Due to elections in December, the Spanish government submitted its DBP on 11 September, well ahead of deadline, prompting the Commission to adopt its Opinion early so that it could still be taken into account in the national parliamentary process. Spain has been in the corrective arm of the Stability and Growth Pact since April 2009 and has been asked to correct its excessive deficit by 2016. In its DBP, Spain expects the general government deficit to decline to 4.2% of GDP this year and 2.8% in 2016, in line with recommended targets under the excessive deficit procedure and down from 5.8% in 2014.
Vice-President Valdis Dombrovskis, responsible for the Euro and Social Dialogue, said: "By carrying out decisive policies, Spain has made a remarkable turnaround from the crisis to become one of the fastest-growing Euro area economies. For growth and job creation to continue and consolidate, Spain has to stay the course of reforms and responsible fiscal policy."
Commissioner Pierre Moscovici, responsible for Economic and Financial Affairs, Taxation and Customs, said: "The Commission has now adopted its Opinion on Spain's Draft Budgetary Plan: a factual and objective assessment of the country's fiscal outlook. This has been carried out by the Commission services in full independence and taking into account all available data."
Given the early submission of the DBP, the Commission's Opinion is based on an ad-hoc forecast, ahead of the Autumn Economic Forecast due in November. The Opinion also takes into account new data provided by Spanish authorities during the review mission that took place in Madrid last week as part of the regular post-programme surveillance.
The Commission expects Spain's headline budgetary deficit to decrease to 4.5% this year and to 3.5% of GDP in 2016, not meeting the target for Spain to correct the excessive deficit by 2016.
The Commission is thus of the opinion that Spain's DBP is at risk of non-compliance with the provisions of the Stability and Growth Pact. The Commission therefore invites the Spanish 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 Stability and Growth Pact. The Commission also invites the national authorities to present an updated DBP, including fully specified regional measures, as soon as possible.
Background on the procedure and timing of the Opinion
Under the EU’s rules on fiscal policy coordination (the so-called Two-Pack), euro area Member States not under economic adjustment programmes are expected to submit their Draft Budgetary Plans by 15 October (Article 6 of Regulation (EU) No 473/2013).
The Commission adopts its Opinions on the Member States' plans by end-November.
The Spanish government submitted its Draft Budgetary Plan significantly ahead of the deadline (on 11 September), so that it could be approved before parliament is dissolved ahead of elections on 20 December. The Commission has adopted its Opinion in time for it to be taken into account before the conclusion of the parliamentary debate on the central government budget currently under way. As the Opinion therefore comes before the Commission's Autumn Forecast of early November, the Commission has carried out an ad-hoc update of the 2015 Spring Forecast only for Spain (cut-off date 29 September 2015). Based on this forecast, the Spanish DBP economic projections for 2015 appear broadly plausible, although slightly above the Commission's central scenario. However, for 2016 the DBP's macroeconomic scenario appears to be somewhat optimistic.