With the “no means no” pronounced yesterday by Senator Eva Ortiz, the Popular Party definitively overturned the budgetary stability objectives that the Government had established for all public administrations for the period 2024-2026.
The fiscal path proposed by the Executive was rejected in the Upper House with 146 votes against, 115 votes in favor and zero abstentions. The intention of Alberto Núñez Feijóo’s party was that, by overturning the objectives, it could paralyze the approval of the 2024 budgets.
It won’t be like that. The first vice president and Minister of Finance, María Jesús Montero, assured that the Government “is working to have budgets and bring them to the chambers as soon as possible.” These accounts will be built on a non-financial expenditure limit (or expenditure ceiling) of 0.5%, up to 199.12 billion euros, a decision already approved by the Government and which does not need parliamentary validation.
In the absence of a stability path approved in the Cortes and without the possibility of being able to extend those of the previous year because Europe has kept these spending limits suspended since the outbreak of the pandemic, the 2024 accounts will take into account the stability objectives set. in the update of the budget plan sent last April to Brussels.
It is a more restrictive document than the one that was knocked down yesterday and that establishes budgetary stability for the autonomous communities, when previously they were allowed a deficit of 0.1% of GDP. City councils will be required to have a surplus of 0.2% of GDP when previously they were allowed budget stability. This means that the autonomous communities, the vast majority governed by the PP, will lose 1,456 million euros. A cut that Feijóo will have to explain in detail to his main barons, Isabel Díaz Ayuso, Juama Moreno and Carlos Mazón, while Madrid, Andalusia and Valencia will be, along with Catalonia, the autonomies that will see their budget cut the most. Specifically, Madrid will lose 284 million from budgets that have already been approved; Andalusia, 195 million, and the Valencian Community, 137 million. The impact for Catalonia, the second victim and which has just presented its public accounts, will be 277 million.
In the case of local corporations, the joint cut will be 2,924 million euros.
To overcome the PP’s veto in the Senate, the Government has chosen the procedure outlined by a report from the State Attorney’s Office, to which La Vanguardia has had access. With this legal document, the Treasury maintains that the processing of the budgets will continue, but using the most restrictive path of stability for the autonomies and city councils that was provided for in the update of the budget plan sent to Brussels in April.
In the legal document, the Law Office explains that, once the circumstances that gave rise to the application of the safeguard clause as a consequence of the pandemic have disappeared, stability and public debt objectives will be determined again. It is mandatory, therefore, that there be a budget rebalancing plan. And he adds: in the event that the Cortes does not approve the aforementioned plan, “the stability path contained in the stability program will be applicable, provided that this has been favorably evaluated by the Council of the European Union”, as well as has occurred. Europe’s endorsement of these objectives also shields the Government, concludes the report signed by the State lawyer, head of the State Secretariat for Budgets and Expenditures.
