I also deal with the arguments the Spanish government presents about growth, and foreshadow today's ruling by the EU Commission that the forecasts for 2011 and 2012 are way too optimistic.
According to the Commission, the Spanish government forecast that it will be able to slash its budget deficit to 3 per cent of GDP in 2013 from 11.4 per cent last year is based on excessively optimistic growth forecasts for growth of 1.8 per cent next year, 2.9 per cent in 2012 and 3.1 per cent in 2013.
The Commission also pointed to the slow pace of public sector bank restructuring in Spain. It said Spain should take action to improve the long-term sustainability of its public finances, notably by means of a pensions system reform (a point I have addressed separately in this post).
The Stability Programme update of Spain reflects that the current crisis is severely affecting its public finances, with an estimated deficit of 11.4% of GDP for 2009 and a rapidly-rising government debt ratio. The Spanish update aims at sizeable continued fiscal consolidation from 2010 on, with a view to gradually reducing the government deficit to 3% of GDP by 2013 in line with the Council recommendation of 2 December 2009. However, the favourable macroeconomic assumptions after 2010 may imply a lower contribution of economic growth to fiscal consolidation than envisaged and the adjustment path after 2010 would still need to be backed up with measures. Public debt, which stood at below 40% of GDP in 2008, is expected to grow to 55% of GDP in 2009 and swell further to 74% of GDP by 2013. Based on this assessment, the invitations to Spain refer to the specification of the budgetary strategy to correct the excessive deficit and reduce debt, improvements to long-term sustainability and the old-age pension scheme, the fiscal framework and the quality of public finances.
¿Pacto Nacional o herramientas de tortura?
Una de las cosas más curiosas que he observado últimamente mirando la televisión, es que mientras ha habido muchos comentarios relacionados a propósito de poner en marcha un Fondo Monetario Europeo, parece que nadie ha sentido la necesidad de explicar cuáles serán los primeros clientes de esta entidad, ni mucho menos se ha atrevido a nombrar el país que tiene muchos números de encabezar la lista de invitados a la fiesta: el Reino de España.
Semejante lapsos ya lo voy a corregir yo, en este espacio. Es evidente que el nombre de Grecia está en la mente de todos, pero el de España no queda demasiado atrás, ni tiene razones de sentir ningún tipo de envidia por el tratamiento especial que Grecia está recibiendo en estos momentos.