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EU Warns Spain on 2026 Fiscal Path as Spending Seen Exceeding 3.5% Reference

Brussels, working without a Spanish draft budget, used its forecasts to flag a small overshoot that remains within its tolerance.

Overview

  • The European Commission says Spain is at risk of non‑compliance in 2026 because projected net primary expenditure would outpace the 3.5% benchmark.
  • Brussels estimates the deviation is below 0.3% of GDP for 2026 and under 0.6% on a cumulative basis, placing it inside the technical margin.
  • The Commission urges the government to adopt the necessary measures in its national budget process to bring policy into line with the fiscal framework.
  • Spain has not submitted a draft budget, so the assessment relies on available data and recent EU macroeconomic forecasts; Belgium only just reached a multi‑year budget deal.
  • Separately, the Commission signals Spain can exit enhanced post‑program surveillance after repaying about 75% of its bank‑rescue loan this year, though the high debt ratio still limits fiscal space.