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The Catalan Government adapts the budget extension guidelines to a provisional 1.2% deficit

As it was announced on Monday, the Catalan Government has adapted its budget extension guidelines to a higher deficit target, while it is waiting to find out the definitive deficit target decided by the Spanish Government. Since the elections were held in November, it was the new Catalan Government’s responsibility to draft the budget for 2013. However, the budget has not been presented since the Catalan Government disagrees with the deficit target imposed by the Spanish Government and it is negotiating for its reduction. Meanwhile, it is operating with an extension of the 2012 guidelines, a procedure run by a series of strict guidelines. The guidelines included the 0.7% deficit target initially allowed for this year, which have obliged the Catalan Government services to implement severe spending limitations in the first months of the year. Most of the opposition criticised not debating the new guidelines.

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15 May 2013 01:18 AM

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ACN

Barcelona (ACN).- As it was announced on Monday, the Catalan Government has approved the adaptation of its budget extension guidelines to a higher deficit, while it is waiting to find out the definitive deficit target decided by the Spanish Government. The first guidelines included the 0.7% deficit target initially allowed for this year by Madrid. However, since the Spanish Government already confirmed a few weeks ago that the deficit allowed to the Autonomous Communities in 2013 will be at least 1.2% of their GDP, the Catalan Executive is raising the guidelines to this temporary target. Since the elections were held in November, the Catalan Government has not presented its budget for 2013 as it had to be drafted by the resulting Cabinet. In these circumstances the budget should have been presented in March or April, but the approval has been delayed since the Catalan Government disagrees with the deficit target imposed by the Spanish Government and it is negotiating for its reduction. The Catalan Finance Minister, Andreu-Mas-Colell, argues that they would rather wait than modify the entire budget with a new deficit target. Meanwhile, it is operating with an extension of the 2012 guidelines, a procedure run by a series of guidelines. In any case, in the first few months of the year, the strict guidelines have obliged the Catalan Government services to implement severe spending limitations in order not to compromise the 2013 budget. In addition, the Spanish Executive is waiting for the European Union to confirm a higher deficit for the entire Spanish public sector in order to allow a higher deficit for the Autonomous Communities, as was explained yesterday by the Spanish Prime Minister, Mariano Rajoy. Furthermore, the Catalan Finance Minister, Andreu-Mas-Colell said on Monday that the definitive specific target should be expected by June. This means the Catalan Government\u2019s budget would be approved by June or July at the earliest and therefore guidelines allowing for not so strict spending limitations should give greater room for manoeuvre to the Catalan Government\u2019s departments during the coming weeks. For instance, the new guidelines will authorise the launching of new subsidy procedures, which were frozen under the previous guidelines. Most of the opposition parties criticised the decision since they think the guidelines represent a de facto budget which has not been debated in the Catalan Parliament, while the Catalan Executive is delaying the presentation of the definitive budget for the year and avoiding the consequent debate.


The Spokesperson for the Catalan Government and Minister for the Presidency, Francesc Homs, explained that on Tuesday the Executive approved the new budget extension guidelines with a 1.2% temporary deficit target. Homs refused to speculate about the definitive deficit target imposed by the Spanish Government. However he also stated that they refuse to approve a budget \u201Cat any price\u201D, meaning that if the final deficit target was too low, the Catalan Government would rather work with an extended budget than draft a new one imposing harsh budget cuts on the public services. In 2012, Catalonia ended the year with a 1.96% deficit. The Catalan Executive is asking for a 2.1% deficit in 2013, corresponding to a third of Spain\u2019s total public deficit expected by the Spanish Government in 2013 (6.3%). The Catalan Government argues that the Autonomous Communities should be allowed a third since they manage 36% of Spain\u2019s total public spending and they exclusively run basic services such as healthcare and education. Homs asked the rest of the parties who support asking for a higher deficit target than 1.2% to be united in this claim. \u201CThis does not mean giving a blank cheque to the Government\u201D but working towards avoiding greater budget cuts in Catalonia, he said.

Most of the opposition parties criticised the lack of debate and not having presented the budget yet

All the opposition parties except the Left-Wing Catalan Independence Party (ERC) \u2013 with whom the governing Centre-Right Catalan Nationalist Coalition (CiU) has a parliamentary stability agreement \u2013 criticised the CiU and the Catalan Government for extending the budget as it prevents the Catalan Parliament from holding a debate on how public money is spent. However, the ERC emphasised that the Catalan Government cannot present a budget with \u201Can unfair\u201D deficit target. For this reason they back CiU\u2019s strategy \u201Cto resist\u201D until a higher deficit target is approved.

The Catalan Socialist Party (PSC) criticised the Catalan Government for implementing \u201Csilent and clandestine\u201D budget cuts using the budget extension. The PSC stated this strategy \u201Cis lamentable from a democratic point of view\u201D. The People\u2019s Party (PP) \u2013 which runs the Spanish Government \u2013 said it fears the Catalan Executive has in fact decided not to present the budget for 2013 and this is why they are modifying the budget extension guidelines. According to the PP, the strategy would be to \u201Cexecute the budget as it pleases\u201D in 2013. The Catalan Green Socialist and Communist Coalition (ICV-EUiA) lamented that by extending the budget the Government was \u201Cdenying debate\u201D to the Catalan Parliament and the citizenry on new measures to increase revenue and ways to foster economic recovery. The ICV-EUiA emphasised that the 1.2% deficit of the budget extension guidelines means that the Catalan Government is implementing a total budget cut between \u20AC3.5 and \u20AC4 billion. The populist and anti-Catalan nationalism party Ciutadans (C\u2019s) asked the Catalan Government \u201Cto resign\u201D. Finally the radical left-wing and independence party CUP denounced the fact that the Catalan Executive \u201Cis not governing\u201D but \u201Cobeying instructions\u201D that \u201Ccome from above, from the economic framework\u201D and the markets.

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