WRITTEN QUESTION E-0081/01

by Camilo Nogueira Román (Verts/ALE) to the Commission

(29 January 2001)

Subject: Imposition on the Spanish regions of a Stability Law requiring a zero deficit in their annual budgets

The Spanish national government has recently adopted in breach of the constitutionally guaranteed autonomy of the Spanish regions a preliminary draft law, to be submitted to the Congress of Deputies, which would oblige all administrations, from next year,

to draw up their budget on the basis of a zero deficit. This measure would be imposed on the regions despite the fact that the national constitution and their own statutes of autonomy endow them with the legislative power to draw up and adopt their own budgets, within general national rules which, while limiting deficits, nonetheless permit them, as is the case for all national or territorial entities enjoying political and legislative autonomy. This decision has been defended by the Spanish minister Mr Cristóbal Montoro, in a speech full of attacks on the opposition parties in which he alluded to Spain's pioneering role in the EU and to the recommendations of the Santa Maria da Feira Council held under the Portuguese presidency. It is extraordinary that the Spanish state, which receives large amounts of funding from the EU and still has major infrastructural deficits to make up, should dogmatically seek to impose a zero deficit on all budgets, thus riding roughshod over the statutes of autonomy. Does the Commission consider that these budgetary decisions of the Spanish government, affecting the regions as they do, are an appropriate response to EU guidelines? Is the Commission aware that this attitude on the part of the Spanish national authorities is part of a political offensive intended to reduce the existing powers of the nations and regions of the Spanish state as recognised by the constitution and the statutes of autonomy?

Answer given by Mr Solbes Mira on behalf of the Commission

(28 March 2001)

In accordance with the Stability and Growth Pact all Member States have committed themselves to respecting a medium-term objective for the general government budgetary position of close to balance or in surplus(1). There is broad agreement that achieving this goal contributes to a stable macroeconomic framework on a sound basis. In the 2000 Broad Economic Policy Guidelines it was recommended that Spain achieve and possibly improve upon the budgetary targets in the updated Spanish Stability Programme for 1999-2003, which the Council considered to be in conformity with the Stability and Growth Pact.

However, the Commission does not suggest how the necessary internal co-ordination between the different general government sub-sectors should be organised to fulfil the objectives of the Stability and Growth Pact. This decision lies with each Member State. This is especially relevant for those Member States with highly decentralised fiscal systems. In the case of Spain, the 2000 Broad Economic Policy Guidelines recommended continuation and full respect of co-ordination between the regions and the State. In addition, the Council Opinion on the updated Spanish Stability Programme 1999-2003 welcomed the sharing out of the budgetary adjustment among all sub-sectors of government. It also particularly welcomed the fact that the budgets of territorial governments were targeted to be in balance from 2001.

Additionally, it is worth noting that the Commission and Council have always encouraged deficit reduction strategies relying primarily on current expenditure restraint, which make room for capital expenditure.

(1) OJ C 236, 2.8.1997.