Today, the Independent Authority for Fiscal Responsibility (AIReF) organised a seminar with the Autonomous Regions (AR) on the new fiscal framework to address its challenges and implications at the regional level. The President of AIReF, Cristina Herrero, opened the seminar by highlighting the importance of the subject matter under discussion after the reform was finally agreed upon on 30 April.
As the president pointed out, the application of the new fiscal framework already has immediate implications for all General Government (GG) authorities. Spain will have to submit a structural-fiscal plan to the EU authorities in September to reduce debt, and all the GG authorities will have to draw up their budgets for 2025 so that they are consistent with that plan.
According to Cristina Herrero, the challenge is enormous given Spain’s decentralisation, and the commitments will have a greater chance of success if they are discussed beforehand, as their compliance will depend on the involvement of all the GG authorities. That is why AIReF – the institution in charge of the fiscal supervision of the plan – has repeatedly recommended starting work as soon as possible to define these commitments. Furthermore, the time challenge is also very demanding, as there are a little more than three months left before the plan has to be submitted to the EU authorities and even less time for the GG authorities to start preparing their budgets for 2025.
In the longer term, the revision of the Organic Law on Budgetary Stability and Financial Sustainability will also have to be addressed to ensure its consistency with the new European fiscal framework, as well as the transposition of the directive that reforms national fiscal frameworks and gives Independent Fiscal Institutions such as AIReF the role of assessing the consistency, coherence and efficacy of the national fiscal framework.
During the seminar, the Deputy Director of Public Indebtedness of AIReF, Lucía Rodríguez, presented the main lines of the Opinion on the new fiscal framework that AIReF plans to publish in early June, while the Director of the Budget Analysis Division, Ignacio Fernández-Huertas, spoke of the challenge that Spain’s decentralisation will pose when it comes to applying the new framework.
Representatives from the Treasury and the Autonomous Regions also took part in the seminar to give their views on the reform and analyse the implications of the new framework for drafting the 2025 Budget and the challenges of decentralised implementation.