The First Vice-President and Minister of Finance, María Jesús Montero, announced today that the State will assume 83.252 billion euros of debt of the Autonomous Communities. This is an unprecedented measure that benefits all communities in the common system, regardless of whether they are indebted to the FLA or other extraordinary state funding mechanism.
In the case of Cantabria, the cancellation of the debt by the State reaches 809 million euros. This means reducing the Cantabrian debt by 24% compared to the closure recorded in 2023.
The objective of this proposal, which has been sent today to the Autonomous Communities for debate in the Fiscal and Financial Policy Council on Wednesday, is to correct the over-indebtedness to which the autonomous administrations were forced during the financial crisis, which contrasts with the support they have received during the Government of Pedro Sánchez to face the health crisis resulting from the pandemic or the effects of the war in Ukraine.
“With less debt there is more welfare state,” Montero said, explaining that, thanks to this government measure, the CCAA will significantly reduce its liabilities and will be in a better position to strengthen public services such as health, education or dependency.
Likewise, the head of the Treasury has stressed that this unprecedented action allows communities to gain financial autonomy and be able to go to the markets in better conditions.
The First Vice-President stressed that the cancellation of part of the regional debt is consistent with the policy of support for the CCAA that the progressive government has provided from day one to guarantee sufficient resources to communities to provide quality public services in very complex contexts such as a pandemic or the impact of the war in Ukraine.
4.502 million more for Cantabria
This policy of support for the CCAA is the one that has allowed the community of Cantabria to receive, excluding European funds, 4,502 million more resources in the seven years of Mariano Rajoy’s government. In fact, among the measures adopted are the 345 million COVID funds transferred by the State to Cantabria, or the 146 million negative liquidations of 2020 of Cantabria that the State assumed, among other actions.
Methodology for condonation
The cancellation of part of the autonomous debt is a further step in that direction of strengthening the State of the autonomies, which also complies with the investiture agreement reached with ERC and will allow all communities of common system to free resources from the payment of the debt to allocate them to public services for the benefit of all citizens.
The Finance Minister explained that the assumption of the autonomous debt starts from the premise of recognizing that the response given in the previous financial crisis by the central government was not adequate, which meant a sharp deterioration of the accounts of the Autonomous Communities. In fact, they were forced to become over-indebted through mechanisms such as the FLA and, in addition, to submit to strong financial restrictions.
The methodology starts precisely from the calculation of over-indebtedness. Thus, the growth of the autonomous debt during the financial crisis, that is, between December 31, 2009 and December 31, 2013, is compared with the growth of the autonomous liabilities during the period of the pandemic and the greater impact of the war in Ukraine, that is, from December 31, 2019 to December 31, 2023. In the first period, the debt increased by 109,582 million and, in the second, by only 29,272 million, which reflects the support they have received from the State.
The differential reaches 80.310 million euros and that is the initial amount to be condoned. The next step is to establish the distribution between Autonomous Communities. To do this, the methodology is divided into three phases:
- Phase 1. The bulk of the distribution of the condonation is done through the adjusted population criterion. In fact, 75% of the detected over-indebtedness of 80,310 million is realized based on the weight of the adjusted population average of each community between 2010 and 2022. For Cantabria, this distribution reaches 809 million euros of cancellation, 24% of its debt, a percentage above the average of 19.3% of the CCAA as a whole.
- Phase 2. The objective is that no Autonomous Community should be below the average of condonation per adjusted population. Therefore, the cancellation of those communities is raised below the average to ensure that they have at least 19.3% debt cancellation. Cantabria is not affected at this stage because it is above the average.
- Phase 3. Two additional adjustments are made. In the first, the autonomous community is identified that with the methodology followed so far presents a greater condonation per adjusted inhabitant, which is the Valencian Community with 2,284 euros. And then, an additional cancellation is fixed until reaching that same level for the autonomous communities that have had during the period 2010-2022 a homogeneous financing per adjusted inhabitant lower than the average.
Secondly, an additional compensation is also established for those communities that have exercised their regulatory competences in the IRPF upwards.
In the case of Cantabria, it would not be necessary to make any adjustments either.
The adjustments of these phases are aimed at trying to compensate and equalize the communities in two ratios that are likely to generate comparisons, such as that of cancelled debt over total and cancelled debt per inhabitant. In this way, the total amount of the cancellation for Cantabria stands at 809 million euros.
“This is an unprecedented effort that benefits all communities of the common system, whether or not they have debt to the State,” said Montero. The First Vice-President has called on all communities to have a constructive and positive debate on this measure at the next Fiscal and Financial Policy Council. “I think it would be hard for citizens to understand to reject something like this,” Montero said.