AIReF refuses to soften the spending rule in its first clash with the Treasury

• Prosecutor: We can now trust the AIReF while PP, Vox and C's doubt their independence

The new president of the Independent Authority of Fiscal Responsibility (AIReF), Cristina Herrero , refuses to soften the spending rule in what constitutes her first clash with the Minister of Finance, María Jesús Montero . This is a rule that prevents public spending from overflowing a reasonable percentage based on economic growth and experts believe that it would have avoided subsequent cuts in the crisis. This year should not theoretically exceed 2.9%.

The appearances of Montero and Herrero in Parliament in recent days show strong differences in the spending rule. AIReF sources confirm to this newspaper that Herrero is against accepting a relaxation of this measure from the outset and refer to his words before the Treasury Committee of the Congress of Deputies. The successor of José Luis Escrivá at the head of the Independent Fiscal Authority considers the spending rule a key weapon to provide Spain with budgetary margin in the event of a possible crisis and will defend it, according to the sources consulted.

In huge contrast, Montero said last Thursday in Congress that he accepts the request of several government allies to take the smoothing step for both the autonomous communities and the municipalities. "I am aware that some of the political groups in this House - specifically, Bildu, Esquerra Republicana de Catalunya, Compromís and Más País - and, for example, the Spanish Federation of Municipalities and Provinces, have asked the Government to make the flexibility of the spending rule and I want to tell you that we are going to collect this request, "said the minister in applause.

Until now, not only Cristóbal Montoro , but she herself has taken long to relax the norm, because it especially constrains the municipalities that are key so that the State as a whole does not present an uncontrolled deficit. The surplus that forces the spending rule on municipal corporations helps to ensure that the final photo of the deficit sent to Brussels is not more serious, but the political weakness of the current Government leads to the step. According to a statement by EH Bildu, his training on Thursday supported the state deficit path, "after the ratification of the agreement reached between the PSOE and EH Bildu to make the spending rule more flexible and thus allow social investments to the municipalities."

Montero did not mention the PNV in the rostrum, but he is the most demanding in flexibilization. "Many administrations of Autonomous Communities and Local Entities ask to reform the interpretation of the spending rule that prevents them from using their available surplus. We believe that once the deficit and debt objectives have been met by public administrations, all the surplus generated should be dedicated to meet the needs of citizens, to improve public services to actions that generate quality and wealth employment, "said PNV Senator María Dolores Etxano to Montero herself.

Multiannual Rule

On the other side is Blacksmith. Last Tuesday, in the appearance in which the Treasury commission approved its appointment to the head of the AIReF by unusual unanimity , it was thus expressed on this measure designed to contain public spending. "Regarding the flexibility of the spending rule, we participate in a working group, which is supposed to make the spending rule more flexible at the local level, and I suppose at some point in the regional sphere. I don't like that name, because it contains a priori and that the result of the group is going to be the easing of the spending rule. I prefer to think that AIReF participates in a group in which the definition of the spending rule is improving, which can lead to a flexibilization in some points and perhaps to a greater rigor in others ".

And he made it clear that "flexibility, not how the spending rule is being measured in which the consolidations of excess expenses of the previous year are allowed." He called it "traps" to make this corset more bearable. "If the spending rule allowed you to spend up to five and you spend seven, the starting point for spending the following year is seven, not the five you had to have met. That leads to a perverse application of the rule in the sense of that the best thing you can do is break the one-year spending rule and consolidate future growth. "

What Herrero agrees to accept in a new spending rule that is not annual, but multiannual, to ensure that a more serious goal in the medium term is more important, than the ups and downs of spending with which it is reached. But that, he explained, does not necessarily imply flexibility, but another methodology.

AIReF, the Bank of Spain and international organizations agree that Spain's high indebtedness and structural deficit is a great vulnerability in case of crisis. For example, the spread of the coronavirus is forcing Italy to take tax relief measures and that penalizes it in the markets. Spain is without budgetary margin after the time lost in the years of growth. A relaxation of the spending rule would further delay the cleanup of public accounts, according to AIReF.

According to the criteria of The Trust Project

• Maria Jesus Montero
• Public deficit
• economy

Social Security Escrivá wants to transfer the pension deficit to the Treasury and delay the effective retirement age

HaciendaMaría Jesús Montero changes a government agreement to strain 3,828 million more spending

MacroeconomicsHacienda gives more scope in the spending rule to municipalities and an extra FLA to compensate VAT