Brussels, 25/05/2016 (Agence Europe) - The Spanish Finance Minister, Luis de Guindos, believes that the Spanish government to be elected in the general elections of June will be able to avoid excessive government deficit sanctions.
Spain is the “'large' Eurozone country which is growing the fastest and creating the most jobs”, the Minister said on the sidelines of the Eurogroup meeting on Tuesday 24 May. He added that the “view shared” by his peers is that the budgetary efforts his country made under the Rajoy government will be recognised.
In mid-May, the European Commission recommended that Madrid be given an extra year - or until 2017 - to bring its government deficit under the 3% of national GDP mark (see EUROPE 11553). The recommended trajectory is as follows: -3.7% of GDP in 2016, -2.5% in 2017, with the Spanish deficit having stood at -5.1% in 2015. The Ecofin Council will be responsible for the final decision.
A date has been set for July, in other words after the elections of 26 June, to take stock of the Spanish economic and budgetary situation. To prevent Spain from becoming the first Eurozone country potentially exposed to financial sanctions for its excessive deficit, the acting Rajoy government currently in place has undertaken, if re-elected, to carry out further adjustments in the second half of 2016, in a letter to the President of the Commission, before the institution suggests an extra grace period, as reported in the Spanish daily newspaper El Pais. The publication of this letter caused a row in Spain, as it was felt that the Rajoy government had a different story for the electorate, who had been promised tax cuts, whilst the same government was talking the talk of budgetary rigour at European level.
“The commitments made are independent of any government. Spain is part of the Eurozone and that brings about commitments. This, amongst other things, was made clear in the letter from Mr Rajoy to Mr Juncker”, said De Guindos. (Original version in French by Mathieu Bion)