to those items with the greatest impact on productivity and growth, by stepping up public
investments in infrastructure, human capital and knowledge.
- In this regard, budgetary stability over the full economic cycle remains essential to reach a
better budget composition as it releases resources to be redirect to those priority spending. In view
of an ageing population, it becomes even more relevant to generate surpluses in good times in
order to have the capacity to devote more public resources to productive areas.
- The institutional mechanisms in place have increased the Spanish government capability to
control public spending by stimulating rational expenditure and efficient resource assignment. The
new government is working on improving certain aspects of it, such as the guarantee of
compliance with the stability objective by all level of government and some procedural issues.
- This exercise has allowed us to reinforce our position concerning the need to improve the data
availability on the composition of public finances, and to devote more resources to this exercise.
The functional classification of government expenditures has proved to be a very useful tool to the
analysis.
