A NEED TO INCREASE PUBLIC INVESTMENT AND APPLY THE EXPENDITURE RULE

This paper analyses the main restriction on public expenditure that flows from European budgetary discipline: the expenditure rule. Beginning with a study of its place in European legislation, the paper then determines how much room for manoeuvre the European expenditure rule allows member states to increase public spending. This point is key, especially at a time when Europe's institutions are aware of the need to boost strategic public investment to avoid situations of slow economic growth or even a downturn. The Spanish State, contrary to others in a similar budgetary situation such as Ireland, has introduced specific legal measures to reduce income from taxes (for example, the 2015 tax reform) which, due to the application of the expenditure rule, substantially limit the possibility of increasing public expenditure on social services such as health and education.