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Montoro Says No More Hidden Bills in Spain as EU Scrutiny Mounts

Nov. 7 (Bloomberg) -- Spanish regions and town halls have no more hidden arrears, Budget Minister Cristobal Montoro said, defending the integrity of the country’s financial statements that have drawn scrutiny from the European Union.

“There are no more bills in the drawers,” Montoro said during a speech in Madrid today.

Even so, local administrations continue to hire companies for jobs, without having the budget, telling suppliers they will be paid when the administration has the funds, Montoro said. The government at its weekly meeting today will approve the details of a third plan to bail out commercial suppliers who have not been paid by town halls and regions, he added.

Officials from Eurostat, the EU’s statistical agency, turned up the pressure on Spain with an extraordinary visit in September to assess whether regional officials are complying with recommendations to ensure their budget statements are accurate. The mission included meetings with officials from Valencia and Madrid, regions that failed to report all the unpaid bills they had accumulated in 2011.

Prime Minister Mariano Rajoy says reining in spending by the semi-autonomous regions has been a pillar in Spain’s recovery as the economy expanded for the first time in more than two years between July and September. The nation has consistently missed EU budget targets since its deficit surpassed 3 percent of gross domestic product in 2009.

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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