The Spanish government wants to limit regional spending even though it knows that constitutionally it is subject to the Spanish constitution and intervention constraints. That said, it is still assuring that regional governments will meet their budget objectives for 2012 in order to maintain budget stability that they have agreed on with Brussels.
working on a document that would establish an expenditure rule for the regional governments, as government and socialist sources have confirmed.
This expenditure rule, which is one of the recommendations that has already arrived from the European Commission, would mean that regional government spending could not exceed nominal growth within each region. This is to say, the limit would determine the net difference between its GDP and predicted inflation.
Therefore, the expenditure rule would be more flexible that what is in place now: a set limit based on projected non-financial income. This is the proposed deficit for the year, so predicted adjustments in the Contabilidad Nacional.
Translated and Edited in English by Brandon Dyches and Jose L. De Haro
