The first vice president of the Government and Minister of Finance, Maria Jesus Montero, this Thursday ruled out responding to the request of the presidents of Andalusia, Valencia, Murcia and Castilla-La Mancha to immediately launch an extra fund to compensate them for their “underfinancing” compared to the rest of the autonomous communities. Montero has ruled that creating this fund is part of what was agreed within the legislative agreement between PSOE and Sumar, where there was talk of implementing in the State Budget measures to compensate “the Generalitat Valenciana and the rest of the autonomous communities “underfinanced” due to fewer resources from the current regional financing model.
“There was no agreement in this regard,” Montero responded to journalists when asked whether the next State Budget for 2024 will include a fund to compensate underfunded autonomous communities.
This same Wednesday, a regional mini-summit of the presidents of Andalusia, Valencia and Murcia (governed by the PP) and also of Castilla-La Mancha (PSOE), agreed to demand from Pedro Sánchez an extra fund of regional financing. Juanma Moreno, Carlos Mazón, Fernando López Miras and Emiliano García Page They demand compensation from the Treasury for the “underfinancing” that the current regional financing model provides them with and which, according to calculations by the Foundation for Applied Economics Studies (Fedea), should be around 3,000 million euros annually.
The Minister of Finance sticks to her commitment to negotiate debt forgiveness with all common regime communities and announces that meetings will begin in February
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The first vice president explained that there is no commitment with Sumar to create this leveling fund and that the proposal that the PSOE has made, “until the financing system is reformed,” consists of starting a process with the communities to assume part of the greater debt incurred by the autonomies as a consequence “of Mariano Rajoy’s cuts” and his PP governments.
In fact, during his appearance before the Finance Commission of the Congress of Deputies, Montero announced that in February meetings will begin with each of the autonomous communities of the common regime to negotiate the application in each territory of the forgiveness of 15,000 million of debt already agreed for Catalonia.
According to the vice president, the objective is to recognize the additional debt that communities incurred to face the consequences of the 2008 financial crisis, with the added difficulty of the cuts imposed by the Government of Mariano Rajoy (PP). “We will propose objective, common parameters for all communities with a common regime,” Montero stressed.
“Valencia and the rest of the underfinanced”
The truth is that the legislative agreement that Pedro Sánchez and Yolanda Díaz signed and presented in public on October 24 indicates that “while this reform [de la financiación autonómica] “If this does not occur, the General State Budget will guarantee the Generalitat Valenciana and the rest of the underfinanced autonomous communities the provision of public services at the same level as the rest of the State.”
There is no express mention of a leveling fundas proposed by the presidents of the four underfunded communities, but there is a mechanism to compensate them.
In any case, Minister Montero explained that in the last meeting with the regional Treasury officials, at the Fiscal and Financial Policy Council on December 11, she herself, “at the request of some communities”, raised the possibility of launch a compensation fund in favor of the least financed territories. “It’s curious,” Montero said, “all communities said no.” The vice president has challenged to the president of the PP, Alberto Núñez Feijóo, to say what he thinks about it since three communities governed by the popular (Andalusia, Valencia and Murcia) are in favor of the fund; but the rest, no.
Fedea report
The Valencian Community It is the only one expressly cited in the text of the legislative agreement. However, the Fedea report points out to the communities of Andalusia, Valencian Community, Murcia and Castilla-La Mancha such as the four territories to which the current regional financing model assigns adjusted income per inhabitant below the average. Fedea calculates that to reach average financing per adjusted inhabitant, Andalusia would need an extra injection of 1,409 million euros per year; the Valencian Community, 1,148 million; that of Murcia, of 405 million and Castilla la Mancha, of 315 million euros. In total, about 3,277 million, based on the data corresponding to the final settlement of the regional financing system in 2021.
According to Fedea calculations, effective financing per adjusted inhabitant reached 99.1% of the average in the final settlement of 2021. Galicia; 99.4% in Aragon; 99.5%, in Catalonia and 99.8% of the average, in Madrid. These four communities are not considered “underfinanced” in the Fedea study, which points to Cantabria, Balearic Islands, La Rioja and Extremaduraas the ones that benefit most from the current financing model, with resources per inhabitant that are more than 10% above the average.
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During his appearance before the Finance Commission of the Congress of Deputies to explain his department’s priorities for this legislature, Montero has pointed out the reform of regional financing as “the great territorial debate that we have pending.” To achieve this, he has lost the will to agree with all political groups to negotiate a reform whose approval requires a large majority of Parliament, as it is an organic law.
Budgets and taxes
The minister has indicated the Government’s intention to approve a draft State Budget for 2024 “as soon as possible” and has said that, to that end, contacts with political groups have already begun.