It will be formed by a president and several division directors and their task will focus on reporting on the budget cycle
The Government has approved the draft Organic Law that allows the creation of the independent tax authority and introduces mechanisms of supervision and transparency to all public administrations, as has been advanced by the Vice President and Government Spokesperson, Soraya Sáenz de Santamaría, at the Subsequent press to the Council of Ministers.
Santamaría explained that this draft also meets the European directive that regulates the budgetary frameworks of member countries, which establishes the need for an independent fiscal institution in the country that performs “reliable and independent” analyzes of the evolution of the accounts
The new fiscal authority, similar to those that exist in other countries of the European Union (EU), will be a public and independent entity with its own legal personality. Its main function will be to guarantee effective compliance with article 135 of the Constitution, which was reformed by the Government to guarantee budgetary stability and financial sustainability.
The Minister of Finance and Public Administration, Cristóbal Montoro, explained that the new body will operate under the name of Independent Authority of Fiscal Responsibility, and its creation responds to the “emphasis” of the Government when reinforcing the country’s institutional architecture to defend budgetary austerity in all administrations.
In addition, the Executive has done so following the recommendations of the European Commission, many of them included in the Memorandum of Understanding (MoU) signed after the granting of an aid of 100,000 million euros to clean up the Spanish financial system. “It is a step in the construction of the channels through which European governance must go,” he said.
The authority, according to Montoro, is configured as a public law entity with a specific regime with the aim of guaranteeing the application of the principle of budgetary stability in all administrations. To achieve this, it is created through an organic law that allows its scope to be extended to the entire public sector, and it is given legal personality and full public and private capacity to guarantee its performance.
Montoro has explained that it will be an agency attached to the Ministry of Finance, but without dependence on any of its areas. “Attached directly to the Minister,” said Montoro, after ensuring that its configuration will be similar to that of the National Statistics Institute (INE), one of the most reliable agencies in the world.
President appointed by the council of ministers
The body will have a president appointed by the Council of Ministers for a term of three years, which can be extended to three more years, so that he can hold the post for a maximum of six years, a period that goes beyond the legislature to guarantee the objectivity and independence of the organism. Before being appointed, he will have to appear in Parliament.
The fiscal authority will also have division directors who will also be appointed by the Council of Ministers at the proposal of the president of the organization. These directors must have an experience of at least ten years in matters specific to the division they are going to occupy.
With the creation of this body, according to Montoro, a technical committee of national accounts was institutionalized and already worked with representatives of the general intervention of the State, the Bank of Spain and the INE. “We give the committee a formal body and capacity to materialize the country’s national accounts,” he said.
Prepare reports and opinions
The functions of the new fiscal authority will focus on analysis, advice and control in relation to budget policy. Thus, it will prepare mandatory and non-binding reports so that, if the Administration to which the report is directed departs from the given criterion, it must motivate it.
In particular, it will decide on the own initiatives of the administrations that affect to matters anticipated in the law of budgetary stability. Thus, it will evaluate the macroeconomic forecasts, which should have a favorable report, and the stability program, and will monitor the budget execution, the public debt and the application of the expenditure rule foreseen in the law.
In the same way, it will calibrate the economic and financial plans of the State and the Autonomous Communities and present a report on the establishment of individual deficit targets that will be sent to the Treasury within ten days of the approval of the overall deficit targets in the Council. of Ministers.
Montoro has assured that the new organism does not “annul” competencies to the Ministry of Finance, but that it will confine itself to making reports that will later be made public over the whole budgetary cycle, in the same way that the Governor of the Bank of Spain appears in the Congress and in the Senate to assess compliance with the Budget.
The “most advanced” body
According to Montoro, the task of the new authority will be “to be present” in the evaluation of the entire budget cycle in all administrations. “It is an independent institution with functional autonomy that will guarantee compliance with the stability principle,” he said, after ensuring that he will have the most experienced and knowledgeable people to collaborate in the task of overcoming crisis from parameters of “reliability and trust”. “
The minister assured that this new project, which will now go to the Council of State and the Fiscal and Financial Policy Council (CPFF) and the National Commission of Local Administration, will allow Spain to have the “most advanced fiscal authority in the developed world” “because it will be the closest to the European directive on this matter.