Economic Policy Reforms 2023

Spain

See more data for Spain on the related dashboard.

Product and labour markets functioning

Performance gaps

• In some sectors, such as professional services and trade, regulations are stringent and differ across regions, weighing on the expansion of burgeoning firms.

• Regulations that depend on the size of firms can hamper scaling-up.

• Labour mobility is hampered by the fact that regional reallocation implies a loss of social and housing benefits, due to prior residency requirements.

Recommendations

• Foster the implementation of the Market Unity Law in order to reduce regulatory differences across regions.

• Gradually eliminate the existing regulations that depend on the size of firms, as needed.

• Ensure full portability of social and housing benefits across regions, by deepening cooperation and providing temporary assistance by the region of origin or the central government.

Digital transition

Performance gaps

• There is room to improve the capacity of small businesses to develop R&D projects and to access new technologies.

• ICT-Training needs could be better identified, in particular by fostering the access for low-skilled and older workers.

Recommendations

• Support Technology Centres, which conduct R&D projects through partnerships between firms, notably SMEs, and research institutes.

• Shift a part of job training subsidies to individuals and develop ICT training programmes targeted to low-skilled and older workers.

Inclusiveness, social protection, and ageing

Performance gaps

• The unemployment rate remains higher for women than for men.

• Social assistance programmes are not fully effective at reducing poverty, due to inefficiencies in the administrative systems, complex rules, and lack of coordination.

• Unemployment and poverty rates are particularly high among young people. Skill mismatches hamper the transition from education to the labour market.

Recommendations

• Support early childhood education and care. Gradually remove the tax disincentives for second earners.

• Create one-stop shops to coordinate social and unemployment services and the assistance to vulnerable people.

• Foster collaboration between education institutions and businesses in designing education degrees and in counselling students to favour a better alignment between studies and labour market needs.

Climate transition

Performance gaps

• Carbon pricing can be improved, for both road and non-road emissions.

• Sizeable investment and reductions in emissions will be needed to meet the ambitious climate objectives adopted in 2021.

Recommendations

• Taxation of fuels should be raised to better reflect emissions of CO2 and be accompanied with redistribution towards the most vulnerable.

• The already well-developed investment plans in energy saving, renovation in buildings and sustainable transport should be hastened.

Overall performance