EU Reiterates Warning Spain to Miss Deficit Despite Rajoy Pledgeby
Spain seen breaching excessive deficit limit in 2016
EU Commission sees shortfall of 4.7% in 2015, 3.6% next year
The European Commission reiterated its warning over Spain missing its deficit target for 2016, pressing the nation to submit a new budget plan as soon as possible.
The country has come under scrutiny over its fiscal plan, which was approved by Spanish Prime Minister Mariano Rajoy using his overall majority in the parliament. The administration faces criticism from the opposition and the Brussels-based commission ahead of a general elections due Dec. 20 in which the conservative leader is attempting to use the government’s economic record to secure re-election.
The commission, the European Union executive, said in its latest assessment released Tuesday that the current budget plan poses a non-compliance risk to the EU’s excessive-deficit ceiling of 3 percent of gross domestic product. The commission also said Spain would not comply with the recommended fiscal effort, calling for a new amended version to be submitted as soon as possible.
In its autumn economic forecasts published on Nov. 5, the commission predicted a Spanish budget shortfall of 4.7 percent of gross domestic product this year and of 3.6 percent in 2016. The government has repeatedly said it will meet its targets of 4.2 percent and 2.8 percent, respectively, with Economy Minister Luis de Guindos describing the divergence as “minor.”
In Tuesday’s report, the commission described Spain’s shortfall as one of the “largest” differentials among euro-area nations.