Brussels confirms that Spain is not among the countries to which it has asked for expenditure control

eurozone quarantineThe global economy is on track to contract significantly this quarter, enough to end the ten-plus years of expansion following the GFC

The European Commission has responded Monday to the Spanish Popular Party that Spain is not on the list of countries it has asked to reduce public spending in its recommendations last October. These include Italy, Lithuania and Latvia, Europa Press reported.

“Several countries in the Euro Zone, Italy, Lithuania and Latvia, have received a call for caution in public spending, but Spain was not included in these countries that have received the notification”, responded the economic vice-president of the European Commission, Valdis Dombrovkis, to a question from the ‘popular’ MEP Isabel Benjumea in the Economic Affairs Committee held in the European Parliament.

An idea with which the Commissioner for the Economy, Paolo Gentiloni, agreed. He added that although the Community Executive has considered the need to control excessive spending in a number of countries, Spain is not amongst them. “We have supported the decisions taken and we have not made calls for caution to Spain regarding excessive public spending,” he said.

In addition, Dombrovskis has qualified that when talking about joint fiscal stimuli, in the framework of the Recovery Funds, “it is important to control current spending”. In this sense, he added that when assessing the budgetary plans of the Member States, “we must distinguish between countries with low debt and those with high debt, including Spain. Here we are asking for more prudent fiscal policies, taking sustainability into consideration”.

The Community Vice-President cited the Spanish Recovery and Resilience Plan as an example of financing future investments and not current expenditure: “As regards the Recovery and Resilience mechanism, we cannot say that it finances current expenditure -or it does so in a very limited way and limited to specific possibilities-. The mechanism is intended to finance investment, which is reflected in Spain’s Recovery and Resilience Plan,” Dombrovskis clarified in response to Benjumea’s question on the control mechanisms to prevent misuse of the funds.

Looking to the future, Gentiloni pointed out the intention to address, within the Recovery and Resilience Plans, “important reforms that the Spanish plan is already dealing with, including the labor market or the reform of pensions, which is a series of important steps”. In this sense, the Commissioner for the Economy stressed that the Community Executive is studying the impact of such reforms from the point of view of sustainability.

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