Spanish Regions Should Hand Back Powers, Madrid’s Aguirre Says

Spanish regions should return some powers to the central government to save money, said Esperanza Aguirre, president of the region of Madrid.

Aguirre estimated that by avoiding duplication and promoting efficiency, handing some responsibilities back to the central government and passing others to municipalities could save 48 billion euros ($63 billion).

“If it’s necessary for Spain, the big departments -- health, education, justice -- should be returned to the central government,” Aguirre told reporters after meeting Prime Minister Mariano Rajoy today. “We politicians would be left without a job, but we’d look for one.”

Spain’s regions, of which Catalonia and Madrid are the biggest, spend about 60 percent of their budgets on health and education and are struggling to rein in deficits after the collapse of the real-estate boom slashed tax revenue. Aguirre, a member of Rajoy’s People’s Party and once a potential rival for the leadership, runs the region that had the lowest deficit last year.

Of the 17 regions, which were created as part of Spain’s return to democracy in 1978, 11 are ruled by the PP. Catalonia, the biggest, is run by Convergencia i Unio, a pro-business, nationalist party that seeks more independence from Spain.

To contact the reporters on this story: Emma Ross-Thomas in Madrid at erossthomas@bloomberg.net; Charles Penty in Madrid at cpenty@bloomberg.net

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

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