Calviño maintains its deficit and debt target despite forecasts


Correspondent in Brussels

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“There is little left”, “it is being signed”, “in the next few days” or “it is practically finished”. Economic Vice President Nadia Calviño It has an unlimited library of expressions to respond vaguely and inaccurately to questions about the arrival of the next European aid and the processing of the reforms committed with the Commission on which they depend.

Yesterday, at the end of the council meeting Ecofin with his colleagues across the EU he dared to say that Spain It will be able to meet its debt and deficit targets this year and the next with the budgets that are being processed, despite the fact that economic forecasts have made the forecasts with which they were designed several times worse. For Calviño, the accounts have been done with «prudence» which «allows us to be in line to meet the objectives of reducing the deficit and debt on the Gross Domestic Product (GDP) in 2021, even in a macroeconomic scenario that may be more adverse.

The fact is that when the European Commission publishes its autumn forecasts tomorrow, it is expected to reduce the expectations of the Spanish economy again. For Calviño, the “up and down” revisions that are taking place in the reports of various Spanish and European organizations “do not have to surprise us” given the environment of “relative uncertainty” and also because the changes that have occurred must be taken into account. caused the pandemic and its consequences in the supply chain. For this reason, the vice president insists that in this situation the Government has opted for a “very clear line of action based on prudence.”

Waiting for funds

With regard to European aid, the vice president maintains that Spain is going to be the first country to process the arrival of money from the Recovery Fund and that in this sense it is “opening the way” to others that are more late in processing . It may be that other countries are waiting to see how the specific mechanisms work, but in the case of Spain everything seems to be fused in a nebula of good intentions.

In the two days that he has been in Brussels, he has not finished clarifying either the when or the content of the “operational agreement”, which is the contract that he has to sign with the community executive before receiving the 10,000 million that he says he will ask for before the end of the year. This request has not yet been processed nor is it known yet when it will be sent since “we are still finishing the formal procedures to be able to make that request.”

The only new reference was his explicit announcement that the content of the contract with the European Commission will be public, which will finally make it possible to know what things and within what calendar the Government will be obliged to comply with. If ever there were intentions in La Moncloa to keep this document secret, the Commission it has already managed to impose its criterion that extraordinary aid for reconstruction should be managed under the greatest of transparency. It does not mean that new or unexpected tasks appear in that document, but rather that it will specify in detail when and how the objectives that the Government itself has committed to execute in the plan that it has already sent to the Commission.

Surely it is that conditionality in favor of transparency imposed by Brussels what is making things go so slow. The 10,000 million that Calviño expects to arrive before the end of the year will probably be processed soon and in fact the Commissioner for the Economy, Paolo Gentiloni, also recognized that the schedule with the disbursement forecasts will be ready “in the next few days”, as soon as Spain can show some tangible achievement on the processing of the labor market and pension reforms, which are the Gordian knot of the entire process.

The Government’s “achievements”

All the other milestones in its recovery plan that the Government presumes to have met are irrelevant elements in this context, because they are objectives that have been imposed and that are either not in the country recommendations or only marginally. Among the elements that Calviño includes as achievements is the processing of taxes on financial transactions and digital services, which is finally due to the OECD, the creation of the commission of experts for tax reform, which is a mere empty procedure, the remote work law, the decrees of equal pay between men and women, which is something that already existed, the creation of the Minimum Vital Income, Despite the fact that it is the competence of the autonomous communities, the entry into force of the Organic Law of Education, which has not taken into account at all the necessary connection with labor legislation or the decision to segregate the sources of financing of the Social Security.

The recommendations by countries insist above all on labor reform and in a very different direction from that indicated by the Executive (or a part), that of pensions and another even more complicated because it requires the elimination of barriers in the internal market and that collides with the autonomic peculiarities and that no government has dared to focus on.

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