Spain will not implement European Union fiscal restraints

SPAIN will not implement European Union fiscal restraints for another year and this decision was approved by the Congress of Deputies on September 22.

One of the major problems that the Government of Partido Popular leader Mariano Rajoy faced was the repeated inability of the Spanish economy to comply with the EU demand for the reduction of debt and to balance imports and exports.

The current coalition has for the last three years been able to argue that the effects of the pandemic and now the backlash from the Russian invasion of Ukraine were unforeseeable.

Whilst confirming that it will endeavour to maintain fiscal responsibility, the Spanish Government will not be restrained by strict ‘guidelines’ from the European Union but will be able to plot its own course in planning the 2023 budget.

This means that it may once again suspend the stability and debt objectives, as well as the spending rule, in the case of “extraordinary emergency situations that considerably harm the financial situation or the economic or social sustainability of the State”.

According to a statement from the Government, “The objective of this initiative is to be able to continue deploying the necessary measures to mitigate the impact of rising prices on families and the productive fabric, as the Executive has already been adopting in the last year.”

Minister of Finance and Public Function, María Jesús Montero, made it clear in a speech to Congress that the suspension of fiscal rules does not mean abandoning fiscal responsibility as Spain’s deficit was reduced from 10.3 pe cent in 2020 to 6.9 per cent in 2021 for 2022 it is forecast to drop to 5 per cent.

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