Montero opposes the fund claimed by the PP barons and Page and affirms that the communities already rejected it in December

The Finance Minister, María Jesús Montero, made a statement on Thursday stating that the majority of regional governments are against the idea of creating a leveling fund to compensate underfunded communities. This was in response to a proposal put forward by the popular barons of Andalusia, the Valencian Community, Murcia, and the socialist Emiliano García-Page in Castilla-La Mancha. However, Montero has opposed the creation of such a fund in the next Budgets.

Montero clarified that no leveling fund will be created with the upcoming Budgets and denied that this mechanism is included in the government agreement between PSOE and Sumar. However, the agreement does include a commitment to provide public services at the same level as the rest of the State to the underfunded autonomous communities.

The reform of the regional financing system has been pending since 2014 and has proven difficult due to competing interests and lack of a clear parliamentary majority. Four autonomous communities in Spain—Valencian Community, Andalusia, Murcia, and Castilla-La Mancha—have financing per inhabitant below the national average and have proposed a common front for the leveling fund.

In addition to this, María Jesús Montero announced that the Treasury will begin negotiating the forgiveness of part of the regional debt contracted during the 2008 crisis in February. The debt write-offs will be made according to common parameters for all communities and will affect all territories, regardless of whether they have debt with the State.

Montero also revealed that the European Commission has given approval for 340 million euros in pre-financing for the recovery plan addendum, as well as 1,040 million euros in non-refundable transfers for the same concept. The approval of general budgets is a top priority for the Finance Ministry in this legislature.