Spain’s recovery and resilience plan

Following an unprecedented crisis due to the pandemic, Spain’s recovery and resilience plan responds to the urgent need of fostering a strong recoveryand making Spain future-ready. The reforms and investments in the plan will help Spain become more sustainable, resilient and better prepared for the challenges and opportunities of the green and digital transitions. To this end, the plan consists of 112 investments and 102 reforms. They will be supported by €69.5 billion in grants. 40% of the plan will support the climate objectives and 28% of the plan will foster the digital transition.

The transformative impact of Spain’s plan is the result of a strong combination of reforms and investments which address the specific challenges for Spain. The reforms address bottlenecks to lasting and sustainable growth, while investments are targeted to accelerate the transition towards a more sustainable, low-carbon and climate-resilient economy, to maximise the benefits of the digital transformation and to ensure social cohesion. The plan also intends to improve connectivity within the country, boost labour market performance, innovation capacity of the economy and make public spending more efficient and sustainable. All reforms and investments have to be implemented within a tight time-frame, as the Regulation on the Recovery and Resilience Facility foresees they have to be completed by August 2026.

The plan will foster economic growth and create jobs. It will lift Spain´s gross domestic product by 1.8% to 2.5% by 2024. This boost to the economy will bring up to 250,000 citizens into jobs. Spain will benefit significantly from the recovery and resilience plans of other Member States, for instance through exports to these Member States. These spill-over effects account for 0.4 percentage points of gross domestic product in 2024. This demonstrates the added value of joint and coordinated action at the European level. These estimates do not include the possible positive impact of structural reforms, which can be substantial.

+ 1.8-2.5% Impact of NextGenerationEU on Spain's gross domestic product by 2024
+ 250,000 Jobs by 2026
0.4% Gross domestic product benefits thanks to other Member States’ recovery and resilience plans in 2024

When designing the plan, the Spanish authorities consulted national and regional social partners and stakeholders, while pursuing a close dialogue with the Commission ahead of the formal submission of the plan on 30 April 2021. On 16 June 2021, the Commission gave its green light to the plan. On this occasion, President von der Leyen transmitted the Commission’s assessment to Prime Minister Sanchez during a visit in Madrid. The plan was in turn adopted by the Council on 13 July opening the door to its implementation and financing.

Green transition

In the area of climate and environmental policies, Spain faces the challenges of the significant renovation needs of its building stock to increase energy efficiency, of making mobility and the transport sector more sustainable, and of further increasing the share of renewables in the energy mix. Spain also faces challenges in the area of biodiversity (including transformation of the agri-food and fishing systems and preservation of ecosystems integrating climate change adaptation) and the need to enhance water and waste management.

Key measures for the green transition

The plan supports the green transition through investments of over €7.8 billion in the energy efficiency of public and private buildings including new social housing. Furthermore, €13.2 billion will be invested in sustainable mobility in urban and long-distance, notably by improving railway infrastructure, creating low-emission zones in urban areas, financing green public buses, deploying electric charging stations and developing urban public transport. The plan supports the decarbonisation of the energy sector by investing €6.1 billion in clean technologies and infrastructure (including storage and electricity grids) and accelerating the development and use of renewables, including renewable hydrogen. Finally, the plan also includes measures to help mitigate the adverse effects of climate change by preserving coastal spaces, ecosystems and biodiversity. It promotes the circular economy by improving water and waste management in the country.
The plan includes a Law on climate change and energy transition establishing into law the renewable targets for 2030 and the objective of climate neutrality by 2050, including a 100% renewable electricity system. It also includes a Renewable Hydrogen Roadmap, new strategies for building rehabilitation, decarbonisation and energy storage, and new procurement auctions for renewable electricity.

Example project: Energy renovations of residential buildings

Spain’s recovery and resilience plan supports more than half a million energy renovation actions in residential buildings by 2026. These energy renovations will achieve on average a primary energy demand reduction of at least 30%. The investments amount to €3.4 billion and are complemented by a coherent package of reforms, including tax incentives and renovation offices (“one-stop-shops”) to facilitate renovations. These measures will contribute to achieving the goals set out in Spain’s National Energy and Climate Plan.

Digital transition

Digital challenges for the Spanish economy include a high share of the population with an insufficient level of digital skills and a shortage of workers with specialist digital skills. This hampers digitization of society and is one of the barriers to investment in Spain.

Key measures for the digital transition

Spain’s recovery and resilience plan supports the digital transition with investments in the digitalisation of the public administration, in digital skills and digital inclusion, in cyber security and in connectivity. It will invest €3.6 billion in digital skills training. Furthermore, the plan will invest €3.2billion in the digital transformation of the public administration, with a special focus on the justice, health care, employment, educational and social services systems. The plan also includes €4.6billion investments to promote the digitalisation of industry and SMEs, investments in artificial intelligence, digitalisation of tourism and culture systems, and €4 billion to support fixed and 5G connectivity, data infrastructure and the related ecosystem. The plan includes significant reforms in this area, including the Digital Spain Agenda 2025, the 5G cybersecurity law, the Artificial Intelligence strategy, the digital skills Plan and a law on telecommunications to upgrade the regulatory framework with the development of new regulatory and enforcement instruments.

Example project: Digitalisation in education

To ensure equal access to digital opportunities the plan will enhance access to digital learning through the provision of portable devices to at least 300,000 students from vulnerable groups in public or publicly subsidised schools. It will also install, update and maintain interactive digital systems (IDS) in at least 240,000 classrooms in public and publicly subsidised schools to enable distance and blended learning. The measure will also support the preparation or revision of a digital strategy in at least 22,000 public and publicly subsidised school centres and includes the digital training of 700,000 teachers. Vocational Education and Training will also be supported through a digital accreditation tool for professional skills acquired through work experience (which is expected to serve for accreditation of 3.5 million people).

Economic and social resilience

Key macro-economic challenges for the Spanish economy include a high unemployment rate - in particular for the youth – and high share of workers on temporary contracts, low productivity growth, large stocks of external, private and government debt, as well as low public investments in particular for the digital and green transitions. These challenges weigh on potential growth and employment.

Key measures in reinforcing economic and social resilience

The plan reinforces economic and social resilience with measures fostering effective and inclusive education systems to reduce early school leaving rate, skills acquisition in line with current and future labour market needs, including the green and digital transition, and measures to improve the employability of the youth. It also puts forward a labour market reform to reduce the high share of workers on temporary contracts. There are substantial investments to upskill and reskill workers and to modernise the vocational education and training system. The plan also provides for specific actions in the area of active labour market policies, including reforming the system of hiring incentives, developing individual pathways for counselling, reinforcing the system of adult learning, and modernising public employment services.
Spain will notably invest €2.1billion in reskilling and upskilling measures, teachers training, digitalisation and internationalisation of VET and €3.5 billion will boost Spain’s innovation capacity by financing research and innovation infrastructure and programmes.
The plan includes measures to make public spending more efficient and sustainable. Spending reviews will contribute to improve the quality and efficiency of Spain’s public spending, allowing to reprioritise it towards more growth and environmentally friendly expenditures. A reform of the pension regime is expected to improve the sustainability and adequacy of pensions.

Example project: modernising VET to boost economic growth and social inclusion

Spain intends to make the Vocational Education and Training (VET) system more dynamic and flexible to respond to present and future skills needs of the economy, including through a closer collaboration with businesses. It aims to situate VET as a standard recurrent element of professional development for all workers throughout their working life, as well as to adapt VET to support the transformation of the economy, in particular by reinforcing the provision of technical and digital skills. With a total budget of €2.1 billion, the investments funded by the RRP include the creation of 135,000 new VET places, among other targets.

The plan is consistent with relevant country-specific challenges and priorities identified in the European Semester, the annual cycle of coordination and surveillance of the EU’s economic policies. For a detailed explanation of the European Semester see the following link: The European Semester explained | European Commission (europa.eu)