| Author (Corporate) | European Commission |
|---|---|
| Series Title | COM |
| Series Details | (2013) 383 final (29.5.13) |
| Publication Date | 29/05/2013 |
| Content Type | Policy-making |
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According to Article 126 of the Treaty on the Functioning of the European Union (TFEU) Member States shall avoid excessive government deficits. On 27 April 2009, the Council decided that an excessive deficit existed in Spain and issued a recommendation to correct the excessive deficit by 2012 at the latest, in accordance with Article 3 of Council Regulation (EC) No 1467/97 of 7 July 1997 on speeding up and clarifying the implementation of the excessive deficit procedure. On 2 December 2009, the Council decided that effective action had been taken and that unexpected adverse economic events with major unfavourable consequences for government finances had occurred after the adoption of that recommendation. Notably, the sharp deterioration in the growth outlook in the wake of the global economic and financial crisis had major negative budgetary implications. As a result, the Council decided to adopted a revised recommendation to correct the excessive deficit by 2013 at the latest in a credible and sustainable manner by taking action in a medium-term framework. On 10 July 2012, the Council decided that effective action had been taken but that unexpected adverse economic events with major unfavourable consequences for government finances had occurred after the adoption of the revised recommendation in 2009. Notably, a worsening in the growth outlook and the shift to a less tax-rich growth composition had major negative budgetary implications. The Council therefore adopted a revised recommendation and recommended Spain to correct the excessive deficit by 2014 at the latest. According to the Commission services' 2013 Spring Forecast extended to 2016, which is based on a no-policy change assumption, no additional measures appear needed at this stage to achieve the recommended improvement in the structural balance for 2013 (and the new 6.5% of GDP deficit target), but the budgetary plans at all levels of government will have to be strictly implemented. For the period 2014-2016, bringing the deficit below the Treaty reference value on a sustainable basis will require considerable structural fiscal measures on top of those already included in the Commission services' 2013 Spring Forecast. Those measures, amounting to around 2% of GDP in 2014, 1% of GDP in 2015, and 1.5% of GDP in 2016 should take into account the need to compensate for the negative second-round effects, negative potential output growth, as well as rising interest and social payments. |
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| Source Link | Link to Main Source http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM:2013:383:FIN |
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| Countries / Regions | Spain |
