The Independent Authority for Fiscal Responsibility (AIReF) will publish the Report on the Stability Programme Update (SPU) in the week of 4th-9th May. AIReF’s Organic Law establishes that the institution must prepare a report on the content of the SPU before 15th April each year. However, as in previous years, the institution has failed to issue and publish this within the legal term due to the lack of sufficient information to prepare it, exacerbated by the exceptional COVID-19 health crisis this year.
AIReF’s assessment will cover the macroeconomic forecasts underlying the SPU and its budgetary scenario. However, on this occasion it will have to be adapted due to the exceptional circumstances of the current health crisis, which will affect both the content of the Government’s Stability Programme Update as well as AIReF’s report.
The preparation of this report must consider the high level of uncertainty surrounding the evolution of the crisis, the lack of previous reference points for its evaluation and the national and EU response to COVID-19.
In fact, at the European level the general escape clause of the EU’s Stability and Growth Pact (SGP) has been activated. This clause facilitates the coordination of fiscal policies in times of economic severity in the eurozone. Although the Pact’s proceedings have not been suspended, the activation of the aforementioned clause allows the Commission and the Council to coordinate measures within the flexibility granted by it, preserving medium-term fiscal sustainability.