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MONEY

Spain says EU nations must be allowed to fix their own fiscal targets

EU budget rules must be reformed to let member states define their own fiscal targets tailored to "the specific circumstances of each country", Spain's economy minister said Monday.

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Spain's Deputy Prime Minister and Minister of Economic Affairs Nadia Calvino addresses a press conference following a meeting with the Irish Minister for Finance and President of Eurogroup, in Madrid on February 7, 2022. (Photo by OSCAR DEL POZO / AFP)

Under terms of the EU’s Stability and Growth Pact, member states must keep their budget deficits under 3.0 percent and overall debt under 60 percent of GDP, although occasional adjustments are possible.

“The current ratios of public debt to GDP are much higher than before the pandemic in all countries of the EU,” said Nadia Calviño during a round table in Madrid with Paschal Donohoe who currently heads the Eurogroup of eurozone finance ministers.

“Therefore, the path for public debt reduction must be adapted to this new reality and take into account the specific circumstances of each country,” she said, calling for swift action to change the budgetary rules.

The pandemic has caused soaring levels of debt, which in France had risen to an estimated 115 percent of GDP by the end of 2021, and almost 122 percent in Spain, rendering the targets almost impossible without tough austerity measures.

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Spain’s Deputy Prime Minister and Minister of Economic Affairs Nadia Calvino (L) and Irish Minister for Finance and President of Eurogroup Paschal Donohoe address a press conference following their meeting, in Madrid on February 7, 2022. (Photo by OSCAR DEL POZO / AFP)

In order for the European Union to avoid making the same mistakes of the 2008 financial crisis, “member states must play a leading role in setting their own fiscal targets,” Calviño said.

Brussels had urged member states to quickly get back on track to avoid a ballooning of public debt. But experts say the rush to impose austerity hampered the bloc’s recovery and caused long-term damage to its economy.

“We’re all aware of the lessons from the past crisis,” admitted Donohoe, who is also Ireland’s finance minister.

That was why it was necessary to find “the balance between debt sustainability and how to fund growth and investment”, he added.

There is an ongoing debate about the future of the EU’s fiscal rules which have been suspended until 2023 due to the pandemic, with some countries like France, Italy and Spain pushing for reform to allow more flexibility.

But others are reluctant to push through changes, with Germany’s new finance minister insisting last month on the need to reduce the EU’s sovereign debt.

Member comments

  1. We saw what with austerity when it was tried the first tine, reaction from the public can be very severe.

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POLITICS

Why Madrid has become a haven for Latin American dissidents

Well-known faces of Cuba's protest have in recent years gone into exile in Madrid, which is rivalling Miami as a haven for Latin American political opponents.

Why Madrid has become a haven for Latin American dissidents

“Miami has always been the destination of those who suffered from Latin American dictatorships,” Cuban dissident and playwright Yunior García, who went into self-imposed exile in Madrid in November, told AFP.

But now “many Latin Americans are choosing to come to Spain,” added García, one of the organisers of a failed mass protest last year in the Communist-ruled island.

The Spanish capital is especially attractive for an artist and dissident fleeing a dictatorship because of its “bohemian” atmosphere, García said.

Spain has long drawn migrants from its former colonies in Latin America who have often sought work in low-wage jobs as cleaners or waiters — but in recent years prominent exiles have joined the influx.

Award-winning Nicaraguan writer and former vice president Sergio Ramírez and Venezuelan opposition politician Leopoldo López, a former mayor of Chacao, an upmarket district of Caracas, are among those who have moved to Madrid.

“Madrid is the new Miami, the new place where so many hispanics come fleeing dictatorship,” said Toni Cantó, the head of a Madrid regional government body charged with promoting the region as the “European capital of Spanish”.

Many Latin Americans are able to establish themselves easily in Spain because they have double citizenship, in many cases because their ancestors came from the country.

Others like García arrive on a tourist visa and then request asylum.

Sometimes, especially in the case of prominent Venezuelan opposition leaders, the government has rolled out the welcome mat and granted them Spanish citizenship.

Cuban political dissident Carolina Barrero is pictured during an AFP interview in Madrid. Spain has long drawn migrants from its former colonies in Latin America who have often sought work in low-wage jobs, but in recent years prominent exilees have joined the influx. (Photo by PIERRE-PHILIPPE MARCOU / AFP)

‘Good option’

Contacted by AFP, Spain’s central government declined to comment.

But shortly after García arrived in Spain, Foreign Minister Jose Manuel Albares told parliament that Latin Americans “share our values, they look naturally to Europe”.

For Cubans, getting a visa to enter the United States has been even more complicated in recent years since Washington closed its consulate in Havana in 2017. It only partially reopened in May.

“Spain is a very good option,” said Cuban journalist Abraham Jiménez, who fled to Spain in January when he finally was able to obtain a passport after years of being denied one.

Spain has received previous waves of Cuban dissidents in the past.

Under an agreement between Cuba, Spain and the Catholic Church, in 2010 and 2011, more than 110 Cuban political prisoners arrived in Madrid, accompanied by dozens of relatives.

There are now about 62,000 Cubans officially registered in Spain, with Madrid home to the largest community.

Cuba is “a pressure cooker, and ever time pressure builds” Havana eases it by forcing dissidents into exile, said Alejandro Gonzalez Raga, the head of the Madrid-based Cuban Observatory for Human Rights who fled to Spain in 2008.

Cuban journalist Mónica Baró is pictured at her home in Madrid. (Photo by PIERRE-PHILIPPE MARCOU / AFP)

‘Lost everything’

Cuban independent journalist Mónica Baró said she left Cuba for Madrid in 2021 because she said she could no longer bear the “harassment” of Cuban state security forces.

Madrid shares the same language and has a “shared culture”, as well as a well-established network of Cubans, that has helped her overcome the “traumas” she brought with her, Baro added.

But not knowing if she will ever see her parents, who remained in Cuba, again saddens her.

“When you leave like I did, you have the feeling that you buried your parents,” said Baró, who faces arrest if she returns to Cuba.

García said he welcomed the absence in Madrid of the deep “resentment” and “rage” towards the Cuban regime found in Miami among its much larger community of Cuban exiles, which he said was “natural”.

These are people “who had to leave on a raft, who lost everything they had in Cuba, whose family suffered jail time and sometimes death,” he said.

Madrid on the other hand, provides “tranquility to think things through,” he added.

“I don’t want anger, resentment, to win me over,” García said.

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