Brussels again alerts Spain about high levels of debt and unemployment

The European Commission on Monday alerted Spain to its high public, private and external debt and high unemployment, some “vulnerabilities” that community officials have detected over the years in the Spanish economy and which have “cross-border relevance”. .

In its macroeconomic recommendations this year, the community executive pointed out that households and companies’ debt is higher than levels before the coronavirus pandemic and “exceeding prudent levels”, while The “high” public debt relative to GDP is also “well above” pre-Covid levels.

This is despite the fact that both indicators return to their negative trends in 2021 and forecasts suggest that they will continue to fall this year and next, added to the fact that the current account of the balance of payments registers a “small surplus”. And the net investment position has reached its best figure since the mid-2000s.

Europe criticizes the divide between the temporary and the uncertain

With regard to unemployment, Brussels warns that The “segmentation” of the labor market persists between temporary and uncertainas well as high youth unemploymentIt does however highlight that “the continued application of the previous and recent labor reform and recovery plan will help address the rest of Spain’s vulnerabilities”.

In addition, there is a level of one of the “imbalances” identified by the community authorities in the Spanish economy. bad debt or “non-performing loans” (NPLs) and the risks they carry, especially in areas with high energy consumption and those previously affected by the COVID-19 crisis, such as tourism.

The European Commission annually evaluates the shortcomings of all European economies in which it has detected “imbalances”, and Brussels has been in this exercise for some time to Spain for its high public and private debt and unemployment levels, among other issues. Alerting about.

In addition, the Community Executive explores economic problems in Germany, France, the Netherlands, Portugal, Romania and Sweden, believes that Cyprus, Greece and Italy are facing “extreme imbalances” and believes that Ireland and Croatia have fixed them.

“Overall, the macroeconomic imbalance is gradually receding. Public and private debt is falling from highs, current accounts are rebalancing, but the impact of Covid-19 has not been fully absorbed and new risks are rising, home prices, for example, in many countries. Growing up », Briefly in a press conference of European Commission Economic Vice President Valdis Dombrowski.