Spain's Budget Minister Cristóbal Montoro in the parliament (photo archive). (Efe)
Spain’s 17 autonomous regions registered a deficit of 0.77 percent of the gross domestic product during the first six months of 2012 in terms of national accountability, Budget Minister Cristóbal Montoro said in a press conference on Thursday. He explained that the autonomous regions “are on the path of complying with the target for 2012,” set at 1.5 percent of GDP, saying he considers this “positive.”
On the same day, the European Central Bank published its monthly bulletin for September, which stated that Spain’s debt could reach up to 100 percent of its GDP in 2015 if the public deficit exceeds the targets set by the government. Also, a smaller growth than estimated could lead to a debt of up to 99 percent of GDP.
The ECB’s report presented various scenarios depending on how public debt could develop in relation to GDP, but it stressed that this “should not be interpreted as forecasts.”
“Clear effort” from Spain’s regions
According to Montoro, Spain's regions have made “a clear effort” until now, but he recalled that during the second half of the year “the budget cuts in health care and education will be at their peak,” which means that the “path for adjustment could clearly improve when the consequences of these budget restraints enter into effect.”
Montoro stressed that now is the time to “put an end to clichés and taboos” because “we hear repeatedly that the budget performance is out of control and that is not true.”
The budget minister said the government will be “more vigilant” with the economic and financial plans of those autonomous regions that present a higher deficit.
At the same time, Montoro did not express an opinion on the model of regional financing, but only said “that is the one we have.”
“The government’s enthusiasm is what it is,” he added, saying that “there will be time in the future” to modify it.
His comments come at a time when there have been calls from the autonomous regions to change the regional financing structure, particularly from Catalonia, where a massive demonstration this week called for more independence for the region, and a fiscal pact that would increase the region’s authority over its tax collection.
The special case of Navarra
In terms of national accountability, all regions registered deficits until June. The regions with the highest deficits were Navarra (-2.50 percent), Extremadura (-1.89 percent) and Murcia (-1.80 percent).
They were followed by Andalusia (-1,27 percent), the Canary Islands (-1,24 percent), Galicia (-1,07 percent), Cantabria (-1,01 percent), Castilla y León (-0,87 percent), Castilla-La Mancha (-0,73 percent), Catalonia (-0,59 percent) Aragón (-0,68 percent), La Rioja (-0,55 percent), Asturias (-0,53 percent), the Balearic Islands (-0,40 percent), Valencia (-0,30 percent) and the Basque country (-0,19 percent).
The budget minister clarified that the high deficit registered in Navarra is due to the region’s special situation, given that it collects its own taxes, and if this circumstance would be excluded, the real deficit would be 1.1 percent of its GDP.
From October onwards the budget performance statistics will be available on a monthly basis from the regions and from 2013 this will be the case also for the national accounts.
This article was translated and edited by Stina Lunden.
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