The Minister of Finance and Public Function and functions, María Jesús Montero, stated this Tuesday that the reform of regional financing will be one of the matters that will be addressed with the different parliamentary groups, with the aim of closing an investiture pact. The deputy secretary general of the PSOE has assured that it is an “urgent” matter that was pending in the last legislature despite the attempts of the coalition executive to introduce changes to the current system that dates from 2009, since it was approved during the Government of José Luis Zapatero after an arduous negotiation.
Autonomic harmonization was the main challenge that Montero’s portfolio wanted to carry out during the last legislature, however, this was left unanswered. The Government agreed in extremis a small tax reform to have the support of ERC in the vote of the General State Budget of 2023 that introduced the solidarity tax on large fortunes, raised the minimum exempt from paying personal income tax to 15,000 euros and extended the deduction of this tax to income of less than 21,000 euros. On the other hand, the reform of the autonomous system was left on hold due to the refusal of the autonomous communities to the proposal presented by the Executive.
The Government led by Pedro Sánchez integrated tax harmonization -focused on assets and successions- in a reform of the regional financing system as a whole within the Recovery Plan sent to Brussels. The Treasury’s approach sought to prioritize spending on Health and Education when distributing funds, a design that was understood to harm territories such as Catalonia, Madrid or Andalusia due to the adjustments applied based on issues such as depopulation, while Others regions that were governed by the PSOE understood that the attention given to empty Spain was insufficient. Added to this conflict was the situation marked by the war in Ukraine that put the brakes on any fiscal reform.
Promoting the financing reform in the investiture
The acting minister has defended that the will of the PSOE is to carry out contacts or negotiations with discretion during the next few weeks to give citizens a “rest” after several months of electoral hustle. Montero has defended the role of her party as leader of the progressive bloc and that, consequently, she understands that it should be the formation in charge of taking the lead in conversations with potential partners. The PSOE vice-secretary has acknowledged that there are strong discrepancies with pro-independence formations -without express reference to Junts- and has assured that issues that are outside the constitutional margin will not be addressed in these talks, such as the referendum and the amnesty demanded by the Puigdemont party.
Montero understands that there are alternative formulas to close the agreements with the formations with which the center-left party has less ideological harmony, but that they will be necessary to form a majority that allows the investiture of Pedro Sánchez. Among the issues outside the proposal for maximums raised by Junts includes the reform of the regional financing system that Montero has recorded that is included in the electoral program of the PSOE. In the possible investiture agreement, the acting minister believes that the “impetus” for the reform will be produced, while this issue will be the subject of negotiation throughout the next legislature.
The head of the Treasury has also referred to the Popular Party, who believes that it is staging a position in the face of the “posturing” gallery due to the letter sent to the acting President of the Government and has criticized that Alberto Núñez Feijóo has not reported on the meeting maintained with Santiago Abascal after 23-J. Once the Cortes are constituted on August 17, the PSOE is open to talking “with all groups”, but Montero has recorded the distance that now separates his party and the PP, which is currently listed in the parliamentary arch with the only support from Vox and potentially that of UPN.
