The euro’s fourth biggest economy will not be the protagonist in long economic debates in 2017. Spain’s deficit and its domestic politics are no longer a concern for Brussels, now focused on the Brexit negotiations and worried about the complicated elections cycle in various countries.
Before March 31, UK Prime Minister Theresa May will trigger Article 50 of the European Treaty to begin the process of abandoning the community project. That same month there will also be elections in Holland with the nationalist, islamofobic Party for Freedom (PVV) leading the polls, ahead of current Prime Minister, Mark Rutte.
“In 2017 we have enough problems, we don’t talk about the referendum in Catalonia,” says a top politician from Jean Claude Juncker’s executive. He notes, relieved, that eurosceptic Geert Wilders “will not govern the alliances of political parties in Holland.”
These elections will be followed on April 21 by the French presidential elections and National Front leader, Marine Le Pen, will go on to the second round. Her discourse on pulling France out of the euro has got through to a large part of the electorate. Then in September, Germany will hold legislative elections which could leave the extreme right-wing AfD party in second place.
And all these dates have an influence even on a technical but also political organisation like the Eurogroup. On this Thursday’s meeting agenda it has Spain’s budget, the Portuguese economy or the supervision of Greece’s bail-out, but “it will be short, and should be used like the one in February to reach political agreements,” ahead of the elections’ cycle, a concerned community source insists.
It will be the first time Economy Minister Luis de Guindos explains the updated 2017 budget draft to his euro colleagues.
“The Commission has evaluated our plan positively, we are complying on the fundamental issues,” Economy ministry sources say. They don’t foresee “the extent of the debate” amongst the ministers, but rule out any problems and “the Eurogroup president will support the Commission’s recommendation on Spain.”
In its latest analysis on Spain’s draft budget, Brussels figures that at end-2017 this will be “0,2 percentage points above the required deficit target of 3.1% of GDP,” due to a lower valuation of the measures on spending and a less optimistic macroeconomic scenario.
The Spanish draft was analysed by Monday’s Eurogroup working group, the EuroWorkingGroup, and no delegation called for more budgetary rigour from Madrid.
“Nobody is showing any signs of concern about Spain’s accounts,” an EU official acknowledges. Its analysis is similar to the one made by the Economy ministry. “It’s fairly clear additional measures will not be asked for. Only if they were needed in the course of the year.”
So no problems for Luis de Guindos and the Spanish government at upcoming Eurogroup meetings. With the deficit problem out of the way, the Commission is not going to get involved in Catalonia’s sovereignity process because they already have a lot of fronts open. Perhaps Holland does concern Brussels more.
The current Eurogroup president, Jeroen Dijsselbloem, needs his prime minister Mark Rutte to repeat his coalition government after the Dutch elections. If not, Dijsselbloem would lose his ministerial post and his job in Europe. And Spain could even restart the battle to get de Guindos appointed as Eurogroup president.