Spanish PM warns on regional spending
After decades of government concessions to regional demands, Mr Zapatero said in a Financial Times interview that the central government would strictly enforce deficit limits and act against any region that stepped out of line.
"At the end of the day, who is accountable, who is responsible?" he asked. "It's the central government, isn't it? And we have to spearhead, lead the way forward with the control of public spending for the autonomous regions. And they have to deliver. They have to fulfil those obligations, because if they don't, the government will act."
A high degree of autonomy for Spain's 17 regions has been a linchpin of the country's democracy since the 1978 constitution that followed the Franco dictatorship.
Regions account for half of public spending, mainly on health and education, with the centre disbursing about a third and social security the rest.
But after the financial bail-outs of Greece and Ireland, and the threat of a forced rescue for Portugal, foreign investors have expressed concern about the budget deficits and growing debts of devolved regions such as Catalonia and Valencia.
Regional debt has doubled to €105bn ($140bn) in five years, says the Bank of Spain, compared with €541bn for the central government, prompting the national finance ministry to impose new disclosure requirements and deficit limits. Municipalities such as the capital Madrid, which owes €7bn, have also built up their own debt.
"We have powerful instruments," Mr Zapatero said. "No autonomous regional government could actually issue debt without the backing, without the authority of the central government. So we hold the key."
Such assertions of central power are resented by nationalists in regions such as Catalonia, a wealthy part of Spain that is a net contributor to the overall budget and thus subsidises poorer regions such as Andalucía.
Mr Zapatero raised another issue in calling for "harmonisation" of business laws across Spain, a response to complaints about the difficulty of complying with different sets of regulations -- such as building codes or in the use of particular regional languages for shop signs.
The government would spearhead legislative reforms so there was "less red tape, fewer licences, more flexibility for economic activity", the prime minister said. "It's all about cutting down the administrative burden on businesses."