Montero pleads for more participation of the CCAA in revenue collection

The Minister of Finance, María Jesús Montero, has called for greater participation of the autonomous communities in the collection of what has been deposited by the State, for example in the VAT, at the time of reforming the regional financing system.

In an interview with Efe, Montero has indicated that communities “are beginning to name” their representatives in the political group that will deal with this reform and has asked that they be people who can “make decisions without having to constantly consult.”

He referred to the work of the commission of experts in which different options are proposed, “some contradictory”, since the particular votes exceeded those of the paper, although, he has acknowledged, it is “good starting material”.

After insisting that the previous government “had no interest” in addressing the issue, has been surprised that now the PP “hurry” and some of its presidents, who “have been characterized by silence, are now less that screaming with financing “, what is” a lack of absolute coherence “.

Montero is committed to “put all the means” for the autonomy to approach positions, which “is not easy” and, therefore, has decided to start with the part that “generates more consensus”: determine what is insufficient resources that they have regarding the assigned competences.

The minister has alluded to the different existing works that go from taking a base year and from there projecting it and the most complex that would be to make a detailed evaluation of the cost of the services, for what it would be necessary to develop an accounting that now they do not have the communities.

In his opinion, if there is agreement on how much the Government has to transfer additionally so that the welfare state is sustainable, “there will be many possibilities to create a climate so that when it is distributed by adjusted population” it has been possible to create a model “Comfortable”, although it is not a “tailor-made suit”, which is “extraordinarily complex”.

For the new model, Montero is in favor of the autonomy level that retains its funding comes from its participation in the collection.

“I am firmly convinced of the state of autonomy,” he added, “and we should design a system that would allow the autonomies to participate to a greater extent than the current collection.”

In his opinion, this option is better than direct transfers, which “makes financing dependent” on the general budgets of the State, and has underlined that communities should have the capacity to do their own “with or without” state accounts, because they are administrations “absolutely autonomous financially”.

Regarding the possibility that the communities could have a collegiate VAT that could go up, it considers that it is “very complicated” and is inclined towards a greater capacity to participate in its collection, although they do not have regulatory capacity.

The minister has not pronounced on when the new model will be ready and indicates that they are working so that it is “as soon as possible”, which will also depend on the capacity of the autonomies to reach agreements.

But he wants to be realistic and recognizes that there can be a reasonable time when there is talk of insufficient resources; that the coincidences will be less in the fiscal harmonization, and that, when speaking of the adjusted population, “the differences will be great, because each one will try the distribution that is perfect”.

It also foresees “large differences” in fiscal capacity and autonomy, since only those with a higher level of income prefer more fiscal capacity.

And “agreeing as a country in the funding model unanimously would be that we all have the same idea of ​​country, social services, health … and as that is not the political reality”, what the minister intends is reach a reasonable consensus, because “unanimous will be difficult”.

Regarding 2019 is municipal election year and in most communities and possible budget excesses, recognizes that there is “a tendency to propose measures that have not been carried out in previous times”, although they know that they have to be responsible and that Your budgets will have to comply with all fiscal rules.

“The Government will use and make use of measures so that administrations comply with what the law requires,” concluded Montero.

Approved the new financing model with the abstention of the autonomous communities of PP

The Fiscal and Financial Policy Council (CPFF) has given its approval to the Government’s proposal on the regional financing model with the favorable vote of the socialist communities, as well as of Cantabria (PRC-PSOE) and Canary Islands (CC-PP), and the abstention of the governed in majority by the PP.

This has been announced by the Minister of Economy and Finance of Extremadura, Angel Franco , who has assured that ten autonomous regions have voted in favor, while the six governed by the PP have abstained and the Canary Islands, Cantabria and the autonomous city of Ceuta, ruled in majority by the PP, have voted in favor.

After being approved, the vice presidents of the Government Elena Salgado and Manuel Chaves have highlighted that the regional financing model debated in the CPFF has not received any votes against and have said that with it all the autonomies win and none loses.

The agreement has gone ahead with the favorable votes of the seven communities of the PSOE (Andalusia, Aragon, Asturias, Balearic Islands, Castilla-La Mancha, Catalonia and Extremadura), Cantabria (PRC-PSOE), Canary Islands (CC-PP) and the Autonomous city of Ceuta, governed with an absolute majority by the PP. The six communities governed by the PP -Galicia, Madrid, Castilla y León, Murcia, La Rioja and the Valencian Community- have abstained, as has the autonomous city of Melilla, while Navarre and the Basque Country, communities to which they are not affected by the model, they have been absent from the vote.

The economic vice president explained that the government “will not save efforts” to ensure that the model obtains the greatest possible consensus in the Cortes Generales through a project that will modify the Organic Law on Financing of Autonomous Communities ( LOFCA ), although the application in each community it will depend on its being ratified in the corresponding mixed commissions.

Without mentioning any community, Salgado has ensured that during the meeting some regional representative has expressed his desire to vote against, but had instructions from his party, alluding to the PP, to abstain.

Chaves, meanwhile, wanted to make it clear that “you can be for or against the model”, but “it is not legitimate” to say that Catalonia benefits, since “it has not taken more or less than the rest”. After recalling that this community was “significantly below the average” in funding per capita, Chaves has urged that the “comparative grievance” or “confrontation” between autonomies not be used, for which he has asked for “maturity” and ” responsibility “, especially to the PP.

Salgado has defended the government document because it grants more resources to the communities, guarantees citizens equality in basic services, contributes to equity in financing per capita and increases regulatory capacity in taxes. And, according to the Government, four out of five euros will go to social policies.

Without specification in the figures
Neither Chaves nor Salgado wanted to provide the final figures of the financing and they have been sent to the communities if they want to make their calculations public, although they have insisted that they will depend on economic growth and tax revenues.

They have only mentioned the additional 11,000 million euros to the system that, according to Salgado, represent around 10 percent of total resources. However, he announced that at the end of July an initial figure will be released of the resources that the communities will be able to count on so that they can reflect it in their 2010 budgets, which will be confirmed in September.

The vice president acknowledged that the current situation is very complicated and that while in the 1999-2007 period the regional funding has had positive results, after those dates the tax revenues have fallen, which may affect the system.
Regarding the requests still made today by some communities for some variables ponder more in the system, Salgado has specified that “it does not seem easy” to introduce more weightings because they already add a hundred, and recalled that a balance has been reached with the demands of the autonomies in this aspect. However, he stressed that the request of Galicia to take into account their emigrants – some 400,000 – could not be collected.

On the other hand, some claims from Ceuta have been accepted, which will allow the autonomous city 1.5 million euros more. With respect to the criticisms of some autonomies of the PP that consider that the model penalizes the reduction of taxes, Salgado has explained that the proposal does allow this reduction and that it does not penalize it, although it has considered that at the time of economic crisis it is not solidary to decrease them.

This morning, some communities of the PP, like the one of Madrid, had announced their opposite vote, although finally there has been an instruction of the national direction of the party so that they abstain.

Catalunya, satisfied with the approval of the new model
The Minister of the Economy of Catalonia, Antoni Castells , has expressed the satisfaction of the Government of the Generalitat for the approval of the new model of regional financing, which “suits Catalonia”, allows compliance with the provisions of its Statute and is “the best for Spain”.

Speaking to the media after the meeting of the Fiscal and Financial Policy Council (CPFF), where the new regional financing system has been approved, Castells has indicated that this proposal will allow “entering a new stage”, “addressing the numerous shortcomings that had the current model “and have a new model that” should not be subject to reinvention every five years. “

In his opinion, the new model improves “appreciably” the financial sufficiency of the autonomous communities and allows to alleviate the financial “precariousness” of these administrations, which must attend the fundamental services of the Welfare State.

It also introduces updating mechanisms, which will avoid having to “reinvent” a new model every five years, while incorporating powerful leveling mechanisms between the different territories. The Government of the Generalitat de Catalunya sees with satisfaction the approval of this funding proposal that allows it to comply with the provisions of the Statute of Autonomy of Catalonia, he highlighted.

“The model is the one that suits Catalonia, but at the same time it is the best model for Spain”, stressed Castells, who added that there will be “a before and after the approval of this new financing model”, that ” It will allow us to enter a stage of stability in a matter that has been for many years an issue never resolved satisfactorily. “

Faced with the abstention of the communities governed by the PP before the new system, it has stressed that in matters of substance such as this, “alignments should not be partisan, but rather based on the logic of the State and institutions.”

The financing of Catalonia is going to get worse

The financing of Catalonia is going to get worse as the regional financing system agreed by the tripartite with the Zapatero Government after the approval of the Statute has been applied. The Socialists proclaimed him as the best in history. It was not a lie at all. For the first time, Catalonia was above average in terms of financing per capita, but it turned out to be a mirage. The relative evolution of the system has been so negative that it has once again placed Catalonia below the average, and Catalonia is once again the third community to pay and the tenth to receive. Catalonia is not the only one harmed. Madrid is much more so and Murcia has also worsened its relative position with respect to the rest of the autonomous communities.

These data appear in the Analysis Document of the Financing Model of the Autonomous Communities , prepared by technicians of the Department of Economy of the Generalitat at the request of the Ministry of Finance and that the Govern will present to the Minister Cristóbal Montoro in the coming days. The document, to which La Vanguardia has had access, supposes a devastating criticism of the system but above all of the application that the Central Administration has made, considering that it generates results contrary to the persecuted ones. Instead of shortening distances between communities, it maintains or increases the imbalance. “The evolution of resources -says the document- shows a progressive increase in the disparity between autonomous communities”, since it has benefited even more those who contributed less and received more. In particular, the per capita financing of Catalonia in the 2009-2012 period has increased by 74 euros per inhabitant, a negative figure when it relates to the population. In this case the community of Madrid has still fared worse because not only has it not won but it has lost eleven euros per inhabitant in the same period. Madrid, the Balearic Islands and Catalonia continue to be the communities that, after making a greater fiscal effort to contribute to the group at the time of the distribution, are left with fewer resources per capita than the host communities.

However, these are not the main conclusions of the document of the Generalitat, which does not make specific reference to Catalonia but analyzes the system as a whole. The main conclusion is not that Catalonia is discriminated against, but that “there has been a vertical imbalance in favor of the State since its resources have increased at a rate of 7%, while communities have done so at a rate of 2.5%. % “.

The most transcendental of this data is not that it penalizes the regional administrations but directly affects personal services: “Expenditures in health and education – the document points out – fall back and reach levels prior to 2002, while the total of public spending is progressively approaching European levels “.

The study offers data to show that the application of the system works in a direction contrary to the objectives pursued. “Redistributing resources from 2012 based on the distribution of 2009 would mean providing the autonomous communities with 5,534 million euros and this distribution should be considered minimal, since the spending needs of the communities since 2009 have increased (dependency law, etc.). ) “.

Another conclusion of the report indicates that “it is contradictory the fact that the communities that have exerted an upward fiscal pressure are not those that have more resources per capita and vice versa the autonomous communities with a downward fiscal pressure have more resources This contradiction is explained because the distribution of the rest of the model’s resources does not obey any criterion of equity “.

The little relevant role in the management of taxes causes, according to the authors of the text, undesirable distortions “by the little perceptibility of the citizens and by the null information on the fiscal reality of each community and supposes a limitation to the financial autonomy”

The text states that the evolution of resources by communities has not had a positive relationship with population growth either. The report analyzes the functioning of the funds that are redistributed among the communities with different criteria and concludes that the application is arbitrary and the result is inconsistent: “The global sufficiency fund and the convergence funds (competitiveness and cooperation) introduce strong distortions .

The report insists that all communities have been harmed by the application of the financing system, but obviously some more than others. The Cantabrian, the Riojan and the Extremaduran have achieved a higher per capita funding in this order.

There are only three donor communities and twelve receiving communities. The three donors are also in this order Madrid, the Balearic Islands and Catalonia, although Madrid achieves greater tax capacity thanks precisely to the status of capital of Madrid that involves the contribution of state officials, senior officials and public companies whose income comes in large part also of the taxes that all the taxpayers of the country pay.

Montoro announces that in a year there will be new system of local financing

The Minister of Finance and Public Administration , Cristóbal Montoro , said on Thursday that “in a year” there will be a new system of local financing and recalled that local authorities have been the only administrations with surplus in their accounts of 2012, a trend that continues in 2013.

In the presentation of the bill of Rationalization and Sustainability of the Local Administration before the Plenary Session of the Congress, Montoro has extended its hand to continue with the negotiations to the rest of the political forces, after the vote of the ten amendments to this local reform. He insisted that they will continue to talk with the parliamentary groups during the parliamentary process and thanked the PNV for having withdrawn its amendment to the whole just before the debate.

The spirit of the reform, has continued, is to empower local administrations because they are “the closest to the citizen and that is where politics becomes greater with commitment to citizens”. The minister recalled that the Constitution does not make explicit reference to municipal powers and that it has been the Constitutional Court, through numerous judgments, who has attributed to the state legislator to set the bases and their powers.

This situation, he added, has led to “certain dysfunctions, duplicities and competition” of competencies or to the municipalities to provide services without having the “competence title”, which the reform will correct. Montoro has valued the financial “good behavior” of the local administrations and the surplus achieved in 2012, as well as in the first part of 2013, which has estimated at 0.19% of GDP. He assured that the reform will also serve so that this attitude “is constant and an example for the other administrations.

He recalled that, although they were authorized to reach a deficit of 0.39% of GDP in 2012, they closed the year with a surplus of 0.22, which shows their “excellent political management”, as well as the efforts of citizens , “who appreciate that the accounts are healthy”. The minister has assured that the intention of the Executive is to count on a new system of local financing in a year, to consolidate the accounts of the local corporations.

He has referred to the gestation of the draft law of local reform, which began in February 2012, and the numerous changes in the text.

In his opinion, he is respectful “to the extreme” with the powers of the autonomies and with the specificities of the Basque Country, Navarre, Madrid, Barcelona, ​​Ceuta, Melilla and the county division. He stressed that for some skills, such as education, there is a transitional period related to new local financing, but that services will be provided equally, without citizens noticing the changes, for which guarantees are set.

Support from the mayors of PP

Before the presentation in the plenary session, some thirty mayors of the PP have staged their support for local reform in a meeting with Minister Montoro. The spokesman of the party in the Congress, Alfonso Alonso, and the deputy secretary general of Autonomic and Local Policy of the party, Javier Arenas, have attended this meeting prior to the debate of the whole that is celebrated in the Congress and that they have attended, among others , the mayors of Madrid, Ana Botella, and of Valencia, Rita Barberá.

The mayor of Santander and president of the Spanish Federation of Municipalities and Provinces, Íñigo de la Serna, has ensured after this meeting that “there is nothing” in this law that makes one think, “not even from a distance”, that a privatization may occur of services, as the opposition denounces, mostly contrary to the reform.

Although he recalled that all the local entities that he knows, of all the parties, have many privatized services, De la Serna has insisted to journalists that there is “nothing” in the reform that says the management system is modified. public services.

The president of the FEMP has admitted that the first drafts of this bill contained aspects that the municipalities rejected and “sufficient reasons” for the complaint, such as the so-called standard cost that violated local autonomy, but recalled that they were withdrawn and not They are already in the project.

That is why he has insisted on defending this reform, which -he has underlined- ends with the “improper powers” assumed by the municipalities when they belong to the communities, and guarantees that the local entities that continue to exercise them as “management encomiendas” will receive the 100% per cent of the financing of the regional administrations.

All this, he added, with the commitment of the State to withdraw that money from the communities and give it to the municipalities if the former do not pay. De la Serna recalled on the other hand that the other great demand of the municipalities, the reform of local funding, will also be addressed by the Government, which will approve at the same time as the autonomy, as expressed today Montoro mayors of the match.

ERC supports the new financing model and assumes that Catalonia will reach 3,855 million euros in 2012

After many deliberations and pressures, the executive of ERC has decided to support the new financing model proposed by the Government considering that Catalonia exceeds the “minimum bar” of 3,800 million euros (in particular, 3,855) and be placed 5 points above the average in the ranking of the Communities (105.6).

The president of ERC, Joan Puigcercós , has made known the “yes” of his party to the new system, after an extraordinary meeting of the executive, which lasted two and a half hours, and in which it has been estimated that the proposal Government revenue exceeds the figure for the Generalitat of 3 additional 800 million euros in the last year of implementation (2012).

This figure had been placed as a “minimum bar” by ERC for some days, together with the guarantee that Catalonia would be located five points above the average in the ranking of income per capita of the Autonomous Communities, after being applied the various funds inherent in the new financing system.

According to your data, Catalonia will be from the first year “slightly” above the per capita income of all Autonomous Communities, to reach 105% in the last year , another of the claims of the Republicans.

ERC took the decision shortly after the economic vice president, Elena Salgado , announced that the new model of regional funding will provide the set of autonomies additional resources slightly higher than 11,000 million euros in 2012, when fully implemented.

According to Puigcercós, who has described as “historic” today, the 3,855 million euros obtained in the fourth year of application of the new model, added to the investments in infrastructure provided in the third additional provision of the Statute, reach the total figure of 5,000 million euros , and this, he assured, means reducing by one third the fiscal deficit of Catalonia with the State.

The approval of the new model by the executive of ERC has not been an easy or unanimous decision, because in the vote the result has been 27 favorable votes, 10 contrary and 4 blank. In addition, Puigcercós has pointed out that the “yes” of his party is conditioned to the verification that the agreement reached is fully reflected in the written text of reform of the Organic Law for the Financing of Autonomous Communities (LOFCA).

“We will be attentive to this,” he pointed out, “because we are a chastened country” with the promises made from Madrid, although he has admitted that the agreement reached marks a “turning point” because from now on “people can see that, if you work and you press, the policy is useful, and we have stood up to the State and we have won. “

In the brief appearance of Puigcercós before the media, the maximum leader of ERC has underlined the work and efforts made from his party to reach an agreement that “is good”, he said, and represents a historic achievement, “because For the first time since the restoration of democracy, Catalonia will be above the average in the ranking of Communities. ”
He also pointed out that by the fourth year of application of the new system, the resources obtained from the ceded taxes “will be consolidated” although it is not the “definitive system” that, for ERC, “remains the economic agreement, and better yet, the independence of Catalonia “.

In internal key, and thinking especially in the sectors of Esquerra that would have wanted to go beyond the reached agreement, Puigcercós has indicated that “it is a decision taken thinking of the country” and “not in the party” and has ensured that it was “the limit that we could reach with the State”.

Puigcercós, who has appeared before the journalists exultant and that has been very applauded by the members of the executive, has indicated that “now we begin a new stage”, in which the Catalan government will have many more resources to apply the “ambitious” laws “That has approved, and at the same time, facing the exit of the economic crisis” working in favor of families and companies “.

The “yes” of the executive of ERC will enable the Catalan government as a whole to approve the new system and that the Minister of Economy, Antoni Castells, can move this position next Wednesday at the meeting of the Fiscal and Financial Policy Council.

Cristóbal Montoro: “The financing system will change when the country recovers”

The Minister of the Treasury, Cristóbal Montoro (Jaén, 1950), has just presented the state budget for the next year – it already has a dozen – and has again provoked criticism from the economic and political world of Catalonia. Replica that the investment of the State is not the key of the recovery, but the cut of the deficit, and is optimistic about the future of the Spanish economy. In line with the President of the Government, he does not propose any economic offer to negotiate with the Generalitat, although he admits that the State is keeping Catalan public debt.

The investment item allocated to Catalonia in the budgets of 2015, 9.5% of the total, has provoked strong criticism at a politically charged moment. Why has it been so short in the most significant economic community? There was a certain expectation that the central government would send a message that what is happening in Catalonia not only worries him, it also makes him act with proposals and offers.
During these years of crisis there has been no choice but to reduce spending and investment, since the objective of the State has been to save the expenses associated with social items and the welfare state. In 2012, unemployment, non-contributory pensions and minimum complements of the lowest ones amounted to 33,000 million. In 2014, 27,000 million, and in 2015, thanks to lower unemployment, will amount to 23,000 million. Therefore, we have had to reduce investment, not only in Catalonia. Now it is said that the 2015 budget is the return of the investment; but it is not true, investment represents 0.8% of GDP. The goal of 2015 remains to save social spending and reduce the deficit.

But, in any case, one more year the investment is very far from the economic weight of Catalonia, and already add many …
The Government’s objective is to finance Catalan public services, from the central State, unemployment and pensions, and, through the communities, education and health. This is first our obligation and then the responsibility of the communities. The social expenditure items that I mentioned before (unemployment, pensions …) go mainly to the most populated communities, especially Catalonia.

The Catalan business organizations, further away from the political battle, have joined the complaints …
The criticism of the bosses is not correct, although I recognize that they are made by all the territories. It is true that investment has been reduced everywhere, but this has not prevented growth from recovering. Catalonia is already growing and with very little public investment. The recovery is not coming hand in hand with public investment. Remember that already in the previous economic cycle, the boom of public investment came when the economy was already very accelerated. Public investment is never the basis or lever of growth recovery.

Although it always helps, especially when recovery is slow …
Some, yes, as the Mediterranean corridor, which benefits Catalonia, and which is one of the investment priorities of the Ministry of Public Works and is included in next year’s budgets.

If the businessmen ask for it, for something it will be …
I believe that businessmen should be concerned about the conditions of business financing, taxes and the tax reform we have put in place -to lower costs and have more resources to invest-, for the market unit or for the framework of labor relations. In this they must demand improvements and reforms.

Nor put on the table proposals on a new system of regional financing.
The finance minister must speak with data and figures. Sometimes differential financing systems are claimed as if they were the panacea, but which community is growing the most, Catalonia or those that have a regional or concert system? Catalonia is the one that grows the most. The regional financing system is attributed functions and effects that do not correspond to it. Its objective is to finance public services in the communities, nothing more.

In short, it is not for the task of proposing a new model, a way to advance proposals that address some of the demands made from Catalonia …
We can not distribute what we do not have. We finance social services with effort, that’s what we are in, and we do not finance economic activities, only public services. The new financing system will come when we have settled the recovery and growth returns and public revenue grows. Remember that just two years ago, CiU was asking Mariano Rajoy in Congress to ask for the rescue of Spain.

Neither have attended the list that President Artur Mas delivered to Mariano Rajoy in their last meeting …
The Govern de Artur Mas is for another thing, it is not for that negotiation. He is about to vote to leave. How are you going to negotiate on that list of points? We are focused on solving the economic crisis and creating jobs, maintaining the welfare state and advancing European integration. Now Spain is a leader in growth in Europe and Catalonia leads that process. And the reforms we approved, the tax reductions, the improvement of financing, the recovery of credit, benefit Catalan companies.

Have you chosen not to advance any proposal in the field of relations between Catalonia and Spain, as if they thought that things are fine as they are and it was not necessary to propose changes?
That is not true. We have done many things. I am thinking, for example, of the Autonomic Liquidity Fund (FLA), which subscribes to the renewals and debt issues of the autonomous communities that can not access the debt markets. Last July we approved a reduction in the financial cost of the FLA and, in addition, a postponement in the maturity schedule of that debt. The financial cost of all this is assumed by the State. This measure represents for Catalonia a saving of about 1,700 million euros. Now we are launching a social FLA so that the municipalities that are financing social activities through agreements with the autonomies receive the money and are not in debt to cover actions for which they do not have resources.

The FLA is the first creditor of the Generalitat, with almost 50% of the total debt. Has a possible waiver to collect it been raised, a waiver to compensate, even partially, for Catalonia’s fiscal deficit?
In practice this debt is already being left by the State, we are sharing it, it is becoming the debt of the entire State. It can not be condoned because Brussels would force us to transfer that condoning to the deficit. It would also convey an idea that communities do not manage properly and would not be good, especially in the face of markets.

What do you think that communities like Valencia, which admit practically their insolvency, announce tax cuts?
As far as I know, at the moment it has only been an announcement. If your goal is to accommodate your rate to the new one that incorporates the tax reform, I see no problem. Although we must be extremely cautious, these things can not be done for political reasons, because then it is not credible. If an autonomous community complains that it has serious financial problems, then it can not make certain cheerful announcements. And in addition, the idea that administrations should act with extreme financial prudence can be difficult. I must also tell him that in the case he mentions, they have told me that the reduction will be practically symbolic.

Sometimes, the Minister of Economy, Andreu Mas-Colell, says that if the Catalan economy has been able to perform with a fiscal deficit of up to 9%, for Spain it would not be impossible to wipe it, since it would represent less than 2% of GDP, 18,000 millions of euros…
And where would more money come from to cover that? The central administration has already made many cuts to maintain social spending. Ministries have greatly reduced their weight.

If the Catalan problem continues to rise in temperature, are you not afraid that markets will take their toll, trigger the risk premium and put public accounts at risk? Some rating agencies have already warned …
There are always risks that counteract creating trust and growth. The markets issue warnings, but what counts is reality. And the cost of placing public debt is very low and remains that way without alterations. At the same time, the flow of new credit to the economy continues to improve and is already above even the Eurozone average.

Going back to budgets, some people consider them too optimistic …
We are not optimistic, we have chosen the consensus scenario and we agree until the tenth. And that does not usually happen. Nobody denies that the economy is in a recovery phase, especially in view of membership data and job creation. It could certainly go faster, but never created jobs with such a low growth rate and this change should be valued.

But from Europe, the first merchandise market and the first issuer of tourists, come very cold airs …
Europe worries me, but I am also aware that the European institutions, especially the ECB, are acting, as they have done, with more or less decision, throughout the crisis. The new European Commission will react. By the way, it is curious that those who now issue more warnings about the possible recession in the Eurozone are the outgoing commissioners. What had they done until now?

The outer front returns to the red numbers. Imports grow, and export volume growth slows down …
The key is to match a sustained increase in domestic demand while maintaining a good tone of exports to avoid the classic bottleneck for dependence on foreign countries. We are the country with the second largest external debt, and that is why reducing dependence from abroad and reducing the public deficit is key for the recovery to arrive and be sustainable. But the Spanish economy is already on a path of sustained growth thanks to the reforms and budgetary policies of expenditure control applied.

Asturias, among the communities affected by new regional financing

Experts from more than 20 Spanish and international universities, the Bank of Spain and the Foundation for Applied Economics Studies (Fedea) urge the simplification and establishment of a “clear” criterion of equity between Autonomous Communities (CCAA), and propose the creation of a ‘piggy bank’ for them to turn to in times of crisis in order to maintain basic services, among the measures to be included in the reform of the regional financing model.

With this reform, communities such as Asturias, Cantabria, Galicia, Extremadura and La Rioja, which benefit from the current model, would be harmed, compared to others such as Valencia or Murcia, which are currently the worst financed and would gain from the change.

These are some of the proposals included in the 30th volume of the collection of Estudios Mediterráneo Económico “Autonomic financing: problems of the model and proposals for reform”, presented this Wednesday by the executive director of Fedea, Ángel de la Fuente, and the president of Cajamar, Eduardo Baamonde, whose entity publishes the volume of 481 pages.

The study, coordinated by De la Fuente and the professor of Public Economics at the University of Zaragoza, Julio López Laborda, includes several proposals for the reform of the current financing system of the autonomous communities of the common system, compared to a current model characterized by the “arbitrariness” in the distribution of resources between regions, a “clear” deficit of autonomy and fiscal responsibility on the part of the Autonomous Communities and the absence of a “reasonable” mechanism that guarantees a balance in the vertical distribution of resources.

The president of Cajamar, Eduardo Baamonde, has advocated for consensus on alternatives to improve the model to contribute to a “more efficient, equitable and sustainable” economy, and recalled that currently has implemented an “almost federal regime”, as the powers, especially in social matters, they are transferred to the CCAA, which represents around a third of total public expenditure.

Faced with an “extremely complex” political situation, Baamonde has asked for “peace of mind” to reach consensus, since, in addition, from the point of view of income “things are quite complicated” and this is added to the vigilance of the community authorities.

De la Fuente has indicated that it is a “recurrent and very complicated” issue, although, after the system has evolved based on “stumbles and patches”, the time has come to undertake a “well thought out” reform.

Thus, has explained that the proposals with greater consensus among experts to undertake a reform of the system of regional funding point to the need to simplify the current model, to be “incomprehensible to the average citizen.”

In addition, they consider that the objectives of equity of distribution should be “much clearer and more explicit”, and their application should be “more recognizable”, as well as working for the respect of the ordinality principle, since “equality should reflect the inequality of origin “.

All these modifications in the model of regional financing would have to be undertaken in a “gradual” way and without “sudden jumps” to avoid leaving an important part of the budget to certain regions, said De la Fuente, who has indicated that another of the proposals of greater consensus is that the CCAA have an “important” common resource, such as VAT, special taxes or part of the IRPF, which is managed jointly and serves to improve the financial autonomy of the CCAA, have more instruments and contribute to vertical balance.

However, experts believe that the CCAA have to “get wet” when raising taxes and that “citizens perceive it”, since “it is the only way that there is a brake to spend more”, even though entails a cost

Likewise, they are committed to incorporating legacy communities into release mechanisms that contribute to transferring resources to the Autonomous Regions that need them most, as well as adjusting the calculation of spending needs and improving the delivery system on account of liquidations so that the money reaches the regions faster and can respond before cycle changes.

AN INDEPENDENT TAX ADMINISTRATION

Another of the proposals made by the experts, although of smaller consensus, suggests the introduction of a stabilization fund for the autonomous communities that in practice would be a kind of ‘piggy bank’ that they can use to maintain basic services in the times of “skinny cows”.

To improve regional financing they also urge to create a single and independent tax administration, shared between the Government and the autonomous communities, and urge to improve the degree of leveling of the system to analyze how far to equalize the financing between the “rich and poor” communities. , which predictably will unleash the “great political fight”, predicted De la Fuente.

The executive director of Fedea has detailed that the subjects without agreement between the experts are those referred to the calculation of the needs of expense, to the having “enough controversy”, since some bet by introducing the level of prices, the income per capita, to give more weight to the population or prioritize the geographical factors.

The disparity among the experts also occurs in how the system should evolve, a point in which some advocate shielding the revenues of the CCAA by isolating them from the economic cycle, and others believe that it is “impossible” and that the resources of the regions must be distributed. that are available.

There is also no unanimity with regard to the negotiation of the system, since while some experts believe that it should be carried out between the parties, others would see meritorious that the CCAA would be entrusted, although it would be more complicated.

VALENCIA AND MURCIA, WOULD BENEFIT WITH THE REFORM

Asked about the autonomous communities that would benefit the most from a reform of regional financing, De la Fuente explained that the rates of financing per inhabitant adjusted show that regions such as Valencia and Murcia are the ones that suffer the worst financing, so “They should probably win with the change.”

On the contrary, communities such as La Rioja or Cantabria are currently the most benefited regions at the level of funding, although in these a fixed component disappeared from the adjusted population and their indices do not reflect their actual level of funding, has qualified De la Fuente .

In any case, both communities, together with others such as Galicia, Asturias and Extremadura, which are also in the upper distribution line, could be damaged if a reform that establishes a more egalitarian designation is approved.

In any case, De la Fuente has insisted on the consensus regarding the need to reform the model to achieve its simplification and transparency, to achieve “explainable and equitable” results, and the establishment of a clearer criterion of equity, to avoid there is an “abysmal” difference between the theoretical distribution rule and the result in its practice.

The negotiation of the regional financing will determine how to pay for dependence

The Government and the communities will arrive at the Conference of Presidents next week with the common will to reform the regional financing model, but during the negotiation they will have to approximate their positions on how to deal with the spending on dependence and other social policies.

With ten agreements will close the Conference of Presidents next Tuesday in the Senate. After the second preparatory meeting today, again with the absence of Catalonia and the Basque Country, five of them are already closed and many more will be finalized tomorrow, when the Government sends to the communities the slight modifications agreed this afternoon.

One of those developments has to do with the agreement that will allow to promote the reform of the regional financing (and in parallel that of the local administration) from the same Tuesday.

Mariano Rajoy and the autonomous presidents, except Carles Puigdemont and Íñigo Urkullu, will agree on the creation in a month of a group of experts chosen by the central and regional administrations to study how the current model has worked between 2009 and 2013 and lay the foundations of what happens to him.

When the work of experts and technicians is over, Minister Cristóbal Montoro and the communities will give the appropriate adjustments in the same Fiscal Policy Council and send the project to Congress, because the reform of the regional financing is an Organic Law and needs a majority absolute parliamentary

At a press conference, the Secretary of State for Finance, José Enrique Fernández de Moya, stressed the importance of marking the beginning of the process, but has not ventured into deadlines.

During this negotiation, whatever the duration, the Government and the autonomies will analyze how to pay for the Dependency system.

According to sources present at the meeting, at the initiative of Extremadura, with the support of the other socialist governments, it has been agreed to provide a novelty accepted by the Executive: the new financing must take into account the expenditure in dependence.

But how it will be taken into account is not clear. Fernandez de Moya has advocated not only treating “exclusively” the investment in this pillar of the welfare state, but also addressing all the expenses derived from social policies, such as access to housing or disability.

Because, he added, “essential public services, in addition to dependency, encompass other policies that include a public expenditure that must be contained in the new model, not to exclude, but to take into account others.”

In this regard, he said, all communities have expressed their agreement today.

The socialist autonomies claim that the new financing assumes an equitable distribution of the cost of dependency, so as to guarantee the financing of this to 50 percent between central administration and territorial administrations, but the Government wants to extend this scope to other social politics.

The agreements closed today are:

– A pact for Education that takes into account the contributions of the autonomous governments through a session of the Commission of Autonomous Communities of the Senate.

– Implement a social card that collects the aid received by citizens of each administration.

– That the communities participate more in European strategies.

– Create before March 31 a National Civil Protection Commission with representatives of the Government and the communities to improve coordination in the face of natural catastrophes.

– The Conference of Presidents will have an annual periodicity and their agreements will be followed up by the Commission of Autonomous Communities of the Senate.

On this point, the Secretary of State for Territorial Administration, Roberto Bermúdez de Castro, said that the session on Tuesday will begin at 9:00 a.m. with “a coffee” chaired by the King, will continue with a series of interventions by Rajoy (10 minutes) ) and the other presidents (7-10 minutes), will include a “relaxed lunch” and will close, in the afternoon, with the debate on the agreements.

Also, the consensus to close tomorrow, in addition to what is related to regional financing, are:

– Draft a National Strategy on demographic imbalances this year, which will advocate for improving access to European funds.

– Strengthen the market unit.

– Betting on the geographical mobility of officials and ending the current replacement rate in basic services and emergency services.

– Promotion of the social bonus.

The Government, represented at the meeting by Soraya Sáenz de Santamaría and Cristóbal Montoro, thanked the communities for their tone and willingness to collaborate, and unlike the first preparatory session on December 21, this time there was no mention of the absences from Catalonia and Euskadi.

However, both will have all the documentation generated by the Conference of Presidents.

Why the Basques and the Catalans do not?

Under the tree are the Fueros and, around them, sailors, farmers and miners pay homage with their tools of work. A sunny day in Gernika (Bizkaia) and the impressive multicolored window covering the roof of the Casa de Juntas makes the whole room shine. The work is a reminder of the historical autonomy of Biscay that, like the other Basque territories, has been articulated for centuries by the statutory regime. A tool that Spain has accepted as a unifying element.

A few meters from the room stands the historic oak, symbol of Basque freedoms. Next to him the nobles of Biscay met in the General Meetings, the kings of Spain swore their respect for the fueros and now the Lehendakari promises his position. In 1200, the Basque territories were incorporated into the Crown of Castile but retained their institutions. Thus the Lege Zaharra (old law) was accepted, recognizing them as a tax-free zone and respecting their internal organization.

This balance, which allowed Bizkaia, Gipuzkoa and Álava to manage their own tax systems, was called into question in the 19th century, when the new liberal State advocated centralism and equality of laws. In 1876 and after three Carlist wars, the Basque fueros were repealed, to which the concert replaced.

The concert created a stable relationship with Euskadi, where the Constitution had the least support

Until then, the three councils had been responsible for the collection. After years of wars, the State, lacking in resources, opted for a quick formula to recover revenues: in some provinces in which the State Treasury had very little intervention, it established that the Basque administrations would hand over part of the taxes. “The objective of the decree was not the differentiation but the assimilation in the general regime of Spain: the Concert is not a Basque invention, it is an imposition,” says Pedro Luis Uriarte, former Minister of Economy and expert in the field. With the Civil War, Franco suppressed in 1937 the Concert in Bizkaia and Gipuzkoa as revenge for supporting the republican government. Álava and Navarre kept it.

After the Constitution of 1978 and the Basque Statute of Autonomy, the 1981 concert modeled the current system and established the quota, the annual payment of Euskadi to the State for non-transferred competencies such as infrastructure and Defense. “The concert -explains Uriarte, who participated in the negotiations- managed to create a relationship of stability with the territory where the Constitution had the least support, less than 30%.”

The Spanish ruling class, with different majorities and parties in power, has always supported the rule. Since 1981, 16 bills related to it have passed through the courts, never being rejected. “The concert has had an overwhelming legal backing,” says Uriarte, who recalls: “The quota is not established by the Basque Country, it is agreed with the State and ratified by Congress.”

Uriarte: “Communities do not care what Euskadi and Navarra pay because it does not affect them”

The calculation of the quota, established by the Five-Year Law, is complex and has led to multiple political clashes. “Euskadi -explains Uriarte- pays 6.24% of the competences not transferred to the Basque Country, but at the state level, and that percentage of non-agreed state taxes, non-tax revenues such as taxes and fines and public deficit are charged. ” According to Pedro Luis Uriarte, the first figure, the gross quota, is around 5,300 million, while the State invests a thousand less in the Basque Country. Subtracting the gross quota to what is charged, the quota comes out, which is then updated every year.

The agreement signed this week by which the State will return to Euskadi 1,400 million as liquidation of recent years is not for Uriarte any gift. “The Government, without resources because of the crisis, was not interpreting the law correctly: it has committed to return what was wrongly collected”. In turn, the Five-Year Law will be taken to the Cortes for the period 2017-2021, a rule in which there was no agreement between administrations since 2007.

Parties like UPyD and Ciudadanos have proposed to end the fiscal rule, but have not had support. Pedro Luis Uriarte says that the criticisms “are unfair” and come from not accepting two different models, the common one and the regional one, which has risks. “If there is a collection deficit,” he explains, “the State is in charge of the budgets not covered by the autonomous communities through loans, without having to be financed through, for example, the international markets at higher interest rates, which means a great savings. “

The controversies regarding regional financing have sometimes spilled over into the concert, a tool that Spain has nevertheless defended and used as an instrument of accession and stabilization with Euskadi. A bilateral financial relationship forged for almost 140 years.

“The communities,” says Uriarte, “do not care what Euskadi and Navarra pay because it does not affect them, it more or less influences the public deficit, but not the amount that the State gives to the rest of the communities.”

And the Catalans?

I have proposed for Catalonia something similar (to the Basque concert) but more modern. (…) Neither in Sau nor in Madrid were my theses accepted “. Ramon Trias Fargas lamented in La Vanguardia in September 1979 his failure to try to reproduce in Catalonia a concert system similar to Basque in the Catalan Estatut.

In fact, CDC-Trias Fargas was still active at that time in the Esquerra Democràtica de Catalunya that joined Convergència-defended in the paper that drafted the project negotiated with Madrid a revised version of the Basque concert for Catalonia but was rejected by the rest of the groups who considered it impossible for that proposal to be accepted by the Spanish government.

We will never know if it would have been like that. What is objectively true is that the Catalans were absolutely convinced that the proposed economic agreement proposed in the Basque Statute, presented and debated in Madrid before the Catalan one, would not prosper. But it was not like that. It was admitted based on historical rights recognized in the Constitution itself, the old fueros. A legal and political position of which Catalonia could not benefit because its privileges – unlike the Basques – disappeared in a stroke in 1716 and were never recovered.

Since those negotiations, the myth of the frustrated Catalan fiscal pact has gone through the history of autonomism almost from the minute zero, as soon as the new Catalan administration understood that the management of all the taxes paid by the Catalans was decisive to be understood with a State that, After the first impulse, he began to retreat
its decentralizing purpose.

In 1983, ERC – which in the negotiation of the Statute did not defend the model of the concert with CDC – was the first to propose the first reform of the Statute that would include the demand for a financing model similar to Basque. The then president of the Generalitat, Jordi Pujol rejected this proposal, perhaps prompted by the circumstances of the moment: the industrial crisis was causing havoc in the Catalan economy and society – there were municipalities where 50% of the active population lacked employment – and the possibility of establishing a Catalan hacienda could aggravate the disease rather than cure it. It was a short-term calculation that much later CDC would regret.

The truth is that over the next decade Convergència, the hegemonic party in Catalonia, focused on perfecting the benefits of the autonomous system to which it had been accommodated. In 1993, it would be able to increase the volume of taxes transferred, part of VAT and IRPF and three years later it would increase the IRPF quota in the Majéstic pact in exchange for guaranteeing the stability of the government of José Maria Aznar as a minority. The pact of the Majestic is, for the purposes of strategy, similar to the pact that this week the Basques have closed with the Government of Rajoy but it is not at all clear what will bring more benefits.

The truth is that three years later, in 1999 – still under the presidency of Jordi Pujol – and then in 2002 – at the dawn of the constitution of the Catalan tripartite – the Parlament de Catalunya had the opportunity to propose a change in the system of financing and claim, even knowing that Madrid would not be for the work, a financing system similar to the Basque and on both occasions it was concluded that this proposal was not viable in the constitutional framework still in force.

Something similar would happen later with the new Estatut of the year 2006. The normative proposal of the renewed Catalan frame text remains in the general regime that already established the first Estatut although it opens the door to the new Agència Tributària de Catalunya can end up charging and managing the total taxes, provided that this is agreed with the State. That is, the mechanism continued to be based on an assignment of the central government, not on the definition of a sovereignty over the fiscal resources generated by Catalonia. The Estatut wanted to change the system from within the system itself. And it did not work. The judgment of the Constitutional Court of 2010 certified the calculation error.

In 2012, Artur Mas, after assuming the presidency of a Generalitat in financial bankruptcy, recovered this time itself, the proposal of a reorientation of the financing system. From regional multilaterality to Basque bilaterality. And that is what he was to propose to the president of the government in a meeting held on September 20 at the Moncloa in which the president of the government responded with the Constitution in hand: the fiscal pact is unfeasible. The refusal was accepted by Mas with a warning: “or you accept the pact to abide by the consequences”.