The “uncertainties” of the Andalusian budget: 400 million because of the deficit and the criterion of the expenditure rule

A few weeks before the Andalusian government’s budget for 2025 begins its examination in the regional Parliament, the bill prepared by the Ministry of Economy, Finance and European Funds issues a warning. “There is total uncertainty over the model of tax rules and the quantitative references that will be applied to the autonomous communities. The deficit and public debt targets have not yet been approved,” the report said. This uncertainty regarding the deficit, which finds its origin in the lack of approval of the new stability path that the Spanish Government approved in the Council of Ministers but had to withdraw it before arriving in Parliament due to lack of support, has a translation concrete in figures. The difference between the approval or not of this route for each community is 0.2 points, which represents 400 million euros that could be spent if requested through a loan. Unless there is any surprise, the Junta de Andalucía undertakes to approve the accounts with a surplus of 0.1% given that it is not expected that by the start of the parliamentary process there will be a vote in the Congress of MEPs who will approve the new, more flexible trajectory of the deficit. There is a second uncertainty: the spending rule. That is to say, the limit that exists for the execution of public expenditure each year within which the effects of tax reductions that can be applied are also calculated. “The autonomous communities face technical difficulties in calculating the most relevant variable in the new European model of budgetary governance, such as the spending rule, which complicates the effective monitoring of compliance with the rules.” Financing systemBut for the Andalusian government, the real determining factor of regional accounts and public spending possibilities is the state financing gap, which it estimates at 1.5 billion euros per year. It’s not about receiving less funding. Quite the contrary. Next year, Andalusia expects an increase in the advance payments it receives from the State, as has happened in recent years. The financing gap occurs because in the distribution of resources, according to the Andalusian population, they would receive more money than they receive, as is the case in Murcia, Castilla La Mancha and the Valencian Community . “The financing system generates an annual loss of 1.5 billion euros. This reduction in resources allocated to the community has forced us to limit execution capacity in areas that are not directly linked to the provision of fundamental public services, creating a notable comparative grievance compared to other territories”, explains the report of the bill.

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