2012 Euskadiko Arrekontu Nazional

The 2012 Euskadiko Arrekontu Nazional was delivered by Xabier Markina Urkullu, the Ogasun-Sailburu (Minister of Finance) to the Eusko Legebiltzarra on Tuesday 18th May 2011.

The budget is framed in the current european financial crisis scenary, and is oriented to the restoration of public finances. The package of measures to restore public finances consists of:
 * public spending cuts;
 * reversal of personal contributions for health care;
 * increased tax and social insurance contributions;
 * investments to make society safer, strengthen the economy and improve the quality of life.

Need for measures
The global financial and economic crisis that commenced in 2008 has hit Euskadi and public finances have deteriorated badly. To overcome the crisis and cushion the worst blows, the economy is being stimulated to keep people in work and investments are being made in business. Public spending has accordingly increased but tax revenue has fallen sharply.

The crisis has led to a serious budget deficit and a sharp jump in the national debt. The gap in public finances will not go away by itself. The public debt will continue to rise as long as there is a budget deficit, as will the interest the government has to pay on the debt every year. Public finances in Euskadi will be untenable without drastic measures. Furthermore, without robust public finances Euskadi will lose the confidence of the financial markets.

Urgent measures are also necessary in view of the ageing population. People are living and drawing their pensions for longer and making more use of care services. Care costs are also rising every year, as are the care contributions. For these social services to remain affordable and accessible, public spending must be cut and the budget deficit must be eliminated in the years ahead to prevent the debt from rising further.

The budget deficit must therefore be addressed and public spending must be cut. To restore public finances, the government has proposed a package of cuts totalling $ 24.58 billion.

Spending cuts

 * $ 9.7 billion in the government sector.
 * The biggest cuts will be achieved by making government smaller and more efficient. There will be fewer civil servants and tiers of government, with fewer tasks and rules.


 * $ 1.9 billion in government grants.
 * Fewer grants will be available for culture and innovation, for instance.


 * $ 2.5 billion in international expenditure.
 * The government wants to contribute less to the UN and the international aid will be cut. Defence and development cooperation spending will also be limited. The number of embassies and consulates abroad will be cut.


 * $ 4.3 billion in healthcare costs.
 * Certain treatments will be removed from the standard healthcare package and transferred to supplementary care insurance schemes.


 * $ 0.9 billion in government contributions
 * The contribution to childcare costs will be limited. The costs have risen by $ 2 billion in four years. Students who take longer to complete their courses will also pay higher fees.


 * $ 5.28 billion in labour market and benefit costs.
 * The state pension age will be raised to 67 on 1 January 2016. The government will also punish benefit fraud more severely.