Spanish AIReF Shows Itself To Be Useless

Banking regulationBanking regulation

It’s been two and half years since Spain set up the Independent Authority for Fiscal Responsability (AIReF) to oversee the economic targets of the different administrations and the sustainability of the country’s public finances. And now that supervisory organisation, created at Brussels’ request, can be considered as having done its job, although it has shown itself to be useless.

In fact the organisation’s chairman, José Luis Escrivá, recently acknowledged that “it cannot evaluate the results and the internal consistency of the macroeconomic situation because it does not have access to underlying fiscal policy.”

“Without even a minimum amount of detail regarding the composition of income and spending, it’s impossible to evaluate the public sector’s influence on the Spanish economy,” he said.

At the same time, Escrivá warned of non-compliance with the current European and Spanish regulation, given that EU legislation requires that both macroeconomic forecasts and the Stability Programme are endorsed by an independent body. In Spain’s case this is the AIReF, and under the terms of the law which consecrated its creation, it has to present its evaluation of the Stability Programme before April 15th. But it has been unable to do this, having not received detailed documentation from the Finance Ministry before April 5th.

Despite the harsh accusation of non-compliance from Spain’s caretaker government, it doesn’t look as if there will be any resignations at the heart of the AIReF. So its president will have to openly live with “the mixed emotions” of impotence and “sadness” at not having succeeded in obtaining transparency from the Finance Ministry or the measures the organisation has been demanding since end-2014. “Spain has the right tools to guarantee the sustainability of its public finances, but these tools have yet to be used,” Escriva concluded.

This is not the first time the AIReF has pointed the finger at the government. One example is the appeal filed by way of administrative-contentious law with the High Court, after deciding last year to contest an order from the Ministry of Finance and Public Adminstrations.

In spite of the accusations and the conflicts,  Rajoy’s government doesn’t seem to have the sensitivity required to accept that there is a need for an organisation like the AIReF. And this being the case, it has opted, from the very beginning, to demonstrate the art of bullfighting in its crudest form. It has shown that the basic principles of these organisations, such as autonomy and independence, are only worthy of its contempt.

Amongst the experts on AIReF’s advisory council there are competent professionals of all types, who complement their salaries and pensions from the 4.84 million euros expenses budget. These include former under-secretaries at the Finance Ministry, and ex-governors of the Bank of Spain, as well as former chairmen of ICO or former regional councellors.

*Image: Archive

About the Author

Carlos Díaz Guell
Editor at and, Carlos began his career in financial journalism as founding member of El País. He's been communications director of Bank of Spain, member of the ECC at the European Central Bank, Institutional Relations director at Iberia and editor at La Economía 16 magazine.