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An objective appraisal of deficit

The asymmetrical distribution between regions must not spark electoral infighting

With good reason, the government is preparing to set regional government deficit ceilings for 2013, incorporating some new features derived from the European Union’s general blueprint. The chief of these is that, compared with 2012, it will attempt a better distribution of the deficit margin between the different regions, in line with the recommendations of the European Parliament and the Commission. Pending more definitive data, this will mean that, instead of reserving for itself the flexibility in the schedule granted by the EU for reducing budgetary imbalance (two years more for Spain, and 6.3 percent in 2013), it will apportion it among all the regions, attributing to them an average ceiling of around 1.8 percent.

The other new feature is that it will apply an asymmetrical focus, similar to that of the EU: the final deficit objective is common to everyone (for the 17 regions, as for the 27 EU member states) though the intermediate yearly goals may differ. This is a sensible and necessary asymmetry if the results are to be optimal, since the circumstances, capabilities and starting points of each territory do not coincide. Finland is not France, nor is Asturias the Basque Country.

Some regional Popular Party “barons” are unhappy about this plan. And they are bringing into the discussion supposed comparative grievances and specious political considerations, particularly those concerning the question of Catalonia. Though politics indeed colors every public issue, the premiers would all do well to concentrate on apportioning the deficit-reduction demands as objectively as possible, using economic criteria alone. The proposition that Spain practices “fiscal pillaging” of Catalonia, as Catalan secessionists maintain, is a truculent one. To answer it by impugning any measure of improvement in the difficult financial situation of Catalonia, terming it a “sop” or premium to forestall Catalan secessionism, is equally suicidal.

The Spanish regions, in the aggregate, made a huge effort in 2012, reducing their deficit by half — the underlying internal cause of the above-mentioned new features. No one should now spoil the result — obtained in different ways, not necessarily the best or the worst — by electorally oriented infighting, often seasoned with anti-Catalan feeling, however objectionable the talk of secession may be.

Everyone, beginning with the citizen, has made sacrifices. And each regional leader must also keep their head-start advantages in mind. Extremadura will find it hard to repeat its atypical revenues of 2012; it must nurse its successes with care, especially as it enjoys the particular advantage of being a net receiver of cohesion funds, EU and Spanish. On the opposite shore of prosperity, the centrality of the Madrid region — with its specific weight of the public sector, somewhat less vulnerable to the crisis — introduces variables that should also be weighed by the regional premier.

With the excuse of keeping their distances from the government of their own party, what some regional premiers are doing amounts to exploiting the secessionist phenomenon in their own favor, at least in the fiscal sense.

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