Document

Marqués de Villamagna 3, 11º
T: (+34) 917 373 200
28001 Madrid
www.circulodeempresarios.org

Documento – Madrid, noviembre 2023

More efficient and modern public administrations.

The need to improve the functioning of Public Administrations (AAPP) and the efficiency and effectiveness of public spending stems from the significant challenges facing the Spanish economy and the citizens' unsatisfactory perception of public services.

As a think tank dedicated to serving the interests of society as a whole, the Círculo de Empresarios has put forward proposals for the profound structural reforms needed in the Spanish economy. Among them, the reform of Spanish Public Administrations stands out as an urgent priority to achieve the necessary efficiency in their operation.

This reform requires determining the appropriate level of governmental intervention that aligns with Spain’s economic reality without hindering its competitiveness. Addressing this question inevitably leads to an economic and financial analysis of Public Administrations through public spending and budget management.

A mechanism must be established to improve medium- and long-term budget planning. While the current budget stability regulations already contain such provisions, they should be reactivated and enhanced by incorporating best practices. Their reactivation, along with Spain’s participation in the reform discussions within EU institutions, presents an opportunity to reaffirm the country’s commitment to sound public finances.

Setting a public spending cap and strengthening institutional mechanisms to ensure compliance can serve as the most effective incentive to drive reforms and modernize Public Administrations. It is essential to demand full transparency and accountability from Public Administrations, as these are fundamental elements of the legitimacy granted to them within a democratic system.

Madrid, January 18, 2023