Bankrupt’ claim heightens Spanish debt fears

Nous pouvons faire un excellent parallèle avec le Canada, la dette publique du Canada se situe aux alentours de 1.2 trillion de dollars, 560 milliards pour le fédéral, le reste distribué par les provinces et les municipalités.

L’Espagne a été décotée récemment :

1.      Pertes des banques espagnoles à cause de la crise immobilière

2.      Déficits structurels de ces régions (équivalent à nos provinces), qu’elles ne contrôlent pas.

Le Canada est dans la même situation, plus de la moitié de la dette publique provient de différentes institutions publiques qu’elle n’a pas de contrôle.

Malheureusement au Canada, on permet aux provinces de faire des déficits d’opérations (dépenses d’épiceries), contrairement aux États-Unis, les États américains par constitution, ne sont pas autorisés, d’où le pourquoi des négociations intenses entre le secteur public et les États pour réduire leurs coûts.

Extrait de: ‘Bankrupt’ claim heightens Spanish debt fears, Victor Mallet in Madrid, Financial Times, June 5 2011

The central Spanish region of Castilla-La Mancha is “totally bankrupt”, according to the incoming administration of the rightwing Popular party (PP), an accusation that will deepen concerns about Spain’s budget deficit.

The claim has prompted angry denials from the Socialist government.

Although the amount is less than a quarter of total public sector debt, regional debt has doubled since 2008. The 17 regions collectively exceeded official budget deficit limits in 2010, and appear likely to do so again this year despite repeated demands for compliance from the central government.

Catalonia, an economy the size of Portugal, says its deficit will be double the target.

Vicente Tirado, a senior PP politician in Castilla-La Mancha, said the region was “totally bankrupt”; owed suppliers such as pharmaceutical companies that provide drugs for hospitals a total of €2bn in unpaid bills; and would have trouble finding the money to pay the region’s 76,000 civil servants next month.

Marcial Marín, the PP’s economy co-ordinator in the region, accused the departing Socialist government of “the height of irresponsibility” and alleged that unpaid bills were being destroyed to hide the evidence.

“From the data that the PP has, Castilla-La Mancha is the Greece of Spanish regions,” he said, referring to the bail-out of the Greek economy by the European Union and the International Monetary Fund.

Mr Marín said the PP, which won the region from the Socialists in elections two weeks ago, would shut between half and three-quarters of Castilla-La Mancha’s 95 government owned companies because they duplicated the work of other organisations and were staffed mostly by Socialist party members.

The departing Socialist administration described the PP’s accusations as false and said PP leaders were scaremongering in order to prepare the way for cuts to public services.

At the national level, Socialist leaders have accused the PP of undermining Spain’s credibility in financial markets for domestic political ends and have noted that several PP-run fiefdoms have also exceeded their deficit limits.

Official data show, however, that Socialist-run Castilla-La Mancha was the worst-performing region last year, recording a deficit of 6.5 per cent of gross domestic product, compared with the limit for that year of 2.4 per cent.

Spain was able to meet its overall public sector deficit target of 9.3 per cent of GDP in 2010 only because austerity at the centre compensated for regional overspending.

Two opinion polls published on Sunday, meanwhile, predicted that the PP, led by Mariano Rajoy, would win national elections with a 13.8 percentage point advantage over the Socialists, under their leader in waiting Alfredo Pérez Rubalcaba.

Mr Rubalcaba is the hitherto unchallenged party candidate to replace José Luis Rodríguez Zapatero, the prime minister. A national election must be held within a year but the PP wants an early poll.

Extrait de: Catalonia defies Madrid on deficit, By Victor Mallet in Madrid, June 1 2011

The economically important Spanish region of Catalonia has again defied the central government over budget targets and said its deficit for this year would reach €5.4bn or nearly 2.7 per cent of gross domestic product, double the official limit of 1.3 per cent.

Andreu Mas-Colell, Catalan finance minister, made the announcement in the regional parliament shortly after the government in Madrid had boasted of a sharp fall in the central deficit in the first four months of the year.

Of the 17 autonomous regions, Catalonia is particularly important because its economy is as large as Portugal’s.

Mr Mas-Colell, a renowned academic economist chosen for the finance portfolio by the Catalan nationalist government elected six months ago, said the regional deficit would fall sharply from that of 2010, was marked by “austerity and credibility” and could even drop below the official target if the central government released funds owing to the region.

Spanish ministers have rejected these demands and are insisting on compliance with central targets.

They are frustrated to find that last year’s pattern, in which the central government cut its deficit more than forecast while many regions overspent, is being repeated in the current year – when the total public deficit is to be reduced sharply to 6 per cent of GDP from 9.3 per cent in 2010.

Elena Salgado, Spanish finance minister, on Tuesday released figures showing that the central deficit fell by more than half in the first four months of this year, compared with the same period last year, to €2.45bn, with tax revenues rising and spending reduced.

She said: “We are on absolutely the right course to meet the target we set,” adding that Spain’s ratio of accumulated public debt to GDP, already one of the lowest among developed economies, would meet or fall slightly below the targeted 68.7 per cent this year.

However, economists warned that deficit figures in the early months of the year gave little insight into the eventual outcome.

They also said the Spanish economy appeared to have been growing recently only because of an unexpected increase in overall public consumer spending in the first quarter.

One explanation is that regional and local authorities continued spending ahead of the May 22 elections. The Socialists, who govern at the central level, suffered heavy defeats in those polls at the hands of the rightwing Popular party and smaller parties, including the Catalan nationalists.

Edward Hugh, a Barcelona-based economist, said: “There has been overspending in the pre-election period.

“They are going to have to try to adjust for that in the second half, and that will have effects on the economy.”