23-J freezes the reform of regional financing, expired for a decade
The agreement reached by the PSOE and ERC in 2019 gave birth to a system of distribution of funds between the CCAAs that has been detrimental to communities such as Andalusia, Valencia or Murcia, but the lack of agreement between the two major parties has made its renewal impossible. And the result of the general elections on July 23 is not exactly the best to unblock this dormant conflict..
The financing model was approved in 2009 with an expiration of four years. And it is not regulated by an organic law, which would facilitate its reform. But the main problem in dealing with its remodeling is that the communities, regardless of the political color of their government, have different priorities. The regional map that came out on May 28 places the greatest responsibility on the PP, since it controls most of the regional governments. But even among popular barons there are differences.
Juanma Moreno, for example, promoted a Mediterranean alliance with the Murcian Fernando López Miras, popular like him, and the socialist Ximo Puig. Now the Valencian president, Carlos Mazón, is also a member of the PP. But in this entente there is also the socialist Emiliano García-Page. These four regions defend that the model must attend to the amount of population and the cost of the public services that are financed, for which reason they came to ask the Government of Pedro Sánchez for a compensation fund of about 1,600 million.
What is striking is that in front of them are the presidents of the Cantabrian coast, regardless of their political color. There was Alberto Núñez Feijóo himself when he was Galician president, together with the Asturian Adrián Barbón, from the PSOE, who want other parameters such as territorial dispersion or the aging of the population to be taken into account. It is these regions that benefit the most from the current model, which is why they are most reluctant to the reform that they are pushing from that Mediterranean corridor sponsored by Ximo Piug and Juanma Moreno.
The devilish arithmetic that has emerged from 23-J distances this possibility even further, despite the fact that the two big parties maintain the reform as one of their priorities. In the National Board of Directors that the PP held on the day after the voting, Feijóo included updating the system in the projects that he would implement if he was able to achieve an investiture. In the event that the Galician manages to turn around the current scenario and reach Moncloa, he will have to work to agree with his barons, since Moreno's priorities are very different from those of his successor in the Xunta, Alfonso Rueda..
Montero's challenge
On the last few occasions that the debate on the financing model has been opened, the Minister of Finance has focused on this disparity within the popular. María Jesús Montero makes it obvious that within the PSOE there is no clear consensus on what the model should be like. However, the Socialists had in their electoral program for July 23 the commitment to approve a new model within a year. Treasury sources now admit that it will be complicated, given the parliamentary arithmetic. Their thesis is that if Sánchez is capable of putting together an Executive, the priorities will have to be modulated to accommodate the proposals of the investiture partners..
It must be remembered that number two of the PSOE championed the need to remodel the system when she was Minister of Finance in Andalusia. And already in the last stage of the Government of Mariano Rajoy, a Conference of Presidents was launched with this intention. The motion of censure that exalted Pedro Sánchez ruined the plans. Shortly after reaching the Executive, María Jesús Montero admitted the difficulties of completing the process. And the same thing happened after the 2019 elections and the formation of the coalition with Unidas Podemos.
The steps that Montero has taken have been aimed at defining the concept of adjusted population, which is the main variable used to distribute the funds among the communities.. It is a concept that starts from the number of inhabitants that a territory has, but qualified by those conditions that have communities in dispute: geographical dispersion, aging or spending on public services. The Treasury drew up a definition in the last legislature that will be the basis if the PSOE manages to put together a government.
Meanwhile, the struggles of the worst-financed communities will continue and the Government will continue to argue that it has been the cabinet that has made the most extraordinary funds available to the regional Administration, especially thanks to covid funds or the arrival of extra money from Brussels. The amounts that the territories receive from the State are the main support of the budgets that the autonomous governments put together and that this year they will have to get ahead without the spending ceiling or without knowing the deliveries on account. From the Treasury, they point out that this is not a relevant obstacle, since the communities have very accurate information about the resources they will have.