Government downsizing “will save 37.7 billion euros”

The government will save some 37.7 billion euros over the next three years under its restructuring of public administrations, which includes the mergers and elimination of 57 public bodies and organizations, Deputy Prime Minister Soraya Sáenz de Santamaría said Friday.

Most of the cost-cutting measures, which were approved on Friday by the Cabinet, will be passed on to taxpayers, she said.

The Popular Party (PP) government is calling the figures “conservative estimates” but said that they involve a spectacular amount of savings — projected to be about four percent of GDP. Under the plan approved by the Cabinet there will be no layoffs, the deputy prime minister said.

“These reforms are not being taken to reduce the public payroll but instead to make government more efficient,” said Finance Minister Cristóbal Montoro, who accompanied Sáenz de Santamaría at a press conference after the Cabinet meeting.

“A painful adjustment was already made, which unfortunately adds to the unemployment problem,” the finance chief said in reference to the loss of 375,000 public jobs across the country since the PP came to power in 2011, and began implementing across-the-board cuts.

“What we want to do is to end the destruction of jobs and that is why we are introducing these measures.”

The recommendations come from the Public Administrations Reform Commission (CORA), which was appointed by the Rajoy administration to examine areas where government could be downsized. CORA drew up a list of 57 public entities to be reduced or eliminated altogether.

Among the institutions that will be eliminated are the Spain Youth Council and CENATIC, a body that teaches the use of software applications in the workplace. Other entities will be swallowed up by ministries or merged with other bodies, such as the Military Construction Service, which will become part of the Institute of Housing, Construction and Defense Armament, which falls under the Defense Ministry.

Prime Minister Mariano Rajoy has called on the regions to make similar adjustments in their governments, including eliminating regional ombudsman offices and local audit courts.

By law, Rajoy cannot order the regional leaders to make these cuts and some have begun to show resistance to the idea. The main complaint lodged by the regions is the recommendation that the ombudsman and audit courts be eliminated, because regional statutes provide provisions for their existence.

The Budget Stability Law and the current dire financial situation facing the regions could give the PP administration some ways to maneuver into pressuring leaders, say some observers.

Catalonia would be the region most affected now that the central government has recommended it reduce or eliminate its so-called “embassies” or trade offices in Brussels, Paris, London, Berlin and New York.

The Basque Country has refused to even study eliminating its ombudsman (Arateko) or the Public Audit Court.

In Madrid, regional leaders said that cost-cutting measures have already been undertaken in its public administration, including disbanding the Fair Competition Court and the Protection of Personal Information Agency on January 1. Since 2008, it has reduced by 38 percent its public sector entities and eliminated half of its councilors.