public debt

Catalonia rejects new deficit targets set by Spain

December 2, 2016 12:46 PM | ACN

The Catalan Vice President and Minister for Economy and Tax Office, Oriol Junqueras, voted against the new regional deficit target of 0.6% of GDP agreed between the Conservative People’s Party (PP) and the Spanish Socialists (PSOE). During the Council on Fiscal and Financial Policies (CPFF, going by its Catalan initials) on Thursday evening, Junqueras said that the target is “absolutely far from what citizens need and deserve”. The Catalan Government had asked for a 1.18% deficit target for 2017, but the Autonomous Communities’ limits were set instead at 0.6% for next year, 0.3% for 2018 and 0% of GDP for 2019. They were accepted despite the opposition of Catalonia, the Balearic Islands and Valencia. The communities led by the PSOE abstained. The Spanish Finance Minister, Cristóbal Montoro, celebrated the fact that only three territories voted against the measure, saying there was a “good atmosphere” at the meeting.

Rajoy further recentralises powers: Catalan Government to need permission to back companies

June 8, 2015 09:54 PM | ACN

In times of economic crisis, the Mariano Rajoy-led Spanish Government has been making recentralisation a main driver of its political agenda, using the economic recovery as the reason for passing the reforms. An additional step in this direction was taken on Monday with a new regulation forcing Spanish Autonomous Communities to seek permission from the Spanish Ministry of Finance before granting loans and guarantees to private companies located in their territories. From now on, Madrid's permission will be conditional upon the applicant's compliance with deficit targets. The new regulation substantially curbs the Autonomies' powers to shape their industrial policies, following a reform passed in May that modifies both the Organic Law for Financing the Autonomous Communities and the Organic Law on Budgetary Stability and Financial Sustainability.

IMF recommends that Spain increase the fiscal capacity of regional governments

June 8, 2015 09:51 PM | ACN

The International Monetary Fund (IMF) has reviewed and improved its economic growth forecasts for Spain, going from a 2.5% growth rate for 2015 forecast in April to a 3.1% one foreseen this June, and from 2% to 2.5% for 2016. However, the IMF has also issued recommendations and warnings, emphasising that Spain will have to carry out "additional fiscal efforts" and "structural reforms" in order not to jeopardise the country’s economic recovery. The IMF recommends that Spain reduce the costs of public healthcare and education by making users pay for part of the services. According to the international organisation, Autonomous Community governments – such as Catalonia's – should have greater fiscal responsibilities in such systems since they exclusively manage them. In this vein, the IMF has praised the fiscal consolidation efforts undertaken over the past few years by regional governments and has asked for an increase in their funding and fiscal powers, as well as for the adapting of the deficit targets to their needs.

BBVA studies question Spain's inter-territorial fiscal scheme, which funds the regional governments

May 6, 2015 01:26 AM | ACN

The Autonomous Community governments, such as the Catalan Executive, cannot meet the deficit objectives imposed by the Spanish Government because of the current inter-territorial fiscal scheme, according to a report from the Spanish banking giant BBVA. The bank has published two studies on two consecutive days that shed some light on this scheme and its consequences. In the first report, the BBVA states that spending per capita on basic Welfare State services, such as healthcare and education, varies by 60% among the Autonomous Communities. A second report highlights that the Spanish Executive reduced the funds for the Autonomous Community governments in 2014, despite the economic situation and the intake of public revenue improving. On top of this, it refuses to review a fiscal scheme that legally expired 16 months ago and that was designed before the financial crisis.

Catalonia requests €9.46 billion in loans from Spanish Government’s Liquidity Fund for 2015

January 20, 2015 11:53 PM | ACN

The Catalan Government has formally requested €9.46 billion in loans from the Liquidity Fund for the Autonomous Communities (FLA), run by the Spanish Finance Ministry, to face debt payments and other obligations during 2015. This is the only way that the Spanish Government authorises the Catalan Executive to request liquidity as it has banned Catalonia’s access to financial markets to obtain additional funds, as many governments do when they issue bonds or ask for loans. Therefore, the FLA has become the Catalan Executive’s only bank and a source of funds that must be returned. However, for the first time this year, the Spanish Government will not make money on the FLA and has set a 0% interest rate, which will have a €300 million positive impact on the Catalan Executive’s budget.

Moody’s foresees a common pro-independence platform in early elections to be positive for Catalonia

October 21, 2014 07:43 PM | ACN

The international rating agency Moody’s analyses the current political situation in Catalonia regarding the alternative consultation vote scheduled for the 9th of November and the potential early elections. Moody’s considers that early Catalan Parliament elections are the most likely scenario, emphasising the Catalan Government’s commitment to respect the legal framework. In addition, it also considers “a common platform” with which pro-independence parties would run in the elections to be the most likely outcome. On top of this, Moody’s predicts the victory of such a common platform and that Catalonia would be in a “strong” position to negotiate a better fiscal deal within the current Constitution. However, in such scenario, Moody’s does not consider independence. In this vein, Catalonia’s credit rating is likely to improve while Spain’s would worsen.

The Spanish Government downplays Catalonia's fiscal deficit and rejects reviewing its funding

July 23, 2014 09:34 PM | ACN

On Tuesday, the Spanish Finance Minister, Cristóbal Montoro, rejected to review the funding scheme of the Autonomous Communities to grant them more resources, despite the fact that the Catalan Government is under-budgeted. On Wednesday, the Spanish Finance Ministry downplayed Catalonia's fiscal deficit by issuing the so-called fiscal balances, which calculate the inter-territorial fiscal transfers, posting a significantly low Catalan contribution. According to the Spanish Government's new calculations, Catalonia gave away €8.46 billion in 2011, representing 4.35% of its GDP. The figure is significantly lower than the Catalan Government's calculations: €15.01 billion and €11.09 billion, using two complementary methodologies used by the Spanish Executive in 2008 and agreed among independent university experts.

Catalonia, the Basque Country and Castile and León lead transparency rankings, while Madrid is at the bottom

July 17, 2014 10:10 PM | ACN

The Catalan Government, alongside the executives of the Basque Country and Castile and León, is leading the index of Autonomous Communities in terms of transparency, according to a study issued on Thursday by the organisation Transparency International Spain. These three Autonomies scored 100 out of 100 in the study, which was based on 80 indicators. They were followed by La Rioja (96), Galícia (94) and the Balearic Islands (93). The Region of Madrid occupies the last position in the ranking, with 65 points, behind the Region of Múrcia (79), the Canary Islands (80) and Castilla-La Mancha (84). The average across Spain is 88.6 out of 100. The study called upon regional governments to indicate the exact location of various data and information about elected officials, political appointments, organisation and personal wealth.

Barcelona municipality posts a budget surplus of €140 million in 2013

March 20, 2014 08:03 PM | ACN

Barcelona’s City Council has achieved a cumulative budget surplus of €23.5 million for the last few years, after posting a budget surplus of €139.3 million in 2013. In a press conference on Wednesday, the Deputy Mayor for Economy, Business and Employment, Sònia Recasens also announced that the city had eventually executed 97.55%, (€2.25 billion) of its planned expenditure. Such a figure is higher than the average execution ratio for 2009-2013. The execution ratio for investments amounts to 94% (€356 million) and is also significantly higher than in 2009-2013. In addition, debt levels represent 46.7% of the annual ordinary revenue. Furthermore, the City Council paid its providers in 29.2 days on average. Thanks to these figures, the City Council will make available 1,000 new social housing units in Barcelona.

“An independent Catalonia should not pay” for Spain’s “odious debts”, says employer association

January 31, 2014 01:37 PM | ACN

The President of the employer’s association Cercle Català de Negocis (CCN), Albert Pont, stated that part of the Spanish Government’s debt is “odious” and therefore Catalonia cannot recognise this “illegitimate debt”. However, Pont underlined the “willingness” to pay for the proportionate share of the rest of the debt, which should be calculated “item by item”. In an exclusive interview with the CNA, he denounced a public debt generated “for the benefit of no more than a few companies” that “provide works, services and infrastructures” for the Spanish Government. “If Spain does not recognise the independence of Catalonia, Spain should assume its debt completely and the Catalan Government its own debt”, he warned. In addition, Pont denounced the fact that the Spanish Executive is taking away “between €16 billion and €18 billion” from Catalonia each year, a fiscal deficit amounting to “around 9%” of the Catalan GDP. “The IMF already established that fiscal deficits exceeding 4% of the GDP of a territory amounted to colonial relations”, he highlighted. Besides, he explained that “the average custom duty is between 1.4% and 1.5%”. However, Pont ruled out this possibility since a “political solution” will be reached to keep Catalonia within the EU.

Catalan Government to require Madrid to pay the €2 billion owed

January 8, 2014 08:31 PM | ACN

The Catalan Government will file several formal demands for payment of the €2.02 billion the Spanish Government legally owes Catalonia from the 2008-2013 period. The money represents 1% of Catalonia’s GDP or 7% of the Catalan Government’s budget. According to the Statute of Autonomy, which was approved by the Spanish Parliament and came into force in 2006, the Spanish Government was obliged to invest a percentage equal to or higher than Catalonia’s share of Spain’s GDP between 2007 and 2013 in order to compensate for an historical lack of infrastructure investment. If it was not doing so, the Spanish Executive had to compensate Catalonia financially. The measure was adopted after exhaustive negotiations and was essential to the approval of this law by the Catalan people through a binding referendum. However, the Spanish Government never honoured it. Madrid compensated Catalonia for the lack of investment in 2007, but not for the remaining years.

Unions and municipalities criticise the Spanish Government for not reducing its structure

December 10, 2013 09:28 PM | ACN

Trade unions and the two associations of municipalities in Catalonia have issued a joint manifesto to protest against the Spanish Government’s Local Administration Reform. This reform recentralises powers and services, reducing the municipalities’ capacities and transferring resources to the Provincial Councils, political bodies associated to Spanish centralism and whose members are not directly-elected. The manifesto criticises the Spanish Government “for not having faced any significant reform of its heavy structure”, despite managing 53% of Spain’s public expenditure. The Spanish Government is also forcing the Autonomous Communities to reduce their services and structures.

Catalan Government’s budget for 2014 to have a 1% deficit, more social spending and further privatisations

November 5, 2013 11:40 PM | ACN / Gaspar Pericay Coll

The Catalan Government has presented its budget proposal for 2014, which posts a 1% deficit, representing a 35.5% annual reduction and amounting to €1.98 billion, in line with the 2014 deficit targets imposed by the Spanish Government. The budget prioritises healthcare, education and social policies, which represent 71% of the total non-financial spending. Non-financial spending grows by 0.2% and reaches €20.30 billion, while the total spending amounts to €29.31 billion. The Catalan Finance Minister stressed that spending had not been reduced this year since in the last 3 years it had already dropped by 22%. Budget cuts “have reached their limit”, as otherwise “social cohesion” and “the Welfare State” would “be at risk” he said. In 2014 the Catalan Executive will spend the same per inhabitant as it was doing in 2004 taking into account inflation (€1,901).The adjustment for 2014 focuses on increasing revenue by €3.2 billion, mostly through new taxes (€910 million) and the sales of assets and privatisations (€2.32 billion). On top of this, the Catalan Government forecasts a 0.9% economic growth for 2014, leaving behind the recession of 2012 (-1.2%) and 2013 (-1.1%).