EC warns that Spain’s debt creates “high risk” to the country in the medium term – Yahoo Finance Spain

Brussels, Jan 25 (EFE) .- The European Commission (EC) today warned that the massive public debt accumulated Spain will remain above 90% until at least 2026, which is “high risks” to the economy in the medium term and would require a “significantly greater” structural effort to correct it.

“The high level of public debt is a source of vulnerability for the Spanish economy, “says the Commission’s triennial report on the sustainability of public finances of Member States, released today.

This says that the country is not at” significant short-term risks “suffering a troubled fiscal situation, although factors such as the primary deficit accumulated Spain and its gross financing needs, could complicate the situation.

In the medium term, however,” the risks appear to be high from the perspective of the analysis of debt sustainability, because the accumulation of debt will remain high in the last year of the projections, 2026 “, said EU experts.

In principle The EC expects the debt to peak this year, reaching more than 101% of GDP and lower than 100% of GDP in 2017 and remain around that figure until 2020, down to 92 in 2026.

This drift is always confirmed as “normal economic conditions” are met and fiscal policies remain unchanged, including equivalent to 0.2% of GDP structural efforts, according to the institution.

“A debt ratio above 90% of GDP at the end of our projections (2026) based on an assumption that fiscal policies remain unchanged involves high risks for Spain,” said the Commission.

In addition, the EC warns that there are 4 10 chance that, on the contrary, the percentage increase in the coming years and in 2020 is higher than this year.

However, if the budget deficit was kept at bay and a “significantly higher” structural adjustment-around 2.6 points of GDP higher than expected- was made, the public debt would be reduced at a much faster pace than expected “to stand at 75 % of GDP in 2026 “.

In the long term, experts from the EU executive observed no risk of sustainability of Spanish finances,” thanks to the reforms “that limit long-term spending,” in particular pension expenditure “

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