Airef pressures the Government to authorize the evaluation of the financial rescues guaranteed by the ICO




The Independent Authority for Fiscal Responsibility (Airef) hopes that the Government will give it the green light in the coming weeks to evaluate the effectiveness of the nearly 140,000 million euros of public resources committed to financing the
Financial bailouts for the self-employed, SMEs and large companies through the ICO guarantee line
during the worst of the pandemic. The president of the institution, Christina Herrerohas considered this Wednesday as "pertinent" to put under the microscope the largest public guarantee program in the history of Spain in the third phase of the public spending review exercise also known as 'spending review' and has recalled that the examination of the which has been the Government's main policy to support the business sector is a recommendation from Ecofin - the EU's council of finance ministers - and is already being carried out in countries like Italy or France.

Herrero has underlined that beyond the fact that it is a punctual policy of response to an exceptional situation, it is important to know if it was executed in the most efficient way possible, also because it is likely to have a significant impact on public finances and on the deficit in the event that the expected reimbursements do not occur. The new director of the Public Expenditure Evaluation Division of Airef, Jose Maria Marriedhas also stressed that the analysis is of particular interest from the perspective that Spain has opted for the path of providing financing to companies and not giving them direct aid, as has happened in other countries, and it is a way of knowing to what extent point that decision has been correct.

From Airef it is understood that the evaluation of the aid from the ICO guarantee line is implicit in the commitments acquired by the Government of Spain with the European Commission within the framework of component 29 of the Recovery, Transformation and Resilience Plan, in which it is stated that the Ministry of Finance will submit a proposal to the Council of Ministers to include in the public spending review process the 'Lines of loans, aid and other financial instruments to the business fabric by public sector entities '. But the institution also recognizes that it cannot do anything as long as this evaluation is not included in its Action Plan for 2022, whose approval corresponds to the Council of Ministers.

The ICO guarantee line is by far the most important, but it is not the only program of lines of loans, guarantees or guarantees financed by the State. There are also some 8,000 million euros of aid for internationalization, R&D, industry, digitization or tourism. The Independent Authority understands that it would not make sense to evaluate this aid and ignore the examination of the 140,000 million of the ICO lines.

Lack of dialogue with the government

Part of the uncertainty regarding the issue of the Independent Authority for Fiscal Responsibility comes from the lack of dialogue with the Government when defining the policies to be evaluated in the 'spending review' for the 2022-2026 period. Component 29 of the Spanish Government's operating contract with Brussels provides for the "joint and coordinated selection with Airef" of the policies to be evaluated, but the institution admits that at least to date that dialogue has not taken place.

The president of Airef has been explicit in expressing that she hopes that the Action Plan do not present a closed list of policies to be evaluated rather, it allows the Tax Authority some room for maneuver when it comes to including certain fields that are understood to be important to examine.

Another source of uncertainty that worries the body is the access to necessary information to carry out their work, information that is not flowing with all the agility that would be advisable. Airef, for example, had the legal mandate to carry out an initial evaluation of the operation of the Minimum Living Income (IMV) in the first quarter of the year, but today they are still waiting for the signing of an agreement with the National Institute of Social Security and the Tax Agency in order to have the necessary information to carry out this evaluation.

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