The European Commission approves the budgetary path presented by Spain. Although it does not have a budgetary plan and is one of three EU countries – with Belgium and Austria which do not have a government after the elections – not to have presented with a draft budget plan, Brussels considers that the path is “credible”. of net primary expenditure – the increase in public expenditure without taking into account certain cyclical costs and debt interest – that the Government presented and which exceeded the indications previously given by community technicians.
Concretely, Spain proposed that this figure should be 3.7% of GDP in 2025 while Brussels left it five tenths lower (3.2%). For the following years, the trajectory projected by the Government is 3.5% in 2026; 3.2%, in 2027; 3%, in 2028; also 3%, in 2028; 2.5%, in 2029; and decrease to 2.4% in 2030. The Brussels approach was more restrictive in the first years while giving a slightly higher margin in the following ones: 2.8% in 2026, 2.7% in 2027, 2.7 % in 2028, 2.7% in 2029, 2.6% in 2030 and 2.5% in 2031.
The approval of the budgetary trajectory is one of the important steps of the new framework of the EU fiscal corset which resumed this year after four years of suspension of the Stability and Growth Pact due to the pandemic and later in due to the consequences of the war. in Ukraine. The new fiscal rules fundamentally rely on the spending trajectory to lead countries to meet deficit and debt targets of 3% and 60% of GDP, respectively.
Spain is one of five countries, along with Finland, France, Italy and Romania, to have presented budgetary guidelines for periods of seven years and not four years, as initially planned. “This has significantly reduced the average annual budgetary effort, by around half a percentage point of GDP,” explained Economy Commissioner Paolo Gentiloni during the presentation of the autumn package, which was his last presentation given that it will not continue in the new College of Commissioners which will receive the green light from the European Parliament this Wednesday.
Having not presented the budgetary plan, the European Commission had doubts until the last moment about the advisability of presenting an analysis corresponding to Spain at the same time as the rest of the EU countries, but it finally opted for an evaluation limited to awaiting the draft budgetary plan that Brussels hopes to receive “in the not-so-distant future”, according to community sources.
The frugal paradox
As for the fiscal trajectories of the twenty European countries which sent them to Brussels, all approve with the exception of the Netherlands. What the community technicians have detected is that the fiscal trajectory proposed following the agreement of the far-right government is that the deficit would exceed 3% in 2029. And one of the main objectives of the Stability Plan and growth is precisely that the public accounts are healthy and below this threshold for the deficit and 60% for the debt. The Netherlands is the only country whose draft budget “does not comply” with the recommendations of the European Commission.
Greece, Cyprus, Latvia, Slovenia, Slovakia, Italy, Croatia and France are those which pass the filter without problem “since their net expenditure should remain within the maximum limits”, while Estonia, Germany, Finland and Ireland do not do so fully. respect the recommendations because they exceed the established ceilings. Luxembourg, Malta and Portugal are not doing so because “they are not phasing out emergency energy aid measures” put in place during the crisis and which the European Commission has invited member states to withdraw.
