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Eurogroup head urges Spain to better check draft budget assumptions
October 10, 2016 / 5:26 PM / a year ago

Eurogroup head urges Spain to better check draft budget assumptions

LUXEMBOURG, Oct 10 (Reuters) - Spain should be careful what numbers it puts into its draft budget plan for 2017, because the quality of its assumptions in the past has been poor, the chairman of euro zone finance ministers Jeroen Dijsselbloem said on Monday.

Spain, which has a caretaker government following inconclusive parliamentary elections in December and June, is to present draft budget assumptions for 2017 to the Commission by Oct. 15 for checks they are in line with EU laws.

In July, the country narrowly escaped being fined for running too high a budget deficit for years and not taking action to reduce it as required by EU laws.

Without a new government, Madrid can only submit a budget based on no changes in policy. But in a rare direct criticism of a government, Dijsselbloem said Madrid should pay better attention to its macroeconomic assumptions.

“Can I make a slightly critical remark on this ... in the last couple of years there have been quite a few debates between Spain and the Commission on the quality of the figures,” Dijsselbloem told a news conference.

“And each time it turned out that the Commission was right. So I would like for the Spanish government to really scrutinise their figures and assumptions before putting them into the budget,” he said, adding this was valid for all governments, but for Spain in particular.

Spain has until 2018 to reduce its budget deficit below the EU limit of 3 percent of GDP from 3.9 percent expected this year and 5.1 percent in 2015. The Commission forecast in April that with policy unchanged, the deficit in 2017 would be 3.1 percent.

“3.1 percent is supposed to be the figure ... but for the time being we know what the political situation is, we expect the draft budgetary plan on the assumption of no policy change, because it is a caretaker government,” European Commissioner for Economic and Financial Affairs Pierre Moscovici said.

“As soon as there is a government with full powers, we expect a draft plan which would contain all the necessary measures to reach the 3.1 percent target.” (Reporting by Jan Strupczewski; Editing by Catherine Evans)

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