Airef urges the withdrawal of anti-crisis measures to face the return to the deficit limit

In the middle of her six years in office, the president of the Independent Authority for Fiscal Responsibility (Airef), Cristina Herrero, has taken the opportunity to take stock, concluding that a legal reform is necessary to expand its supervisory capacity.

In turn, after analyzing the situation of Spanish finances, Herrero urges the political class to reach major agreements that allow the anti-crisis measures to be withdrawn and public accounts to be rebalanced in the face of the reactivation of fiscal rules.

In a video released by Airef itself with the assessment made by its president, Herrero reflects on the battery of initiatives deployed to alleviate the effects of the pandemic first and the energy and inflation crisis later.

"The measures that have been put on the table have contributed to mitigating the effects not of one crisis but of a succession of crises on economic growth, household income and employment. But the time has come to gradually withdraw those measures," he argues.

"Once the measures that have been adopted in recent years have been completely eliminated, the deficit stagnates at around 3% and that implies that the debt ratio stabilizes slightly above 100%. Nobody will care about that. It is clear that it is a situation that puts us in a vulnerable position in any context and much more so in the current context of tightening monetary and financing conditions," he warns.

From there, Herrero recalls that in 2024 the European fiscal rules suspended since the outbreak of the pandemic will be reactivated, which means returning to be governed by a deficit limit of 3% of GDP and 60% public debt. Corsets before which it will be necessary to present a credible budget consolidation plan.

"The fiscal plan has to guarantee that the debt is on a downward path not only in the four years of the plan's validity, but also in the following ten years.

Taking into account the high level of debt that we have, more than 100%, which places us in a vulnerable position, taking into account the challenges that we have on the table in terms of aging, ecological transition or international commitments, expenses for example as that of defense, that requires there to be the greatest possible consensus. I would say that there should be a country agreement," explains Herrero.

When analyzing the main challenges of the budgetary outlook, the president of Airef highlights that "we have a vulnerable fiscal position if we measure it in terms of debt ratio. I have said before that the ratio is currently above 100% and Airef does not see that In the current context, nor with the challenges ahead, will that ratio go down." "If we also take into account the challenges we already have at the end of this decade, the challenge of population aging already has substantive effects on public accounts," she adds.

Regarding the role of the financial authority, Herrero considers it necessary to make its evaluative role official.

"I believe that it is time to modify our organic law, which is not easy due to the majority that is required, because the evaluation requires the development and protection that our other function has, which is fiscal supervision in the macroeconomic field. and budgetary. Therefore, if I had known that this was the transition that Airef was going to have, I would have incorporated the evaluation function with the same guarantees as supervision," he argues.

Finally, Herrero confesses that personally he would like to extend his mandate for another 6 years once the current one ends. However, he clarifies "from an objective point of view, which is what I claim for Airef's analysis, I think it is good that the mandate is for six years and cannot be extended."