Spain, the country with the most public deficit in the European Union … and the sixth with the most debt

Spain, the country with the most public deficit in the European Union … and the sixth with the most debt

  • Eurostat confirms the 4.5% mismatch (two tenths less without the aid to the bank) that the Spanish Government had announced weeks ago.
  • In addition to Spain, only France (-3.4%), Romania and the United Kingdom (both -3%) registered deficits equal to or higher than the 3% threshold.
  • As for public debt, Eurostat certifies that it stood at 99.4% of GDP, which places it as the sixth most indebted country with respect to its GDP.
  • A FUND : City councils ‘saved’ the deficit in 2016 and allowed Rajoy’s first compliance.
Montoro

Montoro, during the presentation of the closing of public accounts in 2016. EFE // Javier Lizón

The Government fulfilled last year the objective of public deficit that marked Brussels but that has not prevented it from being the country of the European Union with a greater imbalance in its public accounts in 2016 .

The budget hole of the Spanish administrations rose last year to 4.3% of GDP, a figure that Eurostat has confirmed on Monday. The gap meets the limit of 4.6% agreed with Brussels, although to achieve this it has been necessary for the European Commission to raise the barrier for Spain on a couple of occasions, from the 2.6% that was required at the beginning.

The statistical agency does not include banking aids in its calculation; with them, the Spanish deficit climbs to 4.5% (50,576 million euros), a mismatch in any case higher than all the EU countries . Spain is next to France (-3.4%), Romania and the United Kingdom (both -3%) the only ones above the 3% imposed by the stability pact. Ten countries present surpluses; among them Germany, with a 0.8% favorable balance in their accounts.

 

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Spain has reduced by eight tenths the deficit of 2015 (5.1%), but it is still far from the 3.1% that the community authorities demand for this year. That forces him to an adjustment of 1.2 points of GDP -about 14,000 million euros- that the government expects to deal with the extra income that the expected economic growth of 2.7% will represent (it would be the highest of all the advanced countries) and of the fiscal reform that could contribute 4,800 million.

The income received by the expansion of the economy will be used entirely to reduce the deficit “We will keep spending frozen, and the income received from the expansion of the economy will be used entirely to reduce the deficit, ” said Alberto Nadal, secretary on Monday. State Budget, during his appearance in Congress to explain the accounts this year. The communities will have a greater margin. “They can raise spending on Education and Health moderately, according to the spending rule.”

Nadal asked the rest of the groups for support to “continue reducing the deficit”, but has found rejection in several parties. Both Javier Lasarte (PSOE) and Segundo González (Unidos Podemos) have aggravated Nadal that the accounts do not include measures against inequality and to raise social spending – now below 40% – to the European standard. “With the excuse of meeting with Brussels, Spain moves away from Europe,” said Gonzalez.

Reducing the deficit sunk 60% public investment

But the cut has not only occurred in social spending. “The effort made to reduce the deficit has had an impact on public investment,” the BBVA Foundation and the IVIE said in a report presented on Monday. His study concludes that -to contain a budget mismatch that rose to 10% in the worst moments of the crisis- Spain has reduced its public investment by 58% since 2009.

It barely weighs 2% of GDP, the lowest rate since the last century After four years of investment cuts, spending on so-called ‘gross fixed capital formation’ rose by 11.6% in 2015 – a marked year by national elections, autonomies and local-, but last year it fell again by 14.3% to 23,432 million . A figure that means 2% of GDP, the lowest rate since the last century.

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All regions have decreased investment. Navarra, the most, did it by 74%. The least, La Rioja with 43%. “The fall has been so intense that in nine communications, the investment made is lower than the depreciation of capital, so the stock that is available [infrastructure, machinery, buildings, computer equipment …] is now lower than that You had it in 2009.

The sixth with more debt

Regarding the Spanish public debt, Eurostat certifies that at the end of 2016 it stood at 99.4% , as had been anticipated at the end of last month by the Bank of Spain. The debit in monetary terms amounts to 1,106,952 million euros.

Sixteen countries have recorded a debt ratio of more than 60% of GDP – the limit set in the Stability Pact – among which Greece (179%), Italy (132.6%), Portugal (130.4%), Cyprus (107.8%) and Belgium (105.9%). Spain would be right after these five.

The lowest percentages of GDP were recorded in Estonia (9.5%), Luxembourg (20%), Bulgaria (29.5%), the Czech Republic (37.2%), Romania (37.6%) and Denmark (37.8%). In the Twenty-eight it went from 84.9% of GDP in 2015 to 83.5% in 2016 and, in the euro area, it registered a decline from 90.3% of GDP recorded at the end of 2015 to 89.2% registered at the end of last year.