Hacienda loosens the regional deficit target to 0.7% in 2016 – Yahoo Finance Spain

MADRID (Reuters) – The Spanish government announced on Wednesday a respite to the regional governments on fiscal discipline, ampliarles 0.3 to 0.7 percent of GDP deficit target for the current fiscal year.

the amendment is a result of a revision of the target for the whole of the Spanish government, which has risen from 2.8 to 3.6 percent of GDP in 2016 after a major deviation from the accounts in 2015.

Hacienda, which maintains the projection that local authorities reach a balanced budget, sets the target regions on the same level as should be reached in 2015.

“the new target makes enforcement thereof by the autonomous communities is much more affordable,” said Presidency in a note in which he did not disclose what the new targets for the central government and social security.

Hacienda held this week bilateral meetings with the autonomous communities to discuss plans adjustment committed to Brussels in exchange for a one-year extension to bring the deficit below three percent.

Spain, which has since December with a functioning government, has also reduced its growth projections as a result of a very different “national and international economic situation that existed in 2013, when the current path of deficit reduction “was set.

the central government, to be applied harshly law of budgetary stability, has already announced a budget cut of 2,000 million euros in spending planned for him this year and has asked the regions belt fit and do not increase their spending.

the Minister of Finance, who has blamed the regions and their governments the national gap in budgetary matters, faces strong opposition among communities, including some with the same political color as the central government.

the Autonomous communities had asked the central executive redivision of the deficit so that the state would reduce more the gap and not to do fall in the CCAA, which support education spending and sanidad- the main setting

Only three of the 17 communities. – Canary Islands Basque Country and Galicia – met its objective of deficit last year, and the remaining 14 six even increased compared to 2014. overall, closed with a lag of 1.66 percent of GDP from 0.7 percent agreed.