Euskadi Budgets: The Basque Government proposes the highest expenditure in its history to combat the pandemic

“It is an ambitious budget, the most powerful that the Basque Government has ever had, which allows it to face the year with enough force to face the economic and health crisis generated by the pandemic,” said the Minister of Finance of Basque government, Pedro Azpiazu, when presenting the draft Budgets for 2021. The total sum of the Budget for next year reaches the figure of 12,442 million euros. It is the highest amount of annual spending by the Executive in its history, in a context that is also unique since the Urkullu Cabinet must face the effects of Covid-19 on public health, to its impact on the most vulnerable sectors and, finally, to attend to the necessary relaunch of the economy. The proposal contemplates an increase in spending of 668 million compared to this year’s accounts, which represents an increase of 5.7%.

Azpiazu highlighted that if the financial burden, which is linked to public debt, is left aside, the increase in real spending available to the different departments amounts to 770 million, which represents an increase of 7.10%, with a very special impact on social policies, health and the reactivation of the economy. Thus, the Budget in matters related to health represents an increase of 236.6 million and 169 in Education.

On the other hand, the PNV-PSE coalition executive has planned a ‘Covid program’ of 542 million to face expenses generated by the pandemic and that is distributed among several portfolios. Further, the Executive has left 140 million for “contingencies”, which will be awarded throughout the year according to needs. 77.8% of the planned expenditure will be allocated to social policies. “Again, almost 8 out of 10 euros are allocated to Health, Education, Employment and Social Policies,” Azpiazu remarked.

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The counselor also highlighted in the presentation of the project the commitment to public investment, which will approach 1,000 million euros -without counting the South Bypass or the Basque Y railway line-, with an increase of 47 million compared to the current fiscal year. “We seek to stimulate the Basque economy for its recovery and face the challenges that existed as a country before the pandemic and the new ones that lie ahead,” he said.

Health, the main expense

The Health area will be, for another year, the one with the largest budget allocation, since its spending capacity will amount to 4,184 million, with an increase of 6%. Education will be the second in spending capacity with 3,108, while Labor and Employment will be the third department in this ranking, with 943.8 million. Vaccinations during the next fiscal year they will be financed with 14 million, This figure includes the fight against Covid-19 plus the usual immunization programs.

The estimate of income from taxes – the contributions transferred by the councils, which are actually the ones who collect the taxes – is moderately optimistic for next year. Thus, an increase of 6.3% has been estimated compared to the closing forecast for this year, which places the revenue section of the Vitoria Executive at levels similar to those of 2017.

The Government has budgeted that it will receive 9,619 million from the provincial coffers -853 less than this year-, which will force it to resort to public debt to fill the deficit hole. All this in an uncertain context, in which a growth of the Basque economy of 8.9% has been estimated, but that will be highly conditioned by the application of the vaccine against Covid-19, the recovery of normality and the healing of the wounds that this crisis will leave in the productive tissue.

“In terms of employed people, 15,100 jobs will be generated next year, recovering about half of the jobs lost in 2020, placing the unemployment rate at 10.7%, predictably,” said the Minister of Economy, who appeared together with spokesperson Bingen Zupiria.

Salary increase

The personnel costs of the Basque Administration will grow by 5.8%, as a result of the salary increases of civil servants and workforce, together with the workforce extensions. In relation to the salary of civil servants for next year, the Basque Executive will increase their salaries by 0.9%, in the same line that it has announced that the State will do it and that it has included in its Budgets. The basic salaries of the employees of the autonomous administration are linked to what the central government decides.

However, the Basque Executive announced this week that it wants to develop a broader negotiation with the unions on some issues -such as the partial retirements of workforce and relief contracts-, while reiterating its commitment to increase templates. In total, the Basque Government has announced the creation of 2,538 new places, of which 836 will be for the Education area; 700 to the Ertzaintza and 1,002 to Osakidetza.

Finally, Azpiazu clarified that although the transfer in the management of the Minimum Vital Income (IMV) is committed, as a result of the negotiations with Madrid to finalize the Statute of Gernika, for the moment no budgetary reservations have been made. “It will be done when the transfer valuations are signed and established,” he clarified.

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