The President of the Independent Authority for Fiscal Responsibility (AIReF), Cristina Herrero, spoke today at the PwC Legal Forum, emphasising the importance of a robust institutional framework for public finances in any economic climate. In fact, in her opinion, periods of growth are the most opportune time to undertake structural reforms that ensure the stability and sustainability of the public accounts.
Cristina Herrero pointed out that Spanish public finances are showing a positive upward trend, with an improvement in the forecast deficit to 2.6% of GDP in 2025 — 2.4% if the effect of the Isolated High Altitude Depression (DANA) is excluded — while debt is on a downward path. This improvement is supported by strong tax revenue growth of more than 10% year-on-year and the resilience of the Spanish economy, whose growth forecasts for 2025 are already around 2.6-2.7%.
However, she warned that this dynamic revenue growth is also accompanied by an increase in net primary expenditure, which will exceed the annual commitment of 3.7% set with the European Union, reaching estimated growth of around 4.6%. Although this deviation would not trigger corrective measures, the President emphasised that maintaining fiscal discipline is crucial to consolidating the credibility of the new European framework and preventing future tensions.
In this context, Cristina Herrero considered that Spain has shown a lack of ambition in translating the new European framework into national policy, limiting itself to complying with the minimum requirements of the regulations. The Medium-Term Structural-Fiscal Plan (MTP), she explained, was not consulted with the Autonomous Regions or debated in Parliament and lacks a comprehensive macroeconomic scenario and concrete measures, which prevents genuine national ownership.
Absence of budgets
In her opinion, this lack of ambition is compounded by the absence of a Budget and a Budgetary Plan for 2025, as well as delays in preparing the 2026 Budget. According to the President, this institutional situation limits the foreseeability of the system, hinders coordination between General Government (GG) authorities and reduces medium-term planning, especially in a decentralised State such as Spain.
In this regard, she emphasised that a robust institutional framework provides foreseeability, strengthens accountability and improves coordination between GG authorities, ensuring that planning is consistent with European requirements. However, she added that, to achieve a robust framework, it is not enough to be ambitious when implementing the new European framework or our current national fiscal rules, but that regulatory changes will need to be introduced to overcome the discrepancies and incompatibilities that currently exist and that generate uncertainty, hinder coordination and can undermine credibility.
Opinion on the reform of the national framework
Cristina Herrero announced that AIReF will publish an Opinion on the Reform of the Spanish Fiscal Framework in a few weeks, with proposals to align the national framework with the European framework, revise supervision and control mechanisms, and strengthen the transparency and consistency of the tax system. She also stated that many improvements can be made without the need for legal changes, through best practices, regulatory developments and procedural updates.
In conclusion, she reiterated that institutional strength is an essential pillar of good fiscal governance. She stressed that the current context of growth and stability represents an opportunity to undertake reforms that strengthen the sustainability of the public finances before less favourable circumstances test their resilience.
