Some regions are trying to “fool” the Spanish government, says an FT expert
Lex Writer Richard Stovin-Bradford argues in an interview with the CNA that Catalonia “is adopting strong measures” to cut its deficit while some autonomous communities “have not yet reduced the spending” as much.
London (ACN).- Catalonia is adopting \u201Cstrong\u201D and \u201Cdifficult\u201D actions to reduce its budget deficit while other autonomous communities within Spain are \u201Ctrying to fool\u201D the Madrid government, said the Financial Times writer Richard Stovin-Bradford in an interview with the CNA. The Spanish government is urging all autonomous communities to cut their deficits but, according to Stovin-Bradford, \u201Csome regions in the South have not yet reduced the spending\u201D as much as others.
Catalonia is introducing 10% spending cuts in crucial areas such as Health and Education, a \u201Cdifficult\u201D and \u201Cbrutal\u201D decision but nonetheless \u201Cnecessary\u201D, according to Stovin-Bradford. Despite all that, the Catalan Government will not meet the 1,3% deficit required by Madrid, and will probably have a 2,7% deficit by the end of the year. The Lex Writer said that the objective will be \u201Cvery difficult\u201D for Catalonia to meet and suggested that not everyone understands the \u201Cdifferences\u201D among autonomous communities and \u201Cthe pain\u201D that will be suffered as a result of such drastic cuts in a highly populated area. \u201CCatalonia has a large income, but it also has high costs due to its high public spending requirements\u201D, said the journalist, who stated that Barcelona \u201Ccannot do everything\u201D and therefore the Spanish government has to assume its \u201Cown responsibilities\u201D cutting central spending and controlling those regions that do not reduce their deficits. Stovin-Bradford said that every region \u201Cshould cut as far as possible\u201D to help Spain getting out of the crisis, but refused to consider Catalonia as an autonomous community that is not taking its burden. Stovin-Bradford said that the measures introduced in Catalonia are \u201Con the right track\u201D but admitted they should have started \u201Cearlier\u201D. In fact, the journalist argued that Spain and Catalonia have a \u201Clack of credibility\u201D because even though they are introducing \u201Cfairly brutal\u201D cuts, they are arriving \u201Clate\u201D. \u201CIn Catalonia, the president is trying to reduce spending on Health by taking difficult steps. But to some extent these are problems that he inherited from the previous government\u201D, he said. In the State level, he added, Prime Minister José Luis Rodríguez Zapatero, \u201Chas not done the maximum\u201D to please the markets and has yet to implement a profound labour reform. \u201CThe competitiveness of Spain will suffer until the government resolves the issue of employment. The possibility of hiring but also of firing easily is vital to attract investment\u201D, said Stovin-Bradford. \u201CThe situation could be favourable in the medium or long term, but we will have to keep the deficit reduction plans in place for at least two or three years\u201D, he explained. \u201CAs a proportion of GDP, the deficit remains too high, and although progress has been made, further measures are needed\u201D in Spain, the expert said. Stovin-Bradford admitted there will be \u201Cjob loses\u201D and \u201Cbrutal\u201D consequences for the society, but, in his opinion, only \u201Cdiscipline\u201D from the central and regional governments \u201Cwill reduce the financial costs of Spain and the private banks\u201D. Asked whether or not an independent Catalonia would come out from the crisis sooner, as some politicians argue, Stovin-Bradford said that the prescription should be to \u201Ckeep positions\u201D. \u201CIt strikes me that the current Catalan President, Artur Mas, is not insisting on independence\u201D, said the expert from the Financial Times. \u201CThat\u2019s for another day. First you fix the economy, both in the state and regional levels, and then you dream\u201D.