The Government calculates that it will require 11,822 million euros next year, which is the amount that it plans to request from the regional liquidity fund (FLA). For the current year, he requested a total of 12,447 million, to which must be added 815 million from the European React-EU fund.
Although the estimate is that it will meet the deficit as it did last year, the deliveries will probably be through the FLA (the fund for the autonomous regions that fail to meet fiscal targets), instead of the financial ease (for those that comply) since the reference is 2019 as the fiscal rules for 2020 and until 2023 have been suspended in the European Union (EU) due to the pandemic, according to Economy sources. And that year, the Generalitat failed to meet the deficit, while the two subsequent years did.
With this amount that you will request, included in a report prepared by the Ministry of Economy for the investorsit has to cover the baseline deficit (the fiscal rules will not be applied next year with the authorization of Brussels either) of 0.3% of the gross domestic product (GDP), which is equivalent to 791 million euros. Another 10,906 million are also calculated for bond maturity, return of resources from liquidity mechanisms from the State and 125 million for other purposes.
In this way it will remain The weight of the State as a creditor of the Generalitat, as holder of more than 82% of the total debt that, as of June 30, amounted to 84,486 million. The Government, whose previous ‘councillor’ of Economy, Jaume Giroestimated that from next year it could begin to go to the marketpredicts that will remain dependent on state funding until 2034albeit with a gradual reduction.
In any case, to combine financing in the markets and liquidity instruments of the State, it is necessary to comply with the public debt reference and the average payment period to suppliers, something that happened in 2020 and 2021, but not in 2019, the year that serves base and in which the pre-pandemic fiscal rules still applied. It will therefore have to be the result of a negotiation with the central government.
nine out of 10
Throughout 2023, the Generalitat will have to return 10,665 million, of which 9,726 million, 91% of the total, that is, 9.1 out of every 10 euros, have the State as a recipient. Since 2012, when the central government established formulas to facilitate the liquidity of the autonomies before the closing of the markets, Catalonia has received more than 100,000 million euros, of which 70,318 million remained pending return as of last September 30.
During the last year, the Generalitat’s debt has ceased to be considered a ‘junk bond’ by two credit agencies credit rating, DBRS and Fitch Ratings. Despite the fact that the volume of liabilities has increased, its cost remains “relatively low”, according to the document delivered to investors, with an average of 1,257% until last September, and a total of 697 million in 2021. The peak in financial costs was reached in 2014 with a total of 1,923 million euros, equivalent to 8.3% of GDP, compared to 0.29% last year.
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2013 will also be the last year of the three-year period with the highest volume of debt repayment for the Generalitat, since from 2024 it will drop drastically to 7,988 million and will continue to do so gradually.
The objective is that in the coming years Catalonia meets the requirements for gradually go out to finance the markets, “although the high volume of the financing needs of the Generalitat will make it necessary to continue counting to a large extent on adherence to liquidity mechanisms”, according to the report on budgetary guidelines presented last June in Parliament. The idea is that the financing in the market is 5% of the total in 2023, 10% in 2024, 15% in 2025 and 20% in 2026.