La Xunta advocates for bringing this issue to the Conference of Presidents in Barcelona
The Finance officials of the governments of Galicia, Castilla La Mancha, and Valencia have urged the Government on Tuesday to reform the system of regional financing, calling for political will to update a model they see as «outdated.»
The Finance Minister of the Xunta, Miguel Corgos; the Finance, Public Administration, and Digital Transformation Minister of Castilla-La Mancha, Juan Alfonso Ruiz Molina; and the Finance and Economy Minister of the Generalitat Valenciana, Ruth Merino, have delivered this message during their participation in a conference on regional financing organized by the Network of Researchers in Regional Financing and Financial Decentralization in Spain (Rifde) at the University of Santiago de Compostela (USC).
In statements to the media, the Finance Minister of the Xunta de Galicia has called on the central Government to take responsibility and seek consensus to reform a regional financing system that is «outdated and insufficient.»
Miguel Corgos has considered it necessary for «the central Government to present a new model, instead of continuing endless discussions on specific elements of financing, seeking to divide territories,» when, as he has pointed out, the reality is that all communities are «underfinanced.»
The Finance Minister has advocated for a multilateral negotiated model, in which each community presents its needs and is willing to make concessions to reach an agreement that allows for stable and sufficient financing for all.
Corgos has said that Galicia is not alone in this position, but that 14 regional governments are urging the central Government to propose a reform that improves their financing. A proposal that, in his opinion, should not come from the Communities, but from the central Government to then be debated and agreed upon by all the autonomous regions.
The Minister has argued that this task can be accomplished through an analysis of which revenues of the central public treasury should finance the regional public systems and how to distribute them to ensure equitable financing of the services that communities must provide.
In response to the launch of a prior consultation on the central Government’s proposal for assuming the debt of the regions, Corgos has recalled that for Galicia, the volume of debt is not a problem, due to the fiscal responsibility policies implemented in the last 15 years.
Furthermore, he has warned that if mutualization of debt is achieved, pending regional issues will be put on hold indefinitely, which, as he has pointed out, «will harm all communities.»
COST OF PROVIDING SERVICES IN EACH TERRITORY
The Finance official has emphasized that the common goal should be to have a service map and accurately quantify the cost of providing services in each territory. Additionally, he has argued that the current model «does not provide the promised resources in 2009, when it was approved.»
Part of the success of the future system relies «on the accurate estimation of the adjusted population variable,» which is being discussed at these conferences.
According to Miguel Corgos, «there is no doubt that this variable must reflect the real costs of providing public services, taking into account factors that influence the estimation, such as population dispersion or aging.»
In this regard, he has pointed out that Galicia has 26.6% of people over 65 years old (compared to 20.4% in Spain), which along with the high dispersion in the community results in a deficit of 500 million euros per year.
The Minister has referred to the Santiago Declaration, signed at the end of 2021 by eight communities, as the «best example» that «despite legitimate differences, based on specific needs,» communities can reach common minimums to unlock the review of the system and obtain more resources to improve the quality of life of citizens.
«OUTDATED SYSTEM»
On the other hand, the Finance, Public Administration, and Digital Transformation Minister of Castilla-La Mancha, Juan Alfonso Ruiz Molina, has stated that the current system «is outdated» after «more than ten years without the central Government,» of any political color, «showing interest in renewing it.»
«The PP did not do it when it had an absolute majority, when there were no demands or requests from the autonomous communities governed by the PP to encourage that new model, and the current Government of Pedro Sánchez is not doing it either, as it is more concerned with solving the financing of Catalonia,» he pointed out.
In contrast, and in a context where he believes there is agreement among the regions on the need to reform the current system, he has highlighted the «consistency» of the government of Castilla-La Mancha, which, with both PP and PSOE governments, «calls for the need to modify» a model that «clearly harms» the region of Castilla-La Mancha.
According to him, this «absence» in the approval of a new model for Castilla-La Mancha means that it has to make a «much greater effort than other communities» to provide fundamental services such as healthcare, education, and social policies.
This «extra effort,» as he pointed out, «is being financed in many cases with debt.» «That is why we are one of the autonomous communities that, in terms of GDP, has the highest percentage of debt relative to regional wealth,» which means that «we cannot allocate resources to other regional development policies.»
For all these reasons, he believes that the Government should even be interested in approving a transitional fund, until a new model is approved, to compensate the autonomous communities that are «well below the average.» Furthermore, he emphasized that the new model must be led by the State in a context where regions have shown that they are capable of reaching agreements. «All we need to do is put a proposal on the table that we can all debate,» he said. On her part, Valencian Minister Ruth Merino has argued that the reform of the current model is a matter of «political will» that both the Minister of Finance, María Jesús Montoro, and the President of the Government, Pedro Sánchez, must have. In her speech, she stated that «more than 5 million Valencians» have been «disadvantaged for more than two decades» by an «outdated» system that is «insufficient, unequal, unjust, and hinders the provision of essential public services.»
As such, she also criticized that on May 20, her community still does not have the certainty from the central Government that it will receive the liquidity injection provided by the Autonomous Liquidity Fund (FLA).
GENERALITAT VALENCIANA