Some regions are trying to “fool” the Spanish government, says an FT expert

London (ACN).- Catalonia is adopting “strong” and “difficult” actions to reduce its budget deficit while other autonomous communities within Spain are “trying to fool” the Madrid government, said the Financial Times writer Richard Stovin-Bradford in an interview with the CNA. The Spanish government is urging all autonomous communities to cut their deficits but, according to Stovin-Bradford, “some regions in the South have not yet reduced the spending” as much as others.

Catalonia is introducing 10% spending cuts in crucial areas such as Health and Education, a “difficult” and “brutal” decision but nonetheless “necessary”, according to Stovin-Bradford. Despite all that, the Catalan Government will not meet the 1,3% deficit required by Madrid, and will probably have a 2,7% deficit by the end of the year. The Lex Writer said that the objective will be “very difficult” for Catalonia to meet and suggested that not everyone understands the “differences” among autonomous communities and “the pain” that will be suffered as a result of such drastic cuts in a highly populated area. “Catalonia has a large income, but it also has high costs due to its high public spending requirements”, said the journalist, who stated that Barcelona “cannot do everything” and therefore the Spanish government has to assume its “own responsibilities” cutting central spending and controlling those regions that do not reduce their deficits. Stovin-Bradford said that every region “should cut as far as possible” to help Spain getting out of the crisis, but refused to consider Catalonia as an autonomous community that is not taking its burden. Stovin-Bradford said that the measures introduced in Catalonia are “on the right track” but admitted they should have started “earlier”. In fact, the journalist argued that Spain and Catalonia have a “lack of credibility” because even though they are introducing “fairly brutal” cuts, they are arriving “late”. “In Catalonia, the president is trying to reduce spending on Health by taking difficult steps. But to some extent these are problems that he inherited from the previous government”, he said. In the State level, he added, Prime Minister José Luis Rodríguez Zapatero, “has not done the maximum” to please the markets and has yet to implement a profound labour reform. “The competitiveness of Spain will suffer until the government resolves the issue of employment. The possibility of hiring but also of firing easily is vital to attract investment”, said Stovin-Bradford. “The situation could be favourable in the medium or long term, but we will have to keep the deficit reduction plans in place for at least two or three years”, he explained. “As a proportion of GDP, the deficit remains too high, and although progress has been made, further measures are needed” in Spain, the expert said. Stovin-Bradford admitted there will be “job loses” and “brutal” consequences for the society, but, in his opinion, only “discipline” from the central and regional governments “will reduce the financial costs of Spain and the private banks”. Asked whether or not an independent Catalonia would come out from the crisis sooner, as some politicians argue, Stovin-Bradford said that the prescription should be to “keep positions”. “It strikes me that the current Catalan President, Artur Mas, is not insisting on independence”, said the expert from the Financial Times. “That’s for another day. First you fix the economy, both in the state and regional levels, and then you dream”.