European Economics Commissioner Pierre Moscovici confirmed on Wednesday that the European Commission will recommend that Spain exit the Excessive Deficit Mechanism in June. He did not specify exactly when the recommendation will be published, but indicated that it will be included in the Commission´s Spring Package, due to be published early next month. Technically the decision must be ratified by the member states of the Union, but this is seen as a formality.
The excessive deficit procedure (EDP) is an action that the European Commission can take against any EU member state that exceeds the budgetary deficit ceiling imposed by the Union´s Stability and Growth Pact, essentially that the budget deficit must not exceed 3% of GDP. The EDP was applied to Spain in 2009. Spain closed 2018 with a budget deficit of 2.48% of GDP. Moscovici said that Spain´s exit from the EDP was good news, but warned that the Commission remains concerned about Spain´s structural deficit, which it sees increasing from 2.9% in 2019 to 3.2% in 2020. The Commission will wait for the formation of a new government in Spain before discussing with that government further measures it should take.
