The debt rating agency Moody’s considers that the result of last Sunday’s Catalan elections is beneficial in terms of finances for the Generalitat. Specifically, he points out in a report that the decline of the independence movement and the victory of the PSC reduces the risk of confrontation between the autonomous administration and the central government.
The firm also points out that the result guarantees the partial cancellation of the Generalitat’s debt, agreed between ERC and the PSOE. The reduction amounts to up to 19% of the 15,000 million liabilities. On the other hand, the electoral results increase the probability that a new fiscal framework will be created that would grant Catalonia more fiscal autonomy.
Moody’s notes that the constitutionalist parties (PSC, PP, Vox, Comuns) obtained 74 seats, well above the 61 seats obtained by the pro-independence parties (Junts, ERC, CUP and Aliança). “This shows a significant decline in public support for regional independence compared to seven years ago, when the Catalan government unilaterally declared independence after holding an illegal referendum, sparking a political crisis between the region and the central government.” , he indicates.
The rating agency considers that “the decline of the pro-independence parties reduces the risk of confrontation between the central government and the Catalan government, while offering President Sánchez’s diverse and narrow majority the opportunity to focus on addressing structural difficulties through level at both the regional and national level. ”These challenges include reforming the regional financing mechanism and preparing the budget for 2025,” he says.