Commission Adds Pressure on Rajoy's Deficit Maths Ahead of Vote

  • European Commission sees Spain missing deficit reduction goal
  • Economy minister says Spain will meets its deficit targets

The European Commission turned up the heat on Prime Minister Mariano Rajoy’s budget math, dismissing Spain’s deficit goals as overly optimistic.

In its autumn economic forecast, the commission predicted a Spanish budget shortfall of 4.7 percent of gross domestic product this year and of 3.6 percent in 2016. Those estimates are considerably higher than the government’s own expectations of 4.2 percent and 2.8 percent, respectively, and also mean the nation would breach the European Union’s 3 percent excessive deficit ceiling next year. The commission said last month the shortfall would be 4.5 percent.

The latest clash over Spain’s finances comes just weeks before a Dec. 20 national ballot, where Rajoy is attempting to use his government’s economic record as the main argument for re-election. Polls show that no party is likely to obtain an overall majority.

“The government is sure that the public deficit goals will be achieved with a 4.2 this year, and next year we will be below the 3 percent,” Economic Minister Luis de Guindos told reporters Thursday. He said the commission raised its forecast for the Spanish deficit in 2015 after including some spending by the Catalan government and the city of Zaragoza that had been previously included in 2013.

Thursday’s numbers add to a string of criticism over the economic projections presented by the Rajoy administration in its budget for 2016, which were called into questioned by European Economic Affairs Commissioner Pierre Moscovici last month. The commission called on Spain to update and resend its budget next year.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE