Andalusia, the Valencian community, Murcia, and Castilla-La Mancha coincided on Tuesday in advocating for a new autonomous financing model. They deemed it an «urgent and imperative task to put an end to an outdated system,» which should have been renewed in 2014 with the aim of achieving equal terms in financing, as stated by the Minister of Economy and Finance in Murcia, Luis Alberto Marín.
The Valencian Institute of Economic Research (IVIE) turned Seville into the capital of an informal summit of unfinished communities on this day. The Minister of Economy, Finance, and European Funds, Carolina España, organized the event at the Valentín de Madariaga Foundation headquarters.
The IVIE gathered the four Treasury counselors from the aforementioned communities for a roundtable discussion moderated by Sevilla economics professor José Ignacio Castillo. They then proceeded to present the Study of the Regional and Community Financing System, conducted by renowned researcher and Emeritus Professor at the University of Valencia, Francesco Pérez García.
Prior to this joint meeting, the Andalusian government spokesperson, Carolina España, shared some key data from the report. It highlighted that Andalusia’s deficit stands at 13.411 million, Valencia’s at 20,000 million, Murcia’s at 4,000 million, and Castilla-La Mancha’s at nearly 2,000 million.
The overall financing model needs, as ensured by the IVIE study, amount to 137,000 million.
In a united speech from the three communities governed by the Popular Party (Andalusia, Valencia, and Murcia) and one by the Socialist Party (Castilla-La Mancha), Minister of Finance, Public Administration, and Digital Transformation, Juan Alfonso Ruiz, expressed a differing opinion.
Ruiz supported the debt forgiveness offered by the government to all autonomous communities in an ERC Pact concerning financing mechanisms. He argued that the debt is linked to «insufficient resources,» considering it a welcomed initiative that would benefit all parties involved.
«Forgiveness is not an additional burden; it relieves the financial task,» stated the Castilla-La Mancha counselor, while the Andalusian counselor advocated for it to be «complementary to a financing system reform,» even if it serves as a step to «test» financing requests.
España emphasized that «we are united» in the pursuit of improved financing, invoking the Independent Fiscal Responsibility Authority (AIREF) as an authoritative source in affirming that «public services cannot be compromised.»
The Castilla-La Mancha representative proposed the creation of a tax harmonization law, comparing it to a process within the European Union, aiming to rectify discrepancies such as «15 different inheritance taxes.» He stressed the need to address the disparity in discounts, stating that his community cannot afford excessive deductions.
España highlighted the «absurdity» of the situation resulting from the disparity between autonomous regions and citizens, noting that Andalusia receives «183 euros less than the average, 214 euros less than Catalonia, or 788 euros less than the Basque Country.» She underscored that under a PP government in Andalusia, the gap with other regional economies narrowed by almost a percentage point.
Following the discourse, First Vice President and Minister of Finance María Jesús Montero, addressed the Treasury Minister in Andalusia, stressing the need for a reform proposal and a swift resolution, emphasizing the urgency of the matter.
The Minister of Finance and Economics in the Valencian Community, Ruth Merino, decried the «evident injustice» in autonomous financing, citing the resulting inequality among Spaniards. She expressed a desire to rectify this deeply rooted issue swiftly, aiming to achieve a situation akin to Catalonia.
Merino acknowledged the need for compromise, recognizing that no party can achieve 100% of their demands. She highlighted the government’s dependency on autonomous regions, describing the situation as a delicate balance, with weaknesses in governance.
The Valencian counselor addressed the chronic structural challenges pushing the community to operate within limited means, resulting in a structural deficit. Despite reducing the region’s debt by 1.3 billion, amounting to 40% of the GDP, they still face financial challenges that require urgent attention.
The Finance Minister in Murcia emphasized that with equal resources as the average autonomous community, their budget would be 11% higher or 23% higher if compared to the best-financed community.
Luis Alberto Marín called for urgent action, stressing the importance of prompt decision-making due to the impact on people. He likened the situation among communities to a 100-meter race where some are «20 meters ahead,» highlighting the urgency with a debt ratio standing at 95.5%.
