Barcelona’s Chamber of Commerce believes that reducing 15% of the public entities’ size would save Catalonia 3,000 million euros

The figure represents approximately 40% of the Catalan Government’s deficit in 2010. Barcelona’s Chamber of Commerce maintains a growth forecast of 0.8% for the Catalan economy in 2011.

CNA / Josep Ramon Torné

February 9, 2011 12:05 AM

Barcelona (ACN) .- The Chairman of Barcelona’s Chamber of Commerce Miquel Valls said this morning that reducing 15% of the “dimension of the public entities of the Catalan Government” would save Catalonia nearly 3,000 million euros. According to Miquel Valls, the “oversizing” in the public Catalan administration has brought about “great inconvenience”. He recommends a reduction, a merger and even the elimination of some of these entities. According to Valls, they represent 42% of the Government’s staff and 56% of the public spending. The president of the Chamber of Commerce recalled that the previous Government had already presented a plan for the rationalization of public enterprises which affected some sixty different organizations; however, the plan did not have time to be implemented. Valls also spoke about the perspectives of the Catalan economy for 2011 and maintained a forecast for annual growth of 0.8%.

Valls, who estimated that this reduction could be made within two years, explained that “the Catalan Government is the one who should decide” which of the more than two hundred public companies would be affected. He also recommended though that only one in every ten staff retirements, except doctors, teachers and police should be replaced.

Barcelona’s Chamber of Commerce also calculated that the Catalan Government could reduce its deficit by 4,400 million euros by balancing the budget. The Chamber proposes introducing certain measures like adjusting 15% of the current transfers, decreasing 20% of the purchases of goods and services, and lowering staff costs by 5%.

With regard to revenue, the Chamber forecasts that there should be an increase of 3.2% through improved economic activity and new revenues from strict compliance by the Spanish Government with the agreed financial model. This forecast of 3.2% increase already took into account the revenue decrease due to the elimination of the succession tax, which the current Catalan Government promised to do already this 2011.

Growth forecast of 0.8% for 2011

The Chamber said that they would maintain the growth forecast of 0.8% of the Catalan GDP by 2011. Valls said that this year exports would be the basis for economic recovery, the same way that in 2010, the foreign sector was the “cushion” that stopped a GDP decrease. Exports have grown in the last year 18.3%.