- The President states that AIReF is a much-needed institution and she intends to establish its durability and usefulness for society, as well as to strengthen the institution’s independence, transparency and accountability
The President of the Independent Authority for Fiscal Responsibility (AIReF), Cristina Herrero, today received the “Grand Cross of Merit in Service to the Economy”, awarded by the General Council of Economists, at its meeting of the Assembly of Deans of all Spanish Associations of Economists and Qualified Financial and Economic Experts. With this award, the General Council of Economists wishes to acknowledge her professional career and high technical profile, as well as the work carried out at the head of AIReF.
Cristina Herrero gave her thanks for the award, which she also considered a recognition for the economists who work in public service and, especially, for the institution she heads up and that she has been part of since its creation. In her words, AIReF is a necessary institution in Spain for improving the quality of the budgetary process that has come to stay. It is also a unique institution due to its independence and functional autonomy. “My aim is to establish its durability and usefulness for society as a whole, as well as to strengthen the three pillars on which its actions are based: independence, transparency and accountability,” she said.
According to the President, the creation of AIReF has resulted in a substantial change and a new development, since, for the first time, annual budget planning begins to be subject to external surveillance: AIReF reports on economic forecasts, draft budgets and their approval and, finally, their execution. It performs more of a prior warning and informative function than an ex post monitoring and sanctioning function. It also incorporates a medium-term vision as it is entrusted with ensuring the sustainability of public accounts, which requires going beyond the fiscal year. AIReF must perform these functions taking into account the decentralised territorial reality, which makes the institution part of the budgetary process of governments at all levels and ensures the sustainability of each and every one of them.
AIReF was also created with a unique institutional configuration due to its independence and functional autonomy. It is the EU that requires the euro countries to have a legal basis which, while respecting specific national features, safeguards these institutions from political interference and provides them with sufficient resources to carry out their functions.
AIReF is not financed from State budgets, but from a fee paid by all General Government (GG) sub-sectors, which provides it with independence. In addition, it is created by means of an organic law in order to be able to exercise its powers at all levels and to be able to subject all GG sub-sectors to the duty of collaboration by providing information. As in the case of the Netherlands, a single-person management format has been chosen, but with demanding appointment requirements. And it incorporates a new principle in the work of the GG sub-sectors, which are subject to the ‘comply or explain’ principle.
“This type of institution was needed in the national economic sphere,” noted Cristina Herrero, after stating that the fact that there is an institution that has a high level of information and that can offer society as a whole its impartial and objective analysis without the interest that the various governments or private entities or stakeholders may have is the chief success of the creation of AIReF.
Nevertheless, AIReF does not have all the functional autonomy it would like, nor is it exempt from the political temptation to limit its independence. For example, even with financial resources, the institution has limitations that affect its staff management capacity. Furthermore, it is not an effortless institution and it has to defend its independence every day.
Looking ahead, Cristina Herrero intends to establish the durability of AIReF and its usefulness for society as a whole. This is one of the objectives contained in the 2020-2026 Strategic Plan, which also commits to strengthening the three pillars that guide the institution’s actions: independence, transparency and accountability.
In her view, there is scope for institutionally strengthening AIReF to ensure its sustainability. Specifically, she does not rule out legal changes that will allow the institution to be more efficient in managing resources and the possibility of having a multidisciplinary team and a budgeting system that does not slow down its activity. In addition, if there is eventually a change in the EU’s fiscal governance model, a window will be opened to strengthen AIReF, since the new model will be less based on fiscal rules and more on independent institutions as a way to integrate specific national features into fiscal discipline.
To conclude, Cristina Herrero reviewed the current economic context, which is difficult and highly uncertain, in which sustainability should be a lever for recovery as persistently high levels of debt over prolonged periods can be detrimental to economic growth and a source of vulnerability for the economy.
In addition, while the fiscal framework has been on hold, supervision has been ongoing and the expectations of recovery have been revised downwards for the end of this year and for next year and are subject to higher than usual levels of risk. For their part, fiscal forecasts are being surpassed by reality, with a significant increase in revenue, which means that the Central Government and the Autonomous Regions are recording a sharp increase in revenue that is purely short term. In this context of maximum uncertainty, there is a need for economic and fiscal reviews that lay the foundations for a comprehensive economic strategy, with a medium-term vision that provides certainty and predictability to public action.
“And this is where I see AIReF’s contribution to the economy and society as a whole, by providing objective data and analysis that will allow evidence-based decisions, even when these may eventually be adopted for different reasons”, concluded AIReF’s President.
CV Cristina Herrero
Cristina Herrero was appointed President of the Independent Authority for Fiscal Responsibility (AIReF), after deliberation by the Council of Ministers, with the unanimity of all the parliamentary groups. She had already taken on the interim presidency of the institution as from January 13th, 2020. Cristina Herrero has been part of AIReF’s management team since its foundation. She became Director of the Budget Analysis Division in 2014, thus becoming the first head of one of the institution’s main functions as a guarantor of budgetary stability and the sustainability of public finances.
She began her career at the General State Comptroller (IGAE), where she served between 1993 and 2000 as Head of Department, in the Sub-directorate General of Economic Analysis and Accounts of the Public Sector, and between 2000 and 2005 as Coordinator of the preparation of the General Government Sector Accounts. During this stage, she was responsible for relations with the International Monetary Fund within the framework of the agreement on Special Data Dissemination Standards (SDDS). Between November 2005 and March 2014, she was Deputy Director-General of Budget Analysis and Institutional Organisation of the Regional Public Sector of the General Secretariat for Regional and Local Coordination, performing functions of supervision and monitoring of the Autonomous Regions in the field of budgetary stability and financial sustainability, as well as the processes of reorganisation of the regional public sector and financing mechanisms enabled by the State for the payment of suppliers.
She holds a Bachelor’s Degree in Economics and Business Studies from the Complutense University of Madrid. She is an active civil servant in the Higher Corps of State Comptrollers and Auditors and a civil servant on leave of absence from the Higher Corps of State Treasury Inspectors. She has participated in various working groups, including, Calculation of Fiscal Balances, Analysis of Healthcare Expenditure, Technical Committee of the Special Commission for the improvement of Dependency and Working Groups of the Council for Fiscal and Financial Policy.