Brussels will measure Spain’s fiscal performance on the adjustment plan due to the lack of budgets

BRUSSELS, Dec. 5 () –

The European Commission recalled this Thursday that it will measure Spain’s fiscal performance in 2025 based on the adjustment plan presented by the Government in the face of the difficulties in approving the budgets, which has prevented for the moment the presentation of the draft budget that was to accompany the structural plan.

“The fact of having a medium-term fiscal structural plan will now be the criterion with which we will measure Spain’s fiscal performance to see if next year’s budget respects the growth levels of net spending,” explained the commissioner of Economy, Valdis Dombrovskis, in the European Parliament’s economics committee.

The Latvian politician recalled in his speech before the MEPs that Spain presented a medium-term fiscal structural plan that foresees an average growth in net spending of 3.0% over 7 years, an extension that Spain could request if it committed a series of measures and reforms whose implementation will also be monitored by the Commission.

Therefore, although the Government has not yet presented its draft budget, Brussels will be able to base itself on the fiscal adjustment plan to evaluate Spain’s fiscal performance next year, which will provide the Community Executive with a “useful basis” to carry out its analysis.

On November 26, the Commission already endorsed the credibility of Spain’s fiscal adjustment plan, which involves setting the growth of average net primary spending at 3% over a seven-year horizon.

The trajectory must guarantee that, at the end of the adjustment period, public debt is on a downward path or remains below 60% of GDP in the medium term and that the deficit does not exceed the 3% of GDP threshold required by the EU fiscal rules, reactivated after four years frozen by the pandemic.

In its plan, the Government foresees that the debt will drop from 102.5% in 2024 to 98.4% in 2027, although it will remain above 90% in 2031, when the adjustment period ends. In this way, it shows a downward path over the next few years, although it does not specify when the debt will be reduced below the 60% threshold.

Based on these commitments, Brussels considers that Spain’s plan meets the requirements of the new fiscal framework by establishing a “credible” trajectory to guarantee a “continuous” downward path of the debt.

Furthermore, the Community Executive believes that Spain meets the criteria to justify an extension of the adjustment period from four to seven years – like Finland, France, Italy and Romania – based on reforms such as the work visa system. and job search.

Regarding the deficit, the Commission maintains that Spain will close 2024 with 3%, but warns that it runs the risk of failing to comply with the deficit reduction committed to in its adjustment plan, since Brussels’ economic forecasts predict 2.6% for 2025, one tenth above the 2.5% included in the plan, and 2.7% for 2026, exceeding the 2.1% of the commitment by six tenths acquired.