Spain’s Finance Minister has said the European Union (EU) will likely approve the country’s budget plans amidst reports Brussels officials were preparing to warn Madrid over public debt concerns.
Maria Jesus Montero said a letter that EU finance officials were due to send Spain “endorsed” measures that will see higher government spending and tax increases if approved.
Montero’s comments follow speculation that the EU was preparing to warn Spain that the draft plans risked efforts to slash the country’s deficit.
The deficit, or negative difference between income and outgoings for the Treasury, stood at more than €36.2 billion at the end of last year according to government data.
“We understand that Brussels will give its endorsement to our budget plans,” Montero said after a Council of Ministers meeting last Friday.
Pablo Casado, leader of the conservative opposition Partido Popular (PP), said the budget plans amounted to a two-year election campaign for the ruling left-leaning Partido Socialista (PSOE).
“The government wants to spend money on unnecessary promises at the expense of the future deficit and debt,” Casado said.
EU officials are concerned about whether planned spending hikes can be covered by proposed increases in taxes, including the planned ‘digital’ levy on large technology firms.
The EU has the power to strike down Spain’s budget plans if it deems them too costly. Diplomatic sources said Brussels is not considering this.
The Spanish government has been preparing its response to Brussels this week. All EU member states in the eurozone are required to submit their budget plans to officials in Brussels before enacting them into law.
The warning comes as the EU showed concerns over plans for Italy’s budget, another country with a large deficit and national debt which also plans increases in spending.
EU budget measures were brought in following the eurozone debt crisis during the recession, which saw countries such as Greece receive large bailouts to cover yawning gaps in their books.