spanish budget

There has been a unanimous call in Catalonia for greater flexibility of the deficit objectives applied to the Autonomous Communities for the current year. Every political party in Catalonia, including the People’s Party (PP), has asked the Spanish Government to provide more flexibility to the Autonomies, which manage 40% of Spain’s public spending and run basic Welfare State services. The Spanish Government has set a new deficit target of 5.8% of Spain’s GDP for 2012; internally, the Central Government allowed itself a deficit of 4% and ordered the Autonomies to commit to a deficit of 1.5%. Some Catalan parties have said that the Spanish Government has double standards.

The Catalan Government considers the Spanish Government to be “disloyal” for unilaterally setting the new deficit objectives and for not allowing the same degree of flexibility to the autonomous communities, who manage all basic services. The Autonomies’ new deficit target has been set at 1.5% while that of the Spanish Government is set at 4%. Mariano Rajoy has announced that Spain will have a total public deficit of 5.8% of its GDP, and not the 4.4% previously agreed with the rest of the European Union Member States. Rajoy has argued that, with a recession coming, the situation has changed and the stability pact foresees changing the targets.