Spain’s Socialist Government Accused of Misusing EU Covid Recovery Funds

Prime Minister Pedro Sánchez’s administration has been reported to have diverted EU coronavirus recovery money to cover shortfalls in Spain’s pension and welfare budgets. El Mundo says the Palacio de la Moncloa used €8.5 billion of NextGenerationEU cash in 2025 for pension subsidies for retired civil servants, social-security beneficiaries and the Post Office. Spain’s Court of Auditors identified €2.4 billion diverted in 2024 to domestic spending.

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The Court of Auditors concluded the transfers were made under legal bases that “should have been better justified,” noting uncertainty about surplus-credit limits for 2024. The Sánchez government maintains the reallocation does not breach EU rules and says it will later allocate an equivalent amount to the original NextGenerationEU projects.

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Key actors include Prime Minister Pedro Sánchez, the Spanish Court of Auditors, El Mundo, Michael Jäger of the European Taxpayers Association, German MEP Andreas Schwab, chair of the EU Budget Control Committee, and Alice Weidel, leader of the Alternative for Germany (AfD).

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The amounts total over €13 billion. El Mundo adds a possible €3 billion spent on bureaucrats’ pensions, raising the sum to roughly €13.9 billion. The money comes from the EU’s NextGenerationEU programme, which allocated up to €577 billion in loans and grants to member states.

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Officials and eurosceptic politicians have condemned the reallocation. Michael Jäger called it a “scandal of the first order” and demanded full disclosure and fund recovery. Andreas Schwab described the action as “absolutely unacceptable” and warned it undermines confidence in EU financial mechanisms. Alice Weidel accused the Spanish socialists of “embezzling ten billion euros” and called for an end to joint EU debt financing.

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The Court of Auditors cites €2.4 billion for 2024, while El Mundo reports €8.5 billion for 2025 and a possible €3 billion still unaccounted for. The total remains uncertain, and further audit scrutiny is expected.

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• “We demand clarification, full disclosure, recovery of funds and criminal consequences,” — Michael Jäger, European Taxpayers Association

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• “The EU is not a self-service shop. This undermines credibility and trust in the EU.” — Michael Jäger, European Taxpayers Association

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• “absolutely unacceptable to use European funds” … “budget problems in the national pension system.” — Andreas Schwab, Member of the European Parliament

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• “Spain’s socialists are embezzling ten billion euros from the EU Corona fund. German taxpayer money is financing socialist mismanagement in Europe. The madness of EU joint debt must stop – an AfD government will ensure that!” — Alice Weidel, Leader of Alternative for Germany

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The EU Budget Control Committee is expected to launch further investigations, and the European Parliament has signaled it will pursue measures to safeguard taxpayer contributions. Additional audits by Spain’s Court of Auditors may clarify the full extent of the alleged diversions.

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