Spain’s government is facing serious questions after senior auditors at the Tribunal de Cuentas reportedly challenged the approval of the 2024 General State Accounts over concerns that EU recovery funds were diverted into ordinary state spending, including pension payments.
According to reports cited by El Mundo and later echoed by El Debate and La Gaceta, unallocated money from the EU’s Next Generation Recovery and Resilience Facility was allegedly channelled through the Treasury’s single account to cover current expenditure. The claims come at a sensitive moment for Prime Minister Pedro Sánchez’s government, which has been operating under an extended budget without newly approved annual accounts.
Auditors inside the Tribunal are said to have warned that approving the accounts without highlighting the issue would risk legitimising “unjustified deviations” from the purpose of the EU funds. The Recovery and Resilience Facility was designed to finance specific reforms and investments, particularly in green transition, digitalisation, economic resilience and social cohesion, with strict traceability requirements attached to every payment.
The controversy has intensified because Spain faces an August 2026 deadline to execute around €27 billion in remaining uncommitted Next Generation funds or risk losing them. Opposition voices and right-leaning commentators have presented the internal audit dispute as evidence of fiscal manoeuvring to support politically sensitive pension spending while recovery-plan targets lag behind.
Government-linked sources have reportedly described any movements of funds as temporary accounting adjustments rather than a permanent reallocation. However, no formal denial has yet been issued.
The European Commission has not commented on the specific dispute, but recently reiterated that recovery milestones must be met by the end of August 2026, with no scope for post-deadline spending.
An official Tribunal report, including any dissenting opinions, is expected to be published soon. The case lands amid wider EU scrutiny, with the European Public Prosecutor’s Office investigating hundreds of suspected fraud cases linked to the bloc’s recovery fund.
