May 11, 2021

Reduce debt, mission "impossible"

Reduce debt, mission "impossible"

The president of the Independent Authority of Fiscal Responsibility (Airef), José Luis Escrivá, today demanded political formations a "firm commitment" to budgetary sustainability, so that this is not "a partisan issue".

During his speech at the Forum Europe, organized by the New Economy Forum, Escrivá recalled that the debt of Spain grew 40 points since its entry into the monetary union, going from around 60% of debt ratio in relation to GDP to current level close to 100%, far from the 2020 target of returning to that "reasonable" 60%, so he pointed out that Spain is "very vulnerable" to possible rises in interest rates or increases in spending due to aging the population.

Escrivá warned that "what happens is that we have been installed in a structural deficit of 2% for several years" and that "we are not converging towards the budgetary stability demanded by the community rules". "We have an additional consolidation pending that will lead us to reduce the debt so that we avoid future scares," he added.

In this sense, the president of the fiscal authority recalled that the objective set out in the Stability Law in relation to indebtedness is that Spain reaches a ratio of 60% of debt in relation to GDP in 2020, so, taking into account that the current level is close to 100%, this objective is unattainable and its "clearly unfulfilled" affects the credibility of Spain.

The president of AIReF has warned that "progress is not being made" towards budget stability and stressed that Se organism detects "some fatigue" in reducing the deficit after the great "effort" made in recent years.


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