The European Commission asked Spain this Wednesday for a budget adjustment of 0.7% of GDP to ensure compliance with its target of a public deficit of 3%. Stability and Growth Agreement. It gives a recommendation to do this. “Prudent” fiscal policy in 2024limit Nominal increase in nationally funded net primary expenditure up to a maximum of 2.6%. Additionally, it asks the Government to eliminate them all by the end of this 2023. energy aid, to reduce dependency on fossil fuels accelerate the implementation recovery funds your program Next Generation EU and increasing the availability of affordable, energy-efficient, social housing. some economic policy proposals It is guided by Brussels within the framework of the annual coordination procedure adopted by the Community Steering Committee every year around this time, which confirms that Spain remains in the group of countries experiencing “macroeconomic imbalances”, even though “vulnerability has decreased”.
List of recommendations to Spain included in the analysis Spanish national reform programincludes many of the requests that both the European Commission and the Eurogroup have made to eurozone governments over the months. First of all, it will be removed by the end of this year general help for energy and use the savings to continue reducing the public deficit. Also, as they suggest, the government should ensure that if energy prices rise again and require new support measures, they will happen. temporary and selective in a way that “protects vulnerable households and businesses, is affordable and maintains incentives for energy savings”.
Brussels is once again focusing on the importance of Europe. program”The need to accelerate their implementation as a ‘strong tool’ to drive ‘Next Generation’ reforms and investments, and the need to maintain adequate administrative capacity for the anticipated increase in the size of the plan. In this area, they advise the government to protect nationally funded public investments and ensure that grants from the bailout and other EU funds are used effectively to promote green and digital transitions. The recommendation to the government for the period beyond 2024 is to continue to implement “a medium-term fiscal strategy of gradual and sustainable consolidation, together with investments and reforms that allow for higher sustainable growth”, to achieve a prudent budgetary position in the medium term. ” .
Finally, the Community Manager encourages Spain to reduce dependence on fossil fuels and speed up distribution renewable energy, in particular through “modernizing and digitizing permitting procedures, supporting the work of permitting authorities, improving grid access and investing in energy storage, electricity transmission and distribution, and cross-border electricity interconnections”. The document also calls on Spain to increase the availability of energy-efficient, affordable and social housing by renewing and accelerating the electrification of buildings and the spread of electromobility.
macroeconomic imbalances
Also, once again the European Commission includes: Spain among countries experiencing macroeconomic imbalances Germany, France, Netherlands, Portugal, Romania and Sweden. However, he notes that “fragility has decreased in Germany, France, Spain and Portugal” and that this trend “will lead to a decision of no imbalance if it continues next year”. Meanwhile, Greece and Italy continue to register “extreme” macroeconomic imbalances, but the European diagnosis also shows that their vulnerabilities have “reduced, among other things, thanks to policy advances”. The other two countries with disequilibrium are Cyprus and Hungary the situation would be brought under control in the Czech Republic, the three Baltic republics, Luxembourg and Slovakia.
The exercise also includes a new post program audit report This confirms the resilience of the Spanish economy, which has managed to “well off” the disturbances caused by Russia’s war in Ukraine, and recorded strong growth last year. As it progresses in its spring economic forecasts, the Commission expects “economic activity to continue growing in 2023, albeit at a more moderate pace than last year”. Analysis, balance of public administrations Improved in 2022 “thanks to good revenue results”, but basic deficit and public debt they are still high. Although the banking sector warned that it still faces new challenges arising from high inflation and tightening financing conditions, it remained resilient as asset quality continued to improve and profitability increased significantly in 2021 and 2022.