The President of the Independent Authority for Fiscal Responsibility (AIReF), Cristina Herrero, took part today in an event organised by the Societat Econòmica Barcelonesa d’Amics del País (Barcelona Economic Society of Friends of the Country) in collaboration with the daily La Vanguardia at the Palau Macaya of the La Caixa Foundation. The President gave a brief speech on the economic and fiscal outlook for Spain, after being introduced by the Chairman of the Economics Committee of Amics del País, Martí Parellada, and then held a discussion with La Vanguardia journalist Eduardo Magallón. The event was attended by the Councillor of Economy of the Regional Government of Catalonia, Alicia Romero; the Secretary of Economy, Francesc Trillas; the President of the General Council of Economists’ Associations of Spain, Valentí Pich; the Dean of the Association of Economists of Catalonia, Carles Puig de Trav, and the President of Amics del País, Miquel Roca, among other leading personalities.
Cristina Herrero began her opening address by highlighting how the creation of AIReF is a symptom of progress in the Spanish economy as it is a new institution that is overseeing fiscal sustainability based on the rigour and independence of its analyses. She then reviewed the economic and fiscal outlook for Spain and Europe.
The President of AIReF pointed out that, in the short term, the outlook for the Spanish economy is somewhat more favourable than was estimated a few months ago, with higher growth and a differential with respect to its European partners, and a public deficit and public debt showing a favourable dynamic after the impact of the pandemic and the energy crisis. However, if a longer-term view is adopted, we can see that growth is not based on a more efficient evolution of factors and that public finances are still under stress.
In this regard, she stated that Spain is facing major economic and budgetary challenges that make it particularly important to design a medium-term fiscal strategy that will enable it to meet the commitments made to the EU authorities in the Structural-Fiscal Plan submitted last October and assessed by AIReF on November 5th. This Plan, in her words, is very useful for European fiscal supervision, but it is not sufficient at a national level and hence it will be necessary to continue working both to specify the national strategy and to adapt the national fiscal framework to these European changes.
After the President’s opening address, a discussion took place with Eduardo Magallón, who asked Cristina Herrero about the risk of Spain not complying with the fiscal rules in the first year of application of these new rules. The President explained that the analysis has not been straight-forward and has been conditioned by the lack of relevant information in the Plan itself. At any event, AIReF considers that in the very short term the commitments appear to be achievable, but in the medium term their achievement will depend on the measures that can be adopted, as AIReF estimates higher expenditure than the Government’s forecasts and greater pressures on public debt.
When asked about the evaluations that AIReF performs, including the analysis of administrative mutual insurance companies, Cristina Herrero pointed out that the institution’s work in the area of evaluation focuses on analysing the effectiveness and efficiency of public expenditure and she welcomed the usefulness and impact that many of AIReF’s evaluations are having. Regarding the study on mutual insurance companies, she said that it was a very broad analysis of the cover and provision of the system, the characteristics of mutual members and their choice of healthcare provision and the analysis of both inpatient and outpatient care. The study, the publication date of which is to be decided by the administrative mutual insurance companies, will provide evidence and concrete proposals to strengthen the health dimension of the administrative mutual insurance system and improve its current set-up.
When asked about the report to be published by AIReF on the estimated impact of the measures adopted since 2020 to strengthen the revenue of the public pension system in the period 2022-2050, the President stated that the legal mandate AIReF received has limitations in that it requires the analysis to be carried out using a specific methodology, and it also has a series of substantive implications as it could lead to an automatic increase in contributions. In this regard, she stressed that AIReF is endeavouring to make an analysis that is as complete and up-to-date as possible and not limited to what is exclusively required by the regulations.
To conclude, regarding the challenges she has set herself for the last year of her term of office, Cristina Herrero said that she has set herself two main goals: to fulfil the commitments of the 2020-2026 Strategic Plan that she made to Congress and to pass on the next President a strong institution that is capable of tackling the most pressing challenges. In this regard, she recalled that AIReF has recently undergone an external evaluation that includes useful recommendations to enhance the functional autonomy of the institution, strengthen the supervision and evaluation functions, the guiding principles (Independence, Transparency and Accountability) and increase its impact. Many of these recommendations will be included in the next Action Plan to be published in a few weeks.