The review of the regional financing system accumulates a delay of nine years. The reform of the organic law approved in 2009 set 2014 as the deadline to carry out this evaluation, however, almost a decade later the system remains unchanged after the failure of the attempts of the governments of Mariano Rajoy and Pedro Sanchez to apply changes. In her turn to Moncloa, the current acting Minister of Finance and Public Function, María Jesús Montero, marked this reform as the main challenge of the legislature, however, the frontal rejection of the autonomous communities to the proposal of her department left these changes in the pipeline, since it is necessary to have an agreement in the Fiscal and Financial Policy Council (CPFF) to advance in the reform.
One year later, the new composition of the Congress of Deputies puts this issue on the table again, given that the support of the pro-independence groups is key to investing Pedro Sánchez. The Socialists have an arduous negotiation ahead of them in which getting the ‘yes’ from Junts seems the most complicated challenge. In this context, Montero has raised the “impulse” of the reform of the regional financing system as an alternative to the demands of the Puigdemont formation: the referendum and amnesty. This could be the first step to pave the way for future negotiations, in which they would not only need sufficient support in the chamber, but also later have the endorsement of the autonomous communities, the majority governed by the PP after the elections of the May 28.
The Organic Law on Financing of the Autonomous Communities (8/1980) created the CPFF made up of the heads of the Economy, Treasury and Public Administration portfolios and the Treasury councilors of each of the autonomous communities, making it the body in which the Government exchanges its approaches with the different territories with the aim of closing an agreement before preparing the reform project that will be debated in the Congress of Deputies. However, this is not a mere procedure, but it is necessary to close an agreement to make way for negotiations with the parliamentary groups, according to confirmed sources from the ministry headed by María Jesús Montero.
The acting minister acknowledged this Tuesday that reaching this consensus is “complicated”. It was left as impossible during the last legislature, despite the fact that the PSOE had a much higher territorial weight by controlling the governments of the Valencian Community, the Balearic Islands, Extremadura, Castilla La-Mancha or Asturias before the last regional elections; Therefore, with the new configuration, everything indicates that this conflict will worsen due to the refusal of the rest of the territories -especially Madrid and Andalusia- to make new concessions to Catalonia in order to sustain a PSOE-Sumar coalition government.
The weight of Catalonia conditions the agreement with the rest of the CCAA
Precisely the fears of the rest of the autonomies about the eventual licenses that could be allowed to Catalonia in the context of the 2017 conflict led the report prepared by a group of experts commissioned by Minister Cristóbal Montoro to be ‘parked in a drawer’. This task was postponed for a legislature that has been plagued by the pandemic and the war in Ukraine, in which talks on the reform of the regional financing system were left in the background. The ministry headed by Montero appointed a new group of experts in 2021 and at the beginning of 2022 the talks with the territories were stalled.
If the remote scenario were to occur in which a new PSOE government managed to successfully overcome the negotiation with the autonomous communities, the role of the nationalist parties would once again be key, since the reform of the organic law demands an absolute majority in the Congress that, due to the new configuration, would have the support of Junts, in addition to other groups such as ERC, BNG, EH Bildu or PNV, although the Basque Country has the foral regime, so they have the power over its tax system as they are not included in the common regime -the same happens with Navarra-.
On the last occasion, the Government headed by José Luis Zapatero chose to carry out, on the one hand, the reform of the organic law and, on the other, develop a bill to address issues that do not require this rank of law , but they can be included in a rule of ordinary type. This second modality only needs a simple majority to make way for the Senate, although at that point, recovering the support of Junts could be less of a problem. Although, since ERC currently controls the Generalitat alone after the government crisis of 2022, the arrival of the reform project in Congress could open a new phase of negotiation with the second Catalan force, even if it already had the support of the Government .
