Deficit overseer stands up for Spanish regions slammed by Montoro
The Airef calls for "not demonizing the regions" and evaluating whether they have insufficient revenues
MadridCristóbal Montoro, the Spanish Finance Minister, has been slapped on the wrist by the Spanish body that oversees compliance with the deficit. After the PP minister last week blamed Spain’s autonomous communities for falling short of their deficit target, on Wednesday José Luis Escrivá —the President of Airef— said that you should not "demonize the regions", and asked that "their spending and income structure" be reviewed before condemning them.
The agency also criticized the central government´s urge to assess compliance with stability targets and point fingers at the least compliant regions. "Compliance with targets does not imply greater diligence or efficiency. It appears to me to be an over-simplification. There´s no need to make heroes out of those who comply and demons out of those who don´t", said Cristina Herrero, Director of Budgetary Analysis for Airef.
Airef is asking for a review of financing models using the criteria of "sufficiency", and "to clarify the fiscal regime applicable to the regions”.
The agency anticipates that next year Spain will fail to meet its deficit target of 2.8% again by an even greater margin than last year, with a deviation of around 4%. The central government would meet its goal, but at the expense of a greater Social Security deficit, which will receive less funds from the Spanish government once again.
The autonomous communities, whose deficit last year was 1.7% and were set a target of 0.3% for 2016, will also fail to meet their objectives, even though the resources from the financing system will rise by 0.7%. Altogether, the overall deviation will be around a half point.
Lastly, local councils will again stay within their deficit cap, after having a surplus in 2015.
