This week’s clash between the government and the autonomous communities governed by the Popular Party (PP) for the debt remove is not the only money problem that is above the table among the protagonists themselves, with Catalonia as a cornerstone. The Executive continues to delay the update of payments to the communities – technically known as deliveries on account – and the aid to the electric car, with the reform of the entire financing system that is pending since 2009 as the great challenge that awaits the fund.
The Government promised at the end of January to return to “weeks” the increase in payments to communities and the Moves Plan, among other measures, in an “economic decree”, after it was lying by Congress, with the rejection of the PP, Vox and Juns, the Omnibus decree in which they were included together with the rise of pensions or discounts to public transport.
The Executive presented a “social decree”, agreed with Junts, to save these last measures, but is pending “the economic decree”, on which sources from the Ministry of Finance say that “there is no novelty.” After a month since it was announced, this delay is a loss of income for the communities of the common financing regime – every less Euskadi and Navarra, which have their own concerts – of almost 10,000 million in total.
Most of those 10,000 million is intended precisely to the eleven communities governed by the PP, as can be seen in the graph. Although the main problem is that it is about money that serves to finance the main public services, such as health or education, which are regional competencies.
At the moment, without the update of the monthly payments of the Central Administration to the Autonomous Communities, these “deliveries on account” continue to be the same as 2023, the last year in which the Executive was able to approve General State Budgets (PGE). Junts – whose parliamentary group was one of those who voted against its increase although Catalonia loses with this 1,910 million – said then that “a different redistribution of the deficit objectives” must be agreed and asked to open a serious negotiation on the economic concert of Catalonia.
Last Wednesday, in the frightened block of the PP communities at the meeting with the Treasury in the Financial Fiscal Policy Council, the body where these issues are treated, the popular representatives delivered a letter to the First Vice President and Minister of Finance, María Jesús Montero. In it, after arguing at the first point its rejection of the proposal of the debt remove, in the second they address “deliveries on account”.
“We take advantage of this communication to formally request that the deliveries on account corresponding to fiscal year 2025 be updated, taking as reference the updated income projections planned for that year,” says this letter signed all the PP communities. “We consider that this update is essential to guarantee adequate financial planning in the Autonomous Communities and effectively respond to the budgetary needs derived from the current economic context,” he continues.
However, Hacienda does not consider having the guaranteed support of parliamentary groups in Congress to recover this measure in an “economic decree.” María Jesús Montero has already accused the regional governments of the PP to make “partisan” politics instead of looking for the interests of their autonomous communities. The vice president came to use thick words to accuse the popular advisors of “a historical unfair”, “abandonment” and “irresponsible attitudes.”
Montero said that some PP councilors chose to get up from the Table of the Fiscal Policy Council so as not to vote against a measure that benefits them, “as their national leader, Alberto Núñez Feijóo, asked them.”
In the proposal on the deliveries on account by 2025, the Treasury opened the hand to the communities by withdrawing the requirement of achieving budget surplus this year and next. The current stability objectives are more rigid, with a path that imposes on the autonomous communities to spend 0.1% less of their resources available in two years (always with respect to GDP).
EU fiscal rules
This 2025 is the exercise of the return of the fiscal rules to the European Union (EU), which force Spain to leave the deficit (the imbalance between income and expenses) in 3% or below, for which all levels of the administration are crucial, from the central, passing through the regional, to local corporations. The objective of the government is to leave the deficit at 2.5% of GDP this year.
“You can reduce imbalances without cuts,” the Vice President Montero has been defending, who stressed that since 2020 that discourse has dropped from 10% to 3% in 2024. And in 2025 the effort will be loaded by the State, “giving margin to local communities and entities.”
This week, the Airef (Independent Fiscal Responsibility Authority) has given its approval to the proposal of the Ministry of Finance of a debt remove to the communities of the general regime of about 83,000 million in total. But he has considered precisely that the measure “must carry conditionality” and “go hand in hand with the reform of the regional financing system” pending update since 2009.
Specifically, the Fiscal Authority believes that the condonation must ensure that communities do not accumulate more debt. “A debt condonation operation must be carried out by tax conditionality for a double reason,” he says In a statement Posted on Thursday.
The first reason referred to by Airef to justify conditionality is “the problems of moral chance that surround this type of operations.” That is, to the incentive that this precedent can assume for the communities of borrowing more with the State will make other removes.
The second reason is “the need to strengthen the guarantees of compliance with fiscal rules.” In other words, the fiscal authority sees an opportunity in the sentence to demand that the communities accept it (and if approved in Congress) that limit the growth of public spending, according to the new fiscal corset of the EU. “It makes no sense to make a debt forgiveness if it is not guaranteed that future debt will not accumulate over what allows fiscal rules,” the airf affects.
“If the law ends approved in the terms we have raised, because it requires a law, there is no conditionality,” said the Minister of Finance last Monday. “This condonation is assumed by the State and there is no consideration that the autonomous communities have to do. I have said it from the first moment: we are generous because we believe in the state of autonomies and we also believe that there was a damage to the autonomous communities in the previous financial crisis that caused an over -indebtedness, ”he reiterated.
Electric car aid
The pending “economic decree” must include the aid to the electric car, the reduction of electric tolls to the large industry and some fiscal measures such as the benefit in the IRPF to those who made reforms of energy efficiency in their homes or the expansion of the limits of the modules for the self -employed to adapt them to inflation.
Regarding the first issue, when the Omnibus decree decree in January, the extension carried out in December of the Moves III Plan for the purchase of electric vehicles, fuel batteries and recharge points until June 30.
The Moves III entailed an endowment of more than 1.5 billion and contemplated aid based on whether the purchase of a plug -in or not to get another polluting vehicle out of the circulation. Specifically, he contemplated, in the case of the purchase of plug -in hybrids, up to 5,000 euros, if it supposed the flattering of another vehicle; and 2,500 without that scenario. And if an electric one was bought, with those same cases, the aid could reach 7,000 and 4,500 euros, respectively. The automobile sector has asked that the new Moves be based on direct aid, without having to wait for the autonomous communities to disburse the subsidy, sometimes two years of delay since the purchase of the vehicle.
When the bus declined, so did the 15% deduction in the IRPF, up to 3,000 euros, in the purchase of an electric vehicle, a measure that was implemented last June. The decree also contemplated aid of up to 80% for the installation of load points for individuals in locations with less than 5,000 inhabitants and 70% in larger locations. And subsidies to companies and public administrations that establish recharge points of up to 50kw.
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