The European Commission approved Spain’s 2022 budget plan sent to Brussels on October 15, which included outlines of the public accounts being finalized in the lower house of the Spanish parliament. In fact, EU authorities, in a report released today, believe that the recovery of the Spanish economy in 2022 will be driven by the investments and reforms included in the recovery, transformation and resilience plan.
âThe European Commission approves the 2022 budget plan, which lays the foundations for a fair recovery, integrates European funds to stimulate investment and balanced and inclusive economic growth and, at the same time, allows Spain to continue to reduce the deficit and the public debt â, declared the Minister of the Treasury and the Civil Service, MarÃa JesÃºs Montero.
The EU approval comes in a key week for processing the general state budget for 2022, which will be put to a plenary vote this week in the lower house of parliament. These are public accounts that include an unprecedented social investment with 240.375 billion euros in the national budget – six euros of expenditure out of ten – a figure which rises to 248.391 billion if we include European funds.
Public accounts which have the largest endowment of pensions, scholarships or dependencies in history and which also seek to boost the competitiveness of the productive fabric with record funding for research, as well as to promote digitization and transformation ecological thanks to the 27.633 billion euros of Europe funds.
Complies with European recommendations
The European Commission considers that Spain’s 2022 budget plan is in line with the recommendation adopted by the Council on June 18, 2021. In other words, European funds from the stimulus mechanism will be used to “finance additional investments to support stimulus, while pursuing a prudent fiscal policy “.
Concretely, the document signed by the Commissioner for the Economy, Paolo Gentiloni, explains that European funds will allow a potential increase in Spain’s GDP of between 1.8% and 2.5% by 2024, not to mention the ‘possible positive impact of structural reforms, which could be significant.
The Commission recalls that the subsidies from the stimulus mechanism allow high quality investments and reforms improving productivity without having a direct impact on the deficits and the debt of the general government. These measures must promote growth by supporting the green and digital transition in particular.
In this regard, Brussels recognizes and appreciates that the Spanish budget plan contains detailed measures that go in this direction and âpromote the digital transition, increasing connectivity and strengthening cybersecurity through different action plansâ such as the Plan connectivity and digital infrastructure for society.
It also recalls that the green transition âis envisagedâ in the new law on climate change and energy transition and in the 2021-2027 National Hydrological Plan. He also underlines that public accounts will increase public support for R&D and knowledge transfer through the Spanish Research Agency and the Cervera network, among other actions.
It should be remembered that the recovery plan designed by the Spanish government received the highest possible score from the technical services of the European Commission in ten of the eleven variables they studied. The Plan contains more than 210 reforms and investments that will lay the foundations for a transformation of the Spanish economy based on four pillars: ecological transition, digitization, social and territorial cohesion and equality.
Furthermore, the European Commission considers that the “macroeconomic assumptions” on which the Budget Plan is based are “favorable” both in 2021 and 2022.
In addition, the opinion endorses the deficit projections for these two years in the public accounts, which involve reducing the deficit by nearly 11% in 2020 due to the measures adopted to deal with the global pandemic, to 8.4 % in 2021 and 5% in 2022. In other words, a reduction of more than half of the deficit that the EU authorities consider âin lineâ with their autumn forecasts.