The regional governments be on the path to meeting their deficit goals, but it is too soon to claim victory yet. According to results from the first half of the year, their deficit is on average 0.93% of GDP. The goal for the year is 1.5%.
If this figure is extrapolated for the second half of the year, it will end up three tenths over the goal despite that in the second part of the year the effects of cutback measures will be seen. Yesterday the Ministry of Finance only supplied an aggregate deficit figure, so it's not possible to know how this variabel is progressing.
The first eight months of Social Security data indicates that 40,403 people have lost their job in the public sector. In addition, 150,091 people have lost jobs in education. Delaying the holiday bonus typically awarded to government employees will save regional governments some cash. The situation is tricky and it's not time for kidding around like the president of Extremadura has done by compensating for the VAT increase with cultural event spending when this region has to date made little effort to trim its deficit.
The Ministry of Finance ought to publish its data in order to gain control and credibility. Of course, it shouldn?t let down its guard. There are many measures it can enact in order to reduce spending permanently.
