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PUBLIC FINANCES

Regions object to deficit treatment afforded Catalonia

Extremadura premier says targets for shortfall should be agreed by consensus

The new deficit target of two percent of GDP that Prime Minister Mariano Rajoy plans to grant Catalonia has triggered criticism from other regional premiers who say they want the same preferential treatment.

While the official target is 1.2 percent for all the Spanish regions, on Saturday Finance Minister Cristóbal Montoro stated that a deficit of more than two percent for the Catalan nationalist government of Artur Mas is not negotiable.

Leading members of Spain’s ruling Popular Party (PP) have expressed dissatisfaction with this asymmetrical system.

Extremadura premier José Antonio Monago has warned Madrid that he will not allow Catalonia to benefit from other regions which are “compliant” with the target. He accused the Treasury of wanting to be flexible “with those who say no to the Constitution and to the Treasury,” meaning the Catalan government and its pro-independence rhetoric. Monago also noted that the deficit targets for the period 2012-2014 were reached by consensus, and said any region wishing to exceed the 1.2 percent ceiling must “ask for other regions’ votes.”

Madrid premier Ignacio González accused Mas of trying to “trade in money for independence,” another reference to the Catalan sovereignty drive, which the PP strongly opposes. "Even if there was no crisis, this plan cannot be admitted,” he said on a radio interview in Radio Nacional. González said that he thinks Mas “has an obvious problem from the internal point of view” as a result of “a nationalist drift” that has got him “into a difficult alley.”

The region of Aragón has also joined the fray. “The deficit must be the same for everyone, that’s the red line,” said Roberto Bermúdez de Castro, chief of staff for the Aragonese government.

Galician premier Alberto Núñez Feijóo turned the concept on its head and demanded “positive discrimination” for the regions that meet their targets. “Generosity for regions that fail to comply, yes, but logically also for those of us who are complying and continue to do so.”

The voices of dissent come on the day after Spain’s prime minister asked his regional premiers for “generosity” in order to reach an agreement over the deficit. If consensus is not possible, the government will have the last word, he warned.

Meanwhile, the secretary of state for public administrations, Antonio Beteta, said that all the regions will have to reduce the deficit they posted last year, “each and every one of them, those who had more and those who had less.”

Spain’s overall 2013 deficit target is 6.3 percent of GDP. Madrid is pressuring regional governments to do their part in the ongoing austerity drive to meet Brussels’ demands.