The Spanish regional governments are throwing in the towel. Yesterday officials admitted to Rajoy that their balance sheets, which are already in the red, will worsen and in some cases could reach a deficit of eight percent. This would ruin Spain?s chances of reaching the six percent deficit objective that the EU mandated.
Salgado maintains that there is room to accept non-compliance, without counting the bookkeeping rats? nest that will have to be sorted out next year after pushing the Sociedades tax in order to raise revenues.
The main goal now is to determine the true state of Spain?s public accounts and make an ironclad agreement for regional governments to hold to in 2012.
The president elect was on target when holding fast to this idea: he will set a firm spending ceiling and a culture that encourages optimal use of resources. Our nation?s credibility, financing capabilities and the cost of both these things is at risk.
