EU Stimulus Package’s Spanish Allocation Sparks Controversy and Concerns: A Look into the Legal Basis and Effectiveness of Distribution

In an article published on June 17th, correspondent Jyrki Palo discussed the EU stimulus package and its allocation to Spain. Despite the availability of information, Finland’s media had not shown much interest in the topic. The legal basis of the stimulus package had been questioned from the start, yet EU leaders made the decision in the context of multi-year financial frameworks, making opposition challenging.

According to Palo, approximately 390 billion euros of the original pot of 750 billion euros in the stimulus package had to be granted as grants, with the remaining 360 billion provided as loans. Finland’s share of the total responsibility was around 12 billion euros, depending on whether all member countries opted for loans. The distribution of funds among member countries has been widely criticized, especially as the aid money follows a similar regional distribution.

Countries like Italy, Spain, and Eastern Europe are among the largest recipients, with Spain set to receive 119.4 billion euros, Italy 118.2 billion, and Poland 106.1 billion. Criticism arises from the belief that many recipient countries may not use the funds sensibly. For instance, Spain will allocate vast amounts to tourism, industry, SMEs, and digital connections while Italy focuses on research, innovation and renewable energy.

Finland is expected to receive around 3.8 billion euros from the stimulus package, with some of it aimed at peat sinking projects. The concern raised is that EU’s transformation into an income transfer union is becoming more evident as discussions about additional stimulus packages need to consider a bigger picture beyond just redistributing funds among members states.

Palo’s article highlights that despite questions about legality and concerns about misuse of funds by recipient countries have been present since early stages of implementation of stimulus package; EU leaders have decided on its allocation in context of multi-year financial frameworks which makes opposition challenging.

He also pointed out how critical it is for monitoring distribution of funds among member states and their effectiveness in using them wisely for economic recovery purposes.

It’s worth noting that this article was published before any significant developments regarding additional stimulus packages or changes in EU’s financial policies have occurred.