The Minister of Finance and Vice President of the Government, María Jesús Montero, yesterday informed the representatives of the autonomous communities in the Council of Fiscal and Financial Policy (CPFF) that at the beginning of next year, between January and February, she will present a proposal for a new regional financing model. The announcement is good news, because the resources for the services closest to the citizen, such as health, education and social services, provided by the communities, depend on this fund. It cannot remain in a vacuum as happened with previous initiatives: the reform of the system is essential and urgent and the economic moment is favorable to carry it out. The current system came into force in 2009 with a commitment to review it after five years. However, no government has fulfilled the task since then.
The reform of regional financing is a technically complicated and politically thorny issue, which generates great friction and on which it is difficult to find consensus. The PP communities themselves, which govern most of the territories – 11 of the 15 communities with a common regime – do not have a united position on the issue. The Catalan independence parties have agreed with the PSOE on “single financing” for Catalonia in exchange for support for the Catalan and central governments.
This bilateral discussion requested by Catalan nationalism represents a challenge in the still of regional finances. It is essential that the Government’s proposal is capable of generating a distribution that does not damage equity and that includes, without causing fractures, economic diversity.
The Treasury also announced that advance payments (advances) next year will reach a record 157,731 million euros and that communities could suffer a deficit of 0.1% between 2026 and 2028. This additional money is the result of Spain’s solid economic growth and is an essential condition for changing the system: all the reforms undertaken so far have involved injecting more resources into the system. Furthermore, we must address the imbalances generated by the current regime and which are no longer sustainable. The financial gap per inhabitant between the most treated territory, the Region of Murcia, and the one with the best unemployed, the community of Cantabria, is around 1,000 euros, an all-time high.
Vice President María Jesús Montero promised to make the aspirations of some and the demands of others compatible. No matter how tough the negotiations may be, they all start from a common point: recognizing that Spain cannot have an autonomous financing system designed 15 years ago today.
