Canary Islands request Spanish deficit fines exemption

Currencies Direct July 28th 2016 - 2 minute read

According to the latest forecast from the European Commission, it has been predicted that the Spanish deficit, which has been granted leeway on multiple occasions since 2009, will be 3.9% of GDP this year and 3.1% in 2017.
Despite a significant reduction from the rate of 5.1% of GDP in 2015, the Spanish deficit is still about the mandatory 3% of GDP of the pact.
Earlier this year, the European Central Bank (ECB) concluded that the required progress on fiscal consolidation in Spain has grounded to a halt, “with part of the structural adjustment implemented in earlier years being reversed".
But the Canary Islands are fighting back, requesting that they be exempt from Spanish deficit fines and the potential suspension of European regional funds.
This is good news for those with property in the Canary Islands, as an exemption would mean that valuable public money could be spent on improving services that will in turn, attract more tourists.
The president of the Canary Islands, Fernando Clavijo, has asked that the archipelago be excluded from any fines on account of Spain’s failure to reduce its deficit, reports EurActiv Spain.
“We have met both the criteria for ceiling expenditure and the deficit, which would be a double injustice,” explained the president following a meeting with climate commissioner Miguel Arias Cañete on July 26th.
He also warned of the very direct link European Union (EU)funds in the Canaries have to essential, basic public services, such as employment and social policies which form a backbone to tourism across the islands.
During the years 2014-2020, the Canary Islands are due to receive €1.17 billion (£99 million) from EU operational programmes, which are intended to be used for research and development, IT, competition and the low carbon economy, among other areas.
President Clavijo, argued that the islands should be dismissed from the suspensions of funds, because of its special status as an outermost region in the EU. 
Yesterday, (July 27th) Rosa Dávila, the Canary Islands’ finance minister, supported the president's request for alternative treatment for peripheral or outermost regions. She asked for the Atlantic Islands to be unaffected by plans to punish Spain, as the Canaries had indeed met their goals and therefore hold no further responsibility.
Later today, (July 28th) the European Commission will reveal its decision on how to fine Spain for its failure to meet its fiscal objects.
The way in which this will affect Spain’s structural funds payment is also to be worked out at at a later date.


Written by
Currencies Direct

Select a topic: