Creative austerity

The large margin of victory for the Popular Party in May's regional elections is giving rise to a political period which may become known, not merely for budgetary rigor, but as one of outright creative austerity. Listening to the newly ensconsed premiers, you would think that the only regions to have run up debts were those previously run by Socialist Party administrations. Notorious cases such as Madrid and Valencia, where Popular Party (PP) authorities have labored under profligate leadership, are conveniently ignored.

It is an inescapable fact that bad times are coming for all of Spain's administrations, not just central government. After the bursting of the property bubble, town halls are having to face up to a harsh fact: day-to-day costs were being covered by the extraordinary proceeds from the construction boom. And the regions, too, are finding that they can no longer have recourse to greater indebtedness without putting the Spanish economy as a whole in danger.

The financing of both municipal and regional levels of government is a problem the PP is approaching from a purely political perspective, and not out of the sense of responsibility that the situation requires. Having gone through the motions of blaming their Socialist predecessors, new regional and local chiefs gleefully announce budget cuts influenced by the proximity of general elections, and not in the interests of good governance in their new posts. They exaggerate both the savings to be made from a series of often petty, half-baked measures, and the income that will be derived from future privatizations of services and infrastructures.

The Popular Party's forseeable victory in November's elections will not in itself produce a miracle cure for Spain's economic ills. Yet the first steps taken by some of the party's regional chiefs suggest they believe in such a discourse, despite the fact that the PP's national leaders seem to realizing the magnitude of the situation.

For the first time since the current crisis began opposition leader Mariano Rajoy and his principal PP colleagues are showing a growing awareness that perhaps taking office may be considerably easier than coming up with the right policy solutions. The financial plight of the regions and town halls is one of the most acute examples of the crisis' depth, and it calls for a different response to that which the new premiers and mayors have offered so far.