Acting Spanish prime minister Mariano Rajoy is promising Brussels further adjustments to the Spanish economy if he wins the June 26 elections.
EL PAÍS has seen a letter written by Rajoy to European Commission President Jean-Claude Juncker in a bid to avoid sanctions against Spain for its continous deficit target misses.
In his letter, Rajoy talks about “the complex political context” in Spain following the December elections
In the letter, written on May 5, Rajoy talks about “the complex political context” in Spain following the inconclusive elections of December 20, which yielded a hung parliament. The country has been without a new government since then, and a fresh election on June 26 is expected to yield a similarly fragmented political scenario.
Although the Popular Party (PP) leader has repeatedly denied in public that he is planning any new spending cuts, his message to Brussels suggests otherwise.
“We are aware of the need to get out of the procedure for excessive deficit as soon as possible, and in the second half of the year, once a new government is in place, we are prepared to adopt new measures, if they are required, in order to meet the target,” he writes.
The dramatic cuts to social spending and government worker wages, which Rajoy introduced as soon as he took office in December 2011, are nowhere on the PP platform ahead of the June 26 elections. Nor was there any mention of new cuts before the December 20 vote. The acting prime minister is not admitting the need for any belt-tightening either in public or in more private talks.
Instead, he is saying that Spain simply needs to keep the same policies in place, create around half a million new jobs and contain spending by regional governments. This will bring the deficit down within target levels, he says.
Spain ended 2015 with a budget deficit of 5.1% of GDP, a full €10 billion above the target. The sanctions could reach as much as €2.1 billion, but Juncker – against the opinion of several members of his own team – has decided to postpone the decision until after elections are held.
“We have concluded that this is not the proper political moment to take that step,” said Economy Commissioner Pierre Moscovici a few days ago, after announcing that sanctions are being put on hold.
However, Brussels is already asking for a further €8 billion in spending cuts.
So far, Rajoy has told Spaniards that there is no need for more impopular cuts, and that if elected, he would even lower taxes.
In his letter, the acting prime minister underscores the reforms that Spain has already undertaken, particularly the labor reform of 2012, and holds that these efforts should be taken into account by EU authorities.
English version by Susana Urra.