Spain to Conclude Oversight by European Institutions by 2025
Spain will conclude its financial oversight from European institutions by 2025, according to Carlos Cuerpo, the Minister of Economy, Commerce, and Enterprise. This announcement marks the end of special monitoring from Brussels after the country has injected approximately EUR90 billion into its banking sector since 2008.
The Treasury has revised its debt requirements for 2025 to EUR60 billion, which is an increase of EUR5 billion compared to the previous year, due in part to the recent DANA (Drought and Natural Hazards) phenomenon impacting the economy.
This financial commitment will have a cumulative impact on the public deficit, which represents the imbalance between the state's income and expenditure, amounting to five percentage points of the Gross Domestic Product (GDP). By the end of 2023, the deficit is projected to reach around EUR75 billion, as reported by the European Commission.
During a recent Cabinet meeting, Cuerpo outlined the Treasury's financing strategy for the year. He noted that Spain will make an additional payment to the European Stability Mechanism (ESM) this year, which relates to the loan provided for the rescue of financial institutions back in 2012, following the collapse of the real estate bubble.
Cuerpo emphasized that after this payment is completed, Spain will no longer be subject to missions from European and international institutions concerning this financial rescue.
Since the financial institutions were rescued, Spain has been subject to periodic missions from these institutions. By the end of 2025, the country is expected to have repaid 75% of the loan from the ESM, thus eliminating the need for further missions and reports.
In an October report from Eurostat, the statistical office of the European Commission, it was revealed that Spain's expenditure related to financial support programs from 2008 to 2023 has totaled around EUR90 billion, with the majority of this occurring in 2012. This period included the bailout of major banks such as Bankia, CatalunyaCaixa, and Banco de Valencia. The state has only recouped approximately EUR16 billion from these expenditures, resulting in a significant shortfall of EUR75 billion. In terms of GDP impact, only Cyprus, Greece, Ireland, Portugal, and Slovenia have experienced a greater financial burden.
Currently, the Spanish government aims to achieve a deficit of 3% by the end of 2024, adhering to the newly established fiscal rules of the European Union (EU) designed to reduce budgetary imbalances and public debt.
