Spain to Ask EU for Two Additional Years to Reduce Budget Deficit

Acting Spanish Economy Minister Luis de Guindos is expected to start negotiations with EU Commissioner on Economic and Financial Affairs Pierre Moscovici on two additional years to bring the deficit down to 2 percent, according to local media.

MOSCOW (Sputnik) — The Spanish authorities are planning to request that the European Union grant them two additional years to decrease the country's budget deficit, local media reported Thursday.

On July 12, EU economic ministers recognized that Spain had not acted on time to rein in its budget deficit to keep excess government spending below 3 percent of GDP in order to meet EU reference values. This means the start of a penalization process, with possible fines of up to 0.2 percent of the country's GDP.

According to El Pais daily, acting Spanish Economy Minister Luis de Guindos is expected to start negotiations with EU Commissioner on Economic and Financial Affairs Pierre Moscovici on two additional years to bring the deficit down to 2 percent.

The two-year extension of terms would be beneficial for Spain because its revenues are lower than expected, the media outlet added.

Spain's 5.1-percent of GDP deficit last year fell short of the target of 4.2 percent set by the European Commission.