Spain used €2.4 billion in EU recovery funds to pay pensions in 2024, prompting Brussels to review whether the money was spent in breach of the rules.
The figure appears in the latest General State Accounts approved by the Court of Auditors. While the accounts received an overall positive opinion, auditors flagged legal doubts about using EU funds in this way. The European Commission confirmed on Wednesday that it is reviewing the case and is in contact with Spanish authorities. For now, it says such transactions may fall under normal treasury management and do not automatically breach EU rules.
The issue is straightforward. The Recovery and Resilience Facility was created to fund reforms and investment—not routine spending like pensions. Exceptions are allowed, but only if clearly justified. Spain’s auditors say that justification is unclear.
The government argues it had little choice, pointing to “insufficient credit to meet unavoidable commitments”—in simple terms, a cash shortfall. Economy minister Carlos Cuerpo has insisted there is no cause for concern, noting that the accounts were approved as a whole.
The case has already reached Brussels politically. Both the People’s Party and VOX have asked the Commission whether it was aware of the practice and whether it could trigger sanctions. Spain is one of the largest beneficiaries of the fund, with nearly €80 billion in grants allocated and more than €55 billion already disbursed.
At stake is the type of spending involved. Pensions are a permanent cost of the state, not a one-off investment tied to reform or economic modernisation. If the Commission concludes the funds were misused, it can demand repayments, impose financial corrections, or suspend future payments.
VOX MEP Jorge Buxadé has accused Brussels of applying a double standard, arguing the EU is less strict with governments aligned with its leadership. He also pointed to broader concerns about transparency following a recent parliamentary mission to Madrid.
The case highlights a wider problem. Spain’s pension system is under growing pressure as the population ages, while EU funds have been slow to translate into visible projects.
For now, the Commission is holding off on any decision. But the outcome is clear: if the spending is judged to break the rules, Spain could be forced to repay the €2.4 billion or face a freeze on future EU funding.
