Public authority deficit in 2015 falls to 5.16% of GDP

This deficit figure includes certain operations that influenced expenditure trends, especially by the regional governments, such as the spending on hepatitis C treatment and the increased public investment caused by the reclassification of certain public-private partnership contracts. When discounting these operations, the deficit would have fallen by 4.8% - fully in line with the forecast made by the European Commission.

Another factor that influenced expenditure trends was the reimbursement of the bonus payment from 2012. When discounting this effect, the remuneration of salaried employees has fallen by 1.24%.

The primary deficit of the public administration services, which excludes interest payments, fell to 2.1% of GDP at the end of 2015. This compares with a figure of 2.4% in 2014.

The financial aid to credit institutions that is not included in the calculation regarding compliance with the deficit target stood at 853 million euros in 2015, representing 0.1% of GDP.

Measures analysed by the CDGAE (Government Delegate Committee for Economic Affairs) to strengthen regional government budgetary discipline

The CDGAE has analysed the measures to be adopted with the regional governments in order to comply with the European Commission Recommendation of 9 March 2016, which states that Spain must adopt measures to guarantee an appropriate and lasting correction of the excessive deficit, in particular by means of full use - as appropriate - of the preventive and corrective instruments provided for in the Spanish Stability Act to control deviations at a local and regional administration service level from the respective deficit, debt and rules on spending targets.

The measures, which are provided for in the legislation governing budget stability and financial sustainability, respond to the need to urgently react to the European Commission requirements and thereby avoid any possible penalties that could be imposed within the framework of the Excessive Deficit Procedure currently active for Spain.

The measures are aimed at increasing controls on spending by those regional governments failing to meet their deficit, debt and rules on spending targets in order for non-compliances to be corrected and avoid their continuation during implementation of the 2016 budget.

The measures are as follows:

• Pursuant to the Stability Act and with regard to non-compliant regional governments that received funds drawn against the FLA (Regional Liquidity Fund) 2015 and hence approved an adjustment plan, requirement of a non-availability agreement for credits in their budget enabling a guarantee to be provided and linked to any further resources they receive regarding compliance with the rules on spending.
• With a view to contributing to the containment of spending trends, adoption of an Agreement from the Government Delegate Committee for Economic Affairs containing additional conditions to be met by the regional governments that signed up to the FLA 2016 and that will include monthly information on the enforcement of the rules on spending, adhesion to protocols with the healthcare and pharmaceutical industry, and the exchange of information via FACe, to guarantee compliance with supplier payment deadlines.
• Activation of preventive and corrective measures provided for in the Stability Act on non-compliance with the supplier payment deadline for public administration services in order to guarantee that suppliers to these public administration services receive amounts owed to them within the legal deadlines.
• In accordance with the Stability Act and following non-compliance with the 2015 stability target, requesting non-compliant regional governments to provide the corresponding Economic-Financial Plan enabling the deviation detected to be corrected in the current and following year. Furthermore, implementation of the 2016 budget will be monitored more closely.
• In order to strengthen the institutional framework on budgetary discipline, additional measures such as the publication of regional government adjustment plans, information on execution of the rules on spending and their calculation, and the requirements stemming from non-compliance with regulations governing the supply of information.