The Minister of Finance and Public Administrations, Cristóbal Montoro, made it known yesterday that the provisional deficit for 2011 for all Spanish public administrations rose from 8.51% of the GDP, a figure that was sent to the EU in the afternoon. "We are not exaggerating anything," Montoro said in order to discredit anonymous rumors that were leaked several days ago, insinuating that the 8% figure had been inflated.
With this figure, which lowers the 6% limit set by the EU for 2011, it is clear that Spain's previous economic advisory team was not capable of reshaping national accounts in that year. Deputy Prime Minister Salgado only reduced the debt ratio from 9.33% to 8.51% from 2010 to 2011, which is a mere 0.8% correction. This year's deficit is 91.3 billion euros, means that around 40 billion will have to be shaved.
But when the figures were presented, Montoro declined to mention additional measurements and assessed the adjustments that her government undertook in December -- nearly 8.9 billion in spending and 6 billion in taxes -- she stressed that we are working with an extended 2011 National Budget and underscored the good-will of the Law of Stability.
That said, Montoro advised against giving responsibilities to particular administrations and criticized the "indolence" of financial systems under the last Prime Minister?s regional governments. Those announcing figures today, she said, are not the same ones who made the latest policy or national budget that is going to get us out of the recession. "The problems are everyone?s responsibility," she said in order to stress that this very spirit signifies a changed rhetoric as compared to the last government.
Regional government accounts
Spain is currently 2.51% over and above its 2011 goal of 6%, and various areas of government are in the red. Central Administration incurred a deficit of 54.7 billion euros, which is 5.1% of the GDP, which is a 0.3% deviation from the original objective. As far as Social Security, it rose to 0.09% of the GDP, a half point below the figure that was hoped for. Montoro believes this is "worrisome."
