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The government delays up to 2022 the end of the public deficit in Spain

The Minister of Finance, María Jesús Montero, will have to address an adjustment of 5 billion next year.

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The government delays up to 2022 the end of the public deficit in Spain

The Minister of Finance, María Jesús Montero, has advanced that Spanish public administrations will not eliminate public deficit until 2022, a year later than planned by previous executive. Montero explained, during his appearance before press after taking part in Council of Ministers, that Spain has softened timetable to reduce red numbers of public administrations after negotiating with European Commission. The Community authorities still have a pending validation of decision when Government presents budgets of 2019. The new fiscal path public deficit stands at 2.7% of GDP in 2018, 1.8% in 2019, 1.1% in 2020 and 0.4% in 2021. In general, Hacienda has raised objectives in middle of year, which allows it to postpone adjustment of about 6 billion this year.

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In exchange for relaxing fiscal effort this year, government is committed to a structural adjustment of 0.4% of GDP, equivalent of about 4.85 billion euros, remainder of deficit reduction comes from additional income that contributes economic cycle. Hacienda already works on establishing new taxes to raise up to 4 billion euros more. and is designing a new plan to combat fiscal fraud and aggressive fiscal planning for large multinational corporations.

"This government met with a general budget that had been designed by former executive without respecting public deficit targets," Montero assured. "It started a job that lasted several weeks. The Government and Council of Ministers commissioned Fiscal Authority (AIREF) a report on budgetary situation and result is that suspicions were confirmed, "he added.

Montero acknowledged that "y were unfulfilled commitments." and abounds: "It has become clear that this path was unrealistic. The European Commission and Bank of Spain warned that deficit target would be dissatisfied and would be 2.6% or 2.7%, which would oblige this government to an additional adjustment of about 11 billion euros. " If Government had to deal with this adjustment "it would have a negative impact on half-point economic growth of GDP with consequent loss of employment," Minister clarified.

After checking budgetary situation and seeing difficulties in adjusting accounts to degree that was envisaged, executive initiated "talks with community authorities" to soften path of reducing public deficit. "These new goals if y are appropriate and compatible. The new path gives our country a greater tax margin for se exercises. They allow us to underpin economic growth while improving social policies. In addition, Spain's commitment to Stability Pact is still conc stronger. "

The new budgetary objectives will "push social agenda forward". The margins are narrow, but at this time of economic cycle is to accompany. "

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