The Independent Authority for Fiscal Responsibility (AIReF) considers that the Government should implement adjustments so that, once the suspension of fiscal rules disappears, as the European Commission has announced, Spain can reduce the public deficit below 3% and lower the debt to less than 100% of GDP. If new measures are not undertaken, it will be "difficult" to be achieved, warned the president of the independent body, Cristina Herrero.
"We have been saying for some time that the bull was going to catch us," Herrero warned at a press conference held this Wednesday in Madrid to present the evaluation of public policies. A warning that coincides with the announcement by Brussels to recover excessive deficit procedures and set fiscal imbalances at a maximum of 3% in 2026 and debt below 60%. Spain is one of the ten countries that, according to the figures for 2022, risks being filed.
"AIReF in its forecasts does not consider it easy to lower this 3% deficit in the absence of measures and also in the absence of measures our debt ratio will stabilize above 100%," added Herrero. "I believe that we have to get used to working in a really uncertain framework and that will not be an impediment for the Commission to ask us to present a debt reduction plan for the coming years," he predicted.
Herrero has qualified, however, that he sees it feasible to meet the 3% deficit target in 2026 once the Government eliminates the anti-inflation measures in force. The difficult thing, without adjustments, will be to get below that figure and get closer to the debt objective of 60%. The independent body plans to review the deficit path for the coming years and has reproached the Government for not having carried out fiscal planning in the medium and long term.
AIReF will publish in the coming days an analysis on the long-term sustainability of public finances with the aim of addressing demographic pressure and the aging of the Spanish population. “That will give us an idea of the starting point and the magnitude of the adjustment that we are going to have to carry out to comply with the European requirements”, warned Cristina Herrero.
“It is important to have a photograph of where the most certain challenge, aging, takes us”, he added. In aging Herrero has framed the public policies of pensions, health and dependency, whose spending will be higher. AIReF will draw a baseline scenario while waiting for the Ministry of Inclusion, Social Security and Migration to close the pension reform. From this base scenario, he will propose several possible alternatives, the successor to José Luis Escrivá has advanced.
The Government has barely implemented one in three proposals to improve public spending, as denounced today by AIReF. Of a total of 276 proposals formulated in the so-called "spending review", the Ministry of Finance has rejected 23, 8%, and has up to 154, 56%, "in process". The body chaired by Cristina Herrero has lamented an "unsatisfactory" degree of adoption of its audit of public spending.
As for the spending affected by its evaluation of Airef, of a total of 81,000 million, the Government has barely implemented proposals worth 21,870 million, 27%. On the opposite side, the Treasury has rejected approaches worth 3,240 million, 4%, and maintains "in process" of study up to 55,890 million, 69% of the proposals made by the independent evaluator.
Some Airef recommendations that have been rejected by the Ministry of Finance have been that Renfe Cercanías has not been implemented within the transport consortiums or that the subsidies for island flights are not reformed so that the airlines do not remain with a margin of the discounts.
The independent authority concludes that the degree of implementation of its proposals to improve efficiency in public spending is "not satisfactory. "The evaluation is useful if it is implemented, but AIReF is not responsible for entering into decision-making," said the president of the authority, Cristina Herrero.
AIReF has also launched today a call to increase staff and resources for the evaluation division that is in charge of auditing government spending. Herrero has ensured that the team led by José María Casado does not give more of itself to carry out its work. To improve resources, Airef proposes that the supervision rate also be incorporated into the evaluation and, therefore, the rate can be increased. At this time, ten employees work in this evaluation area.
