Juvenile unemployment, public debt … Brussels ‘catches’ Spain in seven of the 14 imbalance indexes
- Spain still does not respect the unemployment standards, public and private debt, net international investment position and losses in the share of exports.
- In addition, it fails to meet two new criteria related to employment: long-term unemployment rate and unemployment of young people between 15 and 24 years of age
- The European Commission urges to take “decisive actions” before proposing next year a fine equivalent to 0.1% of GDP (about 1,000 million euros).
- Read the report of the European Commission (PDF).
The European Commission (EC) has warned on Thursday that Spain suspends half of the 14 indicators on macroeconomic imbalances that accumulates its economy, such as high unemployment or large public and private debt, so he recalled that he has to take ” decisive actions “.
l Poverty indicators remain among the highest in the EU Spain still does not respect the standards recommended by Brussels in terms of unemployment , public debt, private debt , net international investment position and losses in the market share of exports .
In addition, it also fails to meet two of the three new indicators introduced by the European Commission in its analysis known as the “Alert Mechanism” on the economic situation of European countries. These three indicators focus on employment and Spain fails to comply with the two related to the long-term unemployment rate of the active population and the relative unemployment rate of young people between 15 and 24 years of age .
“In addition,” says the European Commission, “the improvement of the situation in the labor market has not translated into a reduction in poverty indicators, which are still among the highest in the EU .”
This year, Spain continues to comply with the Brussels cut in six other indicators: the effective exchange rate, the current account balance, nominal unit labor costs, housing prices, the flow of credit to the private sector and total liabilities of the financial sector. It also approves the activity rate of the total population, another of the new markers introduced this year.
“Decisive action is required”
The Commission recalled that it warned last February that Spain is accumulating macroeconomic imbalances that ” require decisive action and specific vigilance , particularly regarding the high levels of private, public and external indebtedness in a context of high unemployment”.
Further examine related risks and monitor progress in smoothing out excessive imbalances In addition, it is stated to be “useful, also taking into account the detection of imbalances that require decisive actions and specific supervision, to further examine the related risks and to monitor the progress in smoothing excessive imbalances “, a recommendation that is not new for Spain.
This will be carried out in a coordinated manner with the surveillance missions of the Spanish economic drift that are carried out after the end of the rescue granted to the country to clean up its banking.
With these data, the Community Executive will decide in the spring if the detected imbalances can be considered “excessive” or not . If Spain continues to persistently suspend the indicators and does not take the necessary measures to correct the imbalances, the EC could propose, as a last resort, the Council of the EU to impose a fine equal to 0.1% of annual GDP ( about 1,000 million euros)