Wednesday, June 8, 2011

Spain's debt crisis: calls for "energetic decisions"

The efforts of the government of Prime Minister Jose Luis Rodriguez Zapatero of Spain to consolidate public finances more vulnerable to resistance from the regions. Thus, the autonomous region of Catalonia refuses to comply with the central government in Madrid agreed deficit targets.


The draft budget provides for Catalonia 2011 deficit, which is well above the ceiling. The following elections last year, newly-elected government in Bareclona said the deficit for 2010 had located 60 percent of the data of the previous government. Catalonia has set a deficit target this year of 2.7 percent of GDP.

This is more than twice as much as with the central government agreed. The Spanish regions have agreed with the government in Madrid seeks to limit their budget deficits this year to 1.3 percent of gross domestic product. That they may contribute to Spain may reduce its budget deficit from 9.2 percent in 2010 to 6.0 percent this year.

Regions that exceed their deficit limit must present stability plans. Only when they are approved by the government, the regions may tap the capital market. Zapatero said that Spain had the unconditional obligation to comply with the deficit target. Also, Mariano Rajoy, president of a right-wing opposition Popular Party said in the regions that are ruled by his party to the thrift.

The budget figures for the first quarter, however, indicate that the regions have lagged behind schedule already. The governor of the Spanish central bank Miguel Angel Fernandez Ordonez said, the regions on 3 June on "strong choices" to reduce spending "no more delay." In the criticism points to the issues fall within the health system, which take about 40% of the budgets of the autonomous regions to complete.

No comments:

Post a Comment