More Spanish Leeway?

spain euro

Madrid looks much further off track.

Spain, in recession last year and seen shrinking again this year, was asked last July to cut its structural deficit by 2.7 points in 2012 to 4.3 percent of GDP and by 2.5 points in 2013.

Commission data showed it came nowhere near doing so, and will fall short again in 2013.

Yet Rehn signaled Madrid’s efforts may be seen positively when the Commission decides in May whether to grant more time to governments or to step up disciplinary action.

“In the case of Spain, its seems that the structural fiscal effort has been undertaken and there has been also an unexpected shortfall of growth,” he said.

One of Spain’s main problems is a record high level of unemployment which is to reach almost 27 percent of the workforce this year. Joblessness in the whole euro zone is set to peak at 12.2 percent, or more than 19 million people, in 2013, the Commission said.

Germany will remain the motor of the euro zone economy, expanding 0.5 percent this year and 2.0 percent in 2014, while the second biggest economy of France stagnates and third biggest Italy only emerges from recession next year.

France will also miss its nominal deficit targets – this year’s shortfall will be 3.7 percent rather than the 3.0 percent agreed with the EU, because of the weaker than expected growth.

But Paris hit its nominal deficit target last year and cut its structural deficit by more than required. It could repeat that feat this year.

Commission forecasts showed Portugal’s headline budget deficit rose to 5.0 percent of GDP last year from 4.4 in 2011 and will only ease to 4.9 percent this year, unless policies are altered.

But Portugal’s GDP is now seen shrinking almost twice as much as previously this year — 1.9 percent instead of 1 percent.

“I think it would not be surprising if there was an opening on behalf of the European Commission,” Passos Coelho said.

VOCABULARY:

leeway: room for improvement, more time to do something; more room to maneuvre

structural deficit: budget deficit that results from a fundamental imbalance in government receipts and expenditures

GDP: Gross Domestic Product

to fall short: to not reach

to grant: to concede

to step up: to increase

to undertake: to do, to begin to do

shortfall: a reduction

workforce: the people working

to set: to establish

to peak:  to reach a high point, to reach  a maximum

to stagnate: to remain unchanged, to neither increase nor decrease

to emerge: to rise

feat: accomplishment, a major achievement

to ease: to slow down

to alter: to change

on behalf of: in representation of

 

 

 

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About Paul Gibson

Economist, financial risk analyst, business English coach and entrepreneur...always disposed to new business ideas and offer support for new business plans. Specialist in e-commerce and marketing.
This entry was posted in B2 - Upper Intermediate (Advanced English), C1 - Proficiency and tagged , , , , , . Bookmark the permalink.

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