Fernando González Urbaneja | The Finance Minister, always cheerful and confident, has presented the budget execution for 2021 with her usual optimism. The deficit stands at 6.9%, three points less than the previous year, a point and a half less than the government’s forecast. The minister gives herself a good mark, a top A, and the media receive the data with not a little optimism, 28% less than the previous…
According to the daily Expansión today, the commercial debt of Spanish public administrations with their private suppliers rose to 7.6% of GDP in the third quarter of 2021: “A study by the firm Estudio Económico shows that the commercial debt of public administrations grew by 19.907 billion euros in the third quarter of 2021, 28% with respect to the same period of the previous year. The total figure would stand…
The European Stability Mechanism (ESM) proposes raising the ceiling on public debt set by EU fiscal discipline rules from 60 to 100 per cent of GDP, and combining it with a rule limiting public spending to ensure fiscal sustainability, as reported by EFE. In a paper published in advance of the review of these rules, economists at the eurozone bailout fund argue that, in the current context, insisting on the…
To govern is to spend. Although the end result, as Zapatero’s experience shows, leads to losing elections in a spectacular fashion, the temptation is irresistible. Zapatero handed out cheques with debt at 60% of GDP. Sánchez is doing it with levels of 140%. May Saint Rita look after his eyesight!
Yesterday, Wednesday, the European Commission gave Spain a two-month ultimatum to reduce the “excessive” delays in payments by autonomous communities and municipalities to their private sector suppliers to avoid the matter ending up in the EU Court of Justice. Spain’s public administrations owed their suppliers over 83.35 billion euros at end-2020, according to data from the Bank of Spain. The debt – which is equivalent to the transfers Spain expects…
T.C. | More than half of the debt, 43.5 billion, corresponds to the central administration, the government, while local councils owe almost 20 billion, the Autonomous Communities 10 billion and the Social Security another 10 billion. And nothing seems to indicate that these figures will improve in 2021. In breach of the law on late payment – which requires payment within 30 days – the central government was paying in January 2021 in almost 40 days.
Public debt could rise to 120% of GDP in 2020, due to a reclassification of €35 billion of the Sociedad de Gestión de Activos Procedentes de la Reestructuración Bancaria (SAREB), the so-called “bad bank” in Spain, reports Expansión. In fact, Eurostat has forced Spain to digest the 35 billion of debt. With this accounting change, the level of Public Debt over GDP, which increased by more than 20 points over 2020 to 117% (1,311,298 M€) from 95.5% in 2019, would rise by about 3 additional points to 120%.
Ofelia Marín Lozano | A business with a positive operating result is viable in the long run, even with a lot of debt. So is a country with a primary surplus. Spain has not achieved this since 2007, with the real estate bubble. But the different behaviour of countries in an ordinary, normal situation (their higher or lower deficits, their surpluses or not in good times) can mark a very different future evolution, which is not evident at first sight. These notable differences are well exemplified by a comparison between Italy and Spain.
Link Securities | Spain’s public debt increased in 2020 by 122.4 billion euros, which takes this item at 1.311 billion euros at the end of the fiscal year, according to data from the Bank of Spain. In terms of Gross Domestic Product, Spanish public debt would have finished last year at 117%, a ratio not reached since 1902 due to the consequences of the Cuban War and the global crisis in agricultural prices.
Adriá Morrón Salmerón (CaixaBank Research) | The COVID-19 pandemic is causing a sharp increase in debt. Since the outbreak of the pandemic, public debt ratios have risen suddenly and significantly to almost unprecedented levels (the historical precedents are closely linked to major wars). For instance, in Italy and Spain a jump of +25 pps of GDP is expected in just one year, whereas it took five and three years, respectively, to amass a similar increase after the financial crisis of 2007-2008.