Regions to shore up finances with drastic 2012 budget cuts

Twelve plans submitted so far show average 14-percent spending reductions

EVA SÁIZ Madrid 28 NOV 2011 - 13:58 CET

Faced with growing pressure from Madrid to reduce their deficits, regional governments are planning significant cutbacks in public works investment for 2012. Twelve out of the 17 semi-autonomous regions that make up Spain have drafted or finalized their budgets, and these show an average 14-percent cut in public money for infrastructure, or 1.7 billion euros less than this year.

The decision represents a new setback for one of the main engines of job creation in a country with nearly 21 percent of its workforce sitting idle. But the central government wants to ensure that the country meets the overall deficit target set by the EU of three percent of GDP by 2013.

Few regional governments have dared to make cuts in social spending, and even fewer to raise taxes, with the exceptions so far of Andalusia and Aragon. Other parts of the country like Catalonia are experimenting with alternative formulas such as higher rates for water consumption and public transportation, steeper college fees, and a co-payment model for prescriptions obtained through the public health system.

With the year about to end, only six regions (Andalusia, Galicia, the Canary Islands, Valencia, the Balearic Islands and Madrid) have already presented their official budgets for 2012. Navarre, the Basque Country, Cantabria, Murcia and Extremadura have put forward drafts, while the rest have yet to do even that, alleging that they cannot estimate their expenses until they know exactly how much they will be getting from the central government.

Everyone is waiting for the incoming prime minister, Mariano Rajoy, to come up with some specifics. Economy Minister Elena Salgado advanced some figures in July, but admitted that these may not be the definitive ones.

A sharp drop in revenues and the 1.3-percent deficit target for the regions has pushed their governments to slash public investment. Although everyone insists that social services will remain untouched, the fact is that outlays will be reduced by 1.56 percent next year.

Otras noticias

LATIN AMERICA

Inflation now everyday battle for millions of Argentineans

Francisco Peregil Buenos Aires

Government has refused unions’ request for wage rise to mitigate high prices

Falling oil prices add to economic woes in Venezuela

Reports of shipment of light crude from Algeria suggest President Nicolás Maduro is now taking a more pragmatic attitude

“We must raise our voices, scream louder than the bullets”

Thousands of students in Mexico City protest disappearance of 43 students

Students challenge Mexican authority with mass protests

Radical left-wing sympathizers of missing Iguala youths threaten to take over towns and assault government buildings

Lo más visto en...

» Top 50

Webs de PRISA

cerrar ventana