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- Liva & Laia : 15th November
The Constitutional Court yesterday ruled that the central government has the right to impose limits on spending by the regions.
The move came just hours ahead of a meeting between the Minister for Finance and the Economy, Elena Salgado, and the financial Chiefs of the Regions to discus the proposed cuts.
It was actually the Catalan regional government who brought the suit before the Constitutional Court, claiming that the Country's Budgetary Stability Law superseded the responsibilities of the region, however, the Court held that the conduct of economic policy was the prerogative of the state.
The prime minister called for commitment from the regions in reducing their budget deficits for 2011 to 1.3% of GDP.
The country managed to reduce public deficit from 11.1% of GDP in 2009 to 9.2% in 2010, but this was due to austerity measures imposed by the central government. The regions, like petulant school children, largely ignored the demands made by Madrid and consequently their deficits have grown.