Spain has ‘bailed out’ the Cuban dictatorship with nearly €5 billion in financial aid

Contacts: Manuel Llamas, Diego Sánchez de la Cruz | Email: info@juandemariana.org | Phone: +34 676 676 188

A dictatorship with an enormous human cost. Castroism is responsible for up to 141,000 deaths attributable to state repression; it has imprisoned over 20,000 political prisoners since 1959 and currently holds more than 1,000 political detainees across nearly 300 penal facilities—compared to fewer than 15 prisons in existence prior to the revolution.

Cuba has become a veritable prison-island. Between 1959 and 1994 alone, at least 100,000 deaths were documented among people attempting to flee the island, while the exiled population and their descendants now exceed 3.5 million people—a figure equivalent to more than one-third of the population remaining in Cuba.

The revolution destroyed one of Latin America’s most advanced economies. Before 1959, Cuba enjoyed income levels comparable to Italy’s, a life expectancy of 64 years (versus 50 in the region), a literacy rate of 79% (compared to 58% in Latin America), and higher rates of car and television ownership and medical care per capita than the vast majority of neighboring countries.

Communism drastically reduced the island’s economic potential. The revolution has cost Cuba more than 50% of its potential per capita income; consequently, a country that today could have resembled Chile or Costa Rica has instead converged toward development levels comparable to Haiti’s.

Current poverty levels are devastating. The average real wage is equivalent to barely 2 dollars a month, while 89% of Cubans live in extreme poverty, 86% of households cannot adequately meet their basic needs, and 61% lack sufficient income to purchase even the essentials for survival.

Scarcity is a part of daily life. According to surveys cited in the report, 7 out of 10 Cubans are forced to skip a daily meal due to a lack of resources, while the average citizen can purchase only about 7 kilograms of chicken, 4.7 liters of oil, or less than 3 kilograms of powdered milk per month.

The collapse of production has reached historic levels. Sugar production perfectly illustrates the economic decline resulting from the communist system, having plummeted from a historic peak of over 8 million tons annually to less than 100,000 tons today. This represents a drop of more than 98% and explains why the number of operational sugar mills has fallen from over 150 to barely 30.

Faced with the entrenchment of tyranny, Cubans are voting with their feet. Between 2021 and 2024, more than a million people left the island—an exodus equivalent to nearly 24% of the population. The UN projects that Cuba will lose half its population in the coming decades if current trends persist.

The “embargo” does not explain the economic disaster. Academic evidence estimates that U.S. sanctions account for approximately 1% of annual GDP—a magnitude insufficient to justify the economic, productive, and social collapse experienced by the island. It is a grave error to adopt the dictatorship’s narrative, which seeks to excuse its failure by pointing the finger at Washington.

The Castro regime was never economically self-sufficient, starting with the USSR. The Soviet Union transferred over $120 billion in aid, subsidies, and loans to Cuba—an amount equivalent to nine times the Marshall Plan and crucial to averting the regime’s premature collapse.

Subsequently, Venezuela replaced the USSR as the dictatorship’s major financier. At the height of the Chavista alliance, resources sent from Caracas accounted for as much as 22% of Cuban GDP, with transfers estimated at up to $16 billion annually and shipments of around 100,000 barrels of oil per day.
More recently, Putin’s Russia has become the regime’s primary lifeline. Moscow has forgiven $32 billion in debt, granted over $2.3 billion in state loans, deferred payments until 2040, and supplied hundreds of millions of dollars’ worth of oil since the invasion of Ukraine.

Havana has exported revolution, terrorism, and instability for decades. The regime trained and supported guerrilla forces and armed groups in Latin America, Africa, and the Middle East, harbored members of ETA, and turned Cuba into a major hub for logistical support to international revolutionary movements.

Cuba is part of an axis of authoritarian regimes. Currently, the dictatorship maintains close political, economic, and military cooperation with Russia, China, Iran, Belarus, and Venezuela, even participating in joint military exercises and strengthening ties with powers opposed to Western democracies.

The European Union has increased its financial support despite the deterioration of human rights. Since 1988, more than 200 projects have been funded at a cost of around €300 million; There are currently 80 active projects valued at €155 million, and the allocation planned for 2021–2027 amounts to €125 million—more than double the figure from the previous budget cycle.

The worse the political situation becomes, the more money the regime receives. European funding has risen from approximately €50 million in the 2014–2020 period to €125 million for 2021–2027, despite increased repression, the imprisonment of dissidents, and Havana’s alignment with Russia.

The European Union itself acknowledges serious issues regarding oversight and transparency within its cooperation system. The European Court of Auditors has reported that over €2.6 billion distributed through more than 7,500 organizations lacks effective monitoring mechanisms, making it difficult to determine the funds’ current destination. This is particularly concerning in the case of Cuba, given the regime’s lack of transparency.

Spain has become one of the Castro regime’s main pillars of support. In 2016, Spain restructured a debt of €2,444 billion, directly forgiving €1,492 billion—equivalent to approximately 60% of the total amount owed. Successful write-offs have reduced Cuba’s debt to Spain to near-zero levels. Following further financial relief operations valued at €375 million and €291 million, Cuba has secured the forgiveness of nearly 90% of its obligations, bringing the outstanding balance down to just €286 million.

The scale of this bailout is even greater than official figures suggest. Had Cuba been required to finance itself under normal market conditions, the debt acknowledged in 2016 would have risen to €5.28 billion by 2026. Consequently, the current economic cost of Spanish support is closer to €4.994 billion.

Spanish aid extends far beyond debt relief. The report documents sales of police equipment, multi-million-euro energy programs, administrative digitization projects, institutional cooperation, technical assistance, food aid, and public funding aimed at bolstering various capabilities of the Cuban state apparatus.

Spain’s autonomous communities also contribute to the flow of resources to the island. Basque cooperation initiatives alone channeled over €41 million between 1993 and 2019; this is in addition to programs funded by Catalonia, Andalusia, and Galicia, as well as by provincial councils and numerous subsidized entities.

While the regime receives this aid, hundreds of Spanish companies remain unpaid due to Havana’s unscrupulous practices. It is estimated that more than 150 Spanish companies are owed a total of €255 million in unpaid debts—a figure that rises to approximately €318 million when including funds and dividends blocked on the island. Some of these companies have even ended up in insolvency proceedings.

Decades of aid have failed to produce any verifiable improvement. Despite hundreds of millions of euros in European cooperation, billions in financial relief provided by Spain, and decades of international support, Cuba remains a one-party dictatorship characterized by political prisoners, widespread poverty, a record exodus of migrants, and a ruined economy that relies on foreign subsidies to survive.

For further information: If you would like more information about the report, or wish to speak with IJM Director Manuel Llamas or the Institute’s Research Coordinator, Diego Sánchez de la Cruz, please email info@juandemariana.org or call 676 676 188.