Carmena shot the expense before the elections and approached the City Council to the intervention of the Treasury
The former mayor of Madrid, Manuela Carmena, pressed the accelerator of spending in the months before the May 26 elections. He invested an additional 100 million euros and approved
- Opinion, by Carlos Segovia. Carmena leaves a record deviation from the spending rule that complicates the management of Almeida and the State deficit
- Opinion, by Ferran Boiza. That's how (not) Carmena spent
- Reactions. Almeida, before the deviation of 400 million from the spending rule: the "accounts" of Carmena were "tales"
- Forecast: The Madrid City Council will breach the spending rule again
The former mayor of Madrid, Manuela Carmena, pressed the accelerator of spending in the months before the May 26 elections. He invested an additional 100 million euros and approved a dozen agreements on personnel with a cost of 90 million more , according to the data accessed by THE WORLD. The pre-election decisions of Carmena cause the City Council to breach the spending rule and bring it closer to intervention by the Ministry of Finance, a situation in which much of the last term was already passed.
The former delegate of Economy and Finance and current mayor of More Madrid, Jorge García Castaño , denies that there is a risk of intervention: «The PP has received the City Council in an enviable situation. We left the PEF [financial economic plan that must be supervised and approved by the Ministry of Finance] and halved the debt ».
The last Budget approved by Carmena with the support of the PSOE already contemplated a deviation of 130 million euros in the spending rule - a requirement from Brussels that prevents disbursement above economic growth -, as reflected in a report of the General Intervention on the verification of the objective of budgetary stability.
In the first quarter of this year, according to EL MUNDO published in July, this breach skyrocketed to 406 million euros, according to AIReF data, and at the end of the second quarter of 2019 the situation has improved slightly but remains bad : 355 million euros above the spending rule and a surplus of 248, much lower than the 1,072 million euros of 2018 obtained thanks to the high collection and low budget execution, as evidenced by the Chamber of Accounts.
In addition, we must add the impact of Financially Sustainable Investments (IFS) approved in previous years and that have not been executed in the corresponding period, which will be computed in the expenditure rule and whose impact can reach 24 million euros in 2019.
Despite this situation, Carmena's team increased spending before the municipal elections by an additional 100 million and approved a dozen personnel agreements that in 2019 alone represent an increase close to 90 million euros not included in the budget initial. In addition, it has left more than 3,700 vacancies without providing financially , jobs that would have an impact of another 150 million euros if it were decided to fill them, according to data held by EL MUNDO.
Probable return to PEF in 2020
With this economic reality, according to municipal sources, it is very likely that in the first quarter of 2020 it will be necessary to return to the PEF supervised by the Treasury , as established by the Organic Law on Budget Stability and Financial Sustainability.
The former delegate of Hacienda de Carmena denies that there is a risk of breaking the spending rule and recalls that “the first quarters are always more pessimistic than liquidation. We defaulted for 200 million in the last quarter of 2018 and we ended up complying ». "AIReF also says that the Community will breach this year the spending rule and perhaps the deficit," he adds. And he argues that the deficit "remains huge" and at the end of the year "will be higher than expected by AIReF, no doubt."
According to García Castaño, "what the PP does is put on the bandage before the wound to justify that it will not fulfill some unrealistic electoral promises."
Regarding the personnel agreements, he argues that "they do have funding" and stresses that "in Carmena's mandate labor rights were recovered, such as 35 hours or the salary level, which the PP Government abolished due to the crisis" . In addition, he emphasizes that « operationalization processes have been initiated that will allow the stability of more than 4,000 public employees, mainly sports services».
Regarding vacancies without endowment, García Castaño argues that “they are endowed according to the probability of being filled so as not to allocate budgetary resources to expenses that are not going to be made. Selective processes are slow and there is no danger of budget insufficiency ».
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