Spain’s regions spent €1.6 billion on ‘foreign policy’ during worst of crisis

Spain’s 17 regional governments between them spent a total of €1.6 billion on foreign policy between 2011 and 2014, according to a new report by the country’s Audit Office.

While the two most pro-independence regions, Catalonia and the Basque Country, spent €202 million and €247.7 million respectively on overseas trade delegations and international cooperation, Andalusia topped the list, spending almost a third of the total, with €449.7 million.

In 2012, Spain’s economy was nearly put under IMF and EU management, and its banking system had to be bailed out by the European Central Bank to the tune of €100 billion, Valencia, Murcia and Catalonia required central government financial assistance to prevent them going under.

Catalonia is also one of just three regions, along with Andalusia and the Basque Country, which have refused to shut down their foreign offices 

Yet this same year, the country’s regions spent between them €1 billion of taxpayers’ money on their international branding.

The Audit Office’s report is particularly critical of Spain’s regional governments for their spending on international cooperation, spending €648.6 million in total between 2011 and 2014. Some 87% of this went to NGOs “without any kind of check or breakdown on how the money was spent on each project,” it says.

It also points out that in many cases, regional governments were doubling up on activities already carried out by the central government. Between 2011 and 2014, Catalonia maintained 29 overseas delegations, while the Basque Country had 13.

Without naming names, the Audit Office says that eight regional governments had no strategic plan for the subsidies for companies looking to enter overseas markets.

In conclusion, the Audit Office says that regional administrations “should respect the principles of joint action abroad, institutional loyalty, and coordination.” It also warns that Spain’s regions should not obstruct the central government’s foreign policy.

Reining in the deficit

In April, as part of its efforts to meet the EU’s deficit targets, the Spanish government announced a €2 billion budget adjustment, reduced its own growth forecast in view of the upcoming global slowdown, and is now seeking ways to rein in spending by its regional governments without sparking a row.

Spanish acting Finance Minister Cristóbal Montoro has blamed regional spending for Spain’s significant deviation from its 2015 target of 4.2%.

In 2014, the Popular Party (PP) government of Mariano Rajoy announced approved legislation with the overarching goal of ensuring "unity of action," "institutional loyalty" and "coordination."

Keeping a tight rein on foreign policy has been a key issue for the government over recent years, at a time when Catalonia has sought international support for its independence drive.

Catalonia is also one of just three regions, along with Andalusia and the Basque Country, which have refused to shut down their foreign offices and transfer employees to the nearest Spanish embassy in order to save money. The government of Catalonia keeps delegations in cities such as New York.

But this foreign offensive could soon be scaled back. While the Foreign Ministry cannot prevent regional leaders from traveling abroad on an official visit, it will demand to be informed and "recommendations" will be issued regarding the convenience of the trip. Should the recommendation be disregarded, the government could withhold assistance from the relevant Spanish embassy. Any treaties or agreements between Spanish regions and foreign bodies will have to be first approved by Madrid to ensure they do not overstep regional powers of self-rule.

English version by Nick Lyne.