Spain today passed the preliminary examination of the Budget, for the second time was carried out at European level.
The finance ministers of the euro area (Eurogroup) noted, as did the European Commission last week, there is a risk that the Spanish public accounts recorded a slight slip in 2015 to a deficit of 4.6%, four tenths of the agreement with Brussels.
But the Eurogroup not Spain calls on additional measures, but merely to seek effective implementation of the budget to ensure that the agreed deficit target is met.
Both the Eurogroup chairman Jeroen Dijsselbloem as European Commissioner for Economy Pierre Moscovici, acknowledged that the discrepancy in figures between Madrid and Brussels is debated. The Eurogroup is decanted, for now, to be granted to Spain the benefit of the doubt and check over 2015 budgetary developments.
If the growth forecasts of the Government, which aims to be met over 2% deficit target seems easily achievable. The Commission is more pessimistic and believes that the Spanish economy will grow 1.7%, which does not rule out further adjustments are needed to reduce the deficit to 4.2%.
“The Spanish Government and the Commission maintain a debate around the effectiveness of some of the budget measures “Dijsselbloem said following an extraordinary Eurogroup meeting to discuss the General Budget of the countries of the euro area. Eurogroup Chairman and Dutch Finance Minister did not rule out that “Spain has to take additional measures if some of the measures envisaged are not as effective as expected.”
The valuation of Brussels is much harder to countries like France. The Eurogroup emphasizes in its statement that Paris “will need additional measures” to ensure an adjustment of the structural deficit of 0.8% rather than 0.3% as expected the French budgets.
Italy and Belgium were subject of a serious warning, but in this case, “by high level of public debt.”
Praise for reforms
Spain also goes well stop on the review of reforms, to the point that the only country that is praised in the press of the Eurogroup.
“We recognize the implementation of a comprehensive and ambitious reform agenda over the past year “said the 18 finance ministers of the euro zone in reference to Spain. The statement added that “hope [Spain] continue with that determined implementation of structural reforms.”
In case, the Economy Minister Luis de Guindos, refused to adopt new adjustments in 2015 and has convinced that Spain will meet the target agreed with the EU to reduce the deficit to 4.2% of GDP with the measures already planned in the budget for next year.
“The Government of the principle that the current measures are enough and therefore will be fulfilled, “he assured Guindos after the Eurogroup meeting in which we have examined the budgets of eurozone countries for next year. In the case of Spain, the Eurogroup sees a risk that the target of 4.2%, according to forecasts Brussels, Spain’s deficit will remain at 4.6% in 2015 and calls for “effective measures” are infringed.
“We are absolutely committed to a public deficit target of 4.2% next year,” stressed Economy Minister. Guindos explained that the government “we are more optimistic” that the Commission as regards growth forecasts in 2015 -2% compared to 1.7% which calculates Brussels and “that will lead logically via automatic stabilizers to be fulfilled without doubt the 4.2% “.
The economy minister has argued that the Eurogroup has not asked Spain” additional measures “but” the commitment that these measures are effective, already included in the budget. ” “And the Spanish Government is convinced that the target of 4.2% will perfectly meet next year,” he insisted.
“Spain is complying with the objectives of reducing the public deficit and especially we are contributing to growth in the euro zone. That’s the key, “he pointed Guindos. “Here the basic point is that Spain, which was the worst in the class just three years now, the major economies of the eurozone ago, we are the more we grow and create more jobs. And these issues recognizes everyone and therefore a positive evaluation of what has been the policy of Spain becomes “stated.
The Economy Minister Luis de Guindos, said this Monday the creation and Bankia IPO was a “mistake”, but is now “one of the most creditworthy entities” in Spain and EU, as demonstrated by the recent review of the European Central Bank (ECB), and “part of the solution” for the Spanish economy.
Parallel Guindos said, when asked about the case Bankia expert report that warns of a possible make-up of the accounts of the entity to its IPO: I said in May 2012 in the Spanish Parliament to both the creation and the IPO of Bankia were a mistake “
However, it has made clear that this. expert report is just one more element of the case and there are “other evidence”. “The CNMV and the Bank of Spain, when they went to testify for the Bankia case, said the process was completed successfully”, said Minister of Economy.
“I will not go there. For me the important thing now is that Bankia is a solvent entity, sound, “insisted Guindos. “Bankia was part of the problem of the Spanish economy in 2011, today is part of the solution” has settled.
“The bottom line is that today Bankia is one of the most solvent entities in Spain and one of the most solvent entities in Europe. What matters is that Bankia is restructured, is sound and solvent, “concluded the minister.
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