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Andorra Raises Public Debt Ceiling to 50% of GDP in Golden Rule Overhaul

General Council approves phased reduction to 40% while rejecting opposition bids for access to sensitive banking data amid EU confidentiality obligations.

Synthesized from:
El PeriòdicARALa Veu Lliure+3

Key Points

  • Andorran General Council approves raising public debt ceiling to 50% of GDP, phasing to 40%, while keeping 1% deficit cap.
  • Reforms backed by governing coalition and Andorra Endavant, adapting to direct taxes over 45% of revenue.
  • Opposition PS and Concòrdia amendments rejected, criticizing rigidity and lack of repayment plan.
  • Majority blocks access to sensitive AREB/AFA banking data citing EU confidentiality obligations.

The Andorran General Council has approved amendments to the "golden rule" on public finances, raising the initial public debt ceiling to 50% of GDP with phased reductions to 40%, while rejecting opposition demands for parliamentary access to sensitive data held by the State Agency for the Resolution of Banking Entities (AREB) and the Andorran Financial Authority (AFA).

**Golden rule reforms secure broad backing** Lawmakers validated changes to the 2014 public finance sustainability and budgetary stability law, with votes from the governing Demòcrates per Andorra and Ciutadans Compromesos coalition joined by Andorra Endavant. The updates account for direct taxation now exceeding 45% of revenue, up from prior thresholds. They set an initial 50% GDP debt limit, dropping progressively to 40%, while keeping the deficit cap at 1% of GDP and adding flexibility for debt maturities or economic downturns.

Finance Minister Ramon Lladós called the measures an adaptation to modern realities, preserving fiscal rigor amid debt reductions and key infrastructure spending without tax increases. He noted Andorra ranks among the few nations with such a framework and warned that looser rules could land the country on lists alongside high-risk states like North Korea or Cuba. Ciutadans Compromesos leader Carles Naudi praised the existing rules for enabling responsible management with flexibility, stressing Andorra's ongoing solvency and steady debt decline. Andorra Endavant's Carine Montaner endorsed the approach, urging public funds be handled like a family or business budget, with every euro delivering citizen value.

Opposition parties resisted. Partit Socialdemòcrata (PS) deputy leader Pere Baró argued the limits rigidly hamper state responses to crises, entrench an unfair tax system hitting producers while sparing capital gains, and rely on a flawed GDP measure. Concòrdia's Cerni Escalé faulted the absence of a structured repayment plan, saying it permits nominal debt growth and burdens future generations; his group's five amendments, including a 35% cap and protections for vital spending, failed in committee.

**Majority cites EU duties to block data access** During debate on banking recovery and resolution law updates to match EU directives, the majority turned down PS amendments for councillor access to AREB and AFA information. Salomó Benchluch (Demòcrates) and Lladós invoked the 2011 EU monetary agreement, which mandates confidentiality for sensitive data to shield financial stability—even overriding Court of Auditors requests in most cases. Lladós said such obligations outrank parliamentary oversight, with narrow exceptions like inquiry commissions, and stressed the government itself lacks direct access to protect international credibility. Jordi Jordana highlighted trust in supervisors.

PS's Baró decried it as an opacity excuse, noting former AREB head Sílvia Cunill had only cited needed legal tweaks, not EU rules, and suggested an inquiry commission. Concòrdia's Núria Segués and Escalé insisted elected officials deserve access to public entity data under confidentiality, questioning EU barriers. Andorra Endavant's Montaner backed transparency. The majority prevailed on the amendments. The overall bill passed 23-0, with PS abstaining and opposition otherwise supporting.

The session also rejected tourism law transparency changes 11-16, advanced 2027-2030 rental reforms to committee, and reached consensus on Spain's energy link and a UN anti-corruption pact. Head of Government Xavier Espot is attending Armenia's European Political Community summit on May 3-4.

**USdA skips May 1 protests for third year, citing worker fears and lack of dialogue** The Unió Sindical d’Andorra (USdA) has again opted against demonstrations on International Workers' Day, marking three years without such events. Union leader Gabriel Ubach attributed the decision to workers' need to labor on the non-holiday—risking dismissal under free dismissal rules—and widespread fear of identification and reprisals. "There was terrible panic about being identified in a demonstration," he said, adding that employees remain at employers' mercy, unlike in countries with recourse protections or festive observances.

In a manifesto released ahead of Friday's date, the USdA framed the silence not as surrender but as protest against a government "turning its back on workers," led by Espot, Demòcrates per Andorra, and supporting groups. It condemns a fragile labor system without genuine collective agreements, diminished unions, and workers holding less rights, protection, or bargaining power than neighbors. The group highlights institutional hypocrisy in pursuing European alignment without social standards, including a long-standing push for International Labour Organization membership—now under government study after 15 years of demands—and for company committees stifled by dismissal laws.

The text broadens to housing policies blamed for fueling speculation and luxury developments, displacing youth unable to emancipate and retirees at risk of losing homes, alongside support for abortion decriminalization as a fundamental women's right hindered by ties to the episcopal co-prince. "Everything is connected: wages, rights, housing, freedoms," it states, warning of inevitable social conflict without dialogue. "Without labor rights, social rights, and freedoms, there is no real democracy."

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