Article amb blocs

The Spanish Organic Law on Budget Stability and Financial Sustainability (Organic Law 2/2012) stipulates that until 2020 the deficit targets for Central Administration and the Autonomous Communities must be determined in accordance with the weight of the structural deficit of these two administrations at January 1 2012, that is, on the date the year 2011 is closed. This signifies an equal and equitable treatment of the deficit targets between the two administrations, as it requires of them an equivalent effort of fiscal consolidation.

The structural deficit/surplus is that part of the deficit or surplus not explained by the stages of the economic cycle, and it is obtained by deducting the effect of the economic cycle in the total budget balances.

The structural balances cannot be observed directly based on the public accounts but are obtained from different assumptions and conventions included in the calculation method. In this respect, the European Commission has defined a method to break down the deficit or surplus between the cyclic portion and structural portion, while the Ministry of Economy and Competitiveness of the Spanish Government provides the value of certain variables that are necessary to apply this European methodology.

In accordance with this methodology, the distribution of the structural deficit of 2011 was 60.5% for the Central Administration and 39.5% for the Autonomous Communities. This proportion should be carried over to the distribution of deficit targets. Despite this, the Spanish Central Government has set deficit targets which are far removed from this proportion, and are always in its favour.

Catalonia and three further Autonomous Communities "Andalusia, Canary Islands and Asturias" have filed different appeals with the courts against the deficit targets established for the Autonomous Communities during the period 2014-2016. At present, these appeals are pending resolution.

Expenditure vs. deficit targets

Moreover, the deficit targets approved by the Central Government are inconsistent with the distribution of public spending among the various Public Administrations.

Thus, for the year 2015, the deficit target for the Autonomous Communities as a whole is -0.7% of GDP. This figure represents 16.7% of the global target authorised for the Public Administrations as a whole (-4.2%), while autonomic spending accounts for 31.8% of total public expenditure by Spain. On the contrary, the Central Administration has a target of -3.5%, that is, 83.3% of the total, and its spending accounts for 57.3% of the total. Equally, the deficit target assigned to the Central Administration for 2016 (-2.5%) represents 89.2% of the global target (-2.8%), while Autonomous Communities are set the remaining -0.3% (10.8%).

It should be noted that in July 29 2015, at the Fiscal and Financial Policy Council latest meeting, nine of the fifteen Autonomous Communities attending the Council proposed to request to the Spain's independent fiscal authority AIREF a report on the current distribution of deficits among the Public Administrations. However, the Spanish Minister of Finance, Cristóbal Montoro, exercised his casting-vote against the proposal, which therefore failed to pass.

This document is accompanied by two annexes. The first one shows the evolution of the distribution of deficit targets among the Public Administrations from 2010 to 2014. The second one is a technical report on calculating the deficit targets in accordance with the Spanish Organic Law on Budget Stability and Financial Sustainability (2/2012)