“Only” 4.8% public deficit, says Montero

MonteroMaría Jesús Montero, Finance Minister

Fernando González Urbaneja | Listening every day, every hour, to the statements of the ministers takes us to a happy world: everything is going well; everything is historic; impressive achievements. But with the coda that the PP and Feijóo are the worst, capable of ruining everything. So much propagandist mumbo-jumbo that embraces the strategy of information flooding, pounding and pounding.

The latest instalment corresponds to the public deficit data for 2022, an exceptional year of revenue (+145) and growth (+5.5%) according to the official thesis backed by data, a year of good harvest that in classical theory it would be advisable to take advantage of to store, to be able to see us through the years of bad harvest, which always come. In such an exceptional year, the deficit reached 4.8% of GDP, more than €65 billion of credit provided, mainly by external creditors, mainly the holy European Central Bank.

The (high) deficit has become structural for the Spanish economy since 2008 (three five-year periods) living off credit. Undoubtedly there were lean years of recession (2009, 2010, 2011, 2012 and 2020) with deficits of around 10% of GDP, justified by the need to sustain the economy. But during the other ten years of growth the primary deficit (before interest payments) was constant. It was always above the 3% that is the benchmark and commitment figure in the euro pact. Last year’s deficit of 4.8% is presented by the Treasury as a success; two points less than the previous year; two tenths of a percentage point less than the government’s forecast.

Although it all depends on how you look at it, a deficit of such magnitude means a risk for the future; even an abuse of the next generations who do not protest because they do not have the opportunity or the awareness to do it. That is why it must be said that this 4.8% is a barbarity, an abuse, an unjustifiable prodigality. Perhaps “governing means spending”, as Professor Fuentes Quintana used to remind us, but with some caution, with restraint. Among other reasons because when you depend on external financing you run the risk that the financier will stop lending.

It is true that the European umbrella protects, that the ECB cannot fail to come to the aid of its partners in trouble; but neither can it go through life as a debtor that sabotages others year after year.

A deficit of 4.8% of GDP in a year in which the economy is growing at 5.5% is not coherent, it is not prudent, it indicates the behaviour of an unrepentant spendthrift. These are not times for a “holy tenor to the deficit”, but neither are they times for disdain and indifference to the red numbers. Claiming that a 4.8% deficit is a good figure is like looking at the finger and not at what it is pointing at.

About the Author

Fernando Gonzalez Urbaneja
Over 30 years working in economic journalism. Fernando was founder and chief-editor at El País, general editor at the business daily Cinco Días, and now teaches at Universidad Carlos III. He's been president of the Madrid Press Association and the Spanish Federation of Press Associations. He's also member of the Spanish press complaints commission.