Brussels raised its economic growth forecast for Spain to 1.1% this year and 2.1% in 2015.

The European Commission today raised its forecast for Spanish economic growth this year, projecting it at 1.1% of GDP, a tenth higher than predicted two months ago and only a tenth lower than the Eurozone (France will grow by 1%, Italy by 0.6% and Germany by 1.8%). Brussels is on the path of the Mariano Rajoy government (1.2%) and predicts that in 2015 it will be the fastest growing country in the Eurozone, with a growth rate of 2.1%, four tenths higher than the average and even two tenths higher than Germany.

This is confirmed by the spring forecast presented today by the acting economic affairs commissioner Sime Kallas (Ollie Rehn is running), which once again points to the serious structural problems facing Spain in terms of unemployment. Brussels has slightly lowered its winter forecasts, but still expects unemployment to reach 25.5% this year and 24% in 2015, which would then tie Greece as the country with the worst unemployment rate in all of Europe. However, Moncloa believes that these deals will end at 24.9% and 23.3%.

Another serious problem that the country must face is the huge deficit. The Commission believes that Spain will be in full compliance this year (5.6% against the required 5.8%) due to macroeconomic improvements, but warns that either far-reaching measures will be taken or the deficit will soar to 6.1% of GDP growth in 2015 when the target is 4.2%. That is, another 19 billion will have to be adjusted to comply with the agreement. However, these calculations are based on the government’s previous commitment to restore personal income tax to the level before the temporary increase in December 2011. Therefore, Rehn’s team is still looking forward to knowing what the tax reform announced by the government will be. Rajoy will be like, and this will logically affect the entire macro plan in Brussels.

Officials in Brussels also stressed that Spain has a huge public debt and that, according to published forecasts, it will continue to increase. This year, the figure will reach 100.2% of GDP and 103.8% in 2015. In other words, the country will owe more than it generates in a year, estimated at just over 1 billion euros.

The spring forecast document also stressed that the eurozone will face low inflation this year (0.8%) and next year (1.2%). This is a new wake-up call for the European Central Bank and its President Mario Draghi to act quickly if they do not want Europe to stagnate in its way out of the crisis.