The now former president of the Independent Authority for Fiscal Responsibility (AIReF), Cristina Herrero, has warned this Tuesday that Spain will not be able to respect the fiscal commitments assumed with the European Union due to the 5,000 million euros in fiscal aid launched to cushion the economic impact of the war of Iran.
During his intervention in the Joint Congress and Senate National Security Commission, Herrero has indicated that, in the medium term, the fiscal scenarios managed point to a deficit that would remain below 3% of GDP until 2030 in a context “of constant policies”, although he has stressed that “all this can change” due to the evolution of the international environment.
“These forecasts present a high uncertainty linked to the geopolitical context and to the quantitative and temporal scope that the war in the Middle East may have,” he added before the parliamentarians.
The importance of primary spending
Subsequently, Herrero has recalled that, with the new European fiscal framework already in force, the commitments of the States are measured in terms of growth of primary expenditure net of revenue measures, which becomes the variable under supervision and the one that conditions the opening or not of an excessive deficit procedure for non-compliance with the debt objective.
Along these lines, it has been pointed out that in the latest AIReF report, published in October last year, it was calculated that the advance of net expenditure between 2025 and 2028, a period covered by the Structural Fiscal Plan sent to Brussels, would be higher than the agreed level, which would imply violating the commitments in all the exercises contemplated in said plan.
Risk of excessive deficit procedure
Nevertheless, to decide whether or not an excessive deficit procedure is opened, it is necessary to consider the flexibility margins that the fiscal framework itself establishes through a control account, which sets two thresholds: three tenths of GDP each year and six tenths of GDP in accumulated terms.
According to Herrero, the agency's projections place Spain within the control account in 2025. In 2026, the annual limit of that account would be exceeded, though not the accumulated one, while in 2027 and 2028 both limits would be surpassed, both the annual and the accumulated, which would force the application of additional measures to respect the commitments made.
In this context, the former president has specified that the Government's response to the crisis in the Middle East would also imply exceeding the deviation margins allowed by Europe in accumulated terms already in 2026.
Nevertheless, it has pointed out that the final evolution will depend on whether, at the community level, specific decisions are adopted or not on these anti-crisis measure packages that the different Member States are deploying.
Despite this, has insisted: “With what there is at this moment, Spain would fail to meet the commitments and would exceed the permitted margins already in the year 2026.”