At the end of 2013, Spain's national debt clocked in at 94% of GDP, or 961.6 billion euros. The government met its goal, but we should not forget that it had to revise its early 2013 prediction of 91.4% because of fears that it could not meet that goal. No matter what, this is still a good figure, but similar to what is going on with the annual deficit, a target that Spain also hit, it has been necessary to steal expenses and income from the 2014 budget in order to meet 2013 goals.
The debt level was kept beneath 100% at a high cost: delaying service provider payments even more. Yesterday Cristóbal Montoro made yet another announcement that regional governments are finally going to pay 8 billion euros as part of the goverrnment's third service provider payment plan.
He made a similar announcement just under a year ago, delayed the payments until the third quarter, and has delayed them once more. During all this time, the indebted administrations have been financing their operations with this money. Their non-payments have created serious liquidity problems for Spanish companies, and many of them have closed shop. At best, companies have lost opportunities to expand their business operations and compete. Although the debts will be paid off, the problem will not get fixed so long as administrations continue to flout the Ley de Morosidad, a law that requires them to pay service providers on time.
A year ago Montoro also said that he would make sure that administrations pay providers within 30 days of services rendered. But he broke this promise, too, and made the Spanish people lose more faith in their government and wonder at what expense it was able to meet national and regional budget goals. There is no room to celebrate when meeting our budget goal costs many companies and citizens so much.
