The Catalan Government had a 0.59% deficit in the first half of the year, below the Autonomous Communities’ 0.77% average

Madrid (ACN).- Catalonia and the rest of the Autonomous Communities are heading “in the right direction” to meet the 1.5% deficit target for 2012, according to the Spanish Finance Minister, Cristóbal Montoro. On Thursday, as part of the new transparency and control measures, the Spanish Government issued the quarterly accounts of the Autonomous Communities corresponding to the first half of the year. In the first six months of 2012, the Catalan Government accumulated a 0.59% deficit in relation to Catalonia’s GDP, which is the size of Portugal. The Catalan Government’s deficit between January and June is below the Autonomous Communities’ 0.77% average. According to Montoro, these figures should end the “stereotypes and prejudices” that the Autonomous Communities’ accounts are “out of control”. Furthermore, Montoro praised the cooperation with the Catalan Government in terms of controlling the public deficit. The Catalan Government had a 0.38% deficit at the end of July, according to its own sources. This represents a €767 million deficit while at the end of July 2011 it had a 2.09 billion deficit, which represents a 63% deficit reduction.

According to the data published on Thursday by the Spanish Finance Ministry, in gross terms, Catalonia had a 1.03% deficit, without taking into account the provisions received from the Spanish Government, explained Montoro. The Autonomous Communities’ gross deficit was 0.9% for the first half of the year. Montoro emphasised the “positive conclusions” the figures show, but asked the Autonomous Communities “to carry on with their austerity efforts”. “Neither the Spanish Government nor the Autonomous Communities can show any sign of relaxation”, stated Montoro. Furthermore, he said that, if needed, the Spanish Government “will be on top” of the Autonomies that might have difficulties meeting the 1.5% deficit target for 2012.

The Catalan Government ended July with a 0.39% deficit

Besides the data published by the Spanish Ministry corresponding to the first six months, the Catalan Finance Ministry published new data corresponding to the deficit accumulated until the end of July. According to its own sources, the Catalan Government had a 0.39% deficit in the first seven months of the year, which represents a €767 million deficit. Last year it had a 2.093 billion deficit at the end of July 2011, which represents a 63% deficit reduction. Revenue during the first seven months of the year increased by 11.9% compared to the same period last year. Revenue reached €14.307 billion by the end of July 2012, while spending reached €15.074 billion, which represents a 1.3% increase compared to 2011 figures.

Catalonia gives away between 6.4% and 8.7% of its GDP each year

In 2005, before the economic crisis, the Spanish Finance Ministry published the so-called fiscal balances, which reflect the contributions of the Autonomies Communities. It was the first and only time the data was published, despite previous formal petitions from the Spanish Parliament and constant claims from the Catalan parties. The Spanish Government used two different principles, with different formulas each. The first principle was based on the cost/benefit, which was supposed to better reflect it at an individual level. Four different formulas were used. They showed that Catalonia was giving between 6.38% and 6.69% of its annual GDP to pay for services and investments made in other parts of Spain, excluding common services such as the Spanish army and ministries. This amount would represent between €13.1 and €13.5 billion nowadays. The second principle used was the monetary flow, which is the most commonly used principle while calculating statistics such as these. In the two formulas used, Catalonia was giving away between 8.69% and 8.70% of its GDP. The amount represents €17.8 billion. Studies made by the Catalan Government have concluded that in the last 20 years, Catalonia has been giving 8.5% of its GDP each year, which equates to approximately €17 billion per year using 2011 figures. Furthermore, after the fiscal redistribution, Catalonia was losing positions in the Spanish ranking of GDP per capita, even being below the average, while subsidised regions were above the average.