The Fiscal Authority criticizes the relaxation of the spending rule for communities

The Fiscal Authority criticizes the relaxation of the spending rule for communities

Warns that there is a risk that 13 autonomies violate this regulation in 2018 and estimated "feasible" to achieve the objective of deficit

   The Independent Authority of Fiscal Responsibility (AIReF) has criticized the flexibilization of the spending rule for the autonomous communities contemplated in the 2018 Budgets. In fact, the agency has warned that the requirements that the Treasury has required the regions to benefit from this possibility are lower than those that are requested from town councils. In addition, the report of the supervisory bodies on the evaluation of the autonomic budgets published today shows that up to 13 regions have the risk of not complying with the spending rule in 2018, which limits the increase in budgetary spending in line with economic developments.

   The Fiscal Authority recalls that the expenditure rule "is the main instrument to continue reducing the deficit" once the administrations approach zero deficit or surplus. Specifically, the body led by José Luis Escrivá expects high risk of non-compliance with this regulation in 2018 in Andalusia, the Balearic Islands and Madrid. But they also estimate that there is a moderate risk of non-compliance from Asturias, Cantabria, Castilla-La Mancha, Catalonia, Extremadura, Galicia, Murcia, Navarra, the Basque Country and the Valencian Community.

In any case, AIReF has criticized the constant changes in the expenditure rule through the Budgets. "There are three spending rules, one for each administration," the agency's sources complain. In this sense, the body considers a "clear" definition of this rule necessary to improve its transparency and help administrations to comply with it.

Precisely, the Fiscal Authority criticizes the few requirements that the Treasury requires communities to benefit from the flexibility of the spending rule beyond achieving a surplus in 2017 and that they comply with the expenditure rule. For their part, the municipalities also take into account the level of debt as well as a positive remnant of the Treasury.

On the other hand, AIReF is more positive when assessing the autonomous deficit. Specifically, the agency considers it likely to reach the objective of 0.4% thanks to the better closing of 2017 and a more positive evolution of the forecast of own taxes. «It does not demand the need to make any adjustments». If the communities are analyzed individually, AIReF considers that it is feasible for most of the regions and considers only "very unlikely" the objective for Murcia and "unlikely" for Extremadura and Valencia.