MADRID (Reuters) – Mariano Rajoy asked in a letter to Commission President Jean-Claude Juncker that Brussels does not charge a fee to Spain for breaching the deficit target, according to information published on Saturday in a Spanish newspaper.
In the letter, the Spanish incumbent president had pledged to extend until 2017 the agreement unavailability of spending Administrations, both the central government and the autonomous communities to achieve the goal of 3 percent of GDP , El Pais reported, citing EU sources.
A government source confirmed the existence of the letter and on the content referred to the information already sent to Brussels in the Stability Plan.
Spain closed 2015 with a deviation of 5 percent, compared with 4.2 percent committed to Brussels. In this situation, the caretaker government and last month announced an additional cut of 2,000 million euros in the budgets of 2016 to contain public spending.
The arguments against the fine set out in the letter insist the effort made in recent years in an unfavorable context of low inflation and would ask the President of the European Commission to consider this so that Spain will not be punished.
Contacted by Reuters, the European Commission declined to comment.
If the Commission approves the fine, would be the first time the EU sanctions mechanism was applied by offset the deficit since the introduction of the euro.
The Commission could recommend, however, only a symbolic penalty, which could reach up to 0.2 percent of GDP – or 2,160 million euros for Spain and 359 million euros for Portugal – but could also be zero percent.
Spain expects the deficit to reach 3.6 percent of GDP in 2016, after revising upward its forecast from 2.8 percent previously estimated. In 2017 foresees a deficit of 2.9 percent.
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