- Fiscal Authority AIReF fears that the transfer of vital income to the Basque Country and Navarra will generate inequalities
- Banco de Esaña. Economic reconstruction will require a structural adjustment of 6,000 million a year in the next decade
Spain closed 2019 with a public debt of 95.5% of Gross Domestic Product (GDP), a figure that is undoubtedly very alarming and that, however, will seem even reduced compared to the levels at which the liability will rise in the next years. In fact, the increase is going to be so remarkable that two decades of budgetary balance will be necessary to return to that same level of 95% , something that seems complicated given the precedents, so the period could be even longer.
"The debt will be between 115% and 122% of GDP in 2020. To stabilize the 2021 ratio in 2030, it will be necessary to return to budget balance throughout this decade and, additionally, it will be necessary to maintain that balance for almost another decade to fully digest the consequences of this crisis, and return to the previous level of a ratio of 95.5% of GDP in 2038, "warned yesterday the president of the Independent Authority for Fiscal Responsibility (AIReF), Cristina Herrero, during her appearance before the Finance commission of the Congress of Deputies.
What is more, «another additional decade maintaining the same assumptions would not be enough to reach the reference limit of 60% of GDP» since, according to projections made by the agency, in 2049 the data will still be 69%. "This is the magnitude of the problem we are facing", which requires " the greatest political consensus ," he demanded, thus coinciding with the request that the Governor of the Bank of Spain, Pablo Hernández de Cos, also sent to Congress a few weeks ago. .
In his speech, Herrero recalled the notable doubts that the agency generates some of the figures that the Government transferred to Brussels in the stability plan. It already did so when AIReF released its first study, and yesterday went even further in areas such as the deficit. The creation of the Minimum Vital Income (IMV), which the Executive did not include in the aforementioned document, despite the fact that the creation of this measure was taken for granted at that time, adds a tenth more deficit. And the increase in health spending beyond what was expected, others.
These are not big numbers, and even less if they are compared with the dizzying data that this crisis is already causing, but they do make the deviation increase. Thus, in the most benevolent scenario, the deficit would go to around 11% of GDP, but one cannot "rule out figures closer to 14% if the most adverse scenario materializes," said Herrero. In either case, data much higher than the 10.3% expected by the Government .
The danger of transferring IMV
The head of the Fiscal Authority also referred to the risk of transferring vital income to the communities, which is precisely what the Government has agreed with the Basque Country and Navarra. "Probably, a management of the autonomous communities gives greater proximity" to the measure, but " this transfer cannot mean differences in implementation, " defended Herrero.
Precisely his predecessor at the head of AIReF and today Minister of Social Security, José Luis Escrivá, tried to justify this decision by referring to the "uniqueness" of the provincial territories. But Herrero made it clear that this transfer involves danger and, in any case, it is unquestionable that the transfer is a new favorable treatment by the Government of Pedro Sánchez towards the Basque Country and Navarra. The antecedents, this same year, the transfer of the pensions agreed with the PNV or the greater financial capacity signed -and later nuanced- with Bildu.
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