Madrid orders Junta to cut back 2020 budgets due to overspend by previous administration

Junta president Moreno (l) with Susana Díaz on Thursday.
Junta president Moreno (l) with Susana Díaz on Thursday. / EP
  • The PP-Cs coalition regionally is outraged by the irony of the move as it refers to debt run up in 2018 when the PSOE were in power and who also control the acting national government

There was outrage in the Junta de Andalucía this week when it found out that Madrid was going to intervene in the devolved regional government's spending for the coming year, ordering cuts or adjustments to the recently approved 2020 regional budget.

The Partido Popular (PP) and Cs coalition in regional government in Seville criticised the acting prime minister, Pedro Sánchez, for cutting back its regional spending plans, when it was, ironically, Sánchez's PSOE party itself in power in 2018 in Andalucía that caused the overspend.

Under a budgeting law for Spain's public authorities, Andalucía had not been allowed to run up debt of more than 0.4 per cent of the regional gross domestic product (GDP) in 2018. However, in the last quarter of that year, an extra 831 million of unforeseen expenditure was made, pushing the debt up to 0.51 per cent of GDP, meaning the region broke Madrid's spending rules.

Even more ironic for the regional president, the PP's Juanma Moreno, only in power since January, was that the order to cut back in 2020 has come from the Finance ministry in Madrid headed by María Jesús Montero, who was the PSOE regional minister for Finance in Andalucía for part of the year the overspend took place.

The order from Madrid says that the national government has to approve regional spending plans and the Junta de Andalucía cannot raise debt on the markets in 2020. The acting national government's letter said that Andalucía could resort to a centralised support fund for the regions, but this means it needs to make cuts to the 2020 budget. This year the new PP-Cs regional government had managed to place 1.32 billion euros of debt on the markets.

While the regional government said this was intervention by stealth, the Finance ministry in Madrid explained that all regions had to abide by the rules before they went to the markets and that the Valencia and Murcia regions also didn't comply in 2018. It wasn't clear whether they had had a letter as well.

Arguments in parliament

In the Andalusian parliament's last session before Christmas on Thursday, Juanma Moreno clashed heavily with opposition leader, the PSOE's Susana Díaz, who was also the Junta president in 2018.

Díaz accused Moreno of lying over Madrid's intervention in the accounts, saying it was routine and that Moreno still had ten days to fulfill the deficit objective in his spending plans.

Moreno told her, "We're here to build a new Andalucía and absolutely nobody is going to stop us, least of all the government of Pedro Sánchez with the complicity of the PSOE party in Andalucía."