The President of the Independent Authority for Fiscal Responsibility (AIReF), Cristina Herrero, took part today in the workshop organised by the General Intervention Board of the State Administration (IGAE) ‘IGAE: Guarantee of integrity and reliability of the public accounts’ as part of the 150th anniversary of the institution. During the event, she was interviewed by the Comptroller General, Pablo Arellano, and they discussed the usefulness of AIReF in the accounting data prepared and published by the IGAE, the new European fiscal rules and the economic outlook.
The President reviewed the National Accounts data and information that AIReF uses for continuous monitoring of the budgetary cycle. She acknowledged the valuable work of the IGAE and its collaboration with AIReF and encouraged it to continue improving access to information that is highly relevant to AIReF’s activity. Specifically, she referred to the advisability of publishing the changes in the National Accounts, the information in the National Accounts on the Recovery, Transformation and Resilience Plan (RTRP) and certain aspects of the expenditure rule.
As regards the new fiscal rules, the President of AIReF identified three features of their design that set them apart from the previous framework: the attempt to improve national ownership of budgetary stability with medium-term Structural-Fiscal Plans proposed by each Member State; the rationalisation of supervision indicators, which are now based on expenditure net of revenue measures; and the aspiration to make fiscal stability compatible with economic growth.
She also highlighted the strengthening of Independent Fiscal Institutions (IFIs) such as AIReF, which are taking on a new function consisting of analysing the consistency, coherence and effectiveness of the national fiscal framework with respect to the European framework. In this way, AIReF revalidates its role as an ex ante supervisor to ensure the sustainability of public accounts, whereby it will also have to act as a link between the European fiscal framework and the national framework.
Cristina Herrero viewed this new design positively, but she pointed out that its success primarily depends on the willingness of the countries to implement it in accordance with the very principles guiding the reform. In this regard, she considered it was somewhat disappointing to kick-off with the presentation of the first Fiscal Plans.
Specifically, she stressed that not all the desired transparency has been achieved, since the European Commission’s reference trajectory was not made public until the Fiscal Plan was submitted to the EU institutions. Moreover, a genuine medium-term planning exercise has not been carried out, since the macroeconomic scenario underpinning the Fiscal Plan has been limited to the period 2025-2026 and the information on the measures is also limited. Neither has AIReF’s expertise been harnessed in drawing up the plan, nor has the General Government and other key stakeholders, such as Parliament, been involved in the first phase. And all this, despite the fact that the Commission encouraged this to be undertaken, even though it was not compulsory for this first round of plans.
On the need to make this new European framework compatible with the national framework, Cristina Herrero said she was in favour of unifying the criteria for the practical application of the national expenditure rule with the European expenditure rule, given that there are many differences in the way they are calculated.
When asked about the macroeconomic outlook, Cristina Herrero stated that AIReF revised its forecasts upwards when it endorsed the macroeconomic scenario on which the Structural-Fiscal Plan is based and called for a new Report on the Main Lines of the GG. However, in the longer term, she pointed out that greater dynamism was needed in investment and to improve productivity, areas in which the RTRP should play a major role.