Deficit target met: Can Spain relax now?
For the first time since the start of the financial crisis in 2008 Spain has met the deficit reduction targets agreed with the EU Commission. At 4.54 percent of the country's economic output the deficit in 2016 was just below the 4.6 percent limit. While some commentators are full of praise, others take this victory with a pinch of salt.
Smart public servants helping Spain out of crisis
The authorities at both the national and regional level deserve praise for their efforts, La Vanguardia comments:
“It is a major achievement for the state that after years of constant deviation it managed to meet the deficit reduction target in 2016. This is of great importance for the economy as well as for the country's credibility vis-à-vis its own citizens, the financial markets and the authorities of the European Union which doubted the target could be met. Those in charge of the various public authorities deserve to be congratulated since this success was only possible because they managed the resources well. At the same time they should be encouraged to continue their efforts.”
Economy and budget still need to improve
The fact that Spain has met its deficit reduction target should not divert attention from the dreadful state of the economy and the public budget, El País stresses:
“At last the Rajoy government has earned a medal for meeting the deficit reduction target agreed with Brussels. … But despite the fact that this strengthens Spain's credibility we should bear in mind that the public finances must improve significantly before the Spanish economy can consider itself safe from major damage inflicted by external convulsions. … The stability of public revenues for the coming years has not yet been guaranteed by a solid financial structure, a rebalancing of the social security budget, a systematic reduction of debt and a sustainable increase in employment.”