The removes of debt to the autonomies, an idea that does not like at all
The increase of the debt after the crisis and the possible withdrawal of the FLA puts on the table a condonation
The Minister of Finance and Public Administration, Cristóbal Montoro (Pierre-Philippe Marcou / AFP) Share on Facebook Share on Twitter Share on Whatsapp 0 > 04/15/2017 03:01 PM | Updated at 04/15/2017 3:22 PM Related topics
- Public debt
- Autonomic Liquidity Fund
- Cristóbal Montoro
- Ximo Puig
Public debt in Spain is running wild and communities with worse outlook demand solutions, but there are discrepancies. Fixing a withdrawal to which the autonomies have contracted is at the moment only a possibility, although some governments are already pushing for it. Is it necessary? Is it convenient?
Comunitat Valenciana is the one that pronounces itself more clearly in favor of canceling a percentage of the accumulated debt, while Madrid , which is the least indebted at the end of 2016 with a debt of 14.4% of its GDP, is part of the group of autonomy in favor of studying this question well before making any decision.
The Comunitat Valenciana, the most active
The Valencian treasurer of Finance, Vicent Soler, has come to ensure that simply getting Minister Cristóbal Montoro does not rule out the option is already a success in itself. Beyond the political variants, Valencia is the most indebted community in Spain, 42.5% of regional GDP (almost 44,000 million euros), which is largely explained by the historical underfunding that the Government of the socialist Ximo Puig.
His neighbor in the south, Murcia , agrees on the causes of the unstoppable expansion of the debt, but is not so clear about the solution. The debt in the Region (of 8,300 million euros, 29 percent of its GDP) has happened to him in other communities, and the Government of Murcia explains it well in the mail sent to Efe, in which, as that Valencia denounces its historical underfunding.
The role of the FLA
It is summarized as follows: the crisis arrives, incomes fall, resources go down and problems arise to finance services such as health, education or dependency.
What have the communities done? Ask for money from the Autonomic Liquidity Fund (FLA) designed by Montoro and get into debt.
Without abandoning the Mediterranean , the Balearic Executive affirms to Efe that the cancellation of the debt is “a reasonable compensation” due to that “insufficient financing” that the crisis, in addition, has aggravated.
Catalonia has been bearing an excessive burden of debt for years. He has also been dieting for years. The result is that it has managed to lighten that burden, as the Bank of Spain acknowledges, but the percentage nests for 35.4% of its GDP, says AIReF. However, the vice president and councilor for Economy, Oriol Junqueras , said on March 30 that he is not sure that the withdrawal is the solution.
The autonomies of the Mediterranean do not have a common position
The Mediterranean front, therefore, does not appear cohesive in this aspect, but not far away there are accessions to the removes, as in Castilla-La Mancha . Then there are the autonomic executives who do not see badly the removes, although with “buts”. Andalusia , for example, would defend it as long as it is subject to the elimination of the interests of the FLA, something that Castilla y León does not share, which wants to set a debt cancellation threshold on the total volume of the debt, not only on the one derived from said Fund.
The PP governs La Rioja and also is open to analyze the possibility of the removes. Your position, however, is guided by consensus, so take it away, yes, but with the highest degree of agreement. Similar is the position of Cantabria , supporter of speaking without apriorisms. “It’s time for suggestions,” his sources point out.
Galicia and the Canary Islands are two of the three communities that comply with the deficit and are covered by a different Fund, the Financial Facility, for which it does not have to pay such high interest. Therefore, they are also two of the least indebted communities. The removal, in the opinion of the governments of both communities, must be studied very well before making decisions. Discard that the forgiveness is done only thinking about the autonomies with higher debts.
Madrid rejects the removes
This possibility is not very funny in Madrid , the least indebted (it does not reach 15 percent), nor in Extremadura and Asturias , two autonomies, governed by the PSOE, so the commitment to take it away, therefore, is not thing that comes from partisan positions.
What to do with the debt is one of the gordianos knots of the reform of the system of autonomic financing, in which already work several experts of the Government and of the autonomous communities. Indeed, as recalled in the Valencian Government , the minister has not ruled out the removal, but has not defended either.
- Montoro does not rule out debt cancellations to the autonomies