The Economic Vice-President, Nadia Calviño, is in support of leaving some of the European Union’s aid, that of loans, for the next Government, if the current one exhausts the legislature and already catches only the subsidy section.
In statements to Radio Nacional, Calviño has stated that “the government does not rule out credits at all, but we have a plan for six years.” It explained that the period for requesting transfers was until 2023, while for appropriations there was an expected period until 2026. The current Executive of Pedro Sánchez concludes his legislature in 2023 and has developed “a two-phase plan” that coincides with that political calendar. “Logically the priority is to execute the investments that can be financed by these transfers,” calviño stressed. As the newspaper El País published today,” Spain now gives up claiming 70 billion in European credits”. Calviño has left the door open to claim them by 2024 “if necessary,” but stressed that the other $70 billion in subsidies “is a very large amount.”
The obvious difference is that lost in-depth transfers do not increase the already high state debt, while appropriations must be repayed and subject the Executive to more conditionality coupled with that of transfers. The Government’s commitment implies confidence that the State will continue to be able to place debt in the markets during this legislature without this section of the EU bailout and that the European Central Bank will maintain its extra support to keep the risk premium low.
On the other hand, Calviño has not closed the door, but it has also not confirmed the rise in civil servants’ salaries in 2021 and explained why it does not entrust the management of new European funds to an independent agency. “We went around a lot to how to manage these funds and it was going to take us so long to create an agency that wasn’t efficient. We must rely on those that already exist.” For Calviño, the challenge of absorbing these funds is “formidable” and “will require a change in the pace of operation of the Administration and private public collaboration”.
It insisted on linking the adoption of the Budgets in order to channel the first 27 billion planned for 2021. “Without budgets they won’t be able to be done,” he said. The European Commission has rejected that without budgets Spain will run out of funds.
LESS GROWTH IN THE FOURTH QUARTER
The Vice President of Economic Affairs expects the Spanish economy to grow in the fourth quarter above 1.5% planned by Funcas, although she has recognized that growth will not be of the same intensity as that estimated by the Government for the third quarter (around 13%).
“Our forecasts are higher (at 1.5%), but it is clear that the fourth quarter has to have lower growth than the third quarter because it is the effect of the rebound. In the face of the intense fall we had in the second quarter, the third is the rebound and the fourth will normally have a lower growth,” said Calviño.
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