The European Commission has expressed concerns over Spain’s delayed submission of its draft budget for 2024, warning Madrid that it risks jeopardizing the consistency of its fiscal plans, Bloomberg reports.
The EU executive expects all member states to present their preliminary budget plans by October 15, with a deadline of late November for Spain.
Sources familiar with the matter revealed that the Commission is particularly worried about the potential disconnect between Spain’s medium-term fiscal plan, already submitted, and its annual budget, which is expected to be significantly delayed. This delay, according to the Commission, could jeopardize the bloc’s fiscal rules, which have been reinstated after their suspension during the COVID-19 pandemic.
During a meeting on Monday, EU Economic Commissioner Paolo Gentiloni stressed the importance of “connecting” the draft budgets with the mid-term plans, emphasizing that while some flexibility on deadlines is possible, it is “limited.”
Spain’s political landscape has made budget negotiations a challenging task for the government. Prime Minister Pedro Sanchez has faced difficulties in securing parliamentary approval for budgets due to a fragmented parliament. This has led to situations where the government has had to roll over previous year’s spending plans, as is currently the case with the 2024 budget.
The current delay stems from the government’s struggle to pass the “stability path,” a set of fiscal targets required for budget approval. After failing to secure approval in July, the government is now engaged in talks with allies to reach an agreement by the end of the year.
Passing the budget this year is particularly crucial for Spain, as it needs to meet the EU’s reinstated fiscal targets and access EU recovery funds.
