HE Spanish budget plan for 2024The document, sent to Brussels in mid-October by Pedro Sánchez’s acting Government, is “in line” with EU fiscal guidelines. The European Commission approved the budget extension this Wednesday, but warned that Spain is facing a situation “difficult” and “complex”Due to the deficit in public accounts it will exceed the 3% threshold in both 2024 and 2025 according to the latest autumn forecasts and public debt will remain very high at 106% of GDP for the next two years and you will need to submit one updated budget plan “as soon as possible”.
“Draft budget plans Slovakia, Spain, Luxembourg and the Netherlands It was presented by the caretaker governments – which celebrate the elections this Wednesday – taking into account the evolution of national political cycles. Slovakia, Spain and Luxembourg are therefore invited to submit draft updated budget plans. as soon as possible“, says the Commission, given the general clause of the General Clause at the end of the year, which is expected to be special this year, within the framework of the autumn package of the European semester and the annual cycle of economic policy coordination. Stability and Growth Pact (PEC) will allow Brussels to take action again enforcement procedures For countries that do not present sound public accounts.
The opening of procedures will depend on data at the end of 2023, but currently 9 countries eurozone Brussels foresees budget deviations greater than 3% of GDP; According to the latest autumn economic forecasts: Spain Once again positioning itself as one of the 11 member countries, alongside Italy, France, Germany, the Netherlands and Hungary. extreme macroeconomic imbalances It will be the subject of a new review by Brussels.
Reliable tax strategy
“The tax situation in Spain is complex. Obviously, an installation will be required. reliable tax strategy Forecast sources from the Community Administration asked about a Spanish budget plan that was prepared without changes to economic policy due to the temporary situation the Government was in until last week and only considered measures announced until the end of October. . That is, when carrying out their analysis, the community technicians did not take into account the impact of the latest Government announcements, such as the extension of some energy measures or the reduction of VAT on food, which will expire at the end of 2023.
“The deadline for the fiscal measures included was the end of October. We need to see what the determined measures are and become much clearer. “Currently (the budget) is in line with the recommendations, but the key message here is that the underlying financial situation is challenging,” Community Management sources warn, still assuring that the plan is in line with the financial recommendations “benchmark”.
Energy support measures
Overall, the Brussels assessment concludes that many draft budget plans include plans to implement prudent fiscal policies, withdraw energy support measures in 2023 and 2024, and use the savings from these measures to reduce the deficit. However, “some Member States are not sufficiently limiting the growth of nationally financed net primary expenditure and some are not planning to withdraw energy support measures quickly enough, one of the measures that Brussels has been demanding for months and to which the Eurogroup has committed; use the savings from these measures to reduce the deficit, although “all Member States plan to protect nationally financed investments”.
In addition to Spain’s plan, Cyprus, Estonia, Greece, Ireland, Slovenia and Lithuania. On the other hand, these Austria, Germany, Italy, Luxembourg, Latvia, Malta, Netherlands, Portugal and Slovakia There are four countries (Belgium, Finland, France and Croatia) that are at risk of not responding to Ecofin recommendations and will therefore have to take additional measures. Despite the eurozone’s determination to phase out energy support measures “Substantial measures” will still be in force in 2024 in six countries (France, Croatia, Luxembourg, Malta, Germany and Portugal) as soon as possible. Brussels is specifically calling on Germany, Malta and Portugal to lift these measures as soon as possible.
Brussels will present its views to Eurozone economic and finance ministers at the Eurogroup meeting in December, with a view to an in-depth discussion in January and approval of budget plans by European leaders at the European Council in mid-March.