Recommendation for a Council Decision establishing that no effective action has been taken by Spain in response to the Council Recommendation of 21 June 2013

The Council, acting upon a recommendation by the Commission, decided on 27 April 2009 that an excessive deficit existed in Spain and issued a recommendation to correct the excessive deficit by 2012 at the latest. Since then, the Council has issued three new recommendations to Spain (on 2 December 2009, 10 July 2012 and 21 June 2013), which extended the deadline for correcting the excessive deficit to 2013, 2014 and 2016 respectively. In all three recommendations the Council considered that Spain had taken effective action, but unexpected adverse economic events with major unfavourable consequences for government finances had occurred.

The latest Council Recommendation to Spain was issued on 21 June 2013. It recommended Spain to reach a headline deficit target of 6.5% of GDP in 2013, 5.8% of GDP in 2014, 4.2% of GDP in 2015, and 2.8% of GDP in 2016, which was consistent with an improvement of the structural balance of 1.1%, 0.8%, 0.8%, and 1.2% of GDP in the years 2013-2016, respectively, based on the Commission 2013 spring forecast extended to 2016. To achieve that improvement, Spain was asked to implement additional measures amounting to 2%, 1% and 1.5% of GDP in 2014, 2015 and 2016, respectively.

A new assessment of the action taken by Spain to correct the excessive deficit by 2016 in response to the Council Recommendation of 21 June 2013 leads to the conclusion that the response of Spain to the Council Recommendation has been insufficient. Spain did not reach the intermediate target for the headline deficit in 2015 and is not forecast to put an end to its excessive deficit by 2016. The fiscal effort falls significantly short of what was recommended by the Council, and the fiscal stance was even relaxed in 2015.

ESO: Background information: Stability and Growth Pact: update on the fiscal situation of Spain and Portugal http://www.europeansources.info/record/stability-and-growth-pact-update-on-the-fiscal-situation-of-spain-and-portugal/

EUR-Lex: SWD(2016)241: Analysis by the Commission services of the budgetary situation in Spain following the adoption of the Council Recommendation to Spain of 21 June 2013 with a view to bringing an end to the situation of an excessive government deficit http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=SWD:2016:241:FIN

---