. setting aside how the pandemic may evolve, some significant sources of uncertainty remain on the external front. one of these is the possibility that the brexit negotiations will conclude without an agreement at the end of the transition period, an aspect on which risks currently remain tilted to the downside. a further source of uncertainty concerns future us - china trade relations. undoubtedly, this matter will be greatly influenced by the outcome of yesterday ’ s us presidential election, though it is still early to accurately gauge all the ensuing implications. on the domestic front, a significant factor for the spanish economy, not only in the coming quarters but also in the medium and long term, is unquestionably our ability to mobilise and efficiently assign the european funds available under the next generation eu ( ngeu ) programme. in the september banco de espana forecasting exercise i have referred to in my address today, the impact of this programme was not explicitly incorporated into the projections, since at that time there was notable uncertainty over many key areas in relation to the use of these funds. however, we did publish an analytical text in which, under different assumptions about the execution time of the projects requested, the types of projects and how they would be financed, an initial approach was made in respect of their potential macroeconomic impact. 4 see box 9 of the “ quarterly report on the spanish economy ”, economic bulletin 3 / 2020, banco de espana. the results of this analysis suggested that the european programme, given the potential volume of funds it could mobilise, has the capacity to become a significant factor of support to the spanish economy ’ s recovery in the wake of the impact of covid - 19. also, and in particular, it could be a unique lever for raising our modest potential growth rate, especially if the design and prompt implementation of new public investment projects exerting a high multiplier effect on activity were pursued, accompanied by the introduction of structural reforms providing for the more efficient functioning of our economy as a whole. in this respect, the ngeu programme entails an upside risk to our september forecasts that i shall quantify later. admittedly, since the publication of our latest projections more details have become known on the use that could be made of the ngeu programme in spain in the short term ( many of which are included in the draft budget we are addressing here today ). but notable uncertainty persists over the ultimate level of actual execution of this programme in spain, and over

deficit will overshoot its reference level of 7. 7 % of gdp next year. as i have already said, public spending forecasts are subject to certain upside risks, basically deriving from a possible intensification of the pandemic, which we have in fact been seeing in recent weeks in spain and in the rest of europe. this may require some of the discretionary measures adopted to protect households, the self - employed and businesses to be extended for longer than initially envisaged. at the same time, we cannot rule out the unemployment rate, and thus spending on unemployment benefit, behaving less favourably than expected. in turn, public revenue projections face downside risks mainly linked to a relatively optimistic forecast for gdp growth and, consequently, for the increase in the tax base in 2021. as regards the fiscal policy stance, this is usually approximated by the change, from one year to the next, in the general government structural balance, a variable that is not directly observable and can only be estimated with a high degree of uncertainty. according to the information contained in the draft budgetary plan, the structural balance will deteriorate from - 4. 1 % of gdp in 2019 to - 5. 4 % in 2020, and again in 2021 to - 6. 3 % ( see chart 14 ). accordingly, the fiscal policy stance will be expansionary in 2020 ( - 1. 4 pp ), and in 2021 ( - 0. 8 pp ). in the case of 2021, the expansionary stance would be mainly due to the impact on growth of the ngeu programme. 6 therefore, should any of the risks mentioned in relation to the impact of this programme materialise, the expansionary stance of fiscal policy could ultimately be smaller in 2021. 2. 4 government debt in the draft budget according to the draft budget, the general government debt - to - gdp ratio will reach a historic high of 118. 8 % of gdp in 2020 and will edge down to 117. 4 % in 2021. this fall would be exclusively a consequence of the strong nominal gdp growth forecast in 2021, since both the budget deficit and the stock - flow adjustments would exert upward pressure on the government debt ratio. 7 nonetheless, taking into account the risks i have already mentioned, to gdp growth ( on the downside ) and to the level of the budget deficit ( on the upside ) in 2021, the government debt ratio may behave less favourably than projected in the draft budget.