By way of a first hook, without specificity, the PSOE yesterday put on the table the reform of the regional financing model, in force since 2009 and expired nine years ago, as an element to be debated during the negotiations to try to secure a parliamentary majority to defeat to the PP in the first big vote of the legislature, that of the next day 17 in the Congress of Deputies. The numbers as of today are not defined, but the proposal opens the initial approximations so that Pedro Sánchez can save the first match ball that allows him, firstly, to control the Presidency and the Table of the Lower House and, then , pave a possible investiture after the round of consultations with the head of state. The path is long and complex, but the acting President of the Government is willing to explore it.
Reforming the regional financing model is a recurring demand from underfinanced communities, such as Catalonia (where Foment and the Cercle d’Economia spearhead the demand) or the Valencian Community, among others, but no government, not even Mariano’s Rajoy nor that of Pedro Sánchez, has dared to take the step due to lack of a quorum. The PSOE confirmed yesterday with a brief “we are talking” to have already activated the initial contacts for the first stop on the 17th and added that new financing from the autonomous communities will be part of the talks. The Minister of Finance and Public Function, and Deputy Secretary General of the PSOE, María Jesús Montero, defined the reform of the system as “an emergency”. The will of the Socialists is to test an agreement at the beginning of the next legislature, government sources explained yesterday. With a broad vision, although aware of the difficulty of being able to combine all the positions. “The principles are clear: sufficiency and fiscal autonomy of the autonomous communities”, they added from the central Executive to define the main lines of the approach that they want to promote.
The Treasury already carried out during the last legislature an approximation to reform the regional financing system. It did so with the intention of proposing, at the same time, a tax harmonization in the face of the downward tax policy applied by the Community of Madrid and Andalusia, among other territories. But the talks did not advance at any time, neither in the technical field nor in the political one.
Reforming regional financing at this time seems like a complicated task. In the first place, because of the position of Catalonia. Pere Aragonès pointed out yesterday that the intention of the Catalan Executive is to negotiate with the central government to reduce the regional fiscal deficit, but added that he is not going to participate in a multilateral negotiation with the rest of the regional governments. “We are not going to negotiate a new financing model with other autonomous communities; We will go to defend that the fiscal deficit of our country is reduced”, said the president, referring to the fact that he does not consider it useful to dialogue in an organization, the Council for Fiscal and Financial Policy, even more so dominated during the next four years by councilors of the Treasury of the People’s Party.
A one-on-one financial negotiation with Catalonia would affect the core of the state autonomous model. The Government was cautious yesterday and defended addressing future talks within the framework of the Fiscal and Financial Policy Council, although Treasury sources were sensitive to the Government’s demands: “Let’s see what they propose.”
What the Catalan Executive is putting off at this moment is the proposal for a fiscal pact to achieve its own financial regime, similar to that of the Basque Country or Navarra. It is not a resignation, however, to his approaches, but a matter of pragmatism in the current situation. “We will position ourselves so that Catalonia obtains the maximum resources,” Aragonès explained.
One of the possibilities that can be opened in the negotiation, and that is already mentioned by socialist charges, is to apply a haircut to the debt that some autonomous communities have contracted with the State. In the case of Catalonia, this debt amounts to 84,500 million, of which more than 71,000 belong to the Autonomous Liquidity Fund (FLA) devised by the former Minister of Finance, Cristóbal Montoro, in 2012. It is not an improvised initiative. The PSC, in the electoral program with which it ran for the 2021 Catalan elections, proposed “the forgiveness by the State of a part of the debt, in the case of those autonomous communities that have been objectively worse treated by the current system and a possible restructuring in some cases”. The Catalan socialists have also defended for years a federalized treasury and the creation of a tax consortium, that is, an organization that collects and manages the taxes paid in Catalonia under a system of co-responsibility with the Tax Agency.
The possibility that the State ends up reorganizing or canceling a part of the debt of some autonomous communities caused a mixed reaction between the autonomous barons of the PP and the PSOE. The president of the Generalitat Valenciana, Carlos Mazón, joined the claim and proposed negotiating “compensation” formulas within the Fiscal and Financial Policy Council, “and not in a dark room”, referring to a bilateral relationship with Catalonia. Compromis also warned Sánchez that he will not have his vote if this problem is not resolved. His community owes the FLA more than 46,000 million.
On the contrary, the Government of the Community of Madrid chaired by Isabel Díaz Ayuso, for its part, took a totally opposite position and warned that it would go to court if the debt of the autonomous communities is cancelled. On the socialist side, the acting president of Aragon, Javier Lambán, defended the initiative and proposed “to put an end to grievances between communities.”
The Treasury lowered expectations yesterday about an urgent reform of the regional financing model – “it is not done in a week”, indicated the Ministry. The PSOE raises it, therefore, as one more piece in parliamentary contacts. Sánchez continues to need neither Junts nor the PNV to bet on a PP candidate for the Presidency of Congress, so the talks, as they assume in Moncloa, could continue until the 17th. Government negotiators are not on vacation .
