Spain risks losing €1.1 bn of EU recovery funds without reforms by August

The European Commission has kept €1.1 billion of Spain’s Next Generation EU funds on hold because the country has not fulfilled two of three reforms pledged to Brussels. The pending measures are a tax increase on diesel fuel and a reduction in temporary public‑sector employment, while the digitalisation of regional and local administrations has already been approved. The deadline to meet the two remaining conditions is 31 August; missing it would mean the funds are permanently lost. Spain has so far received €71 billion in transfers and loans under the recovery plan, and the government is accelerating negotiations with the EU to avoid the loss. A further €626.6 million has already been suspended over the treatment of interim civil‑service workers, a group that includes up to 800 000 staff. The government has also asked for an extension to March 2027 to adjust its temporary‑worker legislation, but the EU has said the 31 August deadline is non‑negotiable for all member states.