Resumen de The use of public sector enterprises as a way to circumvent hard fiscal restraints

Roberto Fernández Llera, María Angeles García Valiñas, David Roibás Alonso

• The main objective of this paper consists of analyzing the creation and use of public sector enterprises (PSEs) as a mechanism to elude legal restrictions on public deficit. We provide a general overview of Spanish Autonomous Communities� (ACs) revenues in the context of the Budgetary Stability Act which has imposed a hard constraint on budgetary deficit from 2002 onwards. We investigate the role of PSEs as an alternative to traditional debt mechanisms given that, in line with Eurostat criteria, PSEs� debt can be taken off the public sector�s consolidated budget. Descriptive and econometric results confirm our expectations. ACs� have been using the PSEs to avoid the stringent financial rules, mainly when the legal limits are overflowed.