In the end, the Catalan Government’s deficit for 2010 is 3.86%

Spain saw 2010 end with 9.24% of public deficit; 4.97% corresponds to the Spanish Government, 3.39% to the autonomous communities and 0.64% to the local administrations. According to the Spanish Government, half of the autonomous communities saw the year come to an end far away from the objective of 2.4% - Catalonia included. The Catalan Government emphasised that the Spanish Government cut down the revenues of the autonomous communities.

CNA / María Jose Fidalgo / Gaspar Pericay Coll

March 1, 2011 11:59 PM

Barcelona (ACN).- The Catalan Government saw 2010 end with a deficit of 3.86% of the Catalan GDP, a deficit of 7,607 million euros. The Second Vice President of the Spanish Government and Minister for Economy, Elena Salgado, released today the final figures for 2010 regarding the autonomous communities’ public finances. As expected, Catalonia closed 2010 with a deficit of almost 3.9%, as the Catalan Government had previously announced. Catalonia is one of the four autonomous communities with the highest public deficit. In fact, only 8 autonomous communities reached the 2.4% objective. Salgado asked the autonomous communities to continue their efforts to cut public expenditure. However, when asked about Catalonia’s viability and stability plan, which was sent to Madrid at the end of January and cuts the Catalan Government’s public expenditure to reduce the deficit, Salgado confessed that she still did not have an opinion and that her services were analysing it. The Catalan Government accused the Spanish Government of not denouncing the situation before the Catalan elections. In addition, it emphasised that decisions in Madrid have an impact on the Catalan Government’s budget, such as emptying the competitiveness fund or reducing the local trains’ tickets. “They invite people out for coffee, but then they ask you to pay the bill”, said the Catalan Government’s spokesperson, Francesc Homs.

Elena Salgado released today the final figures for 2010. The official confirmation will be in a few weeks. All the autonomous communities presented a global deficit of 30,097 million euros, from which 7,607 correspond to Catalonia. It must be stressed that the autonomous communities are responsible for some 40% of the public expenditure, in particular for services such as healthcare and education, which represent an enormous expenditure and are difficult to cut if revenues decrease.

The Catalan Government closed 2010 with a public deficit of 3.86% of Catalonia’s GDP. The figure is far away from the 2.4% objective and represents, according to Salgado, “a considerable deviation”. In fact, Catalonia is among the four communities that had the highest deficit, together with the Balearic Islands, Murcia and Castilla-la-Mancha. The only eight communities that fulfilled the objective were: the Madrid Community, Extremadura, the Basque Country, Castilla-y-León, Canarias, Cantabria, Galicia and Asturias. Andalusia was close to the objective. Aragon, Navarra, La Rioja and the Valencian Community had “a significant deviation”, and will need “decided actions” to address the situation.

Salgado was optimistic with the results and emphasised that some autonomous communities were on the way to address the situation. She also stated that the Spanish Government will increase its control on the communities’ budget, overlooking at them every 3 months and not every 6. However, she confessed she still did not have an opinion about the Catalan Government’s austerity and stability plan, as her services were analysing it. The plan was presented at the end of January and has to be approved urgently to address the current Catalan Government’s lack of cash.

The Spanish Government is in part “responsible for Catalonia’s public deficit”

“The Spanish Government cannot be adopting decisions which represent more expenditure for the Catalan Government and afterwards criticising us for spending too much money without compensating us for this extra expenditure”, stressed the spokesperson of the Catalan Government, FrancescHoms. He explained the last example of this dynamics. Last Friday, the Spanish Government approved reducing train tickets by 5%. However, in Catalonia, the Catalan Government is responsible for the local (from January 2010) and regional (from last January) train services, but the operating company is the Spanish Government owned Renfe. The Catalan Government receives a part of the ticket revenues and thus a decrease of the price has an impact to the Catalan Government’s revenues.

However, there are more impact decisions than this last one. To cut its expenditure, the Spanish Government decided not to put money into the Competitiveness Fund, which was created as part of the regional redistribution to compensate richer regions. Catalonia had to receive 1,350 million euros from this fund in 2010. By not putting money into the fund, the Catalan Government’s budget lacks 1,350 million euros. The Spanish Government accepts it owes this amount, but states it will pay it in 2013. Meanwhile, the Catalan Government has to deal with the imbalance in its budget, increasing its own deficit. This is why the Catalan Government accuses the Spanish Government of being also responsible for the autonomous communities’ deficit, and Catalonia’s in particular. The autonomous communities see this issue as very important because they have a very limited control of their revenues and they are responsible for half of Spain’s public expenditure, in charge of basic services such as healthcare or education.

Spain’s global public deficit is set at 9.24% for 2010

Spain saw 2010 close with an accumulated deficit in all its public administrations (Spanish Government, autonomous communities and local administrations) of 9.24%. The figure is below the expected 9.3% and much lower than the 2009 figure, when it reached 11.13%. However, from the 9.24% of Spain’s global public deficit, 3.38% correspond to the autonomous communities and 4.97% to the Spanish Government. Local administrations, which have a much more limited capacity to be in red numbers, account for 0.64%.