Catalan government refuse to extend spending cuts

 

The regional government of Catalonia are refusing to increase spending cuts to meet the demands of Spain's central-government in order to reach its budget-deficit goal, according to Andreu Mas-Colell, the Financial head of the Catalan government.

Catalonia surpassed the deficit target for 2010 with a shortfall equivalent to 3.9% of GDP, but has agreed to to cut non-financial spending by 10% for 2011. The new Cataln administration, which was elected to office in November, won't increase that amount. Mas-Colell gave the comments in an interview with a Catalan radio station yesterday.

Catalonia is the largest of the 17 semi-autonomous regions, which controls the health and education budgets and hires half of all public workers. Its budget deficit was the fourth largest last year after the new Catalan government predicted that the shortfall would be larger than the previous administration had forecast.

A finance ministry official from central government said that all regions had committed to the deficit target of 1.3% of GDP for 2011 after a target of 2.4% in 2010. The country has set a target of an overall budget deficit of 6% for 2011, compared with 9.2% for 2010, when the central government's efforts were offset by unimpressive results in the regions.