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21st Sep 2019

Commission in show of unity on Spanish budget

  • Monday's double-act followed a disagreement on timing last week (Photo: ec.europa.eu)

The European Commission on Monday (12 October) published its opinion on Spain’s draft budget plan (DBP) for 2016, while trying to alleviate suspicion of politicking ahead of Spanish elections in December.

Both the Commission's vice-president for the euro, Valdis Dombrovskis, and its finance commissioner, Pierre Moscovici, came to the press room to announce that Spain is at risk of not respecting EU rules with its 2015 and 2016 spending.

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Last Monday, at a Eurogroup press conference, Moscovici had said the Commission would publish its opinion on Tuesday, only to be contradicted by Dombrovskis, who said that "more time [was] needed for deliberations".

Spain’s budget is being assessed now because the government submitted it earlier than required to the Commission, so that it can be approved before the general election.

Moscovici is a member of the Party of European Socialists, while Dombrovskis, as well as Commission president Jean-Claude Juncker, are members of the center-right European Popular Party (EPP), to which Spanish PM Mariano Rajoy also belongs.

The dissonance along party lines suggested the EPP wanted to protect Rajoy from EU criticism ahead of the general election on 20 December.

"The EPP is at work," said an EU source. A social-democratic finance minister admitted that, contrary to the EPP, the socialists "are romantically disorganised". Juncker is also said to have phoned Rajoy several times on Tuesday.

But a Commission source told EUobserver that Dombrovskis and Moscovici had agreed the text of the opinion, and that France's budget, earlier this year, had been more controversial.

The two commissioners were sent together to the press room "to depoliticise" the debate, another source at the Commission told EUobserver.

For his part, Moscovici told press the Commission assessment "is obviously objective and factual … it was adopted in the name of the college as a whole".

He said it “is a detailed analysis by the Commission's budgetary services, taking into account the most recent data, including from last week", when EU experts conducted a post-programme surveillance mission in Madrid.

Dombrovskis said that "the election is affecting the procedure, not the substance of the analysis”.

In 2015, the Commission foresees a Spanish deficit of 4.5 percent of GDP, 0.3 percent higher than the required target. For 2016, it expects the a deficit of 3.5 percent, 0.7 percent more than the target.

"The Commission is of the opinion that the draft budgetary plan of Spain is at risk of non-compliance with the provisions of the stability and growth pact”, Moscovici said, quoting the text of the opinion.

"The Commission therefore invites the authorities to strictly execute the 2015 budget and take the necessary measures within the national budgetary process to ensure that the 2016 budget will be compliant" with the pact.

The message to the Spanish government is similar to what Moscovici said at his press conference last Monday.

But the week’s delay saw some softer tones added.

Although the Commission says the 2016 Spanish budget "appears to be somewhat optimistic", it says "the Spanish DBP economic projections for 2015 appear broadly plausible".

Speaking to the press, Dombrovskis also noted Spain's good economic results and the need to carry on with Rajoy's policies.

"By carrying out decisive policies, Spain has made a remarkable turnaround from the crisis to become one of the fastest-growing Euro area economies," he said.

"For growth and job creation to continue and consolidate, Spain has to stay the course of reforms and responsible fiscal policy”.

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