SPAIN: Brussels granted to Spain two years to lower the deficit of 3% – EntornoInteligente

Expand / The commissioners will decide tomorrow the amount of the fine for violating the 2015 fiscal target, ranging between zero euros or a token amount.

The European Commission will give Spain until 2018 to lower the public deficit below 3% of GDP and the fine for violating the 2015 target range between zero euros and a token amount. The decision will be formally adopted tomorrow, after the meeting of the College, but the chiefs of staff of each commissioner paid yesterday the ground in his weekly preparatory meeting, explain sources familiar with the negotiations.

The new path of deficit for 2016 will be around 4%, probably above while 2017 will exceed 3%. The reduction below that figure is left for 2018. Last May, the European Commission proposed an indicative timetable of 3.7% this year and 2.5% next, but this path has been overtaken by events .

The Independent Authority for Fiscal Responsibility (trade show) said last week that the budget gap this year will go to 4.7% and only 4.1% would be reduced if Spain is able to form government and approve for this year and the package of urgent measures that the acting Executive proposed on July 13 in Brussels. These basically include the approval of installment payments on corporate income tax before the end of the year, and that would mean a retention of more than 20% to 4,400 companies, with the intention to raise around 6,000 million euros. With this measure, Spain would reach the limit of 4.1%; without it, it would go to 4.7%.

The final amount of the fine for breaching the deficit of 2015 is still to be decided. The chiefs of staff agreed that this is a political issue and corresponding to the stewards to clear the Xs. On the table are two options: either cancel or impose a symbolic amount. In any case, the figure would be well below the maximum amount, 2,160 million euros.

As explained last Sunday Luis de Guindos, economy minister in functions of the Government of Mariano Rajoy, both Germany and France, and Italy support a zero fine, but EU sources say that there are “strong pressure” in favor of the symbolic fine.

Last year, the deficit was 5.1%, above the target of 4.2%. However, the fine is therefore no deviation, but by the lack of effective government action to correct it. Once the Commission proposes an amount, the Council has ten days to correct it by qualified majority. If it says nothing, the decision shall be deemed adopted.

The decision on the suspension of European funds, up to a maximum of 0.5% of GDP or the corresponding half a year, has been postponed to September. In fact the President of the European Parliament, Martin Schulz, sent yesterday a letter to President of the Commission, Jean-Claude Juncker, to ask that begin “as soon as possible after the summer recess” contacts between institutions on the freezing of European funds to Spain and Portugal for breaching its deficit target. Brussels must hear the views of Parliament because it is co-legislator in budgetary matters and fund management although not binding

SPAIN. Brussels granted to Spain two years to lower the deficit of 3%

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http://entornointeligente.com/articulo/8726899/ESPANA-Bruselas-concedera-a-Espana-dos-anos-mas-para-bajar-el-deficit-del-3-26072016

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