 
at the forefront of digital public services in the EU 
and  continues 
its  services  and 
infrastructure, 
including  through  the  RRP,  to 
respond  to  the  rapid  development  of  technology 
recently 
and 
incorporated  digital  transformation  and  the  civil 
service  under  the  same  Ministry,  providing  for 
unique synergies which will allow maintaining and 
improving  the  Spanish  performance.  The  country 
continues with the implementation of the Spanish 
Public  Administration  Digitalisation  Plan  2021-
2025, including the ‘My Citizen Folder’ application, 
which  allows  citizens  to  easily  access  certain 
digital  public  services.  Spain  has  one  means  of 
electronic 
the  Spanish 
electronic  ID  card  (DNI),  notified  at  level  of 
assurance ‘high’ under the eIDAS Regulation. Spain 
scores  well  above  the  EU  average  on  access  to 
electronic health records, with a score of 85 out of 
100. 

identification 

(eID), 

(76)  2022 PREDICT Dataset: The EU ICT sector and its R&D 

performance. JRC Digital Economy. July 2022 

54 

 
 
Table A10.1:Key Digital Decade targets monitored by the Digital Economy and Society Index indicators 

(1) The 20 million target represents about 10% of total employment. 
(2) The fibre to the premises coverage indicator is included separately as its evolution will also be monitored separately and taken 
into consideration when interpreting VHCN coverage data in the Digital Decade. 
(3) At least 75% of EU enterprises have taken up one or more of the following, in line with their business operations: (i) cloud 
computing services; (ii) big data; (iii) artificial intelligence.   

Source: Digital Economy and Society Index 

55 

EUDigital Decade target by 2030 2022202320242024(EU)Digital skillsAt least basic digital skills64%64%66%56%80%% individuals20212021202320232030ICT specialists (1)4.1%4.3%4.4%4.8%20 million% individuals in employment aged 15-7420212022202320232030Digital infrastructure/connectivityFixed very high capacity network (VHCN) coverage94%93%96%79%100%% households20212022202320232030Fibre to the premises (FTTP) coverage (2)89%91%95%64%-% households2021202220232023Overall 5G coverage59%82%92%89%100%% populated areas20212022202320232030Digitalisation of businessesSMEs with at least a basic level of digital intensity60%NA61%58%90%% SMEs2021202320232030Data analyticsNANA38%33%-% enterprises20232023Cloud27%27%27%39%-% enterprises2021202120232023Artificial intelligence8%8%9%8%-% enterprises2021202120232023AI or cloud or data analytics (3)NANA50%55%75%% enterprises202320232030Digitalisation of public servicesDigital public services for citizens87868479100Score (0 to 100)20212022202320232030Digital public services for businesses94919185100Score (0 to 100)20212022202320232030Access to e-health recordsNA838579100Score (0 to 100)2022202320232030Spain 
 
     
 
 
ANNEX 11: INNOVATION 

This  Annex  provides  a  general  overview  of 
the  performance  of  Spain’s  research  and 
innovation  system,  which 
is  essential  for 
delivering  the  twin  transition  and  ensuring  long-
term competitiveness. 

(EIS  2023;  Table  A11.1).  The  amendment  of  the 
Science,  Technology  and  Innovation  Law  in  2022, 
which among its main objectives is the creation of 
an  attractive  and  stable  scientific  career,  has 
provided  support  through  scholarships  and  grants 
and may start yielding some initial results. 

Spain  is  a  ‘moderate  innovator’,  with  an 
innovation  performance  below 
the  EU 
average.  According  to  the  2023  edition  of  the 
European  Innovation  Scoreboard  (EIS) (77),  Spain’s 
overall  performance  has  slightly  improved  thanks 
to  progress  on  some  key  innovation  dimensions. 
However,  it  still  only  reaches  89.2%  of  the  EU 
In  addition,  significant 
average 
differences 
performance 
persist (78). 

for  2023. 
in 

regional 

R&I 

intensity (79)  has  not  progressed 
R&D 
significantly in recent years, reaching 1.44% 
in  2022,  far  below  the  European  average 
(2.23%) and the national target of 2.12% for 
2027 (80). Both public and private R&D investment 
have  stagnated  and  remain  well  below  the  EU 
average  (Graph  A11.1).  Public  expenditure in  R&D 
remains constant at 0.62% of GDP in 2022, lower 
than  the  EU  average  (0.73%)  and  far  from  its 
national  target  of  1.25%  by  2030 (81).  Similarly, 
private R&D expenditure reached a modest level of 
0.81% of GDP in 2022 but was well under the EU 
average (Table A11.1). 

These relatively low investment levels result 
in  Spain  remaining  below  the  EU  average  in 
scientific  and 
technological  production. 
Notwithstanding  these  weaknesses,  the  system 
has  shown  some  improvement  in  human  capital 
increased 
and  skills  availability,  as  well  as 
scientific  publications  and 
foreign  doctoral 
students, resulting in a more attractive R&I system 

(77)  2023 European Innovation Scoreboard (EIS), country profile: 
Spain. The EIS provides a comparative analysis of innovation 
performance in EU countries, including the relative strengths 
and weaknesses of their national innovation systems. 

(78)  2023 Regional Innovation Scoreboard. Regional profiles of 
Spain as part of EIS shows in regional R&I performance. 

(79)  Defined as (GERD) gross domestic expenditure on research 
and development (R&D) as a percentage of gross domestic 
product (GDP). 

(80)  Spanish science, technology and innovation strategy (EECTI 

2021-27). 

(81)  Spain sets a target for R&D public expenditure in 2030 to 
reach 1.25% of GDP. (Law Science, Technology and 
Innovation (Reform Act 17/2022 sept 2022). 

Graph A11.1: R&D Intensity (GERD as % of GDP) 

Source: Eurostat 

The  Spanish  recovery  and  resilience  plan 
(RRP),  with  investments  of  over  EUR 11 
billion in R&I, plus the additional funds in the 
addendum are positive steps to help address 
the  underinvestment.  Investment  in  boosting 
the system’s R&I capacity and targeted measures 
in  health,  energy  and  industrial  development  will 
be  an  important  step  forward  to  increase  the 
investments  in  the  country,  although  bridging  the 
current  gap  will  require  the  mobilisation  of  more 
resources  at  national  and  regional  levels  and  the 
preparation of a long-term investment strategy in 
the  aftermath  of  the  recovery  period  in  2026. 
Cohesion 
funds  are  also  addressing  R&I 
investment.  

by 

study 

the  OECD (82) 

Business-science 
linkages  are  weak  and 
knowledge  valorisation  is  limited,  so  these 
still  require  a  wide  range  of  actions.  An  in-
depth 
provided 
recommendations  on  improving  science-business 
linkages.  The  proposals  included  improving  the 
governance  of  public  research  organisations  to 
them  more  performance-based  and 
make 
increasing  the 
level  of  professionalisation  of 
knowledge  intermediation  services,  as  well  as 
actions  to  better  support  private  R&D  investment 

(82)  OECD STI Policy Papers. Improving knowledge Transfer and 
collaboration between science and business in Spain. (Dec. 
2021) as part of the project Roadmap to foster cooperation 
between universities, research and business in Spain co-
funded by the European Union via the Structural Reform 
Support Programme (REFORM/IM2020/004). 

56 

00.511.522.52010201520182019202020212022EUES 
 
 
  
 
 
Table A11.1:Key innovation indicators 

(1) EU average for the last available year or the year with the largest number of country data. 
Source: Eurostat, OECD, DG JRC, Science-Metrix (Scopus database and EPO Database), Invest EU 

In  2022, 

overall. 
the  Spanish  Government 
approved  a  follow-up  plan,  but  some  measures 
still  need  to be  fully implemented (83).  The  results 
of these measures are yet to be seen despite the 
slight  positive  trend  for  international  scientific 
public-private  co-publications  in  the  past  year 
(Table A11.1). The reforms in the Spanish RRP aim 
to  support  private  innovation  and  strengthen 
knowledge  transfer  and  improve  the  framework 
conditions. 

of 

R&I 

policy 

The  governance  of  R&I  policies  continues  to 
require more coordination and remains weak. 
and 
design 
Coordination 
implementation 
improved,  while 
monitoring  and  evaluating  R&I  policies  remains 
weak  and  deficient.  The  Spanish  R&I  system  has 
characterised  by  a  dual 
historically  been 
governance,  with  policy  responsibilities  and  roles 
for  both  the  central  government  and  the  regions. 

has 

not 

(83)  The knowledge transfer and collaboration plan includes 
measures that will be implemented between 2023 and 
2025 (December 2022). 

for 

burdens 

arrangement 

administrative 

However,  the  fragmentation  and  overlaps  of  R&I 
initiatives  persist,  resulting  in  heavy  information 
and 
R&I 
stakeholders (84).  Coordination  in  this  multilayer 
governance 
very 
limited and  partial (85).  While  the  complementary 
research  and  development  plans  in  the  RRP 
between  the  central  and  regional  governments 
were  included  as  reforms  and  investments  to 
between 
facilitate 
administrations  for  R&I,  the  mid  to  long-term 
results of these changes remain to be seen. 

collaboration 

closer 

been 

has 

(84)  OECD STI Policy Papers. Improving knowledge transfer and 
collaboration between science and business in Spain (Dec. 
2021) as part of the project Roadmap to foster cooperation 
between universities, research and business in Spain co-
funded by the European Union via the Structural Reform 
Support Programme (REFORM/IM2020/004). 

(85)  Europeanisation of Public Policies in Spain (2022) and 

Informe Fundación CYD (2022). 

57 

EUaverage (1)R&D intensity (GERD as % of GDP)1.361.221.411.411.442.24Public expenditure on R&D as % of GDP0.660.580.620.620.620.73Business enterprise expenditure on R&D (BERD) as % of GDP0.700.640.780.790.811.48Scientific publications of the country within the top 10% most cited publications worldwide as % of total publications of the country 9.49.28.98::9.6Patent applications filed under Patent Cooperation Treaty per billion GDP (in PPS)1.71.51.6::3.4Public-private scientific co-publications as % of total number of publications5.266.36.66.87.6Public expenditure on R&D financed by business enterprise (national) as % of GDP0.0500.0340.0390.040:0.054New graduates in science & engineering per thousand pop. aged 25-3411.115.915.617.0:16.9Total public sector support for BERD as % of GDP0.1560.1160.2320.246:0.204R&D tax incentives: foregone revenues as % of GDP0.0270.0290.1290.146:0.104Share of environment-related patents in total patent applications filed under the Patent Cooperation Treaty (%)16.214.013.0::14.7Venture capital (market statistics) as % of GDP0.0210.0280.0530.0760.0910.085Employment share of high growth enterprises measured in employment (%) 14.79:15.42:12.512022Spain2010201520202021Finance for innovation and economic renewalKey indicators Quality of the R&I systemAcademia-business cooperationHuman capital and skills availabilityPublic support for business enterprise expenditure on R&D (BERD)Green innovation  
 
 
 
   
 
ANNEX 12: INDUSTRY AND SINGLE MARKET 

Graph A12.2: Labour productivity and unit labour 
costs at industry level 

Labour  productivity  performance 
is  an 
endemic  weakness  in  the  Spanish  economy. 
There  is  a  significant  gap  between  Spain’s  labour 
productivity  and  that  of  its  peers  and  the  euro 
area.  Since  2005,  labour  productivity  per  hour 
worked  in  PPS  has  not  caught  up  with  the  EU 
average.  While  the  gap  has  significantly  widened 
after  2014, 
it 
experienced  a  rebound,  countering  the  underlying 
negative  trend  and  reaching  95.4%  97%  of  EU 
average., (86). To improve productivity performance, 
Spain has begun preparations for establishing the 
National Productivity Board. 

last  couple  of  years 

in  the 

Graph A12.1: Labour productivity per hour worked 

Source: Eurostat 

Improving  the  functioning  of  the  Spanish 
internal market remains a challenge. In 2013, 
the  Law  on  Market  Unity  was  adopted  to  support 
the  principles  of  the  internal  market.  Despite  the 
measures  taken,  persistent  fragmentation  exists, 
mainly due to regulatory obstacles that hinder the 
free  circulation  of  goods  and  services  across  the 
country.  A  more  robust  domestic  internal  market 
has  the  potential  to  improve  the  quality  of 
products  and  services, 
lowering  prices  and 
increasing resilience. The Law on Market Unity has 
been  amended  by  the  Law  on  Business  Creation 
and Growth as part of the RRP. It is expected that 
this law will contribute to a more efficient internal 
market  in  Spain.  In  addition,  promoting  better 
coordination  among  regions 
identified  as 
another  crucial  factor  in  overcoming  the  current 
challenges for a more integrated internal market.  

is 

Strengthening  the  enforcement  of  single 
is  essential  for  achieving 
market  tools 
greater integration within the single market. 
In  2023,  Spain’s  overall  performance  in  intra-EU 
imports and exports, as well as integration into EU 
value  chains  for  goods  and  services,  remained 
modest,  lagging  its  peers  and  the  EU  average 
(20.8  %  vs  42.9  %).  In  2023,  the  percentage  of 
non-transposed  EU  directives  in  Spain  was  higher 
than the EU average (1.3% vs 0.7%). Furthermore, 
Spain  had 
the  highest  number  of  pending 
infringements  in  the  EU  in  2023,  almost  double 
the  EU  average  (44  vs  25.9).  Nevertheless,  Spain 
solved 88% of the SOLVIT cases (190) it handled 
as lead centre in 2023 (similar as the EU average 
with  88.3%).  Despite  recent  reforms,  several 
professions (civil engineer and tourist guide)  have 

Source: Eurostat 

low 

investment 

factor  productivity 

(TFP) (87)  has 
Total 
stagnated  for  decades,  in  line  with  other 
advanced  European  economies.  This  is  mainly 
explained  by  structural  weaknesses  in  the  labour 
market, lack of market unity inside Spain, low level 
of  EU  trade  integration,  obstacles  in  regulations, 
the  small  size  of  companies,  weak  business 
innovation,  and 
in  R&D. 
Nonetheless,  recent  reforms  in  the  Recovery  and 
Resilience  Plan  (RRP),  e.g.,  the  Law  on  Business 
Creation and Growth, Law on Start-ups, Insolvency 
Law  and  Digital  Toolkit,  are  expected  to  have  a 
positive  impact  on  total  factor  productivity.  Low 
productivity  performance 
in  sectors  such  as 
agriculture,  forestry,  and  fishing  and  construction 
may  contribute  to  the  limited  performance  of 
aggregate  total  factor  productivity.  Conversely, 
sectors  such  as  wholesale  trade  and  retail  trade, 
as  well  as  professional  and  scientific  services, 
reflect strong performance (see Graph A12.2). 

(86)  Eurostat: Labour productivity per person employed and hour 

worked (EU27_2020=100) [tesem160] 

(87)  AMECO: Total Factor Productivity  

58 

80901001101201301402005200720092011201320152017201920212023Euro area –20 countriesGermanySpainFranceItaly80859095100105110115120125201520162017201820192020202120222023Agriculture, forestry and fishingIndustry (except construction)ConstructionWholesale/retail trade, transport, accom/foodInformation and communicationFinancial and insurance activitiesProfessional, scientific and technical activities 
 
     
 
     
 
 
 
identified  as  facing  higher 

been 
restrictions than the EU average (88). 

regulatory 

Graph A12.3: Regulatory obstacles, 5-year average 

the 

business 

regulatory 

ICT  specialists 

thresholds  and 

firms  continued 

Despite  the measures outlined  in the  RRP  to 
improve 
environment, 
In  2023,  a  significant 
challenges  persist. 
percentage  of 
to  highlight 
business  regulations  as  a  major  obstacle  to 
investment  compared  to  the  EU  average  (48%  vs 
22.2%)  (Graph  A12.2).  Administrative  burden  and 
complex regulation prevent firms from making the 
long-term  investments  necessary  for  growth  and 
is 
development.  Spain’s  public  administration 
essential  for  the  economy’s  competitiveness  by 
creating  a  favourable  business  environment. 
Overall  government  effectiveness  remains  below 
the  EU  average  and  has  deteriorated  over  time 
(See Annex 13). Business regulation, with less size-
dependent 
less 
administrative  burden,  would  help  increase  the 
size  of  small  and  medium-sized  enterprises 
(SMEs) (89).  Lack  of 
is  still  a 
productivity-constraint 
that  particulary 
affects  small  and  medium  enterprses  (SMEs)  and 
(see  Annex  9).  Moreover, 
micro-enterprises 
investors’  confidence  about  their 
investments 
being protected by law and courts in Spain is again 
below EU average (41% vs. 54% EU average) with 
administrative 
non-transparent 
Unpredictable, 
conduct, and difficulty to challenge administrative 
decisions  in  court  being  stated  as  the  one  of  the 
investors’  concern (90).  On 
main 
business  demography,  there  has  been  a  large 
increase  in  bankruptcies  in  the  face  of  the  new 
insolvency  framework  establishing  a  more  agile 
insolvency process. Nevertheless, current levels of 
insolvencies  are  contained  and  have  started  to 
reduce in absolute terms since mid-2023 (91). They 
still  mostly  affect  natural  persons  and  SMEs.  In 
late 
addition, 
payments in 2023 was lower than the EU average 
(41.2%  vs  48.7%) (92).  Nevertheless,  there  is  still 
room  for  improvement,  particularly  at  local  entity 
level.   

the  number  of  SMEs  facing 

reasons  for 

factor 

(88)  COM(2021)385 Communication on taking stock of and 
updating the reform recommendations for regulation in 
professional services of 2017 

(89)  Informe Crecimiento Empresarial 2023     

(90)  2024 EU Justice Scoreboard 

(91)  Registrars' association. Report Q3/23 

(92)  SAFE survey: % of SMEs experiencing late payments in the 

past 6 months. 

Source: EIBIS 

The small size of Spanish firms might pose a 
barrier  to  productivity growth.  The  number  of 
SMEs compared to the total number of companies 
in Spain is very high at 99.9% (93). The productivity 
level of large firms exceeds that of SMEs (94). They 
can  easily  innovate,  use  new  digital  technologies 
like  big  data  and  artificial  intelligence  (AI),  hire 
people  with 
right  skills,  apply  better 
managerial  skills  and  profit  from  economies  of 
scale.  This  productivity  disparity  significantly 
impacts  Spain’s  overall  productivity.  Addressing 
the  scalability  of  SMEs  is  crucial  to  promote  a 
more competitive economic environment.  

the 

On  numbers  of  patent  applications,  Spain’s 
performance  was  below  the  EU  average  in 
2023. This is in line with the assessment made in 
the European Innovation Scoreboard 2023 (95) that 
it  is  ‘a  moderate  innovator  with  performance  at 
89.2%  of  the  EU  average’  (see  Annex  11). 
However,  despite  the  country  not  participating  in 
the  unitary  patent  system,  it  appears  that  the 
uptake  rate  of  the  unitary  patent  system  by 
Spanish patentees (i.e., to obtain unitary protection 
in  the  17  participating  Member  States)  is  above 
average. Spain’s participation in this system could 
help stimulate investment in domestic innovation.  

In  2023,  the  national  public  procurement 
strategy  came  into  force.  It  aims  to  improve 
the  efficiency  and  sustainability  of  public 
procurement. 
its 
concrete 
the 
effectiveness  given 
commitments, the absence of a map of identified 

is  too  early  to  assess 

lack  of 

It 

(93)  SME Factsheet Spain 2022/2023 

(94)  CEPYME: Informe de Crecimiento Empresarial 2023  

(95)  Spain. European Innovation Scoreboard 2023 

59 

0102030405060DenmarkHungaryIrelandEstoniaFinlandCzechiaLuxembourgSwedenNetherlandsSloveniaMaltaSlovakiaFranceBulgariaLithuaniaBelgiumRomaniaLatviaAustriaGermanyCroatiaPolandItalyCyprusPortugalGreeceSpain% OF FIRMS  regulation - major obstacleEU27 average5 year average 
 
          
 
to  produce 

risks  and  that  further  action  at  regional  level  is 
the  expected  public 
required 
procurement  policy  outcomes.  However,  some 
challenges  persist,  such  as  the  rate  of  single  bid 
procedures that has increased in recent years and 
remained  relatively  high  in  2023  compared  with 
the  EU  average  (32%  vs  28.6%)  (see  Annex  13). 
Spain  also  still  needs  to  amend 
its  public 
procurement legislation to make it fully compliant 
with  Directives  2014/23/EU,  2014/24/EU  and 
2014/25/EU. 

Spanish SMEs rely heavily on bank financing. 
According to the EIF SME Access to Finance Index, 
Spanish  SMEs  relied  more  on  loans  than  the  EU 
average in 2022 (0.81 vs 0.49) (96). However, there 
has  been  a  slowdown  in  lending  activity  since 
2019  due  to  the  increase  of  interest  rates  and 
tightening of credit conditions. As regards the use 
of  equity  by  SMEs,  Spain  remains  below  the  EU 
average (0.13 vs 0.17) (97).  

Spanish  tourism  continued  its  recovery  in 
2023 (98),  reaching  a  total  of  85,1  million  of 
visitors during 2023, which represents an increase 
of  18,7%  compared  with  the  previous  year,  and 
the  Spain's  new  inbound  visitor  record.  The  gross 
domestic  product  (GDP)  associated  with  tourism 
accounted for 11.6% of GDP in 2022, an increase 
of 3.9 points over 2021. In addition, there are now 
1.9  million  jobs  in  tourism,  representing  9.3%  of 
total  employment  in  the  economy,  five  decimals 
higher than in  2021 (99).  Effective implementation 
of  tourism  measures  in  the  RRP  will  improve  the 
performance of this sector.   

a 

has 

demonstrated 

strong 
Spain 
the  green  and  digital 
commitment  to 
transformation  of 
industry.  The  RRP 
its 
includes innovative tools, in particular the strategic 
projects for economic recovery and transformation 
(PERTEs),  with  RRP  investment  totalling  EUR  41 
billion (100).  The  objective  is  to  support  industrial 
ecosystems in their transition to become net zero 

(96)  EIF SME Access to Finance Index – Loans, Composite: SME 

external financing over last 6 months, index values between 
0 and 10. 

(97)  EIF Access to Finance Index – Equity, Composite: VC/GDP, 

IPO/GDP, SMEs using equity, index values between 0 and 10. 

(98)  Instituto Comercio Exterior (ICEX). España January 2024. 

(99)  Instituto Nacional Estadística (INE). Turismo  

(100) Adendum Spanish RRP  

60 

the 

given 

circular 

agri-food, 

and digitalised industries. The main PERTEs are on 
electric  and  connected  vehicles,  healthcare, 
renewable energy, renewable hydrogen and energy 
storage, 
economy, 
the 
shipbuilding, aerospace, digitalisation of the water 
cycle,  microelectronics  and  chips,  and  industrial 
decarbonisation. While it is too early to assess the 
projects 
their 
implementation, much is expected of them. Spain’s 
REPowerEU  chapter  also  focuses  on  diversifying 
away  from  fossil  fuels,  by  accelerating  the 
deployment  of 
renewable 
hydrogen,  decarbonising  industry  and  investing  in 
the  value  chain  for  the  net  zero  industry.  Skills 
shortages, mismatches, and the need of upskilling 
and  reskilling  workforce  is  a  challenge  for  the 
green  and  digital  transition  (see  Annexes  14  and 
15).  

renewable  energy, 

complexity 

of 

labour  shortages 

The Spanish economy has shown resilience in 
terms  of  strategic  autonomy;  however,  a 
cautious  approach  is  warranted.  In  2023, 
Spanish  firms  signalled  lower  material  shortages 
than  the  EU  average  (13.6%  vs  17.2%) (101)  and 
(6.6%  vs  23.3%). 
lower 
Moreover, the vacancy rate (102) was the lowest in 
the  EU  in  2023  (0.7  vs  2.5).  On  energy,  Spain 
produced  just  over  half  of  its  electricity  from 
renewable sources in 2022, which is above the EU 
average (60% vs 50%) (see Annex 7). This helped 
reduce  energy  prices  and  pressure  on  energy-
intensive industries.  

for 

Spain  has  reached  the  stage  of  technical 
readiness 
the  Once-Only  Technical 
System (OOTS) (103)  with the need to finalise the 
configuration  of  OOTS  components  and  connect 
Evidence  Providers  and  Evidence  Requesters 
before  initiating  their  first  OOTS  transactions.  As 
part of the Single Digital Gateway Regulation , the 
system  will  enable  the  automated  cross-border 
exchange  of  evidence  between 
competent 
authorities, improving online access to information, 
administrative  procedures  and  assistance  within 
the  EU.   The  onboarding  of  Spanish  competent 
authorities  is  crucial  for  the  system  to  function 
smoothly and to reduce administrative burden. 

(101) ECFIN Business and Consumer Survey.  

(102) Vacancy rate: % of vacant posts to all available ones (vacant 

+ occupied). Source: Eurostat. 

(103) OOTS Commission Implementing Regulation (EU) 2022/1463   

 
 
 
 
Table A12.1:Industry and the Single Market 

Source: (1) AMECO, (2) Eurostat, (3) Single Market scoreboard, (5) ECFIN BCS, (6) COMEXT and Commission calculations, (7) EIB 
Investment Survey, (8) Intrum Payment Report, (9) SAFE survey, (10) EIF SME Access to Finance Index 
* Own Commission calculations for the EU27 average  

61 

POLICY AREAINDICATOR NAME20192020202120222023EU27 average*Net Private investment, level of private capital stock, net of depreciation, % GDP15332.92.43.8Net Public investment, level of public capital stock, net of depreciation, % GDP1-0.200.20.40.71.2Real labour productivity per person in industry (% yoy)2-1.3-85.10.70.7-1.24Cost competitivenessNominal unit labour cost in industry (% yoy)21.59.5-0.22.54.59.83Single Market integrationEU Trade integration, % (Average intra-EU imports + average intra EU exports)/GDP218.317.019.121.720.842.9Transposition deficit, % of all directives not transposed31.11.92.22.51.30.7Conformity deficit, % of all directives transposed incorrectly31.11.311.31.31.1SOLVIT, % resolution rate per country379.087.179.585.488.088.3Number of pending infringement proceedings3525758494425.9RestrictionsEEA Services Trade Restrictiveness Index40.040.040.040.040.040.05Single bids, % of total contractors3272827283228.6Direct Awards, %3615121098.1Material Shortage (industry), firms facing constraints, %55.47.117.226.413.617.2Labour Shortage using survey data (industry), firms facing constraints, %53.14.44.57.76.623.3Vacancy rate, % of vacant posts to all available ones (vacant + occupied)20.50.40.60.70.72.5Concentration in selected raw materials, Import concentration index based on a basket of critical raw materials60.150.140.160.170.210.22Installed renewables electricity capacity, % of total electricity produced20.50.50.50.650Investment obstaclesImpact of regulation on long-term investment, % of firms reporting business regulation as major obstacle758.863.664.152.048.022.2Bankruptcies, Index (2015=100)291.485.7164.9226.1208.3105.6Business registrations, Index (2015=100)299.685.2107.8106.1115.3120.2Payment gap - corporates B2B, difference in days between offered and actual payment8-2112161515Payment gap - public sector, difference in days between offered and actual payment8-2411221716Share of SMEs experiencing late payments in past 6 months, %940.340.633.936.441.248.7EIF Access to finance index - Loan, Composite: SME external financing over last 6 months, index values between 0 and 1100.820.910.850.81-0.49EIF Access to finance index - Equity, Composite: VC/GDP, IPO/GDP, SMEs using equity, index values between 0 and 110 0.110.110.180.13-0.17SpainHEADLINE INDICATORSEconomic StructureSINGLE MARKETCompliancePublic procurement ECONOMIC STRUCTUREShortagesStrategic dependenciesBUSINESS ENVIRONMENT - SMEsBusiness demographyLate paymentsAccess to finance 
 
 
 
 
   
 
ANNEX 13: PUBLIC ADMINISTRATION 

competitiveness  by, 

Spain’s public administration is essential for 
in 
the  economy’s 
particular,  shaping  the  conditions  for  the 
twin  transitions  and  creating  a  favourable 
business  environment.  Overall  government 
effectiveness  remains  below  the  EU  average  and 
has deteriorated  over time (Chart  A13.1).  Spain is 
advancing  with  its  public  administration’s  digital 
reforms  under  the  recovery  and  resilience  plan 
(RRP)  and  European  Regional  Development  Fund 
investments. 

Graph A13.1: Government effectiveness 

Average value over 2018-2022 and change over 2018-2022. 
The GDP per head bar shows the mean value of the 
government effectiveness indicator for the group of EU 
countries belonging to the same GDP per head cluster as 
Spain (EU countries are ranked in terms of their GDP per head 
and grouped into three equally sized clusters). 
Source: Worldwide Governance Indicators 

of 

range 

to  address 

employer-branding 

The ageing of Spain’s civil service can pose a 
risk  for  the  stability  of  public  services.  The 
country  aims 
this  challenge  by 
speeding up the recruitment process, organising a 
wide 
events, 
collaborating  with  universities  to  promote  public 
administration  employment,  setting  up  new 
apprenticeship  programmes  and  giving  grants  to 
public authorities hiring young, unemployed people 
as  part  of  its  RRP (104).  Results  from  legislative 
changes  in  recent  years  aiming  to  reduce  the 
share of temporary staff in the public sector have 

(104) https://planderecuperacion.gob.es/noticias/conoce-Programa-
primera-experiencia-profesional-administraciones-publicas-
prtr 

62 

not  been  published  yet.  Additional  reforms (105) 
aim to improve selection and base it on skills, and 
strengthen  senior  managers’  skills.  The  share  of 
civil  servants  participating  in  adult  learning  is 
higher than the EU average (22.8% vs 17.9%) and 
has  gone  up.  Gender  parity  among  senior  civil 
servants decreased in 2023 and was below the EU 
average (Table A13.1). 

improve 

its 
Spain  has  taken  steps  to 
regulatory  governance.  A  legislative  reform 
under its RRP aims to strengthen policy evaluation 
by  creating  a  specialised  agency,  setting  out  a 
framework to plan, supervise and coordinate policy 
evaluation,  and  publishing  evaluation  results  for 
better  transparency.  The  National  Office  for 
Foresight  and  Long-term  Strategy  provides 
guidance  on  policy  development  to  the  central 
administration. The National Research Centre aims 
to channel scientific evidence in policy design (106). 
The use of emergency procedures to adopt laws in 
Parliament  remains  very  high  although  it  fell 
slightly  in  2022  (60.8%  in  2022  vs  72.3%  in 
2021). 

Spain  is  relatively  advanced  in  the  digital 
transformation  of  its  public  administration. 
The share of individuals interacting with the public 
administration  online  is  above  the  EU  average  as 
is  the  overall  level  of  e-government  maturity. 
Spain also stands out among most other Member 
States in making open government data available 
(Table A13.1). 

Competition  and  transparency 
in  public 
procurement  continues  to  be  weak.  The 
relatively  high  percentage  of  single  bids  and 
negotiated  procedures  without  publication  are  a 
case in point (see Annex 12). Moreover, Spain also 
lags  behinds  in  most  indicators  that  measure  the 
performance  of  single  market  governance  tools 
(see  Annex  13  of  the  2023  Country  Report  for 
Spain). 

To  help  address  fiscal  challenges,  the 
independent  fiscal 
institution  could  be 
strengthened.  AIReF  has  a  broad  mandate  and 
has  established  itself  as  a  trusted  independent 
institution  within  a  relatively  short  space  of  time. 

(105) Royal Decree-law 6/2023: 

https://www.boe.es/buscar/act.php?id=BOE-A-2023-25758. 

(106) https://www.csic.es/es/actualidad-del-csic/el-csic-presenta-
una-coleccion-de-informes-para-contribuir-al-desarrollo-de 

-0.4-0.20.00.20.40.60.81.01.2ESEU-27GDP perhead clusterChange 2018-2022Average 2018-2022 
 
   
 
 
 
Table A13.1:Public administration indicators 

(1) High values denote a good performance, except for indicator # 6. (2) 2023 value. If unavailable, the latest value available is 
shown. (3) Measures the user centricity and transparency of digital public services as well as the existence of key enablers for the 
provision of those services. (4) Defined as the absolute value of the difference between the percentage of men and women in 
senior civil service positions. Flags: (b) break in time series; (d) definition differs; (u) low reliability. 
Source: E-government activities of individuals via websites, Eurostat (# 1); E-government benchmark report (# 2); Open data 
maturity report (# 3); Labour Force Survey, Eurostat (# 4, 5, 7); European Institute for Gender Equality (# 6); Fiscal Governance 
Database (# 8, 9); OECD Indicators of Regulatory Policy and Governance (# 10). 

However,  the  IFI’s  access  to  information  and  its 
dialogue  with  the  government  and  parliament 
could  still  be  improved.  Ways  to  develop  a  more 
active outreach policy could also be considered. 

the 

justice  system 
The  efficiency  of 
continues  to  face  challenges.  The  lack  of 
renewal  of  the  Council  for  the  Judiciary 
is 
negatively  affecting  the  work  of  the  Supreme 
Court and the justice system. Due to the continued 
lack of renewal,  there were more than 90 judicial 
posts pending appointment at the time of writing. 
The length of proceedings is also a major issue, in 
particular,  the  disposition  time  for  civil  and 
commercial cases in the Supreme Court (691 days 
in  2022)  although  it  has  decreased  (from  826 
days in 2021 and 888 days in 2020).  The quality 
of the justice system is good overall. The level  of 
digitalisation  is  very  advanced,  with  procedural 
rules  enabling  digital  tools  in  courts  in  place, 
courts  and  prosecution  services  equipped  with 
digital  technology,  including  an  electronic  case 
management 
remote  work 
environments  for  the  courts  and  prosecution 
service and secure distance communication. There 

system 

and 

is  also  the  possibility  for  people  to  initiate  and 
follow proceedings, particularly in civil, commercial 
and  administrative  cases.  The  perceived  judicial 
independence  among  the  public  has  improved 
compared  with  2023  (34%),  although  it  remains 
below that of 2020 (44%). However, the perceived 
judicial 
independence  among  companies  has 
decreased in comparison with 2023 (34%), as well 
as with 2020 (42%) (107). 

(107) For more detailed analysis of the performance of the justice 

system in Spain, see the 2024 EU Justice Scoreboard 
(forthcoming) and the country chapter for Spain of the 
Commission’s 2024 Rule of Law Report (forthcoming). 

63 

ES20192020202120222023EU-27(2)1n/an/an/a84.083.075.02n/a77.878.879.579.575.830.90.91.00.90.90.8457.257.858.2 (b)60.362.252.9515.014.120.3 (b)22.522.817.9617.614.213.83.817.69.271.21.11.1 (bd)1.1 (d)1.11.580.80.90.90.9n/a0.791.81.81.91.9n/a1.410n/an/a1.76n/an/a1.7Medium-term budgetary framework indexIndicator (1)E-government and open government dataShare of internet users within the last year that used a public authority website or appE-government benchmark overall score (3) Open data and portal maturity indexEducational attainment level, adult learning, gender parity and ageingShare of public administration employees with higher education (levels 5-8, %)Participation rate of public administration employees in adult learning (%)Gender parity in senior civil service positions (4)Ratio of 25-49 to 50-64 year olds in NACE sector OPublic financial management Strength of fiscal rules indexEvidence-based policy makingRegulatory governance 
 
 
      
 
FAIRNESS 
ANNEX 14: EMPLOYMENT, SKILLS AND SOCIAL POLICY CHALLENGES IN LIGHT OF 
THE EUROPEAN PILLAR OF SOCIAL RIGHTS 

The  European  Pillar  of  Social  Rights  is  the 
compass  for  upward  convergence  towards 
better  working  and  living  conditions  in  the 
EU.  This  Annex  provides  an  overview  of  Spain’s 
progress in implementing the Pillar’s 20 principles 
and the EU headline and national targets for 2030 
on employment, skills and poverty reduction. 

Table A14.1:Social Scoreboard for Spain 

(1) Update of 25 April 2024. Members States are categorised 
based on the Social Scoreboard according to a methodology 
agreed with the EMCO and SPC Committees. Please consult 
the Annex of the Joint Employment Report 2024 for details on 
the methodology. 
Source: Eurostat 

but 

in  2023, 

the  employment 

The  Spanish  labour  market  continued  to 
improve 
long-standing 
challenges persist. After a slight dip towards the 
end  of  2022, 
rate  grew 
significantly  to  70.5%  in 2023,  though  it  remains 
below 
The 
the  EU  average  of  75.3%. 
unemployment  and 
long-term  unemployment 
rates were at 12.2% and 4.3% respectively, which, 
despite steady declines since 2021, are double the 
EU averages in 2023. Younger, older and foreign-
born  workers  (both  EU  and  non-EU)  are  most 
vulnerable 
The 
unemployment  rate  of  young  people  (15-29) 
remains  9.9  percentage  points  (pps)  higher  than 
the  EU  average,  at  21.3%  in  Q4-2023,  and 
appears  to  have  stopped  declining.  In  a  context 

labour  market. 

the 

in 

imbalances 

where  close  to  20%  of  the  workforce  is  over  55 
years  of  age,  the  unemployment  rate  of  older 
people  (55-74)  is  almost  triple  the  EU  average 
(11.1%  vs  4.3%  in  2023),  while  the  share  of 
unemployed  workers  born  outside  Spain  was 
16.5%  (vs  9.5%  in  the  EU  in  2023).  These 
persisting 
structural 
challenges in the Spanish labour market, including 
the  need  to  further  improve  the  effectiveness  of 
active  labour  market  policies,  which  currently 
mostly benefit employed people. As part of Spain’s 
recovery  and  resilience  plan  (RRP),  the  envisaged 
law on non-contributory unemployment support is 
supposed  to  link  such  benefits  to  personalised 
activation  pathways,  which  could  improve  the 
employability of beneficiaries. 

point 

to 

improvements,  precarious 
Despite  sizable 
jobs  remain  widespread,  especially  in  the 
public  sector  and  for  young  people.  Following 
the  2021  labour  market  reform,  the  share  of 
fixed-term employees in the private sector fell  by 
almost half (from 23.9% in Q4-2021 to 13.2% in 
Q4-2023).  However,  the  corresponding  share  in 
the  public  sector  remains  high  (29.6%  in  Q4-
2023).  This  especially  affects  women,  and  the 
health and education sectors. Overall, the share of 
fixed-term employees is among the highest in the 
EU,  with  increased  regional  disparities,  although 
the  share  has  fallen,  especially  in  sectors  that 
were  more  affected  by  temporary  employment 
prior to the reform and for young people (down by 
19.4 pps  since  2021).  Spanish  young  people  also 
suffer  from  involuntary  part-time  work  rates  that 
are 2.3 times as high as the EU average (49.1% vs 
21.3%)  –  a  challenge  that  also  applies  to  the 
working-age  population  as  a  whole.  Three  in  five 
young people in work have been employed for less 
than  one  year  –  one  of the  highest  figures in  the 
EU (108).  To  support  good  quality  jobs  for  young 
people,  the  European  Social  Fund  Plus  (ESF+)  will 
fund  targeted  hiring  incentives  for  permanent 
contracts 
these 
challenges would support further progress towards 
the  2030  national  employment  rate  target  of 
76%. 

(EUR 635 million).  Addressing 

Labour  and  skills  shortages  and  an  ageing 
workforce  are  making  it  more  difficult  for 

(108) Eurostat: lfsa_egad. 

64 

34.113.766.212.310.35.670.512.24.395.92632.227.414.69.248.61.2Critical situationTo watchWeak but improvingGood but to monitorOn averageDynamic labour markets and fair working conditionsEmployment rate(% of the population aged 20-64, 2023)Unemployment rate(% of the active population aged 15-74, 2023)Long term unemployment(% of the active population aged 15-74, 2023)Gross disposable household income (GDHI) per capita growth(index, 2008=100, 2022)Social protection and inclusionAt risk of poverty or social exclusion (AROPE) rate (% of the total population, 2022)At risk of poverty or social exclusion (AROPE) rate for children(% of the population aged 0-17, 2022)Impact of social transfers (other than pensions) on poverty reduction(% reduction of AROP, 2022)Disability employment gap (percentage points, population aged 20-64, 2022)Housing cost overburden (% of the total population, 2022)Children aged less than 3 years in formal childcare (% of the under 3-years-old population, 2022)Self-reported unmet need for medical care (% of the population aged 16+, 2022)Better than averageBest performersPolicy areaHeadline indicatorEqual opportunities and access to the labour marketAdult participation in learning (during the last 12 months, excl. guided on the job training, % of the population aged 25-64, 2022)Early leavers from education and training(% of  the population aged 18-24, 2023)Share of individuals who have basic or above basic overall digital skills(% of the population aged 16-74, 2023)Young people not in employment, education or training(% of the population aged 15-29, 2023)Gender employment gap(percentage points, population aged 20-64, 2023)Income quintile ratio (S80/S20, 2022) 
 
 
 
   
 
 
 
and 

social 

services 

companies to find the right workers. Although 
it is still below the EU average, the share of firms 
reporting that labour is a factor limiting production 
is  at  an  historical  high  in  industry  (8%)  and 
services  (23%),  and  close  to  a  historical  high  in 
construction  (10%) (109).  Labour  availability  issues 
are  reported  across  almost  all  skill  levels  and 
sectors, including the green and digital ones (110). A 
shrinking working-age population is contributing to 
this  trend,  especially  in  the  north-western  regions 
and in sectors with a higher average age such as 
healthcare, 
public 
increasing 
administration.  The  combination  of 
labour  shortages  and  still  high 
rates  of 
unemployment  points  to  challenges  in  matching 
the  level  and  availability  of  skills  with  labour 
market needs. In a context of low enrolment rates 
in  dual  courses  and  upper  secondary  levels,  RRP 
measures  are  expected  to  increase  the  relevance 
of vocational education and training (VET) courses 
to the job market. This should  contribute to Spain 
achieving its ambitious national  target of at least 
60%  of  adults  participating  in  training  every year 
by  2030,  although  considerable  efforts  are  still 
combination  of  demographic 
needed. 
challenges,  skills  and  labour  shortages,  and  other 
(structural)  issues  in  the  labour  market  also 
undermines  Spain’s  potential  to 
its 
economic competitiveness.  

increase 

The 

in  education  and 

Challenges 
training 
contribute  to  skills  mismatches.  The  share  of 
adults  that  participate  in  lifelong  learning  has 
increased  from  30.4%  in 2016  to  34.1% in  2022 
but  remains  below  the  EU  average  of  39.5%. 
Higher-skilled  adults  benefit  from  learning  much 
more than lower-skilled ones, which contributes to 
Spain’s  significant  skills  polarisation.  For  three 
decades,  the  country  has  had  one  of  the  highest 
overqualification  rates  in  the  EU.  The  overall  rate 
of young NEETs (15-29)  has decreased to almost 
match the EU average (12.3% vs 11.2% in 2023). 
However, despite recent improvements, the rate of 
early school leavers was still among the highest in 
the  EU  in  2023,  at  13.7%  (Annex  15).  More  than 
EUR  1.11  billion  of  ESF+  funds  will  help  address 

(109) European Business and Consumer Survey. 

(110) Bank of Spain, Encuesta a las empresas españolas sobre la 
evolución de su actividad, third and fourth quarters of 2023; 
pp. 9-10, and 7, respectively; Observatorio de las 
Ocupaciones, Tendencias del Mercado de Trabajo en España 
2023, pp. 37 and 41. 

the challenge of early school leavers in the coming 
years. 

limited 

Despite  various  efforts,  there  is  room  to 
improve  the  effectiveness  of  the  social 
protection  system.  In  2023,  Spain  increased 
child  benefits  and  raised  the  minimum  wage 
again. Besides, several temporary benefits to face 
inflation  were  extended  and  the  coverage  of  the 
minimum  income  was  broadened.  Nonetheless, 
income inequality and poverty rates remained high 
in 2022. Despite decreasing since 2021, the share 
of  people  at  risk  of  poverty  or  social  exclusion 
(AROPE)  ranked  among  the  highest  in  the  EU  (ES: 
26%  vs  EU:  21.6%  in  2022),  notably  for  non-EU 
nationals (60.4%), persons with disabilities (30%), 
single  parents  (49.2%)  and  low-skilled  people 
(33.7%). Child poverty also remains very high, with 
an  AROPE  rate  for  children  of  32.2%.  Social 
transfers  had  a 
impact  on  poverty 
reduction (22.9%, falling by 4.5 pps in 2023), with 
significant  disparities  between  population  groups 
and 
of 
The 
unfavourable working conditions are also reflected 
in higher poverty and deprivation rates for persons 
in  non-standard  forms  of  employment  and  in  the 
rate  of 
these 
challenges,  the  ESF+  provides  integrated  socio-
economic  pathways  for  people  at  risk  of  poverty 
and 
the 
implementation of the Child Guarantee with 10.5% 
of  the  national  ESF+  financial  allocation.  This  will 
be  complemented  by  RRP  measures  such  as  the 
plan to reorganise and simplify the system of non-
contributory financial benefits, the Family Diversity 
Law  and  the  Social  Services  Law.  Nevertheless, 
there  is  scope  for  greater  social  policy  action  to 
achieve  Spain’s  national  target  of  2.815  million 
fewer people at risk of poverty or social exclusion 
by  2030  (compared  to  2019),  including  713 000 
children. 

in-work  poverty.  To  address 

consequences 

regions (111). 

exclusion, 

supports 

social 

and 

Access  to  affordable  housing  is  a  challenge. 
In  2023,  Spain  extended  the  guarantee  for  basic 
supplies  and  enacted  a  new  Housing  Law,  which 
supports  the  supply  of  public  and  affordable 
housing  and  introduces  new  provisions  on  rental 
prices. However, while the housing cost overburden 
rate was only slightly above the EU average (9.2% 
vs 8.7% in 2022), there are significant barriers to 
social  inclusion. The share of social  housing stock 

(111) Results from the Joint Research Centre, based on the 

EUROMOD model. 

65 

 
 
 
The 

rental 

(ERDF) 

housing. 

is less than one third of the EU average. Under the 
RRP, Spain is investing EUR 2 billion to construct at 
least 20 000 energy-efficient social rental housing 
units by 2026. The Spanish RRP and the European 
Regional  Development  Fund 
include 
measures  to  promote  the  supply  of  (social  or 
affordable) 
available 
quantitative  and  qualitative  evidence  and  the 
policy  response  undertaken  and  planned  analysed 
in  the  second-stage  analysis  of  the  Social 
Convergence 
2024 
(SWD(2024)132) point to challenges related to the 
transition from education to the labour market as 
well as to child and energy poverty and the impact 
of social transfers but do not point to major social 
convergence  challenges  for  Spain  overall,  in  light 
of  the  positive  developments  recorded,  especially 
in the labour market. 

Framework 

of  May 

Table A14.2:Situation of Spain on 2030 
employment, skills and poverty reduction targets 

(1) Adult Education Survey, adults in learning in the past 12 
months, special extraction excl. guided on-the-job training. 
(2) Change in the number of persons at risk of poverty or 
social exclusion (AROPE), reference year 2019. 
Source: Eurostat, DG EMPL. 

66 

IndicatorsLatest dataTrend            (2016-2023)2030 targetEU target 70.5(2023)34.1(2022)+383(2023)Poverty reduction2 (thousands)-2 815-15 000Employment (%)7678Adult learning1 (%)6060 
 
  
 
ANNEX 15: EDUCATION AND TRAINING 

This  Annex  outlines  the  main  challenges  of 
Spain’s  education  and  training  system  based 
on  the  2023  Education  and  Training  Monitor  and 
the  2022  OECD  Programme  for  International 
Student Assessment (PISA) results.  

Graph A15.1: Underachievement rates by field, 
PISA 2012, 2018 and 2022 

with 

(<15%). 

Compared 

in  basic 

of  15-year-old 

Underachievement 
skills  has 
increased  over  the  past  decade,  albeit 
moderately,  warranting  policy  action.  The 
proportions 
students  who 
underachieved in PISA 2022 (112) - in mathematics 
(27.3%), in reading (24.4%) and in science (21.3%) 
- were below the EU averages (29.5%, 26.2% and 
24.2% respectively), but still far from the EU-level 
target 
2012, 
underachievement  rates  increased  by  3.7 pps  in 
mathematics,  6.1 pps  in  reading  and  5.6 pps  in 
science,  while  the  average  performance  remained 
relatively  stable  compared  with  2018  (see  Table 
A15.1  and  Graph  A15.1).  The  existing  gap  in  the 
PISA  test  results  based  on  the  socio-economic 
and/or migrant backgrounds of students, although 
still  relevant,  is  one  of  the  smallest  at  EU  level. 
Several  factors  like  school  closures  during  the 
pandemic, the  further  use  of  TIC  or the  readiness 
of teachers for distance teaching (as perceived by 
students)  seems  not  to  have  strongly  influenced 
the  PISA  2022 (113)  However,  it  seems  that  it  has 
been  more  challenging 
low  performing 
students which required greater study support and 
faced  more  difficulties  to  adapt  to  distance 
Educational 
learning 
achievement  of  students  provides  the  foundation 
for  the  skills  of  the  future  labour  force;  this 
determines long-term economic growth, innovation 
capacity,  productivity,  and  Spain’s  potential  for 
improving its overall competitiveness.  

fellows. 

their 

than 

for 

Source: OECD (2023). 

Teacher  shortages  in  STEM  fields  and  the 
lack of job stability represent challenges for 
the  teaching  profession.  The  proportion  of 
teachers  (ISCED  1-3)  aged  55+  is  below  the  EU 
average (20.2% vs 24.5%). However, national data 
show that the share of older teachers is higher in 
secondary education and vocational education and 
training (VET) than in primary, and it is even higher 
in  higher  education.  While  there  are  no  overall 
teacher shortages, it is becoming more challenging 
to  fill  posts  with  qualified  staff  in  STEM  subjects. 
In  addition,  a  significant  share  of  teachers  is 
employed  under  temporary  contracts.  In  2022-
2023, 22.47% of all teachers held such contracts 
(ranging  at 
to 
43.4%) (114).  The  high  turnover  of  teaching  staff 
may  have  a  negative  impact  on  job  satisfaction, 
educational  outcomes,  and  the  effectiveness  of 
pedagogical  projects.  The  government  plans  to 
reduce  the  share  of  interim  teachers  to  8%  by 
2025.  They  are  also  reviewing  the  requirements, 
unchanged  for  more  than  40  years,  for  getting 
access to the teaching profession. 

from  4.7% 

regional 

level 

The  low  proportion  of  top  performers  may 
pose  a  risk  for  future  productivity  and 
competitiveness. PISA 2022 shows shares of top 
performers  in  Spain  in  the  mathematics,  reading 
and  science 
(5.9%,  5.3%  and  4.9% 
respectively)  to  be  below  the  EU  averages  (7.9%, 
6.5%  and  6.9%).  Compared  with  2012,  the  share 
of  top-performing  students  dropped  by  2.1 pps  in 
mathematics but remained relatively unchanged in 
reading and science. 

tests 

(112) OECD (2023), PISA 2022 Results (Volume I): The State of 

Learning and Equity in Education 

(113) https://www.libreria.educacion.gob.es/libro/pisa-2022-
programa-para-la-evaluacion-internacional-de-los-
estudiantes-informe-espanol_183950/  

The rate of early leavers from education and 
training  (ELET)  fell  sharply  since  2012  but 
remains above  the  EU  average.  The  ELET  rate 
in 2023 was 13.7%, 0.2 pps less than in 2022 (EU 
average  9.5%).  After  2 years  of  sharp  decline 
(1.3 pps  in  2020  and  2.7 pps  in  2021),  the  rate 
rose  slightly 
in  2022  (0.6 pps).  Gender  and 
regional differences in ELET rates persist, although 
the  gender  gap  is  de-creasing  (from  8.4 pps  in 
2012  to  4.7 pps  in  2023).  Even  though  the 
regional  disparities  have  shrunk,  they  remain 
significant.  ELET  rates  in  6  out  of  19  regions  are 

(114) https://www.csif.es/sites/default/files/field/file/ 
INFORME%20CURSO%202023-2024.pdf 

67 

05101520253035ESEUESEUESEUMathematicsReadingScience%2012201820222030 EU target 
 
 
  
 
  
 
Table A15.1:EU-level targets and other contextual indicators under the European Education Area 
strategic framework 

Notes: b = break in time series; d = definition differs; e = estimated; p = provisional; u = low reliability; : = data not available. 
Source: 1,3,4,5,7,8,9,10,12=Eurostat; 11= Eurostat, Adult Education Survey; 2,6=OECD, PISA. 

below  or  close  to  the  EU  average.  A  further  4 
regions  show  ELET  rates  below  the  national 
average,  and  the  remaining  9  show  the  highest 
ELET rates (from 15% to 21%). 

EU-level 

attainment 

educational 

Tertiary 
(TEA) 
increased further. In 2023, the TEA rate among 
people aged 25-34 kept its growing tendency and 
was  at  52%  (1.8 pps  more  than  in  2022)  and 
much  higher  than  the  EU  average  (43%) (115)  and 
(45%).  Nevertheless, 
the 
significant  regional  differences 
in  TEA  rates 
remain  (ranging  from  28.1%  to  67.6%).  The 
differences  are  also  significant  by birth-place (116) 
and by students’ place of residence (117). Compared 
with  2016,  the  share  of  university  entrants  in 
STEM  areas  remains  similar  (around  25%,  EU 
average  28.1%) (118),  while  the  share  on  the  ICT 

target 

(115) Eurostat: edat_lfse_03. 

(116) Eurostat: edat_lfs_9912. 

(117) Eurostat: edat_lfs_9913. 

(118) Eurostat: educ_uoe_ent02. 

field  has  increased  (6.3%  vs  5%),  being  higher 
than the EU average (4.9%). 

Many  recent  tertiary  graduates  only  find 
work  below  their  qualifications.  In  2023,  the 
employment  rate  of  recent  tertiary  graduates 
(aged 20-34) continues to rise, but it is still below 
the  EU  average  (83%  vs  88%) (119).  Employment 
opportunities  for  young  people  do  not  always 
match  their  qualifications.  Spain  has  one  of  the 
highest  overqualification  rates  in  the  EU  among 
people aged between 25 and 34 (120). One in three 
tertiary-educated  workers  are  employed  in  low-
skilled  jobs  (36%  in  2020  vs  an  EU  average  of 
24.2%).  Overqualification  affects  men  more  than 
women and people born outside Spain than native-
born.  Skills  mismatches  are  widely  accepted  as  a 
factor  that  acts  as  a  drag  on  potential  economic 
growth. Against a projected decline and ageing of 
the  labour  force,  European  economies  cannot 
afford to waste human capital. 

(119) Eurostat: edat_lfse_24. 

(120) Eurostat: lfsa_eoqgan. 

68 

96%96.6%201391.8%201397.5%92.2%96.0%202192.5%2021,dReading< 15%18.3% 18.0%23.2% 22.5%24.4%202226.2%2022Mathematics< 15%23.6% 22.1%24.7%22.9%27.3%202229.5%2022Science< 15%15.7% 16.8%21.3%22.3%21.3%202224.2%2022< 9 %24.7%12.6%17.9%10.5%13.7%9.5%Men28.9%14.5%21.7%12.1%16.0%11.3%Women20.5%10.6%14.0%8.7%11.3%7.7%Cities21.1%b11.2%15.5%9.4%12.8%8.6%Rural areas29.6%b14.0%19.7%11.0%14.4%9.9%5By country of birthNative21.4%11.3%14.9%9.2%10.5%8.2%EU-born38.8%26.2%34.2%22.4%25.0%21.0%Non EU-born40.5%30.1%31.4%23.0%29.5%21.6%6Socio-economic gap (percentage points)31.9::29.533.4202237.220227Exposure of VET graduates to work-based learning≥ 60% (2025) ::: :96.7% 64.5%45%40.4%34.1%44.3%38.7%52.0%43.1%Men34.9%29.1%38.4%33.3%46.1%37.6%Women46.0%39.2%50.1%44.2%58.0%48.8%Cities46.0%b43.5%50.2%49.0%57.5%53.3%Rural areas31.8%b24.8%35.3%27.7%44.5%31.7%Native45.4%35.4%48.7%39.7%59.1%44.2%EU-born26.5%29.3%32.5%36.7%39.4%40.2%Non EU-born21.1%24.2%26.5%31.0%32.5%37.1%11Participation in adult learning (age 25-64)≥ 47% (2025) ::30.4%201637.4%201634.1%202239.5%202218.0%201322.7%201320.2%23.8%20.2%202124.5%2021Tertiary educational attainment (age 25-34)8Total8By gender9By degree of urbanisation10By country of birth12Share of school teachers (ISCED 1-3) who are 55 years or over1Participation in early childhood education (age 3+)2Low-achieving 15-year-olds in:Early leavers from education and training(age 18-24)3Total3By gender4By degree of urbanisation201220182023IndicatorTargetSpainEU-27SpainEU-27SpainEU-27 
 
 
 
  
 
ANNEX 16: HEALTH AND HEALTH SYSTEMS 

A  healthy  population  and  an  effective, 
accessible  and  resilient  health  system  are 
prerequisites  for  a sustainable  economy and 
society.  This  Annex  provides  a  snapshot  of 
population health and the health system in Spain. 

Life  expectancy 
is  among  the 
in  Spain 
highest in the EU and has partially rebounded 
after  it  fell  in  2020.  There  was  a  drop  in  life 
expectancy in Spain with the onset  of the COVID-
19  pandemic  in  2020.  Then,  life  expectancy 
rebounded,  although  not  to  pre-pandemic  levels, 
as  mortality  from  COVID-19  fell  in  2021  and 
2022 (121).  Spain  fares  comparatively  well 
in 
avoiding  deaths  from  treatable  causes.  In  2021, 
diseases  of  the  circulatory  system,  cancer  and 
COVID-19 were the leading causes of death. 

Graph A16.1: Life expectancy at birth, years 

Source: Eurostat 

Health spending relative to GDP in Spain was 
slightly  below  the  EU  average  in  2021. 
Provisional  data  from  the  OECD  suggest  that  in 
2022  total  health  spending  fell back  to  10.4%  of 
GDP.  Spending  per  capita  on  outpatient  care  is 
below the EU average, underlining the importance 
of  investment  in  primary  care.  Public  health 
spending  as  a  proportion of  total  health  spending 
is  comparatively  low (71.6%  in  2021),  lower than 
the EU average (81.1%). Based on the age profile 
of  the  Spanish  population,  public  spending  on 
health  is  projected  to  increase  by  1.2 percentage 
points (pps) of GDP by 2070 (compared to 0.6 pps 
for the EU overall), raising medium and long-term 
fiscal  sustainability  concerns (see Graph 16.2 and 
Annex 21). 

(121) Based on data provided directly by Member States to the 

European Centre for Disease Prevention and Control, under 
the European Surveillance System. 

69 

Graph A16.2: Projected increase in public 
expenditure on healthcare over 2024-2070 

Baseline scenario 
Source: European Commission / EPC (2024) 

Spending on prevention in Spain amounted to 
3.5%  of  total  spending  on  healthcare  in 
2021,  compared  to  6%  for  the  EU  overall. 
Between  2019  and  2021,  spending  on  prevention 
in Spain increased by around 61%, compared to a 
106%  increase  for  the  EU  overall.  Proportionally, 
budget  shares  for  prevention  across  the  EU 
increased  most  for  emergency  response,  disease 
detection  and  immunisation  programmes.  Further 
is  a 
strengthening  preventive  care 
precondition for efficiency gains. Another measure 
to safeguard public health in Spain is the ongoing 
rationalisation of the use of antimicrobials, as part 
of  broader  efforts  to  foster  the  rational  use  of 
medicines.  Despite  the  slight  decrease  in  the  use 
of  antibiotics  between  2019  and  2022,  Spain  is 
below  the  national  target  of  27%  reduction  by 
2030  in  relation  to  2019  level,  which  was  set  by 
the  Council  Recommendation  on  stepping  up  EU 
actions  to  combat  antimicrobial  resistance  in  a 
One Health approach. 

in  Spain 

average. 

However, 

radiology 

Spain  faces  shortages  and  an  uneven 
distribution  of  health workers.  The  number  of 
doctors per 1 000 population is slightly above the 
family  medicine, 
EU 
anaesthesiology, 
and 
geriatrics, 
psychiatry  have  been  identified  as  specialisations 
with  shortages  and  greatest  future  needs.  While 
the  proportion  of  physicians  who  practise  as 
general  practitioners  increased  slightly  between 
2020 and 2021 (from 20% to 21%), this remains 
lower  than  in  2018,  when  the  figure  peaked  at 
22.2%.  The  number  of  nurses  per  1 000 
population  is  well  below  the  EU  average,  and 
shortages have a negative impact on primary care. 
The percentage of the health workforce aged over 
55  (33%  of  doctors  and  21%  of  nurses)  may 
exacerbate  shortages  if  the  number  of  graduates 
does  not  increase.  Both  the  rate  of  medical 

83.483.584.082.483.383.280.981.081.380.480.180.6201720182019202020212022SpainEU6.65.90.61.202468EUSpain% of GDP20242070increase 
 
   
 
   
 
 
Table A16.1:Key health indicators 

Note: The EU average is weighted for all indicators except for doctors and nurses per 1 000 population, for which the EU simple 
average is used. Doctors’ density data refer to practising doctors in all countries except Greece, Portugal (licensed to practise) and 
Slovakia (professionally active). Nurses’ density data refer to practising nurses in all countries except Ireland, France, Portugal, 
Slovakia (professionally active) and Greece (hospital only). 
Source: Eurostat Database; except: * OECD, ** Joint Questionnaire on non-monetary healthcare statistics, *** ECDC, **** Council 
Recommendation on stepping up EU actions to combat antimicrobial resistance in a One Health approach. 

graduates  (14.2  per  100 000  population)  and  the 
rate  of  nursing  graduates  (23  per  100 000)  in 
Spain  were  below  the  respective  EU  averages  in 
2021. The distribution of health professionals has 
persistently  varied  across  regions.  In  2020,  the 
number  of  primary  care  physicians  ranged  from 
0.6 to 1.1 per 1 000 population while the number 
of primary care nurses ranged from 0.5 to 0.9 per 
1 000  population  across  regions.  The  number  of 
specialist doctors varied from 1.5 to 2.6 per 1 000 
population,  and  the  number  of  specialist  nurses 
ranged  from  3.0  to  6.9  per  1 000  population. 
Working  conditions 
issue,  with 
increasing  use  of  temporary  contracts  (41.9%  of 
all  health  workers  in  2020,  up  from  28.5%  in 
2012).  Royal  Decree-Law  12/2022  modified  the 
status  of  health  professionals  and 
included 
measures 
temporary 
contracts.  However,  its  impact  has  yet  to  be 
assessed. 

the  use  of 

remain  an 

to  reduce 

and 

health 

Through  its  recovery  and  resilience  plan 
(RRP),  Spain  plans  to  invest  EUR 2.4  billion 
(1.5% of the RRP’s total value) in healthcare. 
A  set  of  measures  have  started,  relating  to 
innovation  in  the  health  sector,  investment  in 
renewing  hospital  equipment,  training  of  health 
professionals 
The 
government  has  adopted  an  action  plan  for  the 
modernisation of primary and community care and 
a public health strategy. Pending measures include 
reforms  to  expand  health  coverage,  and  reforms 
the  healthcare  workforce,  digital  health 
of 
infrastructure 
policies 
innovative 
(rational 
pharmaceuticals).  The  digital  health  strategy, 
adopted 
in  2021,  created  a  framework  for 
digitalisation  of  healthcare,  including  related  RRP 

of  medicines, 

pharmaceutical 

promotion. 

and 

use 

investments. Investment in primary care under the 
RRP is limited to EUR 230 million, for digitalisation. 
Complementary  investments  in  healthcare  worth 
more  than  EUR 1.6 billion  are  planned  under  the 
cohesion  policy  funds  for  2021-2027  and  will 
focus mainly on health infrastructure, e-health and 
health equipment (122). 

it. 

for 

resources 

The  action  plan  for  the  modernisation  of 
primary care adopted under the RRP aims to 
expand  roles,  activities  relating  to  primary 
Effective 
care  and 
implementation  of  the  plan  will  depend  on 
appropriate investment in staff, infrastructure and 
facilities.  According  to  OECD  health  statistics (123), 
primary  care  accounted  for  just  13%  of  total 
spending on healthcare in Spain in 2020 and is on 
a  downward  trend,  decreasing  from  14.5%  in 
2002  and  14%  in  2019.  Moreover,  there  are 
substantial  disparities  in  investment  levels  for 
primary  care  at  subnational  level.  Shortages  of 
general  practitioners  and  nurses  in  particular 
hamper  the  delivery  of  primary  care,  with  a  large 
variation 
regions. 
Measures  to  attract  more  students  to  pursue 
medical  careers  and  to  foster  recruitment  and 
retention appear relevant in this context. 

levels  across 

in  staffing 

(122) The EU cohesion policy data reflect the status as of 13 May 

2024. 

(123) OECD Health Statistics, 2022. 

70 

20182019202020212022EU average (latest year) Treatable mortality per 100 000 population (mortality avoidable through optimal quality healthcare)64,662,662,261,0NA93.3 (2021)Cancer mortality per 100 000 population221,9218,3214,5213,3NA235.4 (2021)Current expenditure on health, % GDP 9,09,210,710,6NA10.9 (2021)Public share of health expenditure, % of current health expenditure70,270,673,171,6NA81.1 (2021)Spending on prevention, % of current health expenditure 2,12,13,03,5NA6.0 (2021)Available hospital beds per 100 000 population297295296296NA525 (2021)Doctors per 1 000 population4,04,44,64,5NA4.1 (2021)*Nurses per 1 000 population5,95,96,16,3NA7.9 (2021)Total consumption of antibacterials for systemic use, daily defined dose per       1 000 inhabitants per day ***26,224,919,720,023,219.4 (2022) 
 
 
  
 
ANNEX 17: ECONOMIC AND SOCIAL PERFORMANCE AT REGIONAL LEVEL 

Annex 17 showcases the economic and social 
regional  dynamics  in  Spain.  It  provides  an 
analysis  of  economic,  social  and 
territorial 
cohesion  and  assesses  emerging  investment  and 
subnational  reform  needs  to  foster  economic 
growth, social development and competitiveness in 
the country. 

of 
Overview 
performance at regional level 

economic 

and 

social 

Map A17.1:  GDP per capita (2022) in Spain, by 
NUTS2 region 

Source: Eurostat, DG REGIO elaboration 

Regional disparities in Spain remain high and 
most  of  the  regions  are  diverging  from  the 
EU’s  average  GDP  per  capita  (in  purchasing 
power  parity).  In  Comunidad  de  Madrid,  this 
corresponded to 117% of the EU average in 2022, 
followed by Pais Vasco (at 109%) and Navarra (at 
103%).  These  regions  were  far  ahead  of  the 
autonomous city of Melilla (63%), and the regions 
of  Andalucía  (64%),  Extremadura  (65%)  and 
Canarias (68%) (124). 

(124) The analysis will not always mention Ciudad Autonoma de 

Melilla and Ciudad Autonoma de Ceuta. 

71 

Hampering  internal  convergence,  10  regions 
grew  slower  than  the  national  average  (of 
1.19%). Between 2013 and 2022, only one region 
(Galicia)  reached  the  EU’s  annual  average  GDP 
growth  per  capita  (1.44%).  The  lowest  rates  are 
found 
in  the 
Illes  Balears 
outermost region of Canarias (0.29%).  

(0.46%)  and 

in 

in  terms  of  PPS 

While  many  regions  in  Spain  rank  below  the 
EU  average  in  terms  of  GDP  per  capita  and 
productivity,  some  regions  are  more  acutely 
affected  than  others.  Disparities  in  GDP  per 
capita  go  hand  in  hand  with  disparities  in  labour 
productivity.  Labour  productivity  stood  at  96%  of 
the  EU  average 
in  2022. 
Productivity  was  the  highest  in  País  Vasco  (109% 
of the EU average), in Madrid and Navarra (106% 
and 105% respectively). It stood at 86% of the EU 
average  in  Canarias,  at  84%  in  Andalucía  and 
Extremadura  and  at  81% 
in  Murcia.  Three 
transition regions, Rioja, Illes Balears and Canarias, 
were identified as being in a development trap for 
the  last  15  years.  With  their  GDP  per  capita  set 
between  90%  and  68%  of  the  EU  average  in 
2022, they have experienced serious difficulties in 
catching up.  

As 

Only  Madrid,  País  Vasco,  and  Cataluña 
ranked  above  the  EU  average  in  terms  of 
competitiveness. 
Eurostat 
subnational indicators on regional competitiveness 
in 
regional 
index 
competitiveness are mainly driven by disparities in 
higher  education,  lifelong  learning,  the  labour 
market, and innovation.  

disparities 

(2022), 

shown 

in 

R&D  expenditure  in  2022  was  1.4%  of  GDP, 
below  the  EU  average  of  2.3%  of  GDP  and 
concentrated  in  the  richest  regions.  R&D 
expenditure was the lowest in Extremadura (0.7%), 
Canarias  (0.6%),  and  in  Illes  Baleares  (0.5%),  but 
2.3% of GDP in País Vasco.  

65% 

Canarias 

Similarly,  the  Spanish  labour  market  still 
showed  significant  regional  disparities.  The 
employment  rate  reached  around  75%  in  Madrid, 
La  Rioja  and  Aragón,  but  just  63%  in  Andalucía 
and 
2023.  Overall, 
unemployment  was  nearly  twice  the  EU  average 
(12.2%  versus  6.1%).  Unemployment  rates  were 
below  9.5%  in  País  Vasco,  Cantabria,  La  Rioja, 
Cataluña  and  Aragón,  and 
in 
Extremadura  and  Canarias  (17.4%  and  16.1%and 
Andalucía  (18.3%).  Youth  unemployment  levels 

the  highest 

in 

 
 
 
 
 
 
 
Table A17.1:Selected indicators at regional level in Spain 

Source: Eurostat, EDGAR database 

remained high in 2023, at 28.7%, and reaching as 
high  as  47.3%  in  Ciudad  de  Melilla,  59.8%  in 
Ciudad  de  Ceuta,  37.2%  in  Extremadura  and 
32.8% in Canarias. 

Depopulation  is  an  ongoing  issue  in  most 
Spanish  regions,  with  more  than  half  having 
shown  a  drop  in  population.  The  regions  most 
affected by population decline were Principado de 
Asturias  (-6.6%),  Castilla  y  León  (-6.5%),  and 
Extremadura  (-4.9%).  This  is  in  part  due  to  the 
high  shares  of  out-migration  of  people  aged  15-
39 in these regions and pose significant issues for 
their long-term prospects.  

Although  9  of  the  regions  lowered  their 
greenhouse  emissions  per  capita  between 
1990  and  2022,  others  increased  theirs  by 
over  20%.  Asturias  managed  to  reduce  its 
emissions  per  capita  by  42%  thanks  to  the 
measures  taken  to  transition  towards  a  greener 
economy  and  by  reducing  the  share  of  coal-
dependent  industries.  However,  the  regions  of  La 
Rioja and of Region de Murcia had an increase of 
71%  and  45%  per  capita,  respectively.  All  the 
other regions ranked in between, with an average 
reduction of 9% in Spain. 

72 

Regional  disparities  persisted  in  terms  of 
being at-risk-of-poverty and social exclusion, 
with the highest being in towns and suburbs. 
More 
in 
third  of 
Extremadura, Andalucía and Canarias were at-risk-
of-poverty  and  social  exclusion  (as  observed  in 
AROPE).  

the  population 

than  one 

Marked  disparities  are  observed  among  the 
mainland  regions,  but  also  as  regards  the 
outermost  region  of  Canarias,  and  the 
autonomous cities of Ceuta and Melilla. These 
three  territories  ranked  below  the  EU  average  in 
GDP  per  capita  (at  less  than  70%),  and  the  two 
autonomous cities of Ceuta and Melilla had a high 
unemployment 
rate  of  28.4%  and  21.6%, 
respectively.  41%  of  the  autonomous  cities’ 
population  and  36.2%  of  the  Canarian  population 
were  also  at-risk-of-poverty  and  social  exclusion, 
against  the  national  average  of  26%.  All  these 
factors,  accompanied  by  poor  opportunities in  the 
labour  market,  translate  into  a  lower  incentive  to 
stay  in  these  regions.  The  two  autonomous  cities 
saw their population decline by 2.7% in Ceuta and 

GDP per head (PPS)Productivity (GVA (PPS) per person employed)Real productivity growth 2013-2022GDP per head growth 2013-2022Population growth 2013-2021Unemployment rateYouth unemployment rateAt-risk-of-poverty or social exclusionR&D expenditureGreenhouse Gas EmissionsGreenhouse Gas EmissionsEU Regional Competitiveness Index 2.0 - 2022 Index, EU27 = 100 (2022)Index, EU27 = 100 (2022)Average % change on the preceding yearAverage % change on the preceding yearAverage annual change per 1000 residents% of active population (2023)% of active population aged 15-24 (2023)% of population (2022)% of GDP (2021)tCO2 equivalent per head (2022)Percent change per head (1990-2022)Index, EU27 = 100European Union100100.00.71.441.96.114.521.62.38.0100.0España8696.00.21.191.712.228.726.0             1.4               6.7-9.591.9Galicia7992.30.91.55-2.99.724.623.6             1.1               6.7-25.287.9Principado de Asturias7895.40.20.96-6.612.129.225.3             0.9               18.0-42.890.5Cantabria8096.40.41.08-1.18.119.919.5             1.0               6.78.092.8País Vasco109109.20.71.190.07.723.815.7             2.3               7.224.2107.0Comunidad Foral de Navarra103105.20.51.043.59.925.814.5             1.9               10.125.197.8La Rioja9098.00.20.87-1.09.427.620.9             0.8               8.271.390.2Aragón9498.10.41.29-2.08.622.219.1             1.0               12.3-14.190.8Comunidad de Madrid117106.00.41.346.01027.420.3             1.9               2.21.3118.6Castilla y León8293.40.21.25-6.59.72822.1             1.4               12.5-11.585.4Castilla-La Mancha6989.70.11.23-2.413.229.731.6             0.8               12.7-13.279.5Extremadura6584.7-0.31.25-4.917.437.236.9             0.7               8.723.370.1Cataluña99101.50.21.092.99.322.420.4             1.8               5.522.0100.8Comunitat Valenciana7491.20.21.301.912.828.327.5             1.2               5.219.791.2Illes Balears90102.40.30.4610.810.320.321.5             0.5               6.0-23.386.4Andalucía6484.8-0.11.011.718.339.835.8             1.1               6.9-4.374.9Región de Murcia7181.80.41.314.512.828.631.0             1.1               9.845.883.3Ciudad de Ceuta7087.30.21.01-2.73059.840.7             0.2               1.7-11.462.5Ciudad de Melilla6383.10.00.85-0.526.647.341.3             0.4               1.6-18.471.1Canarias6886.5-0.50.297.516.132.836.2             0.6               4.1-12.474.9 
 
  
 
0.5%  in  Melilla  between  2013-2022  and  are  at 
risk of falling in a talent development trap (125). 

Investment  and  subnational  reform  needs 
ahead 

The 

including 

investments 

Strengthening economic dynamism remains a 
challenge  in  many  Spanish  regions.  This 
concerns  in  particular  the  capacity  of  businesses 
to  innovate  and  invest  in  R&D,  as  well  as  public 
support  to  transform  the  key  industries  identified 
by  the  respective  regional  Smart  Specialisation 
in  net-zero 
strategies, 
technologies  manufacturing. 
Spanish 
productive  sector  could  be  a  driver  of  a  stronger 
and  a  more  resilient  economy.  Delivering  the 
planned  investment  in  competitiveness  under  the 
2021-2027  cohesion  policy  programmes  will  be 
key  to  helping  Span's  less  developed  regions  and 
regions  in  a  development  trap  cope  with  this 
further 
challenge  and  avoid 
development  traps.  Spain  could  benefit  from  the 
Strategic Technologies for Europe Platform (STEP) 
initiative 
to  boost 
investment  opportunities 
investments  for  critical  technologies  to  support 
industry's transformation.  

falling 

into 

The  need  to  invest  in  the  green  transition 
remains  substantial.  Public  investments  would 
be  most  effective  if  they  triggered  appropriate 
leverage  for  private  sector  investment.  Together 
with  the  investments  planned  under  the  national 
recovery  and  resilience  plan  (NRRP),  the  2021-
2027 cohesion policy funding programmes should 
continue to be mobilised to support investment in 
the  green  transition  to  help  Spain  reach  the 
climate  objectives  set  out  in  the  national  energy 
and  climate  plan  (NECP)  and  in  the  EU’s  Green 
Deal.  This  includes  boosting  the  circular  economy 
improving  water 
and  waste  management, 
management,  enhancing  biodiversity,  as  well  as 
adapting  to  climate  and  disaster  risks.  Territories 
more  exposed  to  the  effects  of  climate  change, 
such  as  the  territories  along  the  Mediterranean 
coast,  which  face  water  scarcity,  droughts  and 
forest fires, merit special attention. 

(125) Communication from the Commission to the European 

Parliament, the Council, the European Economic and Social 
Committee and the Committee of the Regions - Harnessing 
talent in Europe’s regions, COM(2023) 32 final: 
https://ec.europa.eu/regional_policy/information-
sources/publications/communications/2023/harnessing-
talent-in-europe-s-regions_en. 

Depopulation  remains  a  major  challenge  for 
many Spanish regions with half experiencing 
population  losses,  including  Castilla  y  León, 
Castilla-La  Mancha,  Principado  de  Asturias, 
Extremadura,  Galicia,  La  Rioja,  Aragón, 
Cantabria,  Ceuta  and  Melilla.  Some  Spanish 
territories  are  at  risk  of  falling  in  a  talent 
development  trap  due  to  young  people  leaving. 
Coupling  investment  in  education  and  in  the 
business environment are crucial for depopulating 
territories to  remain  competitive  and  attractive  to 
people.  Comprehensive  strategies  developed  in 
partnership with local actors and pooling available 
resources,  should  be  set  up  to  help  the  regions 
more affected by this issue.  

to 

investments 

is 
Addressing  barriers 
relevant  at  both  national  and  subnational 
level.  Targeted  reforms  complementing  those 
included  in  the  NRRP  could  be  carried  out  to 
address the challenges faced by the regions.  

to 

needs 

Administrative 
be 
capacity 
strengthened  to  create  the  right  conditions 
for  a  better  absorption  funds  at  all 
governmental  levels  and  to  address  key 
emerging investment needs. A large amount of 
NRRP and cohesion policy funding has been made 
available  in  a  short  period  to  the  national  and 
regional  authorities.  To  this  end,  the  Spanish 
authorities  will  need 
that  public 
administrations,  including  at  subnational  level, 
have  sufficiently  high  administrative  capacity. 
Finalising  the  regional  administrative  capacity 
roadmaps would be an important step in ensuring 
implementation  of  public 
timely  and  correct 
investment.   

to  ensure 

Green investments, including actions in water 
management,  climate  change  adaptation, 
risk  prevention  and  disaster  resilience  have 
faced  difficulties  during 
implementation. 
Reforms  to  address  challenges  such  as  water 
scarcity,  droughts  and  forest  fires  along  the 
Mediterranean  coast,  or  the  risk  of  flooding  in 
inland  and  northern  regions  of  Spain,  would 
improve  the  situation.  For  instance,  shortcomings 
in  wastewater  management  are  identified  in  the 
regions of Andalucía, Canarias, Castilla-La Mancha 
and  Extremadura.  Structural  reforms  could  be 
envisaged  to  speed  up  and  effectively  deliver  on 
planned investments, notably in wastewater, water 
efficiency  and 
fire  prevention.  The 
Outermost  Region  of  Canarias,  a  territory  with  an 

forest 

73 

 
 
increased  exposure  to  the  effects  of  climate 
change, merits special attention 

The 

jobs. 

business 

strategies 

environment, 

innovation 
underpinning 

Targeted  measures  could  be  implemented  at 
regional  level  to  promote  the  upskilling  and 
reskilling of workers, support businesses and 
the 
reduce 
unemployment rates and improve the quality 
smart 
regional 
of 
specialisation 
the 
investments  under  the  2021-27  cohesion  policy 
programmes  need  to  develop  strategic  skills  and 
support  actions  to  retain  and  attract  researchers 
and talent. The Territorial Just  Transition Plan will 
be key to support these transitions in some of the 
most affected areas, as well as to make them fair 
and  acceptable  for  their  communities.  Strategies 
for upskilling and reskilling of workers will help the 
regional  workforce  to  adapt  to  the  needs  of 
thriving  economic  sectors  with  a  high  growth 
potential,  notably  due  to  the  green  and  digital 
transitions.    

74 

 
MACROECONOMIC STABILITY 
ANNEX 18: KEY FINANCIAL SECTOR DEVELOPMENTS 

funds  have 

Spain  has  a 
large  bank-based  financial 
sector  and  sustainable  financing  is  steadily 
expanding.  The  banking  sector  is  predominantly 
domestically owned (95% of total assets in 2023), 
with the five largest banking groups accounting for 
roughly  70%  of  banking-sector  assets  (Table 
A18.1).  Two  large  banking  groups  (Santander  and 
BBVA)  have  substantial  international  activities, 
operating  in  Latin  America,  the  United  Kingdom 
and  Türkiye.  The  consolidation  of  the  Spanish 
financial  system  in  recent  years  has  led  to  a 
reduction  in  the  number  of  bank  branches  and 
bank  employees  due  to  a need  to  adjust  capacity 
and  reduce  costs.  In  capital  markets,  inflows  to 
increased 
investment 
significantly,  boosted  by  flows  into  fixed-income 
funds. Following several years of steady increases, 
the  market  funding 
remained  broadly 
unchanged  at  just  above  44%  in  2022,  but  still 
stood below the EU average (50.8%). At the same 
time, sustainable financing continued to expand in 
2022,  as  Spanish  companies  issued  significant 
amounts  of  green,  social  and  sustainable  bonds. 
The volume of total outstanding private and public 
green-bond  issuance  stood  at  EUR  11.8  billion  at 
the  end  of  2022,  replicating  the  peak  issuance 
recorded  in  2021.  After  Spain’s  first  sovereign 
green-bond  issuance  (EUR  5  billion  at  20  years 
maturity) 
the  Spanish 
Treasury  tapped  the  market  three  times  in  2022 
for a total of EUR 3.2 billion.  

in  September  2021, 

recently 

ratio 

sector  has 
remained 
Spain’s  banking 
continued  geopolitical 
resilient,  amidst 
tensions  and  uncertainty,  high  inflation,  and 
tighter  financing  conditions  for  borrowers. 
Supported  by  a decrease  in  the stock  of  impaired 
in  particular  due  to  sales  of  non-
assets, 
performing  loans  (NPLs)  by  banks,  the  NPL  ratio 
declined to 2.7% at the end of 2022 and remained 
unchanged  in  Q3-2023  (but  still  above  the  EU 
average of 1.8%). The value  of outstanding loans 
that  have  deteriorated  significantly 
in  credit 
quality (126)  also  declined  in  2022,  but  remained 
broadly  unchanged  in  2023.  While  asset  quality 
has  remained  relatively  robust,  the  tightening  of 
monetary  policy  and  the  high  level  of  inflation 
may start to adversely impact the debt repayment 
capacity  of  borrowers.  The  liquidity  position  of 

(126) Stage 2 loans according to the classification by the 

International Financial Reporting Standards 9 (IFRS 9). 

remains 

reassuring,  even  after 

banks 
the 
repayment  of  a  significant  part  of  European 
Central  Bank  (ECB)  TLTRO  funding.  Amidst  rising 
prices and higher lending rates, the availability of 
deposit  funding 
(notably  corporate  deposits) 
weakened  in  the  course  of  2023.  Profitability 
continued  to  be  robust  in  the  third  quarter  of 
2023, with return on equity at 12.1%, higher than 
both  the  EU  average  and  the  2022  level.  For  the 
largest banks, in particular those mainly operating 
in  the  Spanish  market,  profitability  has  been 
adversely  affected  by  the  temporary  bank  levy 
introduced 
in  2023  and 
2024 (127).  After  weakening  in  2022,  banking-
sector capitalisation partially recovered in the first 
half  of  2023.  Overall,  Spanish  banks  continue  to 
have lower capital buffers than their EU peers, and 
in  Q3-2023  they  recorded  the  lowest  common 
equity  tier  1  ratio  in  the  EU.  In  December  2023, 
the ECB raised the minimum capital  requirements 
for Spanish lenders BBVA, Caixabank, Sabadell and 
Bankinter  as  part  of  the  supervisory  review  and 
evaluation process. 

in  2022,  payable 

Graph A18.1: Evolution of credit activity 

Source: ECB. 

lending 

contraction 

The 
activity 
in 
accelerated  in  2023.  In  2023,  lending  to  non-
financial  corporations  declined  by  3.6%  year-on-
year, while lending to households was down by 2% 
year-on-year  (Graph A18.1).  Due  to  the  tightening 

(127) The bank levy introduced in 2022 amounts to 4.8% of banks’ 
net interest and fee income for operations in Spain and is 
applicable only to banks with taxable income above EUR 800 
million in 2019. The levy is to be paid in 2023 and 2024 
based on the 2022 and 2023 financial results.  

75 

-15-10-5051015200920102011201220132014201520162017201820192020202120222023Total privateNFCHH% 
 
 
 
  
 
 
Table A18.1:Financial soundness indicators 

(1) Last data: Q3 2023. 
(2) Data are annualised.  
(3) Data available for EA countries only, EU average refers to euro area. 
Source: ECB, Eurostat. 

of the monetary policy stance in the euro area, the 
cost of lending has gradually increased since mid-
2022. After hitting a peak in September 2023, the 
1-year  Euribor  rate  (which  is  used  as  the  main 
reference  to  set  interest  rates  on mortgage  loans 
granted  by  banks)  moderated  to  3.609% 
in 
January 2024, up by 27.2 bps since January 2023. 
Meanwhile,  private  sector  debt  decreased  further 
in 2022 to 123.5% of GDP, the lowest level since 
2003. In this context, boosting equity financing for 
Spanish SMEs is crucial, especially for those with a 
high  risk-return  profile,  such  as  new,  innovative, 
Spain 
firms. 
and 
significantly  lags  behind  the  EU  average  in  SMEs' 
access  to  equity,  resulting  in  the  third-highest 
equity financing gap in the EU (128). 

high-growth 

However, 

Housing  prices 
in  Spain  saw  continued 
growth  until  the  third  quarter  of  2023,  but 
mortgage  loans  contracted.  After  an  increase 
of  5.5%  year-on-year  in  2022,  house  prices 
continued  growing  in  2023  and  were  up  by  4.5% 
year-on-year  in  Q3-2023.  The  credit-to-GDP  gap 
relative  to  trend  levels (129)  remains  in  negative 
territory  and  on  a  downward  path,  due  to  a 
contraction  in  credit  that started  towards the  end 
of  2022.  The  number  of  house  purchases 
significantly  declined  in  year-on-year  terms  in 
2023,  but  remained  above  their  average  pre-

(128) Commission’s CMU indicators 13 and 14, August 2023.  

(129) The credit-to-GDP gap measures the deviation of the ratio of 
private non-financial-sector credit to GDP from its trend 
level. 

76 

pandemic  level.  Likewise,  new  mortgage  loan 
volumes have continued to lose momentum. Some 
tightening  was  observed  in  credit  standards  in 
2023,  and  this  was  reflected  in  a  slight  decrease 
in the loan-to-value ratio for new mortgage loans. 
Overall,  real-estate-market  indicators  still  show 
some signs of overvaluation, although much more 
contained  than  in  other  EU  Member  States.  The 
Bank  of  Spain  has  maintained  the  countercyclical 
capital  buffer  at  zero.  In  December  2023,  the 
authorities  enabled  partial  or  early  repayment  of 
variable-rate mortgage loans without fees. 

The  insurance  sector  has  remained  resilient. 
Spain’s  insurance  market  is  comparatively  small, 
with  total  assets  of  insurers  amounting  to  21.1% 
of  GDP  in Q3-2023 (down  from  22.3%  of GDP in 
2022),  well  below  the  EU  average  of  53.7%.  The 
solvency position of the insurance sector remained 
broadly  unchanged  in  2022  and  in  2023,  as  the 
solvency  capital  ratio  stood  at  238.7%  in  Q3-
2023,  thus  slightly  below  the  EU  average  (at 
around 262.3%). Motor insurance has continued to 
be  the  line  of  business  that  has  contributed  the 
largest  volume  of  premiums 
in  the  non-life 
business,  although  its  share  has  continued  to 
decline  progressively  over  the  last  two  decades. 
Most recently,  the volume of life-insurance-sector 
premiums  has  grown  significantly.  Spanish 
insurers  have  a  relatively  sizeable  portfolio  of 
sovereign  and  corporate  bonds,  which  exposes 
them  to  changes  in  interest  rates.  On  the  upside, 
the ongoing monetary policy tightening by the ECB 
may  mitigate  the  exposure  of  the  sector  to  risks 
stemming from the low-interest-rate environment. 

2017201820192020202120222023EUMedianTotal assets of the banking sector (% of GDP)234.3219.7214.9258.5245.7220.9207.8257.0184.6Share (total assets) of the five largest banks (%)63.768.567.466.469.369.6--69.6Share (total assets) of domestic credit institutions (%)195.595.395.295.095.094.795.0-62.9NFC credit growth (year-on-year % change)0.2-1.90.07.91.10.8-3.6-2.4HH credit growth (year-on-year % change)-0.50.40.2-0.60.80.6-2.0-1.4Financial soundness indicators:1        - non-performing loans (% of total loans)4.43.73.12.82.92.72.71.81.8- capital adequacy ratio (%)15.415.415.716.817.316.516.819.620.1- return on equity (%)27.08.26.7-3.510.29.912.19.913.2Cost-to-income ratio (%)152.653.353.450.252.148.044.952.844.9Loan-to-deposit ratio (%)189.390.692.685.582.887.088.493.380.2Central bank liquidity as % of liabilities7.97.96.110.911.55.61.2-0.7Private sector debt (% of GDP)139.2133.1129.0147.9137.7123.5-133.0118.4Long-term interest rate spread versus Bund (basis points)123.8102.691.488.872.1103.8104.2107.7104.2Market funding ratio (%)40.942.143.743.244.444.1-50.839.8Green bonds outstanding to all bonds (%)3---1.42.22.83.24.02.71-34-1011-1718-2424-27Colours indicate performance ranking among 27 EU Member States. 
 
 
   
 
ANNEX 19: TAXATION 

This  annex  provides  an 
indicator-based 
overview  of  Spain’s  tax  system.  It  includes 
information on the tax structure (the types of tax 
that  Spain  derives  most  of  its  revenue  from),  the 
tax  burden  on  workers,  and  the  progressivity  and 
redistributive  effect  of  the  tax  system.  It  also 
provides 
tax  collection  and 
compliance. 

information  on 

Despite  recent  improvements,  Spain’s  tax 
burden remains below the EU average. Spain’s 
tax  revenues  reached  37.7%  of  GDP  in  2022 
(Table  A19.1).  It  is  still  2.5  pps  below  the  EU 
average,  despite  having  increased  significantly 
since  2019  (34.8%).  Most  of  the  recent  increase 
has  been  driven  by  a  pro-cyclical  enlargement  of 
the  labour  and  capital  tax  bases,  in  a  context  of 
robust job creation; strong rises in pensions, public 
wages  and  statutory  minimum  wage;  and 
mounting  company  profits.  As  regards  the  tax 
structure, Spain is one of the EU countries with the 
lowest  revenue  from  consumption  taxes  (9.7%  of 
GDP).  This  is  largely  due  to  the  extensive  use  of 
reduced VAT rates and exemptions, leading to the 
highest  VAT  policy  gap  rate  in  the  EU,  which  is 
estimated  at  59%  of  the  notional  ideal  revenue. 
The share of labour taxes over total  tax  revenues 
was in line with the EU average in 2022, while that 
of capital taxes was slightly above (Graph  A19.2). 
Overall  revenues  from  property  taxes  in  2022 
were among the highest in the EU and, in the case 
of  recurrent  property  taxes,  were  slightly  above 
the  EU  average. The  forward-looking  effective 
average  tax  rate  on  corporate  income  exceeded 
the  EU  average  by  4.3  pps  in  2022,  which 
competitiveness 
possible 
reflected 
hindrances  stemming  from  Spain’s  corporate 
taxation  system  (130).  The  performance  of  the  tax 
system should be viewed in a context of persistent 
public deficits and a high debt-to-GDP ratio.  

some 

Environmental  taxation  is  below  the  EU 
average.  Revenues  from  environmental  taxes 
declined to 1.5% of GDP in 2022 (against 2.0% on 
EU  aggregate)  and  were  affected  by 
the 
extraordinary  measures  adopted 
to  contain 
inflation, some of which still remain in place. There 
is  potential  to  strengthen  the  application  of  the 
‘polluter pays’ principle because Spain has not yet 

(130) Herranz, M. M. and Turino, F., Tax Evasion, Fiscal Policy and 
Public Debt: Evidence from Spain, Economic Systems 2023, 
47 (3), 101121, 
https://doi.org/10.1016/j.ecosys.2023.101121. 

implemented  two  of  the  six  main  types  of 
(i.e. taxes  on 
pollution  and 
fertilisers and pesticides). 

resources 

taxes 

Some  important  tax  reforms  included  in 
Spain’s  Recovery  and  Resilience  Plan  (RRP) 
are  still  pending.  To  guide  a  comprehensive 
reform  of  the  tax  system,  the  government 
appointed  a  committee  of  experts  to  prepare  a 
white  paper,  which  was  published 
in  March 
2022 (131).  It  also  tasked  the  independent  fiscal 
authority (AiREF) with producing a spending review 
on  the  system  of  tax  benefits  (this  review  was 
published  in  July  2020)  and  created  a  task  force 
that  assessed  15  tax  benefits  in  2021-2022.  On 
the  basis  of  these  inputs,  Spain  committed  to 
legislative  reforms  with  a  view  to 
enacting 
bringing its revenue-to-GDP ratio closer to the EU 
average  and  making  the  tax  system  more 
efficient.  Some  short-term  tax  measures  have 
in  the  meantime,  but  further 
been  adopted 
measures aim to strengthen corporate, wealth and 
environmental  taxation;  reduce  tax  exemptions; 
and modernise the tax system. 

Graph A19.1: Tax wedge for single and second 
earners as a % of total labour costs, 2023 

Note: Second earners are members of a family with the 
primary earner earning 100% of the average wage and no 
children. For the methodology of the tax wedge for second 
earners, see OECD, 2016, Taxing Wages 2014-2015. 
Source: European Commission 

Spain’s  labour  tax  burden  is  relatively  more 
progressive than the EU average. Graph A19.1 
shows that the labour tax wedge for Spain in 2023 
was  lower  than  the  EU  average  for  single  people 
at 50% of the average wage and close to the EU 
average at higher wage levels. Second earners, at 
a  wage  level  of  67%  of  the  average  wage  and 
whose  spouses  earn  the  average  wage,  face  a 

(131) Libro Blanco sobre la Reforma Tributaria 2022 (ief.es) 

77 

28.436.040.244.739.62025303540455050100150Tax wedge, % of total labour costsEarnings as % of the average wageSingle earner - ESSingle earner - EU averageSecond earner -  ESSecond earner -  EU average 
 
 
       
 
 
Graph A19.2: Tax revenues from different tax types, % of total revenue 

Note: values for EU are GDP-weighted EU averages (EU aggregates). 
Source: European Commission 

higher tax wedge than single earners at the same 
wage  level.  At  the  same  time,  their  tax  wedge  is 
close  to  the  EU  average  of  the  tax  wedge  for 
second  earners.  Spain’s  RRP  includes  a  reform  to 
make  the  tax  system  even  more  progressive.  The 
tax  and  benefit  system 
the  Gini 
coefficient  (a  measure  of  income  inequality)  in 
2022  by  7.6  pps,  which  was  close  to  the  EU 
average of 7.9 pps (see Table A19.1).  

reduced 

Spain  performs  relatively  well  in  terms  of 
tax  compliance  and  tax  administration, 
although  the  age  profile  of  its  staff  poses 
challenges for the latter. Spain is doing well in 
digitalising  its  tax  administration,  which  can  help 
reduce tax arrears as well as cut compliance costs. 
Outstanding tax arrears were low at 8.7% of total 
tax  revenues  in  2021  (significantly  below  the 
EU-27  average  of  35.5%).  The  VAT  compliance 
gap  decreased  further  in  2021,  in  line  with  most 
EU countries. The average age of the Spanish tax 
administration’s  employees 
relatively  high 
(50.7%  of  them  are  older  than  54).  Some  recent 
initiatives  are  trying  to  renovate  the  staff,  but 
more  ambition  will  be  needed  in  order  to  ensure 
the  replacement  of  half  of  the  workforce  in  the 
next  decade.  Spain’s  RRP  includes  measures  to 
further strengthen both the tax system and the tax 
administration  (e.g.  measures  to  prevent  and 
combat  tax  fraud,  modernise  the  national  tax 
agency,  and  improve  assistance  to  taxpayers  and 
international  cooperation  by  increased  use  of 
digital tools). Most of these have been carried out. 

is 

78 

50.627.322.150.625.823.6Tax revenue shares in 2022, Spain (outer ring) and EU (inner ring)Taxes on labourTaxes on consumptionTaxes on capital3.33.90.60.90.20.22.92.54.52.702468Spain -environmentaltaxationEU -environmentaltaxationSpain - propertytaxationEU - propertytaxationEnvironmental and property taxation as % of total tax revenue, Spain and the EUEnergy taxesTransport taxesResource/pollution taxesRecurrent property taxesOther property taxes 
   
Table A19.1:Taxation indicators 

(1) Forward-looking effective tax rate (OECD). 
(2) A higher value indicates a stronger redistributive impact of taxation. 
(*) EU-27 simple average. 
(**) Forecast value for 2022, if available. For more details on the VAT gap, see European Commission, Directorate-General for 
Taxation and Customs Union, 2023, VAT gap in the EU, https://data.europa.eu/doi/10.2778/911698. 
For more data on tax revenues as well as the methodology applied, see the Data on Taxation webpage, 
https://ec.europa.eu/taxation_customs/taxation-1/economic-analysis-taxation/data-taxation_en. 
Source: European Commission and OECD 

79 

ES2010202020212022202320102020202120222023Total taxes (including compulsory actual social contributions) (% of GDP)31.337.037.937.737.940.040.440.2Labour taxes (as % of GDP)16.619.919.319.120.021.320.720.3Consumption taxes (as % of GDP)8.19.29.79.710.810.711.211.0Capital taxes (as % of GDP)6.67.99.08.97.18.08.68.9Of which, on income of corporations (as % of GDP)1.82.02.62.72.42.53.03.4Total property taxes (as % of GDP)2.12.73.02.81.92.32.22.1Recurrent taxes on immovable property (as % of GDP)1.01.31.21.11.11.21.11.0Environmental taxes as % of GDP1.61.81.71.52.42.22.32.0Tax wedge at 50% of average wage (Single person) (*)30.527.927.928.828.433.931.732.131.831.7Tax wedge at 100% of average wage (Single person) (*)39.739.039.539.640.241.040.139.940.040.2Corporate income tax - effective average tax rates (1) (*)23.423.423.319.519.019.0Difference in Gini coefficient before and after taxes and cash social transfers (pensions excluded from social transfers) (2) (*)7.36.98.57.68.68.18.27.9Outstanding tax arrears: total year-end tax debt (including debt considered not collectable) / total revenue (in %) (*)9.58.740.935.5VAT Gap (% of VAT total tax liability, VTTL)(**)11.95.50.89.75.4SpainEU-27Tax structureProgressivity & fairnessTax administration & compliance 
 
 
 
        
 
ANNEX 20: TABLE WITH ECONOMIC AND FINANCIAL INDICATORS 

Table A20.1:Key economic and financial indicators 

(1) domestic banking groups and stand-alone banks, EU and non-EU foreign-controlled subsidiaries and EU and non-EU foreign-
controlled branches. 
(2) NIIP excluding direct investment and portfolio equity shares. 
Source: Eurostat and ECB as of 2024-5-17, where available; European Commission for forecast figures (Spring forecast 2024). 

80 

2004-072008-122013-2020212022202320242025Real GDP (y-o-y)3.6-1.30.56.45.82.52.11.9Potential growth (y-o-y).1.20.40.61.51.91.92.0Private consumption (y-o-y)3.9-2.00.07.14.71.82.11.9Public consumption (y-o-y)5.71.41.63.4-0.23.81.81.3Gross fixed capital formation (y-o-y)5.7-8.52.72.82.40.81.92.9Exports of goods and services (y-o-y)4.61.00.113.515.22.31.62.4Imports of goods and services (y-o-y) 8.3-5.21.414.97.00.31.32.4Contribution to GDP growth:Domestic demand (y-o-y)4.9-3.00.85.33.11.91.91.9Inventories (y-o-y)0.0-0.20.01.4-0.2-0.30.00.0Net exports (y-o-y)-1.31.8-0.3-0.22.90.80.20.1Contribution to potential GDP growth:Total Labour (hours) (y-o-y).0.1-0.20.00.81.11.11.1Capital accumulation (y-o-y).0.70.30.30.30.30.30.4Total factor productivity (y-o-y).0.40.20.30.40.50.50.6Output gap2.9-4.8-3.1-3.90.20.81.00.9Unemployment rate9.219.118.314.913.012.211.611.1GDP deflator (y-o-y)3.80.50.82.74.15.93.32.3Harmonised index of consumer prices (HICP, y-o-y)3.22.30.43.08.33.43.12.3HICP excluding energy and unprocessed food (y-o-y)2.81.60.70.75.25.83.22.2Nominal compensation per employee (y-o-y)3.22.01.14.54.15.44.02.9Labour productivity (real, hours worked, y-o-y)0.61.70.4-0.81.80.6-0.20.3Unit labour costs (ULC, whole economy, y-o-y)3.40.41.90.41.06.13.92.3Real unit labour costs (y-o-y)-0.5-0.11.1-2.2-3.00.20.6-0.1Real effective exchange rate (ULC, y-o-y)2.2-1.60.30.9-2.8-0.4-0.30.0Real effective exchange rate (HICP, y-o-y)1.5-0.1-0.30.7-1.2-1.1..Net savings rate of households (net saving as percentage of net disposable income)3.14.64.29.72.9...Private credit flow, consolidated (% of GDP)27.1-0.7-0.43.00.3-2.2..Private sector debt, consolidated (% of GDP)166.6198.3145.7137.7123.4111.6..of which household debt, consolidated (% of GDP)73.583.263.657.652.346.9..of which non-financial corporate debt, consolidated (% of GDP)93.1115.182.180.171.264.7..Gross non-performing debt (% of total debt instruments and total loans and advances) (1).4.44.22.62.3...Corporations, net lending (+) or net borrowing (-) (% of GDP)-3.96.15.43.66.15.45.76.6Corporations, gross operating surplus (% of GDP)20.423.823.621.323.923.023.124.0Households, net lending (+) or net borrowing (-) (% of GDP)-4.5-0.22.04.80.22.92.82.4Deflated house price index (y-o-y)9.7-8.23.51.40.8-0.2..Residential investment (% of GDP)11.36.94.95.85.75.7..Current account balance (% of GDP), balance of payments-7.8-3.92.00.80.62.62.82.9Trade balance (% of GDP), balance of payments-5.0-0.93.01.01.24.1..Terms of trade of goods and services (y-o-y)0.5-0.90.1-0.7-6.96.40.60.2Capital account balance (% of GDP)0.60.40.40.90.91.1..Net international investment position (% of GDP)-70.5-91.3-84.6-71.0-60.0-52.8..NENDI - NIIP excluding non-defaultable instruments (% of GDP) (2)-39.5-71.8-57.7-39.6-30.1-23.9..IIP liabilities excluding non-defaultable instruments (% of GDP) (2)121.0155.2162.9179.0162.0154.4..Export performance vs. advanced countries (% change over 5 years)..-0.6-8.5-4.61.0..Export market share, goods and services (y-o-y)-2.7-3.8-1.00.45.11.2-1.8-1.3Net FDI flows (% of GDP)4.00.10.9-1.4-0.1-0.3..General government balance (% of GDP)1.3-9.3-4.9-6.7-4.7-3.6-3.0-2.8Structural budget balance (% of GDP)..-2.7-4.3-4.8-4.1-3.4-3.3General government gross debt (% of GDP)40.762.7104.5116.8111.6107.7105.5104.8forecast 
 
 
 
  
 
 
ANNEX 21: DEBT SUSTAINABILITY ANALYSIS 

This  annex  assesses  fiscal  sustainability 
risks  for  Spain  over  the  short,  medium  and 
long  term. 
It  follows  the  multi-dimensional 
approach  of  the  European  Commission’s  2023 
Debt Sustainability Monitor, updated based on the 
Commission 2024 spring forecast. 

fiscal 

1  –  Short-term  risks  to  fiscal  sustainability 
low  overall.  The  Commission’s  early-
are 
detection  indicator  (S0)  does  not  signal  major 
(Table A21.2) (132). 
short-term 
risks 
Government gross financing needs are expected to 
large,  at  around  18%  of  GDP  over 
remain 
Financial 
2024-2025 
markets’  perceptions  of  sovereign 
risk  are 
investment grade, as confirmed by the main rating 
agencies.  

(Table A21.1, Table 1). 

2  –  Medium-term  fiscal  sustainability  risks 
are high.   

Under  the DSA baseline,  debt is projected to 
decline  slightly  before  increasing  again  over 
the  medium  term,  reaching  around  113%  of 
GDP  in  2034  (Graph 1  and  Table  1) (133).  The 
increase  in  the  government  debt  ratio  is  partially 
driven  by  the  assumed  structural  primary  deficit 
(excluding  changes  in  cost  of  ageing)  of  0.8%  of 
GDP  as  of  2024.  This  level  appears  plausible 
compared with past fiscal performance, indicating 
that  the  country  has  room  for  corrective  action 
(Table A21.2) (134). 
ageing-related 

Moreover, 

(132) The S0 is a composite indicator of short-term risk of fiscal 
stress. It is based on a wide range of fiscal and financial-
competitiveness indicators that have proven to be a good 
predictor of emerging fiscal stress in the past.  

(133) The assumptions underlying the Commission’s ‘no-fiscal 

policy change’ baseline include in particular: (i) a structural 
primary deficit, before changes in ageing costs, of 0.8% of 
GDP from 2024 onwards; (ii) inflation converging linearly 
towards the 10-year forward inflation-linked swap rate 10 
years ahead (which refers to the 10-year inflation 
expectations 10 years ahead); (iii) the nominal short- and 
long-term interest rates on new and rolled over debt 
converging linearly from current values to market-based 
forward nominal rates by T+10; (iv) real GDP growth rates 
from the Commission 2024 spring forecast, followed by the 
EPC/OGWG ‘T+10 methodology projections between T+3 and 
T+10 (average of 1.2%); (v) ageing costs in line with the 
2024 Ageing Report (European Commission, Institutional 
Paper 279, April 2024). For information on the methodology, 
see the 2023 Debt Sustainability Monitor (European 
Commission, Institutional Paper 271, March 2024). 

(134) This assessment is based on the fiscal consolidation space 

indicator, which measures the frequency with which a tighter 
fiscal position than assumed in a given scenario has been 
observed in the past. Technically, this consists in looking at 

from  a  still 

expenditure  is  projected  to  increase,  weighing  on 
public  finances.  At  the  same  time,  the  baseline 
projection  benefits 
favourable 
(although  declining)  snowball  effect  up  to  2034, 
notably  thanks  to  the  impact  of  Next  Generation 
EU.  Government  gross  financing  needs  are 
expected to remain large and to increase over the 
projection period, reaching 21.5% of GDP in 2034. 

(in  which 

interest-growth 

interest-growth 

is  stress-tested 
The  baseline  projection 
against 
deterministic 
alternative 
four 
scenarios to assess the impact of changes in 
key  assumptions  (Graph 1).  All  four  scenarios 
lead to higher debt levels than the baseline. Under 
rate  differential 
the  adverse 
scenario 
rate 
the 
differential  deteriorates  by  1.0 pp.  compared  with 
the  baseline),  the  debt  ratio  would  exceed  the 
baseline  level  by  around  9 pps.  by  2034.  Under 
both the historical structural primary balance (SPB) 
scenario (in which the SPB returns to its historical 
15-year  average  of  -1.4%  of  GDP)  and  the  lower 
SPB scenario (in which the improvement in the SPB 
forecast for 2024 is halved), the debt ratio would 
be higher than in the baseline by around 4 pps. by 
2034.  Finally,  under  the  financial  stress  scenario 
(in  which  interest  rates  temporarily  increase  by 
the 
2.1 pps.  compared  with 
government debt ratio would be higher by around 
2 pps. by 2034. 

the  baseline), 

The  stochastic  projections  indicate  high  risk 
due to the high probability of debt increasing 
over  the  next  five  years (135).  These  stochastic 
simulations  indicate  that  the  debt  ratio  will  be 
higher in 2028 than in 2023 with a probability of 
42%,  pointing  to  high  risk  given  the  high  initial 
debt 
the 
level.  Some  uncertainty  surrounds 
baseline  debt  projection,  as  measured  by  the 
difference  of  around  31 pps.  of  GDP  between  the 
10th and 90th debt distribution percentiles in five 
years’ time (Graph 2).  

3  –  Long-term  fiscal  sustainability  risks  are 
is  based  on  the 
medium.  This  assessment 

the percentile rank of the projected SPB within the 
distribution of SPBs observed in the past in the country, 
taking into account all available data from 1980 to 2023. 

(135) The stochastic projections show the joint impact on debt of 

10,000 different shocks affecting the government’s 
budgetary position, economic growth, interest rates and 
exchange rates. This covers 80% of all the simulated debt 
paths and therefore excludes tail events. 

81 

 
 
 
 
 
 
 
4  –  Finally,  several  additional  risk  factors 
need to be considered in the assessment.  On 
the one hand, risk-increasing factors relate to the 
context of higher interest rates given the elevated 
level  of  public  debt.  On  the  other  hand,  risk-
mitigating factors include the lengthening of debt 
maturity in recent years, relatively stable financing 
sources  featuring  a  well-diversified  and  large 
investor  base,  and  the  very  large  share  of  debt 
denominated  in  euro.  In  addition,  the  ‘closure 
clause’ introduced  by  the 2023 pension reform, if 
fully implemented, would contribute to addressing 
the  emerging  fiscal  sustainability  gaps  related  to 
public  pension  expenditure.  Furthermore,  while  a 
number  of  investments  and  reforms  in  the  RRP 
contribute  to  supporting  the  efficiency  of  the 
Spanish health system, measures may be required 
to  further  improve  its  efficiency  and  its  fiscal 
sustainability. 

combination of two fiscal gap indicators, capturing 
the  required  fiscal  effort  to  stabilise  debt  (S2 
indicator)  and  to  bring  it  to  60%  of  GDP  (S1 
indicator) over the long term (136). This assessment 
is  driven  by  the  projected  increase  in  ageing-
related costs and by the unfavourable initial deficit 
and debt levels. 

The  S2  indicator  points  to  medium  risk.  It 
signals  that  Spain  would  need  to  improve  its 
structural  primary  balance  by  5.6 pps.  of  GDP  to 
ensure  that  debt  stabilises  over  the  long  term 
(Table A21.1,  Table 2).  This  result  is  mainly driven 
by  the  projected  increase  in  ageing  costs,  which 
contributes  4.0 pps.  of  GDP,  of  which  2.7 pps. 
stemming  from  pension  expenditure  and  1.8 pps. 
jointly  from  health  care  and  long-term  care 
expenditure,  partially  offset  by  a  negative 
contribution from education. The remainder of the 
needed  effort 
the  unfavourable 
budgetary  position,  contributing  1.6  pps.  of  GDP. 
The impact of the recently adopted pension reform 
under the RRP is included in this projection. (137) 

is  due 

to 

The  S1  indicator  also  points  to  medium  risk. 
This indicator shows that a significant fiscal effort 
of  5.1 pps.  of  GDP  would  be  needed  for  Spain  to 
reduce its debt to 60% of GDP by 2070. This result 
is  also  mainly  driven  by  the  projected  increase  in 
ageing  costs  (contributing  3.2 pps.  of  GDP).  The 
initial  deficit  and  high  debt  level  contribute  an 
additional  1.0 pp.  and  0.9 pp.  of  GDP,  respectively 
(Table 2).  

(136)The S2 fiscal sustainability indicator measures the 

permanent SPB adjustment in 2025 that would be required 
to stabilise public debt over an infinite horizon. It is 
complemented by the S1 indicator, which measures the 
permanent SPB adjustment in 2025 needed to bring the debt 
ratio to 60% by 2070. The impact of the drivers of S1 and 
S2 may differ due to the infinite horizon component 
considered in the S2 indicator. For both the S1 and S2 
indicators, the risk assessment depends on the amount of 
fiscal consolidation needed: ‘high risk’ if the required effort 
exceeds 6 % of GDP, ‘medium risk’ if it is between 2% and 
6% of GDP, and ‘low risk’ if the effort is negative or below 
2% of GDP. The overall long-term risk classification 
combines the risk categories derived from S1 and S2. S1 
may notch up the risk category derived from S2 if it signals a 
higher risk than S2. See the 2023 Debt Sustainability Monitor 
for further details. 

(137) The pension reform includes measures aiming to preserve 
adequacy and intergenerational equity, including by 
increasing the effective retirement age and contributions to 
the pension system, while minimising the impact on the tax 
wedge on labour. 

82 

 
 
 
Table A21.1:Debt sustainability analysis - Spain 

Source: Commission services 

Table A21.2:Heat map of fiscal sustainability risks - Spain 

Source: Commission services 

83 

Table 1. Baseline debt projections20212022202320242025202620272028202920302031203220332034Gross debt ratio (% of GDP)116.8111.6107.7105.5104.8104.4104.7105.0105.5106.2107.4108.9110.9113.2Changes in the ratio-3.4-5.2-4.0-2.1-0.7-0.50.30.40.40.81.11.62.02.3of whichPrimary deficit4.62.41.20.40.30.60.91.21.31.51.71.92.12.4Snowball effect-8.0-8.4-6.4-3.0-1.9-1.0-0.7-0.8-0.9-0.7-0.5-0.3-0.2-0.1Stock-flow adjustments0.00.81.20.50.90.00.00.00.00.00.00.00.00.0Gross financing needs (% of GDP)23.919.020.418.018.217.718.218.518.819.219.620.220.921.5S1S2Overall index  (pps. of GDP)5.15.6of which Initial budgetary position1.01.6Debt requirement0.9Ageing costs3.24.0of which    Pensions2.42.7     Health care0.91.1     Long-term care0.50.7Education-0.5-0.5Table 2. Breakdown of the S1 and S2 sustainability gap indicators9510010511011512012520212022202320242025202620272028202920302031203220332034Graph 1. Deterministic debt projections Historical SPB scenarioLower SPB scenarioFinancial stress scenarioAdverse 'r-g' scenarioBaseline% of GDPp10p20p40p60p80p9070809010011012013020212022202320242025202620272028% of GDPGraph 2. Stochastic debt projections 2024-2028MedianBaselineBaselineHistorical SPBLower SPBAdverse 'r-g'Financial stressOverallHIGHHIGHHIGHHIGHHIGHHIGHDebt level (2034), % GDP113.2116.9117.0122.2115.0Debt peak year20342034203420342034Fiscal consolidation space71%77%76%71%71%Probability of debt ratio exceeding in 2028 its 2023 level42%Difference between 90th and 10th percentiles (pps. GDP)30.6(1) Debt level in 2034. Green: below 60% of GDP. Yellow: between 60% and 90%. Red: above 90%. (2) The debt peak year indicates whether debt is projected to increase overall over the nextdecade.Green:debtpeaksearly.Yellow:peaktowardsthemiddleoftheprojectionperiod.Red:latepeak.(3)Fiscalconsolidationspacemeasurestheshareofpastfiscalpositionsinthecountrythatweremorestringentthantheoneassumedinthebaseline.Green:highvalue,i.e.theassumedfiscalpositionisplausiblebyhistoricalstandardsandleavesroomforcorrectivemeasuresifneeded.Yellow:intermediate.Red:low.(4)Probabilityofdebtratioexceedingin2028its2023level.Green:lowprobability.Yellow:intermediate.Red:high(alsoreflectingtheinitialdebtlevel).(5)thedifferencebetweenthe90thand10thpercentilesmeasuresuncertainty,basedonthedebtdistributionunder10000 different shocks. Green, yellow and red cells indicate increasing uncertainty. (For further details on the Commission's multidimensional approach, see the 2023 Debt LOWHIGHMEDIUMMEDIUMMEDIUMShort termMedium term - Debt sustainability analysis (DSA)Long termOverall                               (S0)Overall Deterministic scenariosStochastic projectionsS2S1Overall(S1 + S2)BaselineHistorical SPBLower SPBAdverse 'r-g'Financial stressOverallHIGHHIGHHIGHHIGHHIGHHIGHDebt level (2034), % GDP113.2116.9117.0122.2115.0Debt peak year20342034203420342034Fiscal consolidation space71%77%76%71%71%Probability of debt ratio exceeding in 2028 its 2023 level42%Difference between 90th and 10th percentiles (pps. GDP)30.6Short termMedium term - Debt sustainability analysis (DSA)Long termOverall                               (S0)Overall Deterministic scenariosStochastic projectionsS2S1Overall(S1 + S2)(1)Debtlevelin2034.Green:below60%ofGDP.Yellow:between60%and90%.Red:above90%.(2)Thedebtpeakyearindicateswhetherdebtisprojectedtoincreaseoveralloverthenextdecade.Green:debtpeaksearly.Yellow:peaktowardsthemiddleoftheprojectionperiod.Red:latepeak.(3)Fiscalconsolidationspacemeasurestheshareofpastfiscalpositionsinthecountrythatweremorestringentthantheoneassumedinthebaseline.Green:highvalue,i.e.theassumedfiscalpositionisplausiblebyhistoricalstandardsandleavesroomforcorrectivemeasuresifneeded.Yellow:intermediate.Red:low.(4)Probabilityofdebtratioexceedingin2028its2023level.Green:lowprobability.Yellow:intermediate.Red:high(alsoreflectingtheinitialdebtlevel).(5)thedifferencebetweenthe90thand10thpercentilesmeasuresuncertainty,basedonthedebtdistributionunder10000differentshocks.Green,yellowandredcellsindicateincreasinguncertainty.(Forfurtherdetailson the Commission's multidimensional approach, see the 2023 Debt Sustainability Monitor)LOWHIGHMEDIUMMEDIUMMEDIUM