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Spain’s Fiscal Watchdog Calls for Overhaul of Fiscal Rules Under EU Spending Cap

AIReF says the framework should be recast as an organic law to align Spain with the EU’s new spending-rule regime before the 2025 transposition deadline.

Overview

  • AIReF argues the current setup is incoherent, citing overlapping deficit, debt, and spending rules that create unworkable targets across levels of government.
  • Cristina Herrero says a congressional vote to reject the government’s deficit and debt path is practically irrelevant because the binding guide is the spending rule.
  • The watchdog highlights a 3.5% cap on net primary spending growth for 2026 and faults the 0.1% regional deficit target for ignoring that cap.
  • AIReF contends that, under the spending rule, regions in aggregate should target balance or a slight surplus in 2026, with asymmetric room across communities such as Valencia and Murcia.
  • The agency urges reforms via organic law rather than decree and disputes the government’s claim of broad EU compliance, noting a December 31, 2025 deadline and estimating debt would be about 69% of GDP today if past rules had been met instead of roughly 101.6%.