Recommendation for a COUNCIL DECISION abrogating Decision 2009/417/EC on the existence of an excessive deficit in Spain
Date: 2019-06-05
Institutions: Directorate-General for Economic and Financial Affairs, European Commission
Subjects: Spain, budget deficit, budget estimate, budget policy, public debt, public expenditure

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   EUROPEAN COMMISSION  Brussels, 5.6.2019  COM(2019) 543 final  Recommendation for a COUNCIL DECISION abrogating Decision 2009/417/EC on the existence of an excessive deficit in Spain  
 
 
Recommendation for a 

COUNCIL DECISION 

abrogating Decision 2009/417/EC on the existence of an excessive deficit in Spain 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 126(12) thereof, 

Having regard to the recommendation from the Commission, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

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On  27  April  2009,  following  a  recommendation  from  the  Commission,  the  Council 
decided, by Decision 2009/417/EC1, in accordance with Article 126(6) of the Treaty, 
that  an  excessive  deficit  existed  in  Spain.  The  Council  noted  that  the  general 
government deficit notified for 2008 was  3,4 % of GDP, thus above the 3%-of-GDP 
Treaty  reference value.  The general  government  gross debt  was  planned at  39.5% of 
GDP in 2008. 

On the same date, in accordance with Article 126(7) of the Treaty and Article 3(4) of 
Regulation  (EC)  No  1467/972,  the  Council,  based  on  a  recommendation  from  the 
Commission, issued a recommendation to Spain with a view to bringing the excessive 
deficit situation to an end by 2012 at the latest3.  

Thereafter,  the  Council  addressed  three  new  recommendations  to  Spain  (on  2 
December 2009, 10 July 2012, and 21 June 2013) on the basis of Article 126(7) of the 
Treaty, which extended the deadline for correcting the excessive deficit to 2013, 2014, 
and  2016  respectively.  In  all  three  recommendations,  the  Council  considered  that 
Spain had taken effective action, but unexpected adverse economic events with major 
unfavourable consequences for government finances had occurred.   

On  12  July  2016,  the  Council  under  Article  126(8)  of  the  Treaty  established  that  no 
effective action had been taken by Spain in response to the Council recommendation 
of 21 June 2013. On 8 August 2016, on the basis of Article 126(9) of the Treaty, the 
Council  gave  notice  to  Spain  to  take  measures  for  the  deficit  reduction  judged 
necessary  in  order  to  remedy  the  situation  of  an  excessive  deficit,  thereby  setting  a 
new deadline for the correction by 2018. The Council also set a deadline of 15 October 

Council Decision 2009/417/EC of 27 April 2009 on the existence of an excessive deficit in Spain (OJ L 
135, 30.5.2009, p. 25). 
Council Regulation (EC) No 1467/97 of 7 July 1997 on speeding up and clarifying the implementation 
of the excessive deficit procedure (OJ L 209, 2.8.1997, p. 6). 
All  documents 
https://ec.europa.eu/info/business-economy-euro/economic-and-fiscal-policy-coordination/eu-
economic-governance-monitoring-prevention-correction/stability-and-growth-pact/corrective-arm-
excessive-deficit-procedure/ongoing-excessive-deficit-procedures/spain_en . 

the  excessive  deficit  procedure  of  Spain  can  be 

found  at: 

related 

to 

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(5) 

(6) 

(7) 

(8) 

2016 for effective action to be taken and for submitting a report to the Council and the 
Commission on action taken in response to the Council notice.  

On  16  November  2016,  the  Commission  concluded  that  Spain  had  taken  effective 
action in compliance with Council Decision of 8 August 2016 under Article 126(9) of 
the Treaty.  

In  accordance  with  Article  4  of  the  Protocol  on  the  excessive  deficit  procedure 
annexed to the Treaties, the Commission provides the data for the implementation of 
the procedure. As part of the application of that Protocol, Member States are to notify 
data  on  government  deficits  and  debt  and  other  associated  variables  twice  a  year, 
namely  before  1  April  and  before  1  October,  in  accordance  with  Article  3  of 
Regulation (EC) No 479/20094.  

The Council takes a decision to abrogate a decision on the existence of an excessive 
deficit  on  the  basis  of  notified  data.  Moreover,  a  decision  on  the  existence  of  an 
excessive  deficit  should  be  abrogated  only  if  the  Commission  forecasts  indicate  that 
the  deficit  will  not  exceed  the  3%-of-GDP  Treaty  reference  value  over  the  forecast 
horizon5. 

Based on data provided by the Commission (Eurostat) in accordance with Article  14 
of Regulation (EC) No 479/2009, following the April 2019 notification by Spain, the 
2019  Stability  Programme  and  the  Commission  2019  spring  forecast,  the  following 
conclusions are warranted: 

– 

– 

– 

– 

After  reaching  3.1%  of  GDP  in  2017,  the  general  government  deficit  was 
reduced to 2.5% of GDP in 2018. Compared with the projections in the 2019 
Draft  Budgetary  Plan  submitted  in  October  2018,  the  2018  deficit  turned  out 
0.2 percentage point lower, thanks to a 0.3 percentage point higher revenue-to-
GDP ratio being only partly offset by a 0.1 percentage point higher expenditure 
ratio.  On  the  revenue  side,  both  corporate  income  tax  revenues  and  other 
revenues turned out higher, whereas on the expenditure side, compensation of 
employees turned out somewhat higher.  

The Stability Programme for 2019-2022, submitted by the Spanish government 
on 30 April 2019, plans  the general  government  deficit to  decline to  2.0% of 
GDP  in  2019  and  to  fall  to  1.1%  of  GDP  in  2020.  The  Commission  2019 
spring forecast projects a deficit of 2.3% of GDP in 2019 and 2.0% of GDP in 
2020,  thus  remaining  below  the  3%-of-GDP  Treaty  reference  value  over  the 
forecast horizon.  

The  structural  balance,  which  is  the  general  government  balance  adjusted  for 
the economic cycle and net of one-off and other temporary measures, remained 
unchanged  between  2017  and  2018.  The  accumulated  improvement  in  the 
structural balance since 2016 amounted to 0.4% of GDP.  

The gross government debt-to-GDP decreased to 97.1% in 2018, from 98.1% 
in  2017,  mainly  due  to  the  debt-reducing  impact  of  real  growth  and  inflation 

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Council  Regulation  (EC)  No  479/2009  of  25  May  2009  on  the  application  of  the  Protocol  on  the 
excessive  deficit  procedure  annexed  to  the  Treaty  establishing  the  European  Community  (OJ  L  145, 
10.6.2009, p. 1). 
In line with the “Specifications on the implementation of the Stability and Growth Pact and guidelines 
on  the  format  and  content  of  stability  and  convergence  programmes”,  adopted  by  the  Economic  and 
Financial Committee on 15 May 2017, available at: 
http://data.consilium.europa.eu/doc/document/ST-9344-2017-INIT/en/pdf  

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more  than  offsetting  the  opposite  impact  of  interest  expenditure,  while  the 
primary balance is close to zero. The Commission 2019 spring forecast projects 
the debt ratio to decrease to 96.3% in 2019 and 95.7% in 2020 mainly due to 
high nominal  growth that  outweighs the impact  of debt-increasing  stock-flow 
adjustments  and  interest  expenditure,  while  the  primary  balance  is  improving 
only slightly. 

(9) 

In accordance with Article 126(12) of the Treaty, a Council Decision on the existence 
of  an  excessive  deficit  is  to  be  abrogated  when  the  excessive  deficit  in  the  Member 
State concerned has, in the view of the Council, been corrected. 

(10) 

In  the  view  of  the  Council,  the  excessive  deficit  in  Spain  has  been  corrected  and 
Decision 2009/417/EC should therefore be abrogated.  

(11)  As  from  2019,  the  year  following  the  correction  of  the  excessive  deficit,  Spain  is 
subject  to  the  preventive  arm  of  the  Stability  and  Growth  Pact  and  should  progress 
towards  its  medium-term  budgetary  objective  at  an  appropriate  pace,  including 
respecting  the  expenditure  benchmark,  and  comply  with  the  debt  criterion  in 
accordance with Article 2(1a) of Regulation (EC) No 1467/97,  

HAS ADOPTED THIS DECISION:  

From  an  overall  assessment  it  follows  that  the  excessive  deficit  situation  in  Spain  has  been 
corrected. 

Article 1 

Decision 2009/417/EC is hereby abrogated. 

Article 2 

This Decision is addressed to the Kingdom of Spain. 

Done at Brussels, 

Article 3 

For the Council 
The President 

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