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Brussels sets Sanchez financial prudence and control over public spending

The European Commission has set fiscal prudence and controls on current public spending for Spain in 2023 due to the…

By admin , in news , at May 23, 2022

The European Commission has set fiscal prudence and controls on current public spending for Spain in 2023 due to the scenario of high government debt. At the end of last year it was close to 120% of GDPAnd continue to assign investments to the European Recovery Plan Fund.

It is the first of the recommendations that the Community Executive has listed Spain in its report of recommendations, a practice that European authorities publish every year in the spring, but marked by the suspension of the rules for the third year in a row. which is the limit deficit and public debt.

Brussels this Monday proposed to freeze the so-called Stability and Development Treaty for another year, and not reactivate it until 2024, but continues to issue recommendations on budget matters to all member states .

In this context, the European Commission urges Spain to “guarantee a prudent fiscal policy”. limiting the growth of current public expenditure below economic growth Potential in the medium term, but, yes, considering the “temporary and specific” assistance to households and companies to reduce energy prices and the support needed by those displaced from Ukraine by the war.

Spanish public debt doubles the limit required by Brussels

“Our recommendation for Spain is similar to that of highly indebted countries. In other words, limit nationally financed current expenditure and keep it below potential GDP growth,” said Valdis Dombrowski, economic vice president of the Community Executive, in a press appearance. said in.

In addition, the European Commission urged Spain to “be prepared for” adjust current expenses The Community’s plan to accelerate Russian fuel independence, in order to influence recovery funds for them, to expand public investment for green and digital transitions as well as energy security, and for the changing situation» (EU power) and other European programs.

Beyond 2023, the report on Spain reiterates the need to maintain a fiscal policy aimed at «prudent medium term position» and guarantees a “credible and gradual reduction” of debt and fiscal stability in the medium term through progressive fiscal consolidation with investment and reforms.

Public deficit close to 7%

According to Eurostat data, the Spanish public administration’s deficit fell to 10.3% in 2020 6.9% last year, While the debt stood at 118.4% of GDP at the end of last year.

In this regard, Brussels points out that the macroeconomic scenario envisaged by the 2022 Sustainability Program is “realistic”, despite the fact that it forecasts GDP growth of 4.3% this year and 3.5% in 2023 and that Brussels estimates such expansion. limit it to 4%. and 3.4%, respectively.

Beyond tax recommendations, European Commission urges Spain to continue to move forward in its deployment recovery plan (whose second disbursement, of 12,000 million, has already been requested by the EU) and above all, to send the necessary documents to start receiving structural funding for the period 2021-2027.

The second suggestion that Brussels tells Spanish authorities they increase recycling rates to meet EU objectives in the region and promote the circular economy by improving coordination “among all levels of government”.

At this point it also recommends complying with the obligations of waste segregation and recycling, as well as making additional investments to promote water reuse, an issue for which Brussels has already submitted to Spain the EU Court of Justice. (TUE). ,

The fourth and final point of the report’s recommendations urges Spain to accelerate the deployment of renewable energy, invest in network and storage infrastructure, reduce reliance on fossil fuels by improving the electrification of buildings and transport; and increasing its interrelationship with the rest of the continent, especially with projects that are compatible with green hydrogen in the future.

That last point stems from the war in Ukraine and a plan presented last week to speed up the bloc’s independence of fossil fuels from Russia, in which it revised its national recovery plans to include projects and energy reforms from member states. was urged to do.

Brussels sets Sanchez financial prudence and control over public spending

2022-05-23 11:46:58