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IMF urges Spain to provide Autonomous Communities with “greater power to mobilise their own revenues”

December 13, 2016 06:40 PM | ACN

Autonomous Communities in Spain should have “greater power to mobilise their own revenues”. This is one of the main pieces of advice the International Monetary Fund (IMF) gives in its monitoring report of the Spanish economy. The text stresses that “without reforms”, the Spanish regional financing framework remains “a risk for the achievement of fiscal targets”. “Reforms should aim to improve regions’ incentives to comply with fiscal targets while accounting for their different economic capacities”, adds the report. In this regard, it proposes a “more automatic and stricter enforcement of targets” and giving the regions greater autonomy to mobilise their incomes. Furthermore, the IMF urges Spain to reduce value-added tax exemptions and excise duties and environmental levies.

Spanish Government rejects reviewing strict 2016 deficit targets for Autonomous Communities

July 30, 2015 09:44 AM | ACN

Despite the fact that all the Autonomous Community governments that are not run by the People's Party (PP) requested the Spanish Executive  – run by the PP – to allow them a greater deficit in 2016 and that Spain's independent fiscal authority Airef also recommended granting regional governments greater deficit targets for next year, the Spanish Finance Minister, Cristóbal Montoro, has rejected doing so. In 2016, the Autonomous Communities will have to close their budgets with less than a 0.3% deficit, "an absurd" and "unrealistic" figure according to the Catalan Finance Minister, Andreu Mas-Colell, who was recently awarded an honorary PhD in Economics by the University of Chicago. The Catalan Government asked for a 0.88% deficit target for 2016. Besides this, next year the Catalan Executive will receive €1.2 billion that should have already been transferred by the Spanish Executive but was not, due to Montoro's tax revenue miscalculations. In addition to this, since economic activity is growing, the Spanish Government will increase the Catalan Executive's funds by €700 million each year from 2016 onwards.