Bloomberg News

Spain to Implement Program to Cut Public Sector Overlap, Costs

June 21, 2013

Spain plans to eliminate overlap in the civil service and improve efficiencies in an effort to cut 37.7 billion euros ($49.8 billion) in costs, Deputy Prime Minister Soraya Saenz de Santamaria said.

The cost savings are being achieved from 2012 to 2015, Saenz de Santamaria said in a televised media conference today. The savings will also come from proposed changes by local governments.

Prime Minister Mariano Rajoy’s cabinet approved a report with 218 measures, of which 78 affect the central government and the remainder Spain’s regions. The program is part of government initiative to trim Spain’s budget deficit of 10.6 percent of gross domestic product, the widest in the European Union and more than three times the limit set for EU members.

“It seeks to strengthen fiscal discipline and transparency,” Saenz de Santamaria said. It also “seeks to change the culture of the administration to bring it closer to the citizen,” she said.

The plan will be discussed with the regions in coming weeks, Budget Minister Cristobal Montoro said. Measures concerning the regions will be voluntary, he said. The government also plans to study ways to reduce size of the country’s black market economy, Montoro said.

To contact the reporter on this story: Esteban Duarte in Madrid at eduarterubia@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net


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