Calviño will present to the Eurogroup the economic policy of the new Government

The Vice President of the Government and Minister of Economic Affairs and Digital Transformation, Nadia Calviño, will present this Monday to the Eurogroup the general lines of the economic policy of the new Executive, who hopes to agree with Brussels a new path of more flexible deficit.

As usual when there is a change of Government, Calviño will take advantage of the first meeting of ministers of Economy and Finance of the Eurozone of 2020 to expose "the main lines of economic policy" during the new legislature, they explain from the Ministry of Economy.

"A clear and forceful message of the three axes of action will be conveyed, and the first is budgetary discipline, compatible with inclusive growth and structural reforms," ​​said sources from the Ministry.

The Government has as one of its economic priorities the approval of the General State Budgets of 2020, for which it must first approve the expenditure ceiling and a new path of public deficit. The Executive wants to negotiate with Brussels this path to make its goals more flexible before taking it to Congress.

Sources of the Ministry of Economy specify, however, that "there is no work being done to make certain objectives more flexible", but rather in the preparation of the new public deficit and debt path for the next three years and the 2020 accounts in contact with Brussels, as has been done in previous years.

"What we are going to do (...) is to have constant communication with the European Commission so that they know our forecasts, where we plan to take our income and expenses, our justifications, so that the result of our work on the path and budget is aligned with what the Commission expects of us, "they point out.

The deficit path that accompanied the 2018 extended budgets sent to Brussels last October provided for a deficit of 1.7% of GDP this year.

However, since Spain left the procedure for excessive deficit in June - by bringing it below the 3% threshold -, the Commission no longer sets specific targets for nominal deficits for each year, as it did during the decade in which the procedure was opened .

What it does require, to prevent it from derailing again, is that the structural deficit be reduced by a certain volume, specifically, by 0.65% of GDP (about 7.8 billion euros) in 2020. Brussels warned Spain in October that does not provide for compliance with the adjustment, although the calculation was based on the extended accounts.

Sources from the Ministry of Economy also remind that European budget discipline rules contain flexibility mechanisms that have been used "in recent years with many countries to achieve the necessary adjustments and that are compatible with their internal policies", in particular, the possibility of deviating from the recommended structural adjustment by 0.5% of GDP in two years.

It remains to be seen the approach adopted in these negotiations by the new European Commission, which maintains the Latvian Valdis Dombrovskis as economic vice-president, but will have as Italian commissioner Paolo Gentiloni. Calviño plans to meet with several members of the Executive during his visit to Brussels.

Apart from the intervention of the minister, the main point of the lean agenda of the Eurogroup will be the resumption of negotiations on the reform of the eurozone after the progress achieved until December last year was less than expected.

Ministers anticipate that the final details of the reform of the European Stability Mechanism - the European rescue fund - will not be closed until March, instead of January as initially noted, and that much more work is needed to advance the European System Deposit Guarantee.

In addition, the International Monetary Fund will present its latest report on the economy of the eurozone and the Commission its economic policy recommendation for the euro area, issued in December.


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