Brussels is flexible, even if this flexibility and its patience are limited. Spain passed the October 15 deadline that the European Commission had set for all member states to send it the budget plan. It is true that the date is not so strict. The community executive generally grants a certain margin to countries to submit the accounts for the following year, although this margin is adjusted to a few days and not a few weeks. So that’s it La Moncloa has already exceeded the additional deadline in two weeks that Brussels granted him to present the budgetary plan.
The process “is clearly established” in the rules of the Stability and Growth Pact, a European Commission spokesperson told elEconomista.es. In continuation of previous messages sent by the Community Executive, he stressed that Brussels hopes that “all the Member States of the euro zone which have not yet presented their budgetary plans, including Spain, do it as soon as possible and, in any case, before the budget is presented to the national Parliament.
The idea is not new. The warning has already been issued by Economy Commissioner Paolo Gentiloni at the meeting of eurozone economy and finance ministers in Luxembourg. The Italian warned that “the flexibility of the European Commission is limited” and asked Spain, as well as other eurozone countries, not to lose “this link between the draft budgets and the plans structural budgets”. Indeed, sources close to the European Commission insist to this media on the fact that Brussels is still waiting for Spain’s accounts for 2025.
The return to the application of new budgetary rules, after the long years of pandemic, established that countries had to send their roadmap to Brussels on December 20 to reduce the deficit and debt, for the next four years, on December 20 september. This document would be followed by the presentation of the 2025 accounts on October 15, with a few days of relaxation, Brussels specified. For practical reasons, which Spain presents its structural budget plan without accounts that support such adjustments Next year, the first of the documents could be invalidated. Tax plans without a budget to support them run the risk of becoming a dead letter, community sources warned this media.
Last September, the Minister of Economy, Carlos Body, announced that Spain would extend until October 15 the deadline for sending the structural budget plan to Brussels, “with the budgets.” But, at the moment of truth, the Government sent the first documents to the Community Executive on time, but it did not do the same with the budgets. When Corps announced its intention, the community executive reminded the government that the margin for flexibility was limited to a few days, in no case to two weeks who have already passed.
The fine print
The presentation of the 2025 accounts in Brussels requires that the Government approves them in the Council of Ministers, and not that they be processed and approved in Congress, which shows the difficulty of the Government in maintaining support to implement any measure. However, the prelude to the budgets, the budget, has already suffered its own setback in July and an attempt to revive the situation about a month ago. Concretely, this summer, it was the refusal of Junts which prevented Moncloa from approving the deficit and debt objectives for the years to come.
The government is now firmly committed to implementing the budgetary path and tax reform. before developing budgets. The latest proposal presented proposes a greater tax margin for the autonomous communities in 2025, at the request of Junts. The formation led by Carles Puigdemont requests that the fiscal trajectory includes a deficit limit for the autonomies close to 1%, nine tenths higher than that approved, or sets a more favorable distribution of objectives for the regions that contribute the most to the national GDP. .
The possibility that this budgetary trajectory suffers a new setback should not prevent the Spanish executive from establish some accounts for 2025. If it does not obtain the necessary support, the Government could use the latest approved budgetary trajectory, in any case more restrictive than this latest proposal, to draw up next year’s accounts.
The government has made a commitment to Brussels, in its seven-year structural budget plan sent to Brussels, to implement tax reform. If the measures are formulated and formalized before implementing the budget plan could influence the composition of the accounts for the next financial year. Not that the details of the proposal are known. For the moment, it is only extracted from the structural budget plan which could increase the income/GDP ratio by 0.3 points until 2031, and which will include the permanence of banking and energy taxes which began to be applied during the pandemic.
