Spain sets limit on deficit and debt for regions

 
City A.M. Reporter
THE SPANISH government yesterday set limits on budget deficits and debt issuance by the country’s 17 autonomous regions through 2016 in a drive to help meet budget goals agreed with the EU.

Treasury minister Cristobal Montoro said after a meeting with officials from all the regions that the maximum annual budget gap for the regions as a group would be 1.3 per cent of economic output in 2013.

That global figure will be reduced to one per cent in 2014, 0.7 per cent in 2015 and 0.2 per cent in 2016.

But this year the different regions will get individualised goals in an effort to soften the blow for those that missed targets last year.

Montoro said he would meet again with the regions in July to discuss budget goals with each, a decision which has been delayed several times as key regions, including economic heavyweight Catalonia, want leeway to soften spending cuts.

The ratio of debt to gross domestic product, or GDP, in the regions will be limited to 19.1 per cent in 2013, 20 per cent in 2014, 20.5 per cent in 2015 and 20.3 per cent in 2016.

Spain has made a commitment to the European Union to reduce its deficit below the European limit of three per cent of GDP by 2016. Its budget gap topped 10 per cent of economic output last year.