Canary Islands ask for exemption from Spanish deficit fines

The president's of the EU's outermost regions met in Brussels in April. President Clavijo (2nd from right) wants the Canary Islands to be immune from fines levied at Spain. [European Commission]

The president of the Canary Islands has asked for the archipelago to be excluded from any potential suspension of European regional funds on account of Spain’s failure to sufficiently cut its deficit. EURACTIV Spain reports.

“We have met both the criteria for ceiling expenditure and the deficit (…), which would be a double injustice,” Fernando Clavijo told reporters after a meeting with Climate Commissioner Miguel Arias Cañete yesterday (26 July), in which the president asked for different treatment for peripheral or outermost regions.

Clavijo warned that EU funds in the Canaries “have a very direct link to essential, basic public services, like employment and social policies”.

The Canaries are eligible for €1.17 billion from operational programmes during the 2014-2020 period, intended for use in research and development, education, information technology, competition and the low carbon economy, among other areas.

At a meeting today (27 July), the Canaries’ finance minister, Rosa Dávila, echoed Clavijo’s calls for the Atlantic islands to be left out of any plans to punish Spain, insisting that they had “met their goals”.

The European Commission will decide today how to fine Spain for failing to fulfil its fiscal objectives. The extent to which Spain’s structural funds payments will be affected will also be worked out at a later date.

According to Clavijo, the Canary islands should be exempted from any suspension of funds, as it has a special status as an outermost region in the EU, along with Guadeloupe, French Guiana, Réunion, Martinique, Mayotte and Saint-Martin, the Azores and Madeira.

At his meeting with Cañete, he explained the autonomous government’s “difficulty” in managing its energy system and asked Brussels to take into account the “conditions” of the outermost regions when it comes to the renewable energy legislation.

Italy and Spain test EU’s 'intelligent' use of economic rules

The European Commission is expected to fine Spain on Wednesday (26 July), but it will give two extra years to Madrid to adjust its budget – while the commissioners pledge a solution for Italian banks that will protect small investors.

In 2013, Spain received three extra years to cut its deficit below the mandatory 3% of GDP of the pact.

Despite the fact that this was the third time Madrid had been granted leeway since 2009, the deficit reached 5.1% of GDP in 2015, higher than previously announced.

The European Commission's latest forecast predicts that the Spanish deficit will be 3.9% of GDP this year and 3.1% in 2017.

In April, the executive and the ECB concluded that the needed progress on fiscal consolidation in Spain "has come to a halt, with part of the structural adjustment implemented in earlier years being reversed".

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