To deal with a state whose funding is sustained by a handful of the European Central Bank?s most controversial purchases, the Spanish government is taking it with remarkable calm. In the last Consejo de Ministros, an advisory meeting that includes federal ministries, an additional adjustment worth 5 billions euros was unveiled.
That said, half of this will derive from advance corporate tax revenues. That is to say, to strip themselves of funds for the upcoming year. The next government will also have to manage the difficult task of reigning in regional government accounts.
Although it is true that our current debt levels are sustainable and that the regional governments are not adding too much to the federal debt burden, what is not sustainable is the structural gap that exists between the regional governments? revenues and spending. That is to say, the deficit.
And for that reason we must fix it, all the more in uncentralized and fragmented administrations. Still, more and more regional governments are announcing that they are not in compliance with the deficit tax (equal to 1.3% of the GDP). Five of them (Aragón, Cantabria, Cataluña, Baleares and Castilla-La Mancha) have confirmed that they are already overspending. There will probably be more added to the list, including Murcia, Valencia and Extremadura.
President Zapatero should put forward a concrete funding plan that aligns with taxes and is not open to fund petitions. If that cannot be paid for, the level of service offered at this time will have to be reconfigured, and Moncloa?s next resident will have to deal with it.
