- EU: The European Commission takes Spain out of the car of the derision of the deficit
The political blockade continues to take its toll on Spain. The extension of the Budgets for 2020 worries the European Commission that reprimands the Government when considering that the account sheet sent by the Minister of Economy Nadia Calviño represents a "risk of significant deviation" from the European tax rules, particularly as regards to debt reduction.
Another jug of cold water to the Executive from Brussels. The political paralysis has caused Spain to resubmit an extension of the Budgets, in the context of the growth and stability pact. And although Brussels is sympathetic, it understands that it is due to the recent holding of elections, warns that Spain is moving away from the adjustment path and that it must submit additional measures to reduce debt as soon as possible.
In particular, the risks of deviation from fiscal regulations are due "both to the insufficient reduction of the high level of public debt and to the projected significant deviation from the adjustment route." That is to say that Spain not only does not reduce the debt sufficiently despite the risks, but also carries out an expansive fiscal policy that exceeds what was agreed upon.
The Council recommended last July to Spain that the nominal increase in public spending in 2020 should not exceed 0.9% to achieve a structural adjustment of 0.65% of GDP. Brussels believes that Spain will not meet those goals .
Debt, the priority
Although the Commission understands that this is because the Budget does not include changes, reduce debt, warned the vice-president of the Commission for the euro, Valdis Dombrovskis , should be the main priority for the Government, thus encircling the margin of maneuver of the future executive. In the coalition pact recently signed by the PSOE and Unidos Podemos, both parties pledged to develop an economic policy "in accordance with Spain's fiscal responsibility agreements with Europe."
The opinion of the Commission on the Spanish Budget confirms the doubts expressed by the technicians of the European executive last October. Already then Brussels warned Spain that it ran the risk of deviating from the fiscal pact.
A year ago, Spain abandoned the excessive deficit procedure, which establishes a tight control of the accounts, by reducing the deficit below 3%. However, Brussels closely monitors the evolution of the Spanish accounts, which once again depart from what was agreed with the Council.
Although Spain is not alone. Belgium, France, Portugal, Slovenia, Slovakia and Finland are also in the spotlight of the Commission for its deviation from the rules of the growth and stability pact. France, Belgium and Italy also share the concern about debt.
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