32 %. that is to say, overall central government and social security spending in 2011 accounted for only 54 % of the total, while that of regional and local government amounted to 46 %. the picture given by the state and social security budget is thus necessarily incomplete in respect of overall general government spending. admittedly, prior to the presentation of the state budget, parliament and the senate have approved the budget targets, both for overall general government and for each of its sub - sectors, on the proposal of the government and following a report by the fiscal and financial policy council and the local government national board. yet clearly the budgets of each regional government and each municipality are approved separately, there being no document containing information on all of them, together with that on the state and social security budget. hence, although we do have ex - post information that enables the public spending outcomes and outturn for the four major spending groups – central, regional and local government, and the social security system – to be analysed, we do not have an ex - ante or prior document that provides a detailed analysis of budgetary projections for overall general government and its compatibility with the objectives set. it should be recalled, however, that the new budgetary stability law introduced substantial improvements in this respect. specifically, it stipulates that, before 1 october each year, regional and local government shall submit information on the essential items contained in their forthcoming budgets to the ministry of finance and general government. then, before 15 october, the ministry of finance and general government will release a report on the alignment of this budgetary information with the stability objectives, in such a way that the ministry may make recommendations should it perceive slippage. and, finally, before 1 april the following year, the minister of finance and general government has to submit a report to the government on the degree of fulfilment by all tiers of government of the objectives in the initial budget. i consider that these reports should in fact offer this complete picture of the budgetary projection that we are today lacking. i would further remind you that the government has announced the creation in 2013 of an independent fiscal authority to ensure compliance with budgetary regulations. this type of institution has proven useful in other developed countries in enhancing budgetary policy credibility. it is, however, crucial that such an institution should enjoy a degree of independence, effective responsibilities and resources in line with best international practices. i will now discuss the essential features of the state and social security budget for

to regulatory amendments to the benefits system. note, however, that changes in expenditure on social security pensions in 2013 will be affected by the revision that should be made, taking into account the inflation rate recorded to november 2012. since an increase of 3. 5 % is projected and the corresponding adjustment payment could be around 2. 5 %, that would represent an increase in spending of approximately €3 billion in 2012, which would be consolidated in 2013 and in future years. i should mention that, in the next budget, one of the most important agreements of the so - called toledo pact will finally be concluded, in connection with the separation of the system ’ s sources of financing : on one hand, contributory pensions will be financed exclusively by contributions ; and, on the other, the non - contributory top - ups and non - contributory pensions will be financed by taxes. this separation, which began to be applied in 2002, will be completed in 2013 : and this is good news for the proper functioning of the system as a whole and for its future. public debt as i indicated above, from the beginning of the crisis in 2007 until the end of 2012, the ratio of our public debt – as defined in the excessive deficit protocol – to gdp has increased by 50 pp. undoubtedly, this is the highest increase over the shortest period in this ratio in spain ’ s economic history. the increase from 2011 to 2012 will amount to 16 pp of gdp, of which : 7 pp are explained by the deficit ( 4 pp by the primary balance and 3 pp by interest ) ; nearly 1 pp is due to the fall in nominal gdp nominal, and 8 pp are attributable, essentially, to the financing of the plan to pay suppliers and €30 billion of the amount estimated by the frob to be drawn down from the european financial facility before year - end. this ratio is projected to grow more moderately in 2013, from 85 % to 91 % of gdp, i. e. an increase of 6 pp compared with the 16 pp we will record in 2012, and will be almost exclusively due to the increase in the interest burden on public debt because, if the projections are fulfilled, the primary deficit will be 0. 7 % of gdp in 2013. clean - up and restructuring of the banking system i would not like to conclude without commenting, albeit very briefly, on the programme for the clean - up and restructuring of our banking system. as you know, a further step has been taken with