The Government of Spain continues its austerity drive by launching a reform plan that aims to cut ten billion euros from its health and education budget. On Tuesday, the Prime Minister Marino Rajoy assured the critics that the savings will be achieved solely by introducing “efficiencies” into the system, and not via decreasing services or making quality compromises.
The education services are administered by the Spanish autonomous region governments, so the PM hopes to enlist the local government support for his plan.
The government will seek “a greater rationalisation, the elimination of overlaps and efficiency in the delivery of major public services,” it said in a statement.
The government did not provide details on how it intends to streamline public services but said they would be outlined during a meeting at the beginning of May between representatives of the central government and the regions, which are mostly governed by the ruling conservative Popular Party.
Budget Minister Cristobal Montoro said the government planned to define in talks with the regions exactly what health, education and social care services must be provided.
The new initiative is part of the Spanish government’s attempt to comply with the European Union directive to cut its budget deficit to and reign in spending by its regions. The investor concerns over the feasibility of the government meeting this goal has driven Spain’s borrowing costs higher in the past week.
Spain must reduce its deficit to 5.3 percent of gross domestic product this year and to the EU limit of 3 percent of GDP in 2013 from 8.5 percent last year in a period of recession and high unemployment.
Last year, the regional governments ran a 2.94% budget deficit. This year, the central government is mandating a deficit of no greater than 1.5%.