The Independent Fiscal Responsibility Authority (Airef) advises the Ministry of Finance to impose conditions on the Autonomous Communities that are paid to the condonation proposal of 83,252 million euros of debt that was approved on Wednesday in the Council of Fiscal and Financial Policy (CPFF). The president of the independent agency, Cristina Herrero, was part of that meeting after which she values that the future bill can contribute to the different territories again to finance the markets, however, she explains that “a fiscal conditionality must lead to ensure that the fiscal rules are fulfilled. “It makes no sense to make a debt forgiveness if it is not guaranteed that future debt will not be accumulated over what the fiscal rules allow” warns Vice President María Jesús Montero.
The agency recalls that the formal obligation to meet the debt and deficit objectives collected in the national and European standards has not prevented the expense of public administrations from growing above the potential growth of the medium -term economy over 2024. This percentage was set at 2.6% and the structural fiscal plan sent to Brussels recognized that computable expense for the purposes of this rule had advanced 5.3%; while airf estimates that in The autonomic scope would have reached 7%. “It is not necessary to strengthen compliance with the fiscal rules with a fiscal conditionality associated with the debt forcononation process,” since the Autonomous Liquidity Fund (FLA) does not disappear and the regions will continue to finance through this mechanism the deficits and excesses of deficit of previous years.
The Minister of Finance itself admitted that Herrero had transmitted this recommendation at the meeting from which all the counselors of the Popular Party were absent and in which only the four representatives of the territories headed by the PSOE remained. Montero explained that the agency proposed that only communities benefit “Fulfill” with the Expenditure Rulesince this is the most relevant criteria to which governments should be tied to lower their debt level, according to the new European fiscal rules. The minister opened to take this recommendation in the face of the processing and parliamentary negotiation of the bill that wants to have approved before the end of the year to comply with the agreement with ERC.
The agency questions the sources used to establish the criteria for the distribution of the condemnation. “It seems a Very partial approach Keep in mind the rising exercise of regulatory competencies in the matter of IRPF as an approximation of the effort made by the communities. “Instead, it is committed to using the computable expense – despite its limitations – since it understands that the effort cannot be measured only from the perspective of the income. However, it values that the sentence will translate into a horro in interest for the autonomous communities, which will have a positive effect in its levels of deficit but which will entail an increase in that of the central administration.
In the note released on Thursday, Airef also calls to take into account the treatment that will be given to the future foronation in terms of national accounting, since the autonomous communities will register an increase in income and the State an increase in spending as a result of this transfer of 83,000 million. “The nature of the transfer would affect the calculation of the central administration spending rulewhich could be restricted its expenditure capacity “in that same amount, warns the agency that takes as an example the year 2024 in which an increase in income derived from the financing system led to a generalized breach of the expense rule.
“It is necessary to limit the use of the increase in autonomic income in the year of the forgiveness, which could be carried out through precisely the fiscal conditionality that must accompany the condonation process,” he affects. These conditions should take into account the starting position of each territory and its relative position in a financing system expired for a decade and which has not yet been remedied.
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