- AIReF issued 12 new recommendations in the second quarter of 2025 aimed at strengthening the national fiscal framework, promoting compliance with the spending rule, and improving transparency
- Administrations are required to follow AIReF’s recommendations or explain why they are deviating from them
- The Government responds to AIReF that it is already working on transposing the directive on budgetary frameworks following the European reform, but told the Commission that it does not see the need to reform the Stability Law, a position that AIReF does not share
- AIReF updates the interactive tool that facilitates the monitoring of recommendations with information from the second quarter
The Independent Authority for Fiscal Responsibility (AIReF) today published on its website the follow-up to the recommendations issued to the public administrations in the second quarter of 2025, during which it made 12 new recommendations aimed at strengthening the national fiscal framework, promoting compliance with the spending rule, and improving transparency. These recommendations are governed by the principle of comply or explain, meaning that administrations are obliged to follow them or explain why they are deviating from them.
Given that the same recommendation may be addressed to more than one administration, 35 recommendations were issued in the second quarter: 8 to the Ministry of Finance (MINHAC), 1 to the Ministry of Economy, Trade, and Business, 1 to the Ministry of Inclusion, Social Security, and Migration, 19 to the autonomous regions (CCAA), and 6 to local corporations (CCLL).
National Fiscal framework
AIReF included several recommendations in its reports to strengthen the national fiscal framework. In the Report on the Evaluation of the Pension Expenditure Rule, it recommended integrating this rule into the national fiscal framework, aligning it with the objectives and deadlines of both the national and European fiscal frameworks. The Ministry of Inclusion, Social Security and Migration responded that work is already underway on the transposition of Directive 2024/1265 on budgetary frameworks and that the process is being led by MINHAC and the Ministry of Economy, Trade and Enterprise. In the Monitoring Report on the Medium-Term Fiscal and Structural Plan (PFEMP) 2025-2028, AIReF recommended that MINHAC begin this transposition as soon as possible and unify the calculation criteria for the national expenditure rule with those of the European fiscal framework, as well as incorporate the pension expenditure rule. MINHAC responded that it is conducting an in-depth analysis of national regulations to align them with the new European requirements. In response to the second recommendation, it stated that the national expenditure rule has points in common with the European rule that make them compatible, but it is working to ensure maximum consistency between them.
However, the European Commission’s report on the progress made by Member States in transposing the directive, dated June 30, shows that the government considers that, with a few exceptions related to climate risk, Spanish legislation already complies with the requirements of the new directive, and therefore the government does not consider it necessary to amend the Organic Law on Budgetary Stability and Financial Sustainability (LOEPSF). The AIReF does not share this position and considers that transposition offers an opportunity to articulate a genuine medium-term budgetary framework adapted to the national reality in order to comply with European commitments. Transposition also offers an opportunity to help eliminate discrepancies between the national and European frameworks.
Furthermore, AIReF recommended that the Ministry of Economy, Trade, and Business request approval of the macroeconomic table accompanying the Annual Progress Report or establish a technical dialogue with AIReF prior to its publication. The Ministry replied that approval is unnecessary as it is an administrative document that cannot be assimilated into the reports covered by the AIReF Law. It also pointed out that it already collaborates closely with the institution. AIReF, on the other hand, considers that this Report replaces the Stability Program Update, which required endorsement, and recalls that in May the report included a medium-term scenario different from that contained in the PFEMP.
Spending rule
In the Report on the Initial Budgets of the General Government 2025, AIReF recommended that MINHAC monitor budget execution and establish coordination mechanisms to ensure compliance with the national and European spending rule by all public administrations (AAPP). It also urged the monthly publication of net primary expenditure of revenue measures and the resumption of monthly publication of computable expenditure according to the national rule. MINHAC accepted both recommendations and indicated that it was evaluating the feasibility of providing such information.
At the regional level, AIReF recommended that each of the autonomous regions and the city councils of Murcia, Palma, Las Palmas de Gran Canaria, and the Provincial Council of Valencia monitor the execution of their budgets and adopt corrective measures where necessary. It also recommended that the autonomous regions publish their monitoring of the spending rule on their websites. Finally, it recommended that the City Council of Vitoria-Gasteiz monitor the execution of its budgets and, where appropriate, adopt the measures it deems necessary to avoid incurring a deficit in 2025.
All the Autonomous Regions undertook to monitor implementation and, where appropriate, adopt measures. Half of them undertook to publish monitoring data (Andalusia, Cantabria, Catalonia, the Region of Murcia, the Canary Islands, Galicia, the Community of Madrid, and the Balearic Islands). Of these, publication has been positively verified, except in the case of Galicia, which only provides historical data that does not allow for monitoring of the current financial year, and in the Community of Madrid and the Balearic Islands, where verification is still pending.
The Local Governments undertook to comply with the recommendation, with the exception of the Provincial Council of Valencia, which claimed the need to take measures to deal with the damage caused by the DANA. However, AIReF considers that these expenses are excluded from the calculation of the expenditure rule and therefore cannot justify non-compliance. In relation to these local and regional governments, AIReF also contacted their respective supervisory bodies and recommended monitoring to detect increases in expenditure or decreases in revenue that are incompatible with compliance with the spending rule and/or budgetary stability. The supervisory bodies, with the exception of the Álava Provincial Council, which did not respond, undertook to comply with the recommendation.
Transparency
In terms of transparency, AIReF recommended that MINHAC expand the information in the Annual Progress Report, but the Ministry responded that its content complies with European regulations. However, AIReF maintains that it does not contain sufficient information to adequately assess compliance with fiscal commitments. This lack of ambition reduces the medium-term orientation of fiscal policy, making it difficult to identify risks of deviation at an early stage.
On the other hand, AIReF recommended that MINHAC, in coordination with the Ministries of Economy and Defense, formalize an agreement or Memorandum of Understanding (MoU) for the regular provision of information, including information on military deliveries, court rulings, and other contingent liabilities, as well as on the implementation of the Recovery, Transformation, and Resilience Plan. MINHAC declined, arguing that information flows with AIReF are already regulated. In addition, it pointed out that it maintains close collaboration with the institution through regular meetings and continuous communication. However, AIReF continues to consider the information insufficient, which, in the current geopolitical context of particular uncertainty, conditions its reports.
