Spain to suspend spending cap so that local councils use their surplus

Spain's finance ministry will suspend the spending cap of local councils for 2020 so that they can use the surplus of 2019 – something not possible under current laws in normal circumstances.

The government aims to let councils spend more money to be more prepared to face the Covid-19 health emergency and impact. 

This was a long-standing demand of local governments and some regional executives, like that of Catalonia, and will be approved "in the coming weeks."

Indeed, the Spanish cabinet tried to pass a decree letting councils voluntarily hand over their excesses to the central administration last week – but the measure did not garner the support of a majority of lawmakers, as it was only backed in congress by the Socialists and Unidas Podemos. 

The new measure will have an impact of 987 million euros, according to the finance ministry – which will reach 3 billion euros taking into account other measures such as allowing regional authorities to also use their surpluses. 

Catalan president: "Too late"

The Catalan president, Quim Torra, welcomed the announcement, which he called a "U-turn" after the failed attempt in congress last week. 

"The Catalan government has been requesting it since the beginning of the pandemic," he said in a statement. 

Yet, he added that the measure comes "too late" despite the insistent calls of his government and the local councils in Catalonia and Spain. 

In the same vein, vice president Pere Aragonès said that "it is good to rectify" the surplus situation and added that "the savings of local councils have to be at the service of the people, not in a finance ministry bank."