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Spain passes the test; The government does not

Montoro places its deficit as a red lantern of Europe despite the growth of GDP at 3%

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Spain passes the test; The government does not

Against what Luis de Guindos swore, government suspended public debt review in 2017. And he has a crime, because his oretical magnificent management is what catapulted to Frankfurt. As if it were not enough, Mariano Rajoy's team also failed in or review of public accounts: deficit.

More information
  • The Autonomous Communities meet for first time target of deficit
  • The government meets for first time and first target of deficit
  • The public debt marks a new peak when it rises in 1.184 billion in January

It is a good thing that Spain is also whole of autonomous Communities and ir thousands of municipalities. Because if it were only — as Centralists dream — central government and General administration of State (AGE) it administers, and Social security (SS) it manages, we would not only have passed European Stability Pact in any of exercises of Mandate of Rajoy. We would have also suspended last Test. And only one that country approved cleanly: deficit target established by Commission, 3.1% of GDP (we reach in 2017 3.07%). Cleanly: No successive Brussels concessions (higher ceilings). In 2016, Spain also fulfilled, but thanks to that flexibility was applied on two occasions.

It happens that autonomy (criticized for wasting) and municipalities (lauded and have) were largely fulfilled and lent government its surplus. Let's remember data. The local authorities obtained a surplus of 0.6% ( balance was sufficient: y lent six tenths) and autonomies were deficit in 0.3% (half of 0.6% allowed): Toger y won nine tenths to ir target. While AGE breached its deficit limit in eight, closing by 1.9% (versus a target of 1.1%) and SS in a tenth (reached 1.5%).

The explanations of Minister of Finance, Cristóbal Montoro, to mask success of ors and ir own failure, blush. He said that autonomy complied with control of article 135 of Constitution, but that was invented by Rodríguez Zapatero, and he paid for it; He said that autonomy has reached more resources thanks to its financing system, but its last reform is 2009, and PP has failed for years legal mandate to redo it, which should have given m more resources; He said that arranging Basque quota cost him two tenths, but that was a party government policy rinse.

Looking to future, this scenario is worrisome for several reasons: 1) 2017 recorded second-best collection of History, after 2007: How much more must be extracted from taxpayers to comply?; 2) 2017 was third year with an economic growth of more than 3%; Why not take advantage of bonanza to improve central accounts to meet?, and what will happen when growth descend?; Why is government aiming at success of growth, which is largely due to external tail winds (euro, oil, world trade), and hides that its budget deficit has been worst of all Europe, scale that, this yes, depends on its application and with Troll?; and 4) What will happen when ECB raises interest rate, if one of best savings of 2017 was (of 5%) in payment of interest on debt, thanks to zero interest rate?


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