Spain Accused of Diverting Billions in EU Recovery Funds

The government of Spanish Prime Minister Pedro Sanchez is facing accusations that it diverted billions of euros from a European recovery fund, intended to address the effects of the Covid-19 pandemic, into the domestic welfare system. Spanish media reports suggest more than €10bn may have been redirected, according to the daily Welt.

El Mundo reported that money from Brussels was used to cover budgetary expenditure rather than support economic recovery after the pandemic, citing documents submitted by the Ministry of Finance to the Spanish parliament.

According to the published documents, around €2.39bn was directed toward civil servants' pension schemes and minimum social security pensions at the end of 2024. The Ministry of Finance has confirmed the practice, according to media reports. A further €8.5bn was to be added to the social system in the following year, money originally intended for the country's industrial transformation.

The NextGenerationEU fund was established by the European Union after the pandemic outbreak in 2020 to promote economic resilience and sustainable growth in member states.

The Taxpayers Association of Europe has called the affair a scandal and is demanding an investigation, full disclosure of all relevant information and the return of the funds. The Spanish government maintains that its actions were legal.

(welt, bak)