Spain's 2015, 2016 budgets risk breaking rules - EU Commission

By Francesco Guarascio LUXEMBOURG (Reuters) - Spain's 2015 budget and its draft for 2016 are at risk of breaking EU fiscal rules and will need to be revised, the European commissioner for economic affairs said on Monday. "The Commission’s assessment confirms the risk of non-compliance with the pact in both (years)," Pierre Moscovici told a news conference in Luxembourg after a meeting of euro zone finance ministers. European Commission forecasts, prepared in September, see Spain's deficit reaching 4.5 percent of gross domestic product in 2015 instead of the required 4.2 percent. In 2016 the deficit is seen at 3.5 percent of GDP, much higher than the target of 2.8 percent. The Commission is therefore urging the authorities in Madrid to "strictly execute the 2015 budget" and "to take the necessary measures to ensure the 2016 budget will be compliant" with EU rules, Moscovici said. Spain's Economy Minister Luis de Guindos remains confident that the fiscal targets will be respected. "We are absolutely sure that in 2015 we will reach the objective of 4.2 percent," he told reporters after the meeting. "This will allow us to be in a very good position to reach the target also in 2016." An extraordinary meeting of euro zone finance ministers has been scheduled for Nov. 23 to discuss exclusively the budgets of the countries sharing the euro, but Spain is highly unlikely to present a new budget by then. New fiscal rules adopted after the euro zone debt crisis give the European Commission the power to ask for amended national budgets. The bloc's finance ministers have the last say in the monitoring procedure. Spain will hold national elections on Dec. 20. Spanish authorities would be invited to submit an updated budget shortly after the new government takes office, Moscovici said. The revised budget will include data from Spanish regions that is currently missing. (Reporting by Francesco Guarascio; additional reporting by Julien Toyer; editing by John Stonestreet)