E Eurozone finance ministers Monday required Spain to submit an updated Draft Budgetary Plan as the assessment showed the country's budget is at risk of not complying with the Eurozone requirements.
The finance ministers of 19 Eurozone countries gathered in Brussels for a monthly meeting today, to discuss the euro area member states' draft budgetary plans for 2016.
These plans have to be submitted each year by 15 October, and the European Commission assesses whether they comply with the rules of the Stability and Growth Pact (SGP).
The Eurogroup said that no draft budgetary plan was found in serious non-compliance with the obligations of the SGP. However, four countries - Austria, Italy, Lithuania and Spain - have budgetary plans that are at risk of non-compliance with the rules.
The finance ministers argued that Spain's Draft Budgetary Plan has a risk of excessive government deficits.
The finance ministers have recommended Spain to correct the excessive deficit for 2016, to bring the headline government deficit below the 3 percent of GDP, which is the reference value for the Eurozone countries.
However, according to latest forecast by the European Commission, Spain's headline deficit will be 3.6 percent of GDP in 2016, whereas a deficit of 2.8 percent of GDP is recommended.
Therefore, the Eurogroup said additional measures would be needed to ensure that the requirements are met.
"We call on Spain to submit an updated Draft Budgetary Plan covering all sectors of general government, as soon as possible, including measures to allow for an improvement of the headline deficit, in order to comply with the rules of the SGP," it said in a statement.
Meanwhile, the Eurogroup urged Portugal to submit its Draft Budgetary Plan as soon as possible. It is the only country that has missed the deadline to submit its spending plan, except Greece and Cyprus who are subject to a macro-economic adjustment programme.
The Eurogroup said it will continue closely monitoring euro area' fiscal and economic policies, as well as the budgetary situation.
"In particular, the Eurogroup will assess progress made with respect to the implementation of the Draft Budgetary Plans and additional commitments," it said in the statement.