Brussels again warns Spain of high debt and unemployment


The European Commission (EC) has proposed to freeze European rules for managing the government deficit and debt for 2023, a year longer than expected due to the impact of the war in Ukraine on the economy of the European Union.

The European Commission warned Spain this Monday of its… high public, private and external debt and because of high unemployment, some “vulnerabilities” that community authorities have been detecting in the Spanish economy for years and that are “cross-border relevant”.

Eurozone economy and finance ministers met this Monday to discuss the Community Executive’s budgetary evolution and the spring package, i.e. to discuss the country-specific recommendations and guidelines to boost growth and jobs while maintaining sound public finances.

In this year’s macroeconomic recommendations, the Community Executive points out that household and corporate debt remains at a higher level than before the coronavirus pandemic and is “exceeding prudent levels”, while “high” government debt-to-GDP ratios are also “good is”. above” the pre-Covid level.

This is despite both indicators returning to their negative trends in 2021 and projections suggest that will keep falling this year and the next, adding to the fact that the current account balance shows a “small surplus” and the net investment position has reached its best figure since the mid-2000s.

Taking into account unemploymentBrussels has warned that the “segmentation” of the labor market between temporary and indefinite continues, as does the high youth unemploymentalthough it emphasizes that “past and recent labor reforms and the continued application of the recovery plan will help address the rest of Spain’s vulnerabilities”.

In addition, another of the “imbalances” in the Spanish economy identified by the community authorities is: the level of non-performing loans or “non-performing loans” (NPL, in English) and the risk they pose, especially in sectors with high energy consumption and sectors previously affected by the Covid-19 crisis, such as tourism.

They propose to leave the deficit and debt rules suspended for another year

The European Commission (EC) has proposed: keep European rules for managing public deficit and debt frozen in 2023a year longer than expected due to the impact of the war in Ukraine on the economy of the European Union.

“Aggravated uncertainty and strong downside risks to the economic outlook in the context of the war in Ukraine, unprecedented increases in energy prices and ongoing supply chain disruptions justify extending the general escape clause in 2023,” the Community Executive said in a statement. statement.

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Source: EITB


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