Economic fears dog budget talks

PALMA
THE Balearic minister for Tax and Economy yesterday defended his government's application for a higher 2008 budget, saying that the previous Partido Popular (PP) administration had left a “black hole” of debt. The Opposition meanwhile declared the regional economy is at crisis point..

Speaking in the Balearic Parliament at a preliminary debate on how much money the region is going to ask from central government for spending in 2008, Carles Manera said that the new Socialist government in the Islands had inherited a “very worrying” economic situation from the outgoing centre-right government, who, he alleged, were guilty of gross financial mismanagement. Manera claimed that the PP, now in Opposition, had diverted funds originally intended for one project onto another, and had ended up deep in debt after their economic “juggling acts” went wrong. He asserted that there were funds coming in from central government to cover costs for a major highway building programme in the Islands, that in fact never arrived. This resulted from ex-PP Balearic, Jaume Matas having signed a pact with outgoing central government prime minister Jose Maria Aznar which the new Socialist government in Madrid failed to honour. The Partido Popular meanwhile, represented in debate by Francesc Fiol said that the regional budget figure of 3'323 million euros - a 14.82 percent increase on the figure for 2007 - was excessively optimistic and failed to match the needs of the Islanders in terms of Education and Health. The accusations were rejected by Manera who claimed it was these areas to which more than 70 percent of the budget figure would be devoted. The political clash centred on economic interpretation. “The strength of the Balearic economy will lead to institutional tranquility,” declared Manera. “Will this “tranquility” lead to economic soundness for Balearic families?” countered Fiol.