On eof the issues in the EMU debate is wether it should be endowed with a stabilizer mechanism at a federal level. In order to answer this question we need to know the dregree of stabilization given by the national budgets of the EMU members to their regions. The aim of this paper is to evaluate the macroeconomic functions of the Spanish budget using the methodology developed in the fiscal federations literature. For this purpose we perform panel data analysis for the period 1967-1997 at two regional levels: autonomous communities and provincies. Within the stabilization function we have singled out that which comes from the interregional fiscal transfer, which we call risk-sharing. Our results evidence the limited degree of stabilization coming from the Sapnish budget, not higher than 10%, with around a third of this being due to risk-sharing.

Key words: fiscal policy, redistribution, stabilization and fiscal risk-sharing.
JEL classification: E62, H20, H22, H23, H24.