Cristóbal Montoro has one more year to cover up budget imbalances in order to meet the 6.5 GDP/deficit ratio that the EU wants Spain to meet. The strategy is to delay 2013 spending until 2014, a common accounting trick.
Starting yesterday the government stopped payments corresponding to the 2013 fiscal year. However, it will continue to include any tax revenues on the 2013 budget. The difficulties that the government has experienced balancing the budget have had repercussions on Spanish companies. The two main firms in the healthcare industry, Fenim and Farmaindustria, will have to wait until February to collect 6 billion euros that public administrations owe them.
Delayed payments like this makes pharmaceutical companies less likely to invest in Spain. Recently, Roche decided to build an anti-cancer drug plant in Germany even though Baselga, a Spanish doctor, discovered the medicine.
