The forgiveness of part of the debt of the Generalitat Valenciana has been made subject to the fruition of the negotiation between ERC and the PSC so that Salvador Illa become the next president of the Catalan Government.
The negotiations are being piloted by the Ministry of Finance, which is led by Maria Jesus Monteroinclude the forgiveness of a debt for Catalonia of just over 15 billion euros and a tax consortium that allows the Catalan Generalitat to collect the 100% of taxes that are paid in that community.
This is the previous step before the negotiation of the forgiveness of part of the Valencian debt can begin, since if there is no agreement, this ‘can of worms’ will not be opened for the rest of regions Spanish, as confirmed by They got up sources from the Valencian Government.
7 month silence
At the last Fiscal and Financial Policy Council held in Madrid last Monday, the Minister of Finance did not transfer to the counselors of the different regional governments on this issue, although it was ‘leaked’ once the meeting had ended.
The sources consulted by this newspaper in the Generalitat regret that María Jesús Montero summoned them in December of last year to maintain a bilateral meeting in the first quarter of the year to negotiate the issue of the forgiveness of part of the Valencian public debt, as well as to analyse the needs while tackling a reform of the financing system that has been out of date for more than a decade.
The silence continued after that first information and has remained that way until today: seven months later.
About 10 billion
What this medium has been able to find out is that the calculations of the technicians of the Ministry of Finance place the possible forgiveness of part of the Valencian debt (which would be assumed by the State) at around 10,000 million euros, over the total of 58 billion which is the global debt of the Autonomy.
This amount is much lower, half, than what the Valencian Community would need to be able to go to the markets to finance itself, something that is currently impossible with a debt that represents 42.5% of PIB and which is the highest in Spain in that section.
The General Directorate of Financing of the Ministry of Finance already explained a few weeks ago that the debt forgiveness should rise to 20 billion euros (35% of the total) to ensure that the conditions were met to be able to finance its debt in the markets.
Dependents of the FLA
Nowadays the Generalitat Valenciana has to resort to the Autonomous Liquidity Fund, which is a temporary line of credit created by the Government of Spain in 2012 and which has had to be extended over time due to the inability of the Autonomous Communities to finance their debt on the free market.
The political claim of the Generalitat Valenciana goes much further, since it estimates that the debt forgiveness should reach the 43 billion of euros because it argues that 78% of the total debt is the result of the underfinancing accumulated over decades.
In eighth place
If Moncloa ends up opening negotiations to the rest of the Autonomous Communities (if it successfully resolves the bilateral talks with Catalonia), the Valencian Community would be in eighth place, as Montero has expressed in recent days.
The justification is that for this type of meetings the following is followed creation order of the different autonomous communities. The first should be the Basque Country, which obtained its recognition in 1979 together with Catalonia, but the Basques do not participate in these negotiations as they have their own financing system recognised in the Constitution.
Catalonia It is therefore the first to negotiate and it comes with the spirit of achieving a system similar to the Basque one. This hypothetical round of negotiations (which was already announced and not fulfilled in December 2023) would continue with Galicia which obtained its status in (1981), while Montero would then meet with the Economic advisors of Andalusia, Asturias, Cantabria, La Rioja and the Region of Murcia (1982).
The meeting with the Minister of Economy and Finance of the Valencian Government would be the next and it is not likely that, if it were to take place, it would be Before the end of the yearalthough that is the goal.
The Valencians would be followed by the Government’s meetings with Aragon, Castile-La Mancha, the Canary Islands, Navarre, Extremadura, the Balearic Islands, Madrid, Castile and Leon, Ceuta and Melilla.
Grows below average
While all these unknowns are cleared up, what the Valencian Government is certain of is that you will not get a leveling fund annual to alleviate the structural underfunding it suffers from due to the current financing system (whose reform is not even being considered by the Government).
And the first studies on the progress of the Valencian economy for 2024 are also confirmed, such as that of Funcas, which places the Valencian GDP with a 2.4% growthone tenth less than the national average.
Employment, in terms of the EPA, will grow according to this study by 2.2%, while unemployment rate will be reduced to 11.9%, slightly higher than the national average, since there will be ten Autonomous Communities that will be below double digits in the unemployment rate.
Source: www.vozpopuli.com
