de diapositiva

MINISTERIO
DE ECONOMÍA
Y HACIENDA
Dealing with a change in the economic growth
pattern, high unemployment and the need for
fiscal sustainability
Elena Martín Córdova
Doha, November 2009
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MINISTERIO
DE ECONOMÍA
Y HACIENDA
General Outlook
I. Special features of the Spanish crisis and the
fiscal stimulus Plan.
II. The impact of the crisis on the budget.
III. Main challenges for the budget:

The need for fiscal sustainability.

Public debt.

The exit strategy.
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MINISTERIO
DE ECONOMÍA
Y HACIENDA
I. Special features of the Spanish crisis and the fiscal stimulus Plan
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MINISTERIO
DE ECONOMÍA
Y HACIENDA
Special features of the Spanish crisis:
property bust and non financial crisis
There is a double crisis in Spain:
 The international global crisis- The Spanish Economy is the second
most open economy in Europe.
 The internal housing slump- Adjustment more severe than expected.
Main features of the Spanish crisis:
 The property bust.
 High unemployment.
 Sound banking sector: there haven´t been any bank bailouts.
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MINISTERIO
DE ECONOMÍA
Y HACIENDA
Spanish Plan to stimulate the economy and
employment
2. Companies
1. Families
Plan E
Strategic items
4. Financial and
budgetary measures
3. Employment
5. Economic modernization
 Coordinated with the European Economic Recovery Plan.
 More than 100 measures included.
Fiscal measures amounted to 1,8% of GDP in 2008 and to 2.3 % of GDP in 2009.
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MINISTERIO
DE ECONOMÍA
Y HACIENDA
Spain had a good fiscal position at the beginning
of the crisis
Public debt in the EU 2008
Growing surpluses 2005-2007
As a percentage of GDP
As a percentage of GDP
120,0
2,5
2,0
1,5
1,0
0,5
0,0
-0,5
2,0
2,2
105,7
100,0
80,0
1,0
65,6
68,7
67,1
60,0
50,1
39,8
40,0
20,0
2003
2005
2006
2007
0,0
ITALY
GERMANY
FRANCE
UNITED
KINGDOM
EUROZONE
SPAIN
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MINISTERIO
DE ECONOMÍA
Y HACIENDA
Job creation measures
 Local Investment Fund for Local Authorities
(In 2009: € 8 billion / In 2010: € 5 billion)
 Fund for Economic Reactivation (€ 3 billion)
 Tax allowances in the Corporate Income Tax to boost
employment
 Measures to support strategic sectors, for example, the
automobile industry.
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MINISTERIO
DE ECONOMÍA
Y HACIENDA
Financial Measures
Main goals:
 to underpin the financial sector and to prevent a financial
institutions crisis
 to inject liquidity into the financial system
• Budget fund to buy assets: €30-50 billion
• Public guarantee of €100 billion
• Deposit guarantee fund has been raised to €100,000 per client
and per bank
• Fund for Ordered Bank Restructuring (€9 billion)
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MINISTERIO
DE ECONOMÍA
Y HACIENDA
II. The impact of the crisis on the budget
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MINISTERIO
DE ECONOMÍA
Y HACIENDA
The economic downturn has affected
public finances
Saldos presupuestarios en varios países de la UE 2005-2009
Porcentaje
del PIB
Budget
deficits forecasted for 2009 (%GDP)
Crecimiento en varios países de la UE 2004-2010
Economic
Tasa
de variación growth in EU countries (%GDP)
4
4,5
2
3,5
ITALIA
2,5
1,5
0,5
-1,5
-2
FRANCIA
-4
REINO UNIDO
-6
ZONA EURO
-2,5
0
ALEMANIA
-0,5
Alemania
Reino Unido
Francia
-8
Italia
-10
-3,5
ESPAÑA
-4,5
-12
-5,5
-14
2004
2005
2006
2007
2008
2009 (F)
2010 (F)
Fuente: Comisión Europea, FMI, Proyecto PGE 2010
Source:
European Commission and Spanish Draft Budget 2010
España
2005
2006
2007
2008
2009 (p)
Fuente: European
Commission,Commission
Economic Forecast, and
spring 2009.
Para España
2009,Budget
proyecto PGE
2010.
Source:
European
Spanish
Draft
2010
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MINISTERIO
DE ECONOMÍA
Y HACIENDA
The functioning of automatic stabilizers
during the crisis
 During 2008: There was a significant difference between the budget
passed and the execution. Quick reaction of automatic stabilizers.
Expected surplus
Deficit in budget execution
 In 2009: Free functioning of automatic stabilizers
 An increase in unemployment benefits
 A fall in tax revenues (emphasized by previous fiscal
allowances)
 Budget for 2010: The recovery may start but the consequences of the
crisis in the labour market will continue.
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MINISTERIO
DE ECONOMÍA
Y HACIENDA
Strong impact on the labour market
TASA DE PARO
Unemployment
rate
Media anual
18.0
16.0
14.0
12.0
10.0
8.0
6.0
4.0
UE
EU
2.0
Zona
EuroEuro
zone
España
Spain
EEUU
United States
0.0
2000
2001
2002
2003
2004
2005
2006
2007
2008(E)
2009(P)
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MINISTERIO
DE ECONOMÍA
Y HACIENDA
Fiscal revenues
Evolución de los ingresos del Estado
En millones de euros
Fiscal revenues trend (Million Euros)
170.000
160.000
150.000
140.000
130.000
120.000
110.000
100.000
90.000
80.000
70.000
60.000
50.000
2002
2003
2004
2005
2006
2007
2008
2009 (p) 2010 (p)
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MINISTERIO
DE ECONOMÍA
Y HACIENDA
III. Main challenges for the budget
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MINISTERIO
DE ECONOMÍA
Y HACIENDA
Challenges for the budget:
the need for fiscal sustainability (I)
Real GDP
Public budget balance
(% GDP)
2010
-0,3
2011
1,8
2012
2,7
-8,4
-8,1
-5,2
-5,2
-3
-3,0
Spending limit for 2010: Homogeneous non-financial spending (Million Euros)
3,9%
192.736
2009
185.249
2010
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MINISTERIO
DE ECONOMÍA
Y HACIENDA
Challenges for the budget:
the need for fiscal sustainability (II)
Is there any fiscal space?
Local
From the side of public spending:
 Austerity measures.
Fund
2%
UnemploymentDesempleo
9%
benefits 9%
From the revenue side:
 increase taxes,
 fiscal benefits,
 strong fight against fiscal
corruption
Otros gastos
Other
spending
2%
2%
Fondo local
3%
Ministries
Gastos
Spending
ministerios
30%
30%
Interests and
other
Intereses
y otros
gastos no
nof discretionary
discrecionales
spending 27%
27%
Financiación AATT
Transfers
to
29%
subcentral
Governments
29%
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MINISTERIO
DE ECONOMÍA
Y HACIENDA
Public debt
 Direct impact on the
budget (interests burden).
Deuda pública 1996-2010
Public debt 1996-2010 (%GDP)
Porcentaje del PIB
80
 According to the EU, new
medium-term plans are
neccesary to reduce the
public debt < 60% GDP.
Zona Euro
60
40
% intereses/presupuesto no financiero Estado
España
20
 Public finances sustainability
needs to incorporate longterm perspective.
0
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
(f)
CCAA
17 17
MINISTERIO
DE ECONOMÍA
Y HACIENDA
Exit strategy:
A change in the economic growth model
 The exit strategy should take into account what cause the current
crisis: An economy excessively dependent on one sector.
 Shift to a sustainable economic pattern based on: R+D, infrastructures
and education.
 Changes in the legal framework:
 Sustainable economy draft law
 Draft law to make the service sector more dynamic
 The withdrawal of the fiscal stimulus measures will be gradually not to
hamper economic growth
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MINISTERIO
DE ECONOMÍA
Y HACIENDA
Final remarks
Is this a cyclical crisis or…
… a crisis of the economic model?
 New role for the budget
 New role for the State
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MINISTERIO
DE ECONOMÍA
Y HACIENDA
Thank you so much
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