The European Commission has warned about "imbalances" in the Spanish economy, including high levels of public and private debt. It also says that unemployment remains high, despite having declined "rapidly".
The criticism comes in the "Alert Mechanism Report" published this Tuesday using 2018 figures. Of the eleven economic imbalance metrics evaluated, Spain fails to pass on four. It is one of the 13 member states recommended to undergo an "in-depth review" in the new year to "identify and assess the severity of possible macroeconomic imbalances". The other twelve countries range from Italy and Greece to France and Germany.
Over the last three years, the average unemployment level in Spain has been 17.4%, more than seven points higher than the 10% benchmark. "Unemployment has been declining rapidly, but is very high and above pre-crisis levels, especially among youth and unskilled workers," the document says.
When it comes to the public debt, far above the benchmark of 60% of GDP at 97.6%, the text says that "strong" economic growth has been the main cause of its reduction in recent years, but warns that "persistent deficits imply that the still high government debt ratio is only slowly decreasing".
Private sector debt, meanwhile, is at 133.5% of GDP, just over the 133% benchmark. Although it was reducing over the course of 2018, the report says that this process has to continue. "The decline in corporate debt to GDP ratio continued, but has slowed down due to slightly positive growth in new credit. For households, debt to GDP has continued to decline although credit growth turned positive in 2018," the report says.
Finally, Spain misses the target for net international investment position (NIIP), which evaluates the difference between Spanish investment abroad and international investment in Spain. "The negative NIIP has kept improving but remains very high," the report warns.