the moment of truth for Feijóo and his ‘viceroys’

The difficult thing, the really brave thing, is to lead by example. The PP, which has criticized so much the plugging and the tendency to waste of the coalition government, has before it the opportunity to clean up and modernize regional economies weighed down by atavistic debts. That change demands decisions as unpopular as reducing the political command cadres or identifying which organizations -and which jobs- are redundant. Will the new autonomous ‘viceroys’ dare to put the bell on the cat?

With the signing, this week, of the economist Luis Garicano, Alberto Núñez-Feijóo he launches a trial balloon at his ‘generals’. The former ‘economic brain’ of citizensliberal, defender of budgetary rigor and greater austerity, has always criticized the “clientelistic system” prevailing in the Spain of the autonomies. “The improvisation that has characterized the construction of the autonomous state has led to the paralysis. Neither the autonomous communities nor the State are capable of acting decisively to tackle the problems that afflict Spain”, he writes in his essay The Liberal Counterattack.

Some of Garicano’s recipes, ‘ministrable’ if Feijóo wins in the generals, point in the direction that the most healthy autonomy has marked for a long time: the Madrid’s community. On a recent visit to London, Isabel Diaz Ayusodefended his “Spanish-style liberalism”an economic and social model that, in his opinion, has allowed Madrid to take off, “while other regions become shielded and impoverished”.

Leaving affinities and antipathies aside, and without entering into hot debates (such as health), the truth is that numerous ‘objective’ indicators allow the PP in Madrid to poke their chest. These same variables place the regional socialist leaders who are at serious risk of losing this Sunday at the polls in the group of bad managers. Let’s go to the figures.

An electoral turnaround would give the PP candidates a unique opportunity to clean up and modernize regional economies weighed down by bad decisions. That change requires unpopular decisions. Will they put the bell on the cat?

In its latest revision of deficit forecasts, the Independent Authority for Fiscal Responsibility (AIReF) worsened the outlook for twelve autonomous communities. The cause is the deviation of the accounts at the end of 2022. The forecasts “worsen in most of the Autonomous Communities, with special incidence in Canary Islands, Valencian Community, Castilla-La Mancha, Aragon and Castilla y León“, says the AIReF.

Far from balancing their numbers, the autonomies that are most at stake this Sunday have continued to increase the gap. “The CCAA as a whole closed 2022 with a deficit of 1.14% of GDP, the highest record since 2015, despite the context of strong collection in recent years. The worsening of their budget balance has led them to accumulate in 2022 the highest debt levels in absolute terms of the entire historical seriesreaching 316,937 million euros (23.9% GDP)”, recalls in a recent report Economic Team (EE).

The fact that spendthrift governments abound is demonstrated by a fact: revenues have grown strongly, but expenses have grown even more vigorously. Specifically, the former advanced a 19% between 2019 and 202, “thanks to the increase in resources that come from taxes and current transfers,” recall US economists. The second item grew in the same period by 20,9%“fundamentally due to the growth of personnel expenses, current expenses and current transfers”.

The INE statistics accurately reflects how the payroll bill has skyrocketed. Since 2019, in the period that has included the pandemic and the war in Ukraine, the autonomous governments have created almost 257,000 public jobs. They account for 82% of the total generated in all public administrations. A good part of the income is also attributable to the CCAAs. 10,900 new jobs linked to companies and public institutions. Hiring in the autonomous communities grew by 14% in that period, compared to 5.3% in the town halls and a fall of 0.5% in the central administration.

The regional governments that have expanded their staff the most are socialist. Throughout 2022, Canary Islands increased contracting by 4.1%, followed by Aragon (3%) y The Rioja (2.7%). The communities that have more public employees with respect to the total employed in the region are also governed by the PSOE. at the head is Estremadura (12.6%), followed by Asturias (11,1%) y Aragon (9.8%). The average in Spain, which serves as a reference, is 7.9%. Madrid is below (6.3%).

The community led by Díaz Ayuso, shielded economically by Javier Fernandez-Lasquetty, appears as the first in the class in different indicators. Again according to the EE report, at the end of 2022 it was the most exemplary in collection efficiency. That is, in getting the most out of taxes.

also featured the lowest structural expenses and the best efficiency ratio. The latter reflects “the percentage that the expenses caused by the ordinary operation – personnel expenses and expenses of goods and services – represent over the income collected by the Autonomous Communities in terms of taxes and fees”, recall from the team of economists led by Ricardo Martinez Rico.

The Community of Madrid is opening a path through which the rest of the regional presidents and those aspiring to be can travel. He is also passing with excellent marks the exam to the Andalusia of Juanma Moreno. The autonomous community has a long way to go in terms of employment, but it has improved considerably in markers such as the deficit (0.7% in 2022) or GDP (1.7% since 2019). The Madrid and Andalusian governments, in addition, have managed to place debt in the marketsunlike the vast majority of autonomies that are financed in the General Regime.

In the economic field, Díaz Ayuso and Moreno are a source of pride for Núñez Feijóo and provide a beacon for the possible winners on election night this Sunday. For the same reasons of success, the one from Madrid and the Andalusian also represent a future threat to the Galician leader. But that battle does not touch, for now.