The Ministry of Finance has yet to start technical meetings with the autonomous communities of the common regime to address the forgiveness of a part of their debt. These bilateral meetings, which were originally going to begin in February, have been delayed as a result of a complex political context, in which the difficulties in gathering sufficient parliamentary support and the electoral advance in Catalonia have led the Government to even resign. . or to the General State Budgets of 2024 to focus now on next year’s accounts.
In these meetings, the department headed by the first vice president intends to reach a consensus with the territorial governments on the way in which this reduction will be carried out, which will be conveyed through a bill. The Minister of Finance has already made it clear that the condonation, which was agreed in the investiture pact with ERC, may be extendable to all autonomies.
“What is done with Catalonia, will be done with the rest, beyond the fact that there is an a la carte menu and that they can choose one formula or another, depending on what interests each one the most,” María specified last week. Jesús Montero after presenting the progress of the 2023 budget execution data, which will be known in a disaggregated manner next Wednesday, March 27.
Those regions that became indebted to the State through the extraordinary liquidity mechanisms created during the last financial crisis, such as the Autonomous Liquidity Fund (FLA), may request it, but also those that continued to resort to financing themselves in the markets, since the The impact of the cycle severely affected its accounts.
This measure will not be affected by the absence of public accounts for this year, since originally it was not contemplated that it would be incorporated into the Budgets. Treasury sources emphasize that the objective proposed with this measure is that the communities that have not been able to go to the markets on their own since 2012 can return to do so “as soon as possible” either totally or partially (in case after forgiveness they still accumulate a significant volume of debt).
Both the Foundation for Applied Economics Studies (Fedea) and other ‘think tanks’ have expressed the fear that an unconditional reduction of part of the autonomous liability would discourage the territories – more than what they believe the current financing model already does – to continue tightening their belts and meet their goals. The recovery of fiscal rules at the European level requires that the increase in public spending by public administrations as a whole does not exceed 2.6% this year, a goal that the same sources hope will not be compromised by the situation of the autonomies.
These prepared their 2024 accounts based on less demanding deficit objectives – which were finally overturned by the Senate – and together they have ended the last year with an imbalance greater than that which had been set for them as a reference. Specifically, a total of six communities closed last year with a gap between their income and expenses above average (-0.9%).
Among them are the four autonomies that are underfinanced with the current system, according to calculations recently published by Fedea, which was betting on creating a fund of 3,000 million to compensate them while the new distribution model is approved. They are the Valencian Community, which, with a deficit equivalent to -2.45% of its GDP (3,358 million euros), registers the largest hole in relation to its economy at a territorial level; Murcia, with an imbalance of -2.32% of its GDP; Andalusia (-1.13% deficit) and Castilla-La Mancha (-1.12%).
Catalonia also ended the year with a deficit above the average, the third to accumulate a higher imbalance in relative terms (-1.31%) and the first in volume, given that the red numbers in its accounts reach 3,616 million. of euros. . The autonomy is also the most indebted with liabilities that reached 84,549 million euros at the end of the third quarter of last year, according to the Bank of Spain (BdE), which will also make public the data for the fourth quarter this Wednesday.
Condonation, the Catalan quota and the regions on a war footing
“Sánchez must comply with the investiture agreements (…) The agreements already signed must be fulfilled and, in this sense, the condonation of the FLA does not need the PGE to be carried out,” said the president of the Generalitat, Pere Aragonès. , in a recent interview with RNE. His government has put on the table a proposal to collect 100% of taxes and transfer a part of the resources to the State, as a Basque quota. It is a proposal that has put other territories on a war footing and that threatens to torpedo any conversation about the removal.
The negotiation is already complicated in itself, given that some regions have announced their intention to take the forgiveness of the Catalan debt to court, as is the case of Castilla y León or Murcia. All those governed by the PP have also demanded that this matter be addressed within the Fiscal and Financial Policy Council (CPFF) and not bilaterally.
