Regions agree budget savings of 18.3 billion for this year

Spain’s regions have agreed to combined budget savings of 18.349 billion euros for this year in order to meet the deficit-reduction target of 1.5 percent of GDP set for them by the central government.

The savings agreed late Thursday at a meeting of the Fiscal and Economic Policy Council include spending cuts of 13.071 billion euros and increased revenues of 5.278 billion.

The government is aiming to reduce the deficit of all the country’s public administrations to 5.3 percent of GDP from 8.5 percent last year. The regions were the main reason for the failure to reach last year’s goal of a shortfall of 6 percent of GDP. Their combined deficit came in at 2.94 percent of GDP — more than double the target set them of 1.3 percent.

All of the regions’ budget stability plans were approved with the exception of Asturias, which saw its budget rejected on technical grounds. Asturias’ plan included cutbacks of 551 million euros, but the secretary of state for public administrations, Antonio Beteta, said the region needed to find savings of 616 million euros.

Asturias has been managed by a caretaker government since regional elections in March, with a deal between the Socialist Party and United Left yet to be converted into a concrete coalition agreement.

“Almost the whole of the territorial map of Spain is committed to credible plans with the aim of reaching the deficit target fixed for this year,” Finance Minister Cristóbal Montoro said after Thursday’s meeting.

The government has threatened to take charge of the finances of any region that fails to meet the deficit target.