The European Commission has predicted that Spain risks breaching the maximum recommended net spending growth in 2026, though the projected deviation remains within the margins allowed by EU fiscal rules. Despite this warning, the body concludes that the country is ready to exit the financial surveillance program stemming from the 2012 bailout. The analysis relies on macroeconomic forecasts, as the Spanish government has not yet submitted its budget project.
The EU's autumn fiscal package annually assesses member states' compliance with community rules on spending, deficit, and debt. In this review, around twenty countries, including France and Germany, have passed, while six, like Spain, Croatia, Lithuania, Bulgaria, Hungary, and Slovenia, are at risk of non-compliance based on their budget projects. The Netherlands and Malta face significant risk.
Spain follows a seven-year fiscal adjustment path agreed with Brussels, focused on net spending, which excludes cyclical or one-off components like DANA payments in Valencia. The plan forecasts a 3.7% net spending increase this year and 3.5% in 2026. However, Commission projections show a deviation: growth in 2026 will exceed the limit, but by less than 0.3% annually and 0.6% of GDP accumulated. "It is projected that net spending growth in 2026 will exceed the maximum limit recommended by the Council, but the deviation is less than 0.3% (annual) and 0.6% of GDP (accumulated)," states the European document.
Calculations draw from executed spending and macroeconomic forecasts, estimating a 30 billion euro increase in 2025, 5 billion more than agreed, equivalent to 0.28 tenths of GDP. Factors such as defense and pension spending drive this rise. Spain has not requested the defense exception sought by 16 countries, allowing security spending to rise to 1.5% of GDP (650 billion euros across the EU), opened by Ursula von der Leyen.
The margin is slim, and the Commission will review the budget project that María Jesús Montero will present in February. If no measures are taken to boost revenues, an excessive deficit procedure could open. Nonetheless, a positive balance in 2024 provides leeway.
Positively, the Commission states Spain can exit the 2012 bank bailout surveillance program. In December, it will repay 4.6 billion to the ESM, reaching 75% of the 41.3 billion received. It would be the first country to do so, following evaluation visits by the ECB and Commission.