Spain diverted €8.5 billion in Next Generation funds to pay pensions
The Spanish Government diverted €8.5 billion of Next Generation funds to pensions, an accounting manoeuvre that breaks the law and leaves €22.5 billion unaccounted for.
English · Original discussion in Spanish · Published
Spain's diversion of €8.5 billion in Next Generation funds to pensions: an accounting scandal with no consequences
The Spanish Government used €8.5 billion from Next Generation funds to pay pensions, an accounting manoeuvre that abusa the royal decree governing the Recovery and Resilience Mechanism. According to the data, two budget modifications worth €2,389.4 million were authorised in November 2024, financed with surplus credits from the RRF, something independent analysts have called an 'accounting crime'. The EU, moreover, pointed out that Spain failed to spend €30 billion of these funds, leaving a €22.5 billion hole unaccounted for.
The illegality of the swap
Royal Decree-Law 36/2020, in its article 37.1, establishes that credits under service 50 of the RRF may only be used for the intended purposes. However, the Ministry of Finance approved a credit increase of €1,722.1 million on 6 November 2024 and a transfer of €667.3 million on 19 November, both charged to that service, to cover pensions for retired civil servants and minimum income top-ups. Lawyers consulted consider this to constitute accounting malfeasance and documentary fraud, since it alters the nation's accounting records. While in the private sector a manager who diverted funds like this would go to prison, here those responsible merely sign decrees.
The complicit silence
One current of opinion holds that citizens stay quiet because they are direct beneficiaries of these budget lines: pensions, minimum income schemes, subsidies. They point to an 'implicit social contract based on a con', where the money does not come from taxes on great fortunes but from debt and European funds. Those who downplay the scandal argue that it is only a fraction of what Europe owes Spain for its industrial dismantling, and that the country should go all in and simply not return the funds. Others, from a more critical stance, point out that pension entitlements have been oversized, especially widow's pensions, which should be restricted.
The question nobody answers
The most disturbing figure is that, according to the European Commission, Spain left €30 billion of the Next Generation funds unspent. If €8.5 billion were used for pensions, where are the other €22.5 billion? The lack of transparency and the absence of political accountability turn this episode into a symptom of a management style where legality bends to convenience. Meanwhile, the public debate barely mentions it.
Related discussions in the forum
The Spanish Government used €8.5 billion from Next Generation funds to pay pensions, an accounting manoeuvre that abusa the royal decree governing the Recovery and Resilience Mechanism. According to the data, two budget modifications worth €2,389.4 million were authorised in November 2024, financed with surplus credits from the RRF, something independent analysts have called an 'accounting crime'. The EU, moreover, pointed out that Spain failed to spend €30 billion of these funds, leaving a €22.5 billion hole unaccounted for.
The illegality of the swap
Royal Decree-Law 36/2020, in its article 37.1, establishes that credits under service 50 of the RRF may only be used for the intended purposes. However, the Ministry of Finance approved a credit increase of €1,722.1 million on 6 November 2024 and a transfer of €667.3 million on 19 November, both charged to that service, to cover pensions for retired civil servants and minimum income top-ups. Lawyers consulted consider this to constitute accounting malfeasance and documentary fraud, since it alters the nation's accounting records. While in the private sector a manager who diverted funds like this would go to prison, here those responsible merely sign decrees.
The complicit silence
One current of opinion holds that citizens stay quiet because they are direct beneficiaries of these budget lines: pensions, minimum income schemes, subsidies. They point to an 'implicit social contract based on a con', where the money does not come from taxes on great fortunes but from debt and European funds. Those who downplay the scandal argue that it is only a fraction of what Europe owes Spain for its industrial dismantling, and that the country should go all in and simply not return the funds. Others, from a more critical stance, point out that pension entitlements have been oversized, especially widow's pensions, which should be restricted.
The question nobody answers
The most disturbing figure is that, according to the European Commission, Spain left €30 billion of the Next Generation funds unspent. If €8.5 billion were used for pensions, where are the other €22.5 billion? The lack of transparency and the absence of political accountability turn this episode into a symptom of a management style where legality bends to convenience. Meanwhile, the public debate barely mentions it.
Related discussions in the forum
- What is the perversion of a debt-based system? · 124 replies
- The PRISOE creates a new TV channel: Tele Siete, sister of La Secta · 16 replies
- Pedro Sánchez is finished, but if he calls an election he is dead. · 97 replies
- Elon Musk did not make himself: daddy's emerald mine and the biggest scam of the "hustle culture" · 45 replies
Summary of a discussion on Burbuja.info - Foro de economía, actualidad y política., translated from Spanish and reviewed before publication. Read the full discussion (17 replies).
More summaries
-
€9.815 billion injected into pensions: the gap keeps growing
Spain injected €9.815 billion into Social Security in the first quarter, up 12%. Monthly pension spending now tops €14 billion. Where is the money coming from?
-
Migrant regularization in Spain would fund just 4.5 days of pensions
Spain's fiscal watchdog AIReF estimates the regularization of migrants will raise only €2.3 billion in social contributions, equivalent to 4.5 days of pension spending.
-
La Vanguardia fires columnist over article accusing PSOE of seeking civil conflict
La Vanguardia suspends Lacasta for criticising the PSOE's drift. A reflection on the limits of journalism.
-
Petrol stations lose 123,000 customers to electric cars
Spanish petrol stations have lost 123,000 customers in a year while electric car sales reached 125,562. Is public charging now more expensive than LPG?
-
Iceland rejects EU membership as euroscepticism gains momentum
Iceland turns its back on the EU and euroscepticism sharpens its tone: monetary sovereignty, Schengen and pensions. Could a domino effect be next?
-
Spanish government seizes Ceuta port to house migrants
Spain's government has taken over the port of Ceuta to house more than 1,000 migrants, despite opposition from local businesses. What will the economic consequences be?